Project Summary The recent introduction of new drugs to treat hepatitis C virus (HCV) has drawn intense attention from the media, policy makers, and researchers. Despite those drugs' novel aspects, such as high cure rates in clinical trials, their high price tag has been the center of attention, igniting national debates over how much our society is willing to pay for innovative prescription drugs. Facing financial pressures from new HCV drugs, payers rely on restrictive coverage and high cost-sharing for those drugs. Patients' access to those drugs is a growing concern. Debates are ongoing over how to develop optimal coverage and benefit schemes for new HCV drugs. Incorporating ?value? in coverage or benefit decisions for new HCV drugs has been proposed to address the challenges by those drugs. Yet, we lack critical information needed to develop optimal coverage decisions for new HCV drugs. Little is known about patterns of utilization and effectiveness of new HCV drugs, especially among sub- groups such as HCV-HIV co-infected people. No real-world evidence exists on how much new CV drugs reduce downstream medical care spending (i.e., are they cost-offsetting?) and whether cost- offsetting effects differ by patients' disease progress ? key information needed for coverage expansion decisions. We propose to provide the first evidence on these key questions in Medicare. We will examine factors contributing to initiation and completion of new HCV drugs in Medicare. We will also examine how use of new HCV drugs responds to Medicare Part D plan benefits (cost-sharing for new HCV drugs) among enrollees with no low-income subsidies (non-LIS). We will then assess the effects of new HCV drugs on patients' health outcomes, health care use, and costs. Finally, we will compare cost impacts of new HCV drugs across patient groups by disease progress and risk factors, and will identify patient groups that are most cost-effective to treat. To minimize plan selection effects, we will select ?newly diagnosed? patients and leverage features of Part D plan enrollment, which essentially eliminate endogeneity associated with drug plan benefits. We will use an instrumental variables approach or propensity score matching to address potential selection bias associated with HCV drug use. We will address the study aims using several Medicare data sets. As financial challenges related to HCV grow, our study will provide the first evidence on use, effectiveness, and cost impacts of new HCV drugs ? critical information needed for payers and policy makers to develop optimal coverage decisions and address challenges raised by those novel yet costly drugs.