[Ip-health] JAMA: Hep C drugs could add $300 to every American's insurance premium

Claire Cassedy claire.cassedy at keionline.org
Tue Jul 22 07:34:50 PDT 2014


JAMA: Hep C drugs could add $300 to every American's insurance premium
July 21, 2014 | By Tracy Staton

The payer panic over the cost of Gilead Sciences' ($GILD)
pricey-and-wildly-successful hepatitis C drug Sovaldi has been well
documented. But now, one of the two biggest pharmacy benefits managers in
the U.S. says the debate over Sovaldi's $1,000-per-pill price is a symptom
of a bigger anxiety.

Specialty drugs, in two words. So, not just the new generation of highly
effective, highly expensive hep C drugs, but a whole raft of drugs that
stand to burden the U.S. healthcare system. And with that in mind, payers
are going to have to develop an entire menu of ways to control their
spending on pricey meds, CVS Caremark ($CVS) CMO Troyen Brennan and CSO
William Shrank say in a JAMA commentary published online Monday.

As the two authors point out, it's not just the price of Sovaldi that's the
trouble. The drug is highly effective and promises to save money on pricey
hep C complications. "[T]he more important issue is the number of people
eligible for treatment," the commentary notes. "Sofosbuvir is not really a
per-unit cost outlier but is a 'total cost' outlier because of its high
cost and very large population eligible for treatment."

That's millions of people, and many billions of dollars. "The simple math
is that treatment of patients with HCV could add $200 to $300 per year to
every insured American's health insurance premium for each of the next 5
years," the authors write.

Is it any wonder that insurers are trying all sorts of things to avoid the
cost? Barring Sovaldi from formularies in spite of new treatment
guidelines. Treating only the sickest patients. Demanding, in the case of
Medicaid programs, additional state funding just to cover its cost. With
more pricey specialty meds rolling out all the time, payers will be looking
these and other strategies to save money. Consider, for instance, the state
of Arkansas' choice to bar some cystic fibrosis patients from using
Kalydeco, Vertex Pharmaceuticals' ($VRTX) $300,000 treatment.

"Effective approaches to control costs for high-priced medications need to
be developed and evaluated to ensure broad, equitable, and appropriate use
of these new interventions in an already stressed healthcare system," the
commentary states. Any ideas?

- see the CVS Caremark release:
- get the JAMA commentary:

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