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Medicaid programs grappling with cost of new hep C drugs

Medicaid programs grappling with cost of new hep C drugs

Picture of Kristin Gourlay

Like a growing number of Medicaid programs around the country, Rhode Island’s Medicaid program has quietly posted its first guidelines for approving coverage of a new drug for chronic hepatitis C.

If you are enrolled in Medicaid, have hepatitis C, and you’ve been waiting for these new drugs, you might be jumping for joy. If not, you might be asking, "Huh?" or "Who cares?"

Here’s what this means and why it matters, whether you have hepatitis C or not.

First, the new drug. It’s called a direct acting antiviral, and it’s going to change everything for people in treatment for hepatitis C.

Until recently, one of the only options for treating this disease — which attacks the liver over time and can lead to cirrhosis or liver cancer — was a drug called interferon. By most accounts, it was an awful treatment. Several weekly injections for an entire year, major side effects, about a 50 percent cure rate. It felt, some said, like chemotherapy. The new drug, called sofosbuvir (trade name Sovaldi) comes in pill form. It takes 12 weeks. And it’s reported to have about a 90 percent cure rate, with no major side effects (so far — it’s still pretty new).

The rub? Sovaldi can cost up to $84,000. State Medicaid agencies have been, understandably, busy trying to come up with a policy that outlines who gets the treatment and who has to wait. If we treated everyone who has chronic hepatitis C with this new drug, we’d go bankrupt. Rhode Island has just come out with its policy.

The good news is that people who have been waiting for this drug may now be able to get it. The bad news is that they may not.

The policy requires something called a “pre-authorization,” which is a bunch of paperwork you and your doctor have to fill out documenting your need for the drug, how bad your liver disease is, and the fact that you can’t tolerate other treatments very well. Many drugs and treatments require some kind of pre-authorization, so this isn’t completely unheard of. But this particular pre-authorization has some doctors scratching their heads about some of the extra hoops patients have to jump through. Rhode Island’s Medicaid director, Diedre Gifford, says the idea is to ensure patients can comply with the treatment regimen, and understand the risks of getting re-infected (most often through injection drug use).

Why does any of this matter to people who don't have Medicaid or hepatitis C? Well, for starters, Medicaid is taxpayer money. Second, this new drug is a harbinger, I think, of more to come. It's considered a specialty drug, and these often expensive drugs are becoming more common. How insurers - whether Medicaid or a private carrier like United Healthcare - decide to cover them could affect all of us. And third, you or someone you know could have hepatitis C and not know it. In fact, most people don't know they're infected. The CDC recently came out with the recommendation that everyone born between the years 1945 and 1965 (boomers) get tested. You could have become infected with hepatitis C by a single use of injection or snortable drugs, a blood transfusion before 1992, or even an accidental needle stick in a health care setting. There are a few other ways, but those are the most common.

I’ll be reporting more about hepatitis C in Rhode Island and beyond, and the changing treatment landscape, in the months to come.

Photo by r. nial bradshaw via Flickr.


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I think it is a reasonable question though. How fast should they be allowed to recoup their costs? Is there no limit? If a drug company comes up with a cure for breast cancer as a single daily very low side effect pill for 12 weeks is it reasonable for them to charge $10,000 a pill if they spent "billions"?

Gilead bought Pharmasset for $11 billion (this is no secret). Parmasset did all of the R&D, Gilead did the final FDA approval work. As it says in the article, Gilead will recoup that $11 billion this year (the drug was approved only 10 months ago, very few people got started on it before January/February because it isn't exactly pre-approved by your insurance company and stocked on pharmacy shelves the day the FDA gives the green light). It is currently approved for only genotype 2 and 3 (though a new combination pill which will be $1500-2000 a pill will probably be approved in about 1-2 months for genotype 1 which is 70% of Hep C in the US). So, with only 30% of the people with the infection even eligible, only a smaller fraction of them actually getting on treatment because their insurance denied it, the drug company has already almost recouped cost. If everyone person in the US with Hep C (lets use the low number of $84k, which truly is low end (Genotype 3 and patients with cirrhosis need to be treated longer, Genotype 1 will cost $120-140k for the full regimen, so the real average cost of treatment is probably closer to $100-120k).

So 3 million cases in the US x $84,000 = $252 trillion potential profit. Subtract the $11 billion investment and you still have $251.989 trillion. That isn't even counting the rest of the world (to whom Gilead is selling the drug for as little as $3.50 a pill in Egypt). So why again are US patients automatically the people who are forced to pay for drug development for the entire rest of the world? They are not - they are just the ones who drive the profit for the drugs company.

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I have been waiting for treatment scenes February. I was just now told treatment was denied . I was fired from my job in may due to my illness and denied disability. I am pissed that people out of the country can get treatment for $3.50 a pill. what the hell.

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