[Ip-health] Illinois Medicaid restricts use of hepatitis drug

Claire Cassedy claire.cassedy at keionline.org
Thu Jul 31 09:33:08 PDT 2014


Illinois Medicaid restricts use of hepatitis drug

Posted on Wednesday, 07.30.14

CHICAGO -- Facing ballooning costs for a $1,000 pill to treat hepatitis C,
Illinois' Medicaid program is putting tight restrictions in place,
including requiring patients to meet 25 criteria and get prior approval
before the government program will pay for the new drug.

After spending an estimated $16 million this fiscal year on Sovaldi, which
holds promise for a cure for the liver-damaging disease, the state agency
headed by Julie Hamos approved the restrictions July 10.

The rules limit the drug to sicker patients and bar it for anyone with a
history of drug or alcohol abuse within the past year. Hepatitis C spreads
today mostly among drug users sharing needles, although some people became
infected before widespread screening of the blood supply through blood
transfusions and transplants.

The restrictions prohibit doctors from using Sovaldi in ways that seem
promising in preliminary research but haven't been approved by federal
regulators. And a "once in a lifetime" rule will give Medicaid patients
only one chance at the treatment.

Doctors who have seen Sovaldi wipe out the virus find the rules too
restrictive. Dr. Steven Flamm of Northwestern University Feinberg School of
Medicine said the constraints could eliminate all but 30 percent of the
Medicaid patients he'd like to treat with Sovaldi.

"It's going to ratchet down the numbers and lead to significant outrage in
the community and among patients," said Flamm, who is involved in research
and accepts consulting fees from several drug companies.

The limit on early treatment is what bothers Dr. Nikunj Shah of Rush
University Medical Center. He'd rather treat with Sovaldi before severe
liver damage occurs. Treating earlier could prevent expensive liver
transplants. "I think this would be much better investment of the money for
the state," Shah said.

Like Illinois, most other states are restricting Sovaldi's use, according
to a July 23 earnings call held by the drug's maker, California-based
Gilead Sciences Inc. The company reported second-quarter profits of $3.66
billion, or a net margin of 56 percent.

The Food and Drug Administration approved Sovaldi in December. Illinois'
$16 million spending since then represents more than 70 percent of the cost
of all the state's Medicaid hepatitis C treatment for fiscal 2014 so far.
And it dwarfs the $6.7 million paid for all hepatitis C treatment in fiscal
2013. Nearly 600 Sovaldi prescriptions have been written for Illinois
Medicaid patients this year.

"When you multiply the people who have hepatitis C by the cost of the
therapy, it gets to be a very big number pretty quickly," said Matthew
Eyles, an analyst at market research firm Avalere Health. States get
rebates on FDA-approved drugs from drugmakers, but it's unknown how much
Gilead will rebate to Illinois.

Dr. Arvind Goyal, Illinois Medicaid's medical director, said the cost — a
12-week course of treatment is $84,000 — led to the restrictions, along
with a lack of research in minority patients and in people who have tried
other treatments first.

"It is unfortunate the medication is so expensive that we have to think of
expense before we treat a patient," Goyal said. Illinois Medicaid now
covers 3 million low-income and disabled residents with a budget of about
$18 billion.

By the end of 2014, half of Illinois Medicaid patients will be covered by a
managed care plan. The private insurers with Medicaid contracts are writing
their own Sovaldi rules. Illinois has agreed to pay the managed care plans
more to account for the new drug, but not by as much as the plans would

"The medical world is a dynamic one and we would like a universal solution
to fit the needs of health plans, the state and consumers," said Samantha
Olds of the Illinois Association of Medicaid Health Plans, which represents
nine health insurers with state contracts.

In contrast to Medicaid, people with private insurance have out-of-pocket
costs such as copays, which get them thinking critically about whether a
drug is worth it, Goyal said. Medicaid patients pay nothing. The cost falls
on taxpayers, leaving governments to make the call.

"We will have this debate time and time again," Goyal said. "As soon as a
drug hits the market, we need to be more enthusiastic, prompt and
deliberate in deciding when we will cover it."

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