Hepatitis C drug’s cost pits state vs. insurer

Molina Healthcare balks at price of new breakthrough medication; prisons also face cost challenges

msantos@theolympian.comMay 4, 2014 

A new drug to treat hepatitis C is boosting patients’ odds of recovery, but it’s causing a major insurer in Washington and the state’s prison system to wonder how they’re going to pay for it.

Washington’s largest provider of Medicaid managed care plans, Molina Healthcare, isn’t covering the new hepatitis C medication for all patients, including some who state health officials say should get it.

Sofosbuvir, known by the brand name Sovaldi, boasts a 90 percent cure rate when used to treat the typical patient with hepatitis C.

It also costs about $1,000 a pill — or $84,000 for a 12-week treatment. And that doesn’t include the cost of other drugs a hepatitis C patient might need.

The state Health Care Authority is now pressuring Molina to broaden its rules for covering Sovaldi, which the federal Food and Drug Administration approved for treating hepatitis C in December.

“They’re not covering it under the same guidelines that we think are appropriate,” said Jim Stevenson, spokesman for the Health Care Authority.

Meanwhile, state prisons — where 16 percent of inmates have hepatitis C — might end up spending even more on hepatitis C medications this year, after earlier treatments already doubled prison spending on hepatitis C drugs between 2010 and 2013.

The drug is raking in money for the manufacturer, Gilead Sciences of California, which reported $2.27 billion in sales of Sovaldi during the first quarter of 2014.

Stephen Polyak, a research professor in the departments of global health and laboratory medicine at the University of Washington, said he sees Sovaldi as “a great breakthrough” for treating hepatitis C, but the cost of the drug creates questions about who will be able to access it.

“It’s going to impact health tremendously,” said Polyak, whose research focuses on hepatitis C and HIV. “But it is going to be for the countries and the insurers and the individuals who can afford to pay for that.”


An estimated 3.2 million people in the United States have chronic hepatitis C, a blood-borne virus that can cause liver failure or liver cancer if left untreated.

A big selling point of Sovaldi is that the daily pill can treat hepatitis C with fewer side effects than previous drug regimens, while getting better results. Sovaldi also can treat patients in 12 weeks, while previous drug combinations took 24 or 48 weeks.

Two national organizations — The American Association for the Study of Liver Diseases and the Infectious Diseases Society of America — now recommend Sovaldi for treating hepatitis C in most circumstances.

Yet Molina Healthcare, which contracts with the state Health Care Authority to provide Medicaid plans for roughly 429,000 people statewide, still is developing its internal rules for covering the drug.

Molina has denied at least some hepatitis C patients coverage for Sovaldi. In an April 23 letter obtained by The News Tribune, the company wrote it was denying a request to cover the drug “until such time as clinical guidelines have been established.”

Dr. Daniel Lessler, the chief medical officer at the Health Care Authority, said his agency is working with Molina to ensure the company’s policy for covering Sovaldi matches the state’s coverage standards.

“We have spoken with them and made it clear that we expect them to be providing coverage for this drug,” Lessler said last week.

The other four insurance companies that contract with the state to provide Medicaid plans already cover Sovaldi in accordance with the state’s clinical guidelines, Lessler said.

But of all the state’s managed-care providers, Molina serves the most people — about 39 percent of the nearly 1.2 million Washingtonians who are on Medicaid managed care plans.

Dr. J. Mario Molina, the president and CEO of Molina Healthcare, said in a trade publication last week that he has concerns about the high price of Sovaldi, as well as other hepatitis C drugs that will soon come on the market.

“These new drugs could be a budget buster for state Medicaid programs,” Molina told the magazine Modern Healthcare.

An older drug to treat hepatitis C, telaprevir, cost significantly less than Sovaldi when it debuted in 2011 — about $50,000 for a longer treatment cycle.

Molina spokeswoman Laura Hart wrote in an email Wednesday that the company has agreed to cover Sovaldi for some patients, and is working with the Health Care Authority “to formalize a clear and clinically driven process for future requests.”

For now, Hart wrote, “we are reviewing requests for Sovaldi on a case-by-case basis.”

Dr. John D. Scott, the assistant director of the Hepatitis and Liver Clinic at Seattle’s Harborview Medical Center, said he doesn’t understand why Molina’s process is taking so long. Scott said the insurer has already declined to cover Sovaldi for about 10 to 15 Medicaid patients at his clinic, many of whom have advanced liver scarring and need the treatment.

“Every other insurance company is paying for Sovaldi,” said Scott, an assistant professor in the University of Washington’s Department of Medicine. “Molina is denying potentially life-saving therapy to many patients, which I think is wrong.”

State Medicaid Director MaryAnne Lindeblad said the back-and-forth that’s happening between the state and Molina isn’t unusual, and that it should be resolved soon. She said it’s too early to say how the cost of Sovaldi could affect the state’s Medicaid program financially.

“With any new drug coming out, it takes time to look at what is appropriate clinically,” Lindeblad said. “I don’t know that we should draw attention to this one particular drug.”


The state’s prison system also is grappling with how to deliver the expensive drug to inmates who need it. State prisons have a constitutional obligation to provide care that is deemed medically necessary, so simply not treating seriously ill inmates isn’t an option, said Norah West, a spokeswoman for the state Department of Corrections.

Even before Sovaldi came on the market, the costs of treating hepatitis C in the state prison system were on the rise. The state Department of Corrections spent $834,113 on medications to treat patients for hepatitis C in the 2010 fiscal year, compared to $1.8 million on hepatitis C drugs in fiscal year 2013.

This year, the prison system expects to meet or exceed the amount it spent on hepatitis C drugs in 2013, West said. Some patients are starting to receive a multidrug regimen that includes Sovaldi, which costs a total of about $142,000 per patient, she said.

Not all infected inmates get treated, though. Historically, the prison system has treated about 70 inmates for hepatitis C each year, even though about 2,640 prison inmates in Washington are living with the disease, West said.

“We would love to treat everyone,” West said. “There’s absolutely no way we can afford to do that.”

Dr. Lara Strick, a clinical assistant professor at the University of Washington and an infectious disease specialist for the DOC, said that many factors go into deciding which inmates get treated for hepatitis C, including whether inmates want to undergo the therapy and how badly the virus is damaging their health.

Because hepatitis C is a progressive illness, not all patients need treatment immediately, said Strick, who also treats patients at a clinic at Harborview Medical Center.

For certain patients, it might be better for them to wait until newer treatments are available that cause even fewer side effects, she said.

The FDA is expected to approve additional drugs to treat hepatitis C this year.

Still, the cost of the new drugs coming on the market is a barrier for those who would like to eradicate the hepatitis C virus, instead of just treating the sickest patients, Strick said.

“The hope is the future will bring medications that are priced in such a manner that we can treat this as a public health issue, and eventually eliminate the epidemic,” Strick said. “But I don’t think we’re there yet.”

Melissa Santos: 360-357-0209 msantos@theolympian.com Melissa Santos: 360-357-0209 melissa.santos@ thenewstribune.com

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