For the first time, a federal court has struck down a state Medicaid provider’s restrictions on covering hepatitis C medication — restrictions that Congress has referred to as one of the most “potent public health issues in the United States.”
On Friday a federal judge ordered Washington state’s Medicaid program to cover hepatitis C treatment coverage for all patients with severe liver disease, not just patients with the most extensive liver damage. The drug rationing system violates federally approved standards of care for Medicaid, the Court found.
The strain on these payers has been ‘tremendous’
The injunction may compel the state to cover the pricey $1000-per-pill treatment for nearly 28,000 Medicaid enrollees with hepatitis C. The cost could be upwards of $3 billion — three times the agency’s current drug budget, according to estimates from Washington’s Medicaid director.
The judge’s decision calls into question similar restrictions in 24 other state programs and highlights the perennial conundrum of public health insurers: how to control rising health care spending without harming patients who need access to expensive treatment.
When it comes to this problem, hepatitis C represents the worst-case scenario.
One Way To Help People Stay Out Of Jail? Sign Them Up For Health Insurance.Health by CREDIT: AP Photo/Rich Pedroncelli For the thousands of incarcerated Americans, prison may be the first place…thinkprogress.orgHepatitis C is the most common blood-borne disease in the United States, affecting 5.2 million people. It’s also very expensive to treat. Curing someone of hepatitis may cost as much as $95,000 — while letting it go untreated and potentially turn into end-stage liver disease or cancer will cost several times more. And since low-income individuals who receive health coverage from public payers like Medicaid, Medicare, the VA, and the prison system are disproportionately affected by the disease, the strain on these payers has been “tremendous,” to quote one Senate report.
Often, states can only afford to cover the sickest patients. In Georgia, for instance, $30 million was spent to treat 329 Medicaid enrollees — just 6 percent of the estimated 6,000 enrollees who have been diagnosed with hepatitis.
In some states, though, patients who have been denied coverage are fighting back. Lawsuits nearly identical to the one in Washington are pending against the Family and Social Services Administration in Indiana and the prison system in Massachusetts.
In one state, Massachusetts, the attorney general is suing not the state Medicaid system, but the manufacturer of the drug itself, Gilead Sciences. Though a competitor, AbbVie Inc., has entered the market and lowered prices somewhat, Gilead remains the largest supplier.
Gilead faced widespread backlash from health insurers and the media following its announcement of the hepatitis pill’s $1000 price tag. Advocacy groups and insurers pressured the company to be more flexible with the price but saw only “limited” results, the Senate investigation found.
Health Advocates Worry About The Rapidly Increasing Cost Of ‘Opioid Overdose Antidote’Health by CREDIT: Mel Evans/AP Photo In the midst of growing concern about the rising cost of prescription drugs…thinkprogress.orgState Medicaid programs negotiate contracts with the company, but most negotiations produce relatively small discounts. “The company appears to have been strict in its limits for rebate negotiations,” a Senate report found.
Gilead focuses negotiation efforts on the largest payers, leading some smaller state Medicaid programs to group together for negotiating purposes.
The federal government has stepped in by providing rebates to state programs, but the rebates may be just a band-aid on a deeper issue. “Federal law requires us to provide a pathway to coverage for all FDA-approved drugs,” Oregon’s Medicaid director wrote in a letter to the Senate, “no matter how minimal the likely benefit per dollar spent.”
In Washington, federal law has become a court order, and the state Medicaid program must report back within 60 days. The state’s reaction may serve as a model for how to adapt under the current legal landscape.
Cory Herro is an intern at ThinkProgress.