For the past three years, various governments and patient advocacy groups have clamored for lower-cost hepatitis C medicines, given the high cure rate for these pricey new drugs. Now, a new study finds that upfront treatment with cheaper generic versions can offer a substantial payback.

“We assumed [generics] would be cost effective, given their high cure rates, but we wanted to know how quickly they saved costs,” said Jagpreet Chhatwal, a scientist at the Institute for Technology Assessment at Massachusetts General Hospital and one of the co-authors. “The results are not...

Dr. Jagpreet Chhatwal, at Massachusetts General Hospital, calculates that the new, more effective therapy will cause the overall cost of treating patients with that leukemia to balloon by nearly six times. That's due to both the cost of the new drug and the growing number of patients who will live longer and thus will need continuous treatment.

Dr. Jagpreet Chhatwal, assistant professor of radiology at Harvard Medical School, has studied the economics of treating hepatitis C in prisons and said that while the drugs are expensive, liver transplants and treatment for patients with hepatitis C in its later stages are also costly.

He said treating the disease in prison is worth it in the long run because cutting the number of infected people in prison has a dramatic impact on the number of people living with the disease society wide. That’s...