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'Oregon wants to deny access to HCV Drugs for Some, while "Other states by law must cover the drugs for their Medicaid programs. And private insurers are under pressure from Medicare to do the same.......the scientific evidence for ....[new drugs] is 'still poor"'
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Facing a $168-million price tag for new hepatitis C drugs, Oregon Health Plan balks
A five-year-old is examined at Multnomah County's North Portland Health Center. State reforms aim to make care cheaper and better for members of the Oregon Health Plan, but officials say costly new drugs threaten that goal. (The Associated Press)
http://www.oregonlive.com/health/index.ssf/2014/06/facing_a_168-million_price_tag.html
June 12, 2014 at 9:55 AM
Eyeing a $168-million annual price tag for two costly new hepatitis C drugs, state officials hope to limit access to a small fraction of the 20,000 Oregon Health Plan members afflicted by the liver disease.
The new drugs, Sovaldi and Olyssio, offer a cure that lacks the side effects of current treatment. But at $1,000 a pill, the cost adds up quickly - to $84,000 for a three-month treatment.
Other states by law must cover the drugs for their Medicaid programs. And private insurers are under pressure from Medicare to do the same.
But Oregon's state and federally funded program has a special waiver. It lets the state deny routine coverage of drugs for OHP members based on cost and efficacy.
And that's precisely what officials plan to do, according to a staff recommendation to be presented to an Oregon Health Authority subcommittee Thursday.
While the new drugs offer great promise, the scientific evidence for them "is still poor," the staff report reads. "The cost could potentially devastate the OHP budget."
Any decision to deny routine coverage may not be permanent, as new evidence and additional hepatitis C drugs continue to come out. But observers in the private and public health coverage realm hope the Oregon decision helps prompt a national discussion about drug costs, not just about Sovaldi, the hepatitis C drug that is drawing the most attention.
"This is a huge issue," said Matt Salo of the National Association of Medicaid Directors. "This drug itself has the potential of doubling the pharmacy budget of every state, and that's clearly an unsustainable scenario."
He said the debate over Sovaldi and similar drugs "is just the tip of the iceberg" in an onslaught of new, pricey drugs. "We need a holistic national conversation on what are our priorities. What should we be paying for, and are we actually willing to pay for it in health care."
Ultimately, the state staff recommendation to deny routine coverage must be approved by OHP's Health Evidence Review Commission, a process that could take months. Even if it is approved, patients' providers can challenge an individual denial on the basis of medical necessity.
The recommendation is based on an evidence review by researchers for the Center for Evidence Based Policy at Oregon Health & Science University in Portland.
[ "Medicaid Evidence-Based Decisions Project at OHSU" Report Questions Sofosbuvir Research & the AASLD Guidelines & Medicaid Director (NAMD) Comments - (06/01/14) ]
Valerie King, an OHSU physician, was among the researchers who reviewed 10 studies done on Sovaldi. She cited several weaknesses in the studies, and said other hepatitis C drugs expected to soon hit the market may be superior.
"For most patients with hepatitis C, they have the time to make those decisions," she said. "I'm certainly not saying that this is a bad drug. I'm just saying that we don't know that it is a good drug."
Sovaldi is the most frequently discussed of the next-generation hepatitis C drugs because it's considered the most effective of those approved so far.
It's made by Gilead Sciences, a California firm whose CEO, John Martin, has taken fire recently for a compensation package that has awarded him more than $250 million over the last five years, according to the magazine Forbes.
Gilead Sciences said in a statement that the OHSU critique is off-base, and that Sovaldi offers the "clear potential to improve significantly on previous treatment approaches."
In other countries, the firm has reached special deals to market the drug at bargain rates, such as $900 for an entire treatment regimen in Egypt - 1 percent of the U.S. cost, according to news reports.
In Oregon, the drug's $84,000-per-patient cost bears a special significance. That's because Gov. John Kitzhaber in 2012 agreed to cap the growth of OHP costs in exchange for $1.9 billion from the federal government over five years.
Under the agreement, if the state blows those caps, which eventually settle on 3.4 percent a year, it must reimburse hundreds of millions of dollars to the federal government.
"We need to stay under it as a state," said Oregon Health Authority Chief Medical officer Jeanene Smith.
Covering the new drugs for just a third of the OHP members with Hepatitis C, about 7,000 people, would cost $168 million a year. In comparison, all pharmaceutical spending for the Oregon Health Plan's more than 600,000 members last year was $377 million.
The new coordinated care organizations that care for OHP members also must keep their budgets under the growth caps, said David Labby, chief medical officer for Health Share of Oregon, the largest Portland-area CCO.
If Oregon approves coverage of the drug for its low-income health plan, it would mean money that would otherwise be spent on reforming the state's health care system -- as well as for patients with cancer, diabetes and other conditions -- would instead be spent on hepatitis C, according to Labby.
"This is a huge challenge to the transformation efforts that are underway in Oregon," Labby said.
-- Nick Budnick
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