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Medicaid, Private Insurers Begin To Lift Curbs On Pricey Hepatitis C Drugs

By Kaiser Health News  
   July 06, 2016

Although up-front costs of covering more people with hepatitis C could be enormous, significant savings are possible longer-term, as transmission of infections is reduced and complications such as liver failure, cancer, and kidney disease are avoided.

This article first appeared July 6, 2016 on the Kaiser Health News website.

By Judith Graham

After legal battles and lobbying efforts, tens of thousands of people with hepatitis C are gaining earlier access to expensive drugs that can cure this condition.

States that limited access to the medications out of concern over sky-high prices have begun to lift those restrictions — many, under the threat of legal action. And commercial insurers such as Anthem Inc. and United HealthCare are doing the same.

Massachusetts is the latest state to decide that anyone with hepatitis C covered by its Medicaid program will qualify for the newest generation of anti-viral drugs. Previously, managed care plans serving Medicaid members often limited the drugs, with a list price of up to $1,000 a pill or more, to people with advanced liver disease only.

The expansion follows a threatened lawsuit against drugmakers by Massachusetts' attorney general, which induced companies to offer the state bigger rebates on the medications, making them more affordable.

Over the past few months, Florida, New York and Delaware have also expanded access in their Medicaid programs. And in April, a federal judge ruled that Washington state couldn't withhold treatments from Medicaid members with hepatitis C who hadn't yet developed serious medical complications.

"I think the writing is on the wall for restrictive policies, and plaintiffs are likely to prevail in these lawsuits," said Nicholas Bagley, a professor of law at the University of Michigan.

"These aren't me-too drugs with marginal benefits: they're actual cures. While their cost is a huge fiscal problem, states aren't permitted under the law to restrict access to medically necessary therapies on the grounds that they cost too much."

Hard Decisions

The problem for states that are lifting restrictions: how to offset the expense of covering thousands of patients who may now come forward for hepatitis C treatment. "We want to give these medications to everybody who needs them, but with the prices they're commanding, something has to give," said Matt Salo, executive director of the National Association of Medicaid Directors. "We've run out of escape valves."

The drugs in question — Sovaldi and Harvoni from Gilead Sciences, Viekira Pak from AbbVie Inc., and Zepatier from Merck & Co., among others — eliminate the hepatitis C virus over 90 percent of the time, a cure rate almost double that of earlier therapies. The latest entrant in this market, Gilead Sciences' Epclusa, received approval from the Food and Drug Administration last week.

But with a sticker price of $54,600 to $94,500 for an average 12-week course of treatment, dozens of states balked at the budgetary implications and provided the medication for only the sickest patients.

Private insurers followed suit in their group and individual plans, but many have been reversing those policies recently, also under the threat of lawsuits. Anthem Blue Cross and Blue Shield plans in 14 states quietly began authorizing treatment to people "in all stages of fibrosis" (liver scarring) in December, the company confirmed in an email. Previously, medication had been limited to hepatitis C patients with severe fibrosis or cirrhosis.

UnitedHealthcare enacted the same policy nationwide on Jan. 1, according to an email from the firm. After a March legal settlement with New York's attorney general in New York, seven commercial insurers there are extending hepatitis C treatments to people who haven't yet developed serious liver disease.

Meanwhile, in March, after Congress appropriated extra funds, the Department of Veterans Affairs said it would treat anyone in its health system with hepatitis C, regardless of the stage of illness — a move that could extend therapy to nearly 130,000 veterans.

Medicare embraced a similar policy after acknowledging that medical guidelines recommended that all hepatitis C patients receive care, with a few exceptions.

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

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