[Ip-health] VA proposes moving $400 million from Section 802 of the Choice Act to meet the needs of Veterans with HCV.

Jamie Love james.love at keionline.org
Thu May 14 09:58:06 PDT 2015

The same day Senator Sanders called upon the VA to use compulsory licenses
to obtain generic HCV drugs, the VA wrote to the Senate, explaining they
proposed "to access $400 million from Section 802 of the Choice Act to meet
the needs of Veterans with HCV."

At present the cost of HCV drugs are probably more than $50k per patient,
for the 12 week all oral SOF based treatment regimes.  Senator Sanders
mentioned during a Tuesday hearing that the VA was paying $540 per pill for
SOF alone.   At $50k, the VA would spend $1 million on drugs for every 20

Among veterans, there are an estimated 200,000 persons yet to be treated
who may be living with HCV.  Treating everyone would cost about $10 billion
for the drugs alone, so the extra $400 million would just be a start.

The VA proposal is basically to rob a different VA program, designed to
address a much wider range of medical needs for patients, to pay for the
expensive new HCV drugs, and it would only be enough to treat about 4
percent of the veterans living with the HCV.

Senator Sander's office says that it will continue to press the VA to
consider the compulsory licensing option.  At a hearing on Tuesday, Senator
Blumenthal asked the VA to consider Senator Sander's proposal.

Attached before is an example of the letters that the VA has been sending
to Senators, making the case to shift $400 million from the "Choice Act" to
pay for the cost of providing more patients (about 8,000) with access to
the new HCV drugs.




May 12, 2015

The Honorable Richard Blumenthal
Ranking Member
Committee on Veterans' Affairs
United States Senate
Washington, DC 2051 O

Dear Senator Blumenthal:

The inexcusable delays and cost overruns that have plagued the Denver
 Replacement Medical Center have imperiled our ability to complete this
project for the more than 390,000 Veterans and their families it is
intended to serve. In order to complete the project, VA requires an
additional $830 million to pay for the unanticipated cost of the Denver
Medical Center project. After an extensive review of our funding situation,
we have identified approximately $100 million in FY 2015 unobligated
balances that could be used to help finance the cost of completion for the
Denver project without affecting the quality of care and services we
provide to Veterans. However, even after these unobligated balances are
applied, continued uncertainty about fully funding the project would have
an adverse impact on the ability to complete the hospital without
additional substantial delays and even greater cost. Accordingly, VA seeks
authorization to use $730 million from Section 801 (a) of Veterans Access,
Choice, and Accountability Act of 2014 (Choice Act) to pay for the
remaining costs of the replacement hospital.

The changes to this funding plan for Section 801 of the Choice Act will
result in a  delay to Non-Recurring Maintenance projects and seven minor
construction projects that were expected to be funded under VA's initial
spend plan. We plan to prioritize these projects for available resources in
our VA construction spend plan over the next three years. In the meantime,
we will continue to mitigate any potential effect on Veterans' access to
care in these areas through VA care in the community, extended daily and
weekend hours for care at local VA facilities, and further improvements in
medical center productivity.

To prevent a recurrence of the unacceptable mistakes made on the Denver
project,  VA intends to expand its relationship with the Army Corps of
Engineers (the Corps) regarding management of future VA major construction
projects. Of 15 active major construction projects planned for the next
three years, five are already underway and past the logical transition
point for the Corps to take over. VA expects to designate the Corps as our
construction agent for seven other projects, which total 86 percent of the
value of the 10 active major construction projects. Going forward , VA
believes that the Corps should be designated as our construction agent for
all new medical facilities with a cost of $250 million or greater that have
not yet started construction.

As we continue to learn from and embrace the lessons of these and other
past  mistakes, we must hold accountable all those who are found to have
presided over mismanagement or acted inappropriately. VA requests to use
$15 Million from Section 801 of the Choice Act to increase the VA Office of
Inspector General's (OIG) ability to perform oversight across the
Department. VA will also support an independent investigation into the

Page 2.

The Honorable Richard Blumenthal

Denver construction project (beyond the current investigations being
conducted by the OIG,  the Corps, and as part of the Independent
Assessments required by the Choice Act) to ensure that we fully understand
what occurred and are positioned to take needed corrective actions for
future projects. We welcome your suggestions on qualified organizations to
perform this investigation.

We understand that the Veterans Choice Program is not working as well for
 Veterans as it should, in part because Veterans, VA employees, and
community providers do not understand how the program works. VA worked hard
to implement th is incredibly complex program as effectively and
efficiently as possible in a short period of time. However, the
establishment and utilization of this new program tested our ability to
adequately communicate to more than eight million enrolled Veterans and
thousands of community providers, as well as adapt to new business

To honor the spirit and intent of Congress in establishing the Veterans
Choice  Program and ensure Veterans received timely care, VA has used its
current authority to refer Veterans for care in the community as quickly as
possible. Over the past year, VA has increased the number of authorizations
for Veterans to receive care in the community by nearly 50 percent, hired
thousands of new clinicians and essential support staff, extended hours of
operations, and boosted productivity. While these efforts have led to
faster care in some cases, the cost growth in the existing care in the
community program has been substantial and it is clear that we cannot
sustain the current rate of spending for this care within our FY 2015

Accordingly, as we make the necessary adjustments to shift care provided in
the  community to the Veterans Choice Program, VA requests flexibility to
make the program work better for Veterans through limited authority to use
funds from Section 802 of the Choice Act to fund care in the community to
the extent it exceeds our FY 2015 budget. The total funds required to cover
additional costs of providing care in the community will depend on the
level of flexibility provided by Congress. This request is wholly
consistent with both the spirit and intent of Congress to accelerate access
to care by making more care available in the community, as well as with
Secretary McDonald's request for flexibility to allow resources to flow to
Veterans' needs as they evolve.

Finally, VA's FY 2015 budget did not include any designated funding to
provide  Veterans diagnosed with Hepatitis C Virus (HCV) with the new,
state-of-the-art medications. Anticipating higher utilization of the
Veterans Choice Program, VA transferred nearly $700 million in funding from
its budgeted amounts for care in the community to meet the significant
surge in Veterans seeking HCV treatment within VA. However, even that
amount is proving to be insufficient to meet the needs of Veterans. These
new drugs have significantly higher cure rates, are easier to prescribe,
and have fewer and milder side effects than older medications. Prior to
these medications becoming available, VA was treating approximately 100
patients per week. After these newer drugs were released, VA

Page 3.

The Honorable Richard Blumenthal

began treating approximately 750 patients per week. VA currently estimates
that demand  for HCV treatment will outpace FY2015 HCV-specific funds. In
order for VA physicians to provide Veterans living with HCV with a known
cure, VA seeks authority to access $400 million from Section 802 of the
Choice Act to meet the needs of Veterans with HCV. This request is
consistent with the purpose of section 802 to address emergent needs for
Veterans' health care that cannot be covered within current resources, as
well as our shared goal of accelerating access to care for Veterans.

Thank you very much for your continued support of our Nation's Veterans.
Similar  letters are being sent to the leaders of the House and Senate
Committees on Appropriations and Veterans' Affairs.


Sloan D. Gibson
(United States Deputy Secretary of Veterans Affairs)

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