As Pricey Hepatitis Pill Harvoni Joins Sovaldi, States Erect Medicaid Hurdles
As Gilead Sciences GILD +1.39% (GILD) launches its next generation Hepatitis C pill, Harvoni, Medicaid programs are bracing for another extraordinary wave of costs, with 70 percent of states implementing coverage restrictions.
Already, the cost of Gilead’s first generation Hepatitis C drug Sovaldi, which costs $1,000 a pill and more than $84,000 for a course of treatment, has triggered 35 states to require prior authorization before Medicaid patients can get the drug, according to a report from Washington-based consulting firm Viohl & Associates. Gilead today said Harvoni’s price will be $94,500 for a 12-week course of treatment.
A so-called insurer “prior approval” in Sovaldi’s case means candidates for these new Hepatitis treatments have to have a liver biopsy “to determine the severity of the disease,” according to Viohl, which interviewed state Medicaid administrators and analyzed pharmacy policies and preferred drug lists across the country.
Sovaldi costs are hitting Medicaid health insurance programs for poor Americans particularly hard because the population of patients in need of Hepatitis C treatments tends to have low incomes and wouldn’t be able to afford the drug otherwise. Medicaid is funded by state and federal tax dollars and administered by state governments.
“These results clearly show how the states are struggling to manage the sky-high cost of this drug,” said Jeff M. Myers, president and CEO of Medicaid Health Plans of America (MHPA), which represents some private health insurers that manage state Medicaid coverage like Aetna AET +1.38% (AET), UnitedHealth Group UNH +0.43% (UNH), Centene (CNC) and myriad Blue Cross and Blue Shield plans. “There is no doubt that Sovaldi is a great advance in the treatment of HCV, but it won’t do any good if no one can afford it.”
MHPA, which paid for the consulting firm’s analysis of coverage restrictions, said Harvoni’s all-oral indication will make it easier for patients to comply with treatment regimens, which could further escalate costs and force states to introduce more restrictions.
It’s unclear exactly how Medicaid programs will deal with Harvoni or the coming wave of Hepatitis C drugs also expected to get Food and Drug Administration approval from Abbvie (ABBV), Bristol-Myers (BMS) and Merck (MRK).
But health insurers generally implement similar coverage decisions for classes of drugs treating the same disease so Gilead and other drug makers can expect similar prior approvals and perhaps even more restrictions than what Sovaldi is facing.
“HCV is contagious disease with known and extensive medical risks, but given Gilead’s choice to price these treatments so irresponsibly high, it makes it impossible for states to treat everyone who could benefit,” MHPA’s Myers said. “The prior authorization efforts are the best clinical effort to make sure those that need it most get it first, and our plans are doing their best to help the states manage this tsunami of cost.”
There’s a lot at stake for Medicaid health plans, which are increasingly being hired by states and local governments to manage benefits for poor Americans. There are now 37 states that use managed care plans to provide benefits to Medicaid beneficiaries, and most of these plans also have a contract to administer the pharmacy benefits, according to the Viohl analysis said.
Though the pill is deemed effective and studies show it can eradicate Hepatitis C in patients, state Medicaid plans and the insurance companies they work with are putting the breaks on coverage. Not all patients need Sovaldi depending on their diagnosis so coverage restrictions leads to more screening.
Here are some examples cited of what the Viohl study said some state Medicaid programs are doing to curb Sovaldi costs:
- several states, including Arizona, have implemented a “once in a lifetime” rule that allows Medicaid patients one opportunity at treatment with Sovaldi
- Alaska requires the patient candidate for Sovaldi to abstain from using drugs and alcohol for at least three months. Then, the patient has to submit to a urine test to verify being drug free
- West Virginia only allows a board certified gastroenterologist, hepatologist or infectious disease specialist to prescribe Sovaldi
- Several states won’t pay for any lost or stolen Sovaldi
- Illinois, which requires patients to meet more than two dozen criteria before they get Sovaldi, will only dispense the drug for two weeks at a time for a total of 12 weeks.