| March 4
March 4 U.S. health insurers are seeking help
from state health officials to foot the bill for a new
generation of hepatitis C treatments that could cost the nation
$200 billion or more in the next five years.
Several insurers, including Molina Healthcare, which
administer health plans for California's Medicaid program for
the poor are asking states to step in and pay for Gilead
Sciences Inc's Sovaldi, a drug that costs $84,000 per
patient. The wrangling has reopened a national debate on how
much the United States can afford to spend on the newest,
California, home to more than 9 million of the 62 million
people who receive Medicaid benefits nationally, said it is
still considering policies on how to reimburse for these new
drugs. It is looking both at Sovaldi and a combination of the
drug with Olysio from Johnson & Johnson.
Gilead and some health experts argue that the high price
represents a worthwhile tradeoff, since the new treatments for
the first time can cure nearly all patients who adhere to the
12-week course of drugs. That can help millions of Americans
avoid repeated treatment with other therapies, as well as the
more serious consequences of liver disease.
"Government systems ... will bear the long-term medical
costs of liver cancer, liver failure and transplant, and
therefore are the systems that will benefit most from the
availability of new therapies for (hepatitis C)," Gregg Alton,
executive vice president of corporate and medical affairs at
Gilead, said in a statement.
At the same time, state and federally funded Medicaid
programs have been straining under a slow economic recovery,
repeated budget cuts and rising public-sector costs.
"The challenge is providing the most appropriate treatment
for medical members that is also fiscally sound," said Tony
Cava, a spokesman with the California Department of Healthcare
Services in Sacramento. Cava said in a phone interview that the
department received requests to separate, or carve out, the
medication from several insurers' plans. Instead, patients would
be reimbursed directly by the state for any drug costs.
As many as 3.2 million U.S. patients have hepatitis C. It
can take 20 to 30 years for the virus to develop into more
serious health problems such as cirrhosis or liver cancer and is
the main cause of liver transplants.
Sovaldi was approved in December by the U.S. Food and Drug
Administration. AbbVie Inc and Bristol-Myers Squibb Co
have developed oral treatments for hepatitis C with cure
rates in excess of 90 percent. They are expected on the market
over the next year, while Merck & Co and Vertex
Pharmaceuticals are also working on new therapies.
Sovaldi's price tag has made headlines, but the actual cost
can be higher in many cases. Some patients must take the drug
for longer than 12 weeks or require a combination of other drugs
for it to be most effective.
Many doctors are requesting a $150,000 combination of
Sovaldi (sofosbuvir) and Olysio (simeprevir). The FDA is
expected to decide later this year on a Gilead combination drug
that will have a similar effect.
A METEOR OUT OF THE SKY
Camilla Graham, co-director of the viral hepatitis center at
Beth Israel Deaconess Medical Center at Harvard Medical School,
fears that insurers will restrict the treatments.
"There is probably some price point where we as a society
say we can afford to treat everyone with hepatitis C, like
currently we say everyone needs to be treated with HIV," she
said in a phone interview.
Graham estimates that treating two-thirds of U.S. hepatitis
C patients at about $100,000 each would cost the country $200
billion. Doctors expect the disease to peak in 2019 or 2020.
Insurers that manage Medicaid plans, including HealthNet Inc
, WellPoint Inc and Aetna Inc, say they
are talking to the state-based agencies about how to manage
these costs. The fear is that the true number of people infected
with the virus is not known, making it hard to gauge whether
they will lose money by covering the new drug costs.
Molina is based in California and has nearly 2 million
Medicaid members nationwide. It has asked for carve-outs, or
direct government reimbursements outside of its contracts in all
of its 11 states, which also include Texas and Florida.
"The drug was approved in December and it was not factored
into our rates for 2014. We are going back to the states and
saying, 'How do you want us to handle this?'" said Chief
Executive J. Mario Molina in a phone interview.
Medicaid programs nationwide are so far holding off on
deciding. They are more likely to allow insurers to renegotiate
contracts or build in additional payments based on the risk
profiles of Medicaid recipients than turn to carve-outs, Matt
Salo, executive director of the National Association of Medicaid
directors said in a phone interview.
"We are sensitive to the potential that this is a meteor
falling out of the sky and devastating a business model (for
insurers) ... but I don't think we are there yet," Salo said.
WellPoint spokeswoman Jill Becher said in a statement that
the Sovaldi approval was not included when it negotiated its
Medicaid contracts or set rates in its commercial business. The
company is covering the Sovaldi and Olysio combination for
members with advanced liver disease.
Aetna is paying claims now on Sovaldi and said it will
adjust guidelines as the other new drugs come onto the market.
It is negotiating Medicaid coverage of the drug on a
Ed Pezalla, Aetna's national medical director of
pharmaceutical policy, said in a phone interview that insurers
are facing a deluge of hepatitis C patients as screening efforts
for the disease ramp up, while people already diagnosed had been
waiting for an easier-to-tolerate treatment.
Richard Esnard, a 73-year old retired policeman who lives in
Rockland County, New York, is part of the early wave of patients
who waited for Sovaldi after having failed to be cured in a
clinical trial several years ago.
"After the clinical trial ended, there was a long period of
time for me to recuperate and then in the interim these drugs
became approved," Esnard said in a phone interview. He has a $15
co-pay for each of the three drugs he takes in combination:
Sovaldi, Olysio and older drug ribavarin. The rest is covered by
his primary and secondary Medicare plans as treatment for his
advanced liver disease. "I'm lucky in that way," he said.
U.S. health officials have recommended that all baby boomers
born between 1945 and 1965 be screened for the virus, estimating
that more than 2 million of them may be infected.