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Florida Blue To Provide Costly Hep C Drug After Lawsuits
  By Dani Kass
Law360, New York (June 21, 2016, 4:44 PM ET) -- Florida Blue has agreed to provide coverage of the costly but life-saving hepatitis C drug Harvoni to all of its members, ending RICO and ERISA suits and bringing an equivalent of $126 million in relief to proposed class members, according to a settlement that got preliminary approval Tuesday.
In lead plaintiffs Eugene Oakes and Keith Burt's unopposed motion for preliminary approval of the agreement, they said the proposed class features about 2,000 members, but that Blue Cross & Blue Shield of Florida Inc. will provide coverage for Gilead Sciences Inc.'s Harvoni to all current and future members with hepatitis C. The retail value of the drug for those 2,000 class member is $126 million, the motion states.
Previously, the insurer had denied coverage to those whose livers weren't scarred enough, a condition called fibrosis, suits had claimed.
"Florida Blue's agreement to remove the fibrosis restrictions has life-changing, and potentially life-saving implications for thousands of class members and other insureds," the motion states. "This is an outstanding result."
Florida Blue said Tuesday that it has provided Harvoni for its members since the drug came on the market based on guidelines it created through "internal and external clinician evaluations, medical literature reviews and other scientific information."
"While we were confident in our position, we realized that continuing with the legal defense would require significant time and financial resources," the insurer said in a statement. "Therefore, we decided it was in the best interest of our members to resolve the matter through a settlement."
The plaintiffs said the negotiations after more than a year of litigation were "hard fought and, at times, as contentious as the litigation itself" but that the proposed settlement provided the wanted results. U.S. District Judge Robin L. Rosenberg scheduled a hearing for final approval of the settlement on Aug. 26.
Oakes and Burt had brought the Employee Retirement Income Security Act claims in January, saying they were wrongly denied access to Harvoni as part of their ERISA-governed health plans through Florida Blue.
The Racketeer Influenced and Corrupt Organizations Act suit, which also featured breach of contract claims, had been brought in May 2015 by Janie Kondell, alleging the insurer had "inherently fraudulent guidelines that purported to be based on medical evidence" even though Harvoni was denied without medical reason, the motion states. That case was dismissed with prejudice in May.
According to many suits over the drug, Harvoni is almost 100 percent effective at treating hepatitis C, with few side effects, but can carry list prices of close to $100,000 for typical rounds of treatment. The previous treatment option, while cheaper, had up to a 70 percent cure rate and significant side effects.
In Washington, a federal judge in May ordered the state Health Care Authority to provide Medicaid enrollees access to direct-acting antivirals, like Harvoni, no matter their level of fibrosis.
Following an attorney general investigation in New York, all insurers in the state have agreed to cover the treatments.
Blue Cross and Blue Shield units have also been hit with putative class actions in California state and federal courts, and in Massachusetts, the state attorney general has targeted Gilead over the price.
Counsel for the proposed class didn't immediately respond to request for comment.
The proposed class is represented by Andres Rivero, Alan Rolnick and Charlie Whorton ofRivero Mestre LLP.
Florida Blue is represented by Marcos Daniel Jimenez, Justin Brian Uhlemann and Robert Michael Kline of McDermott Will & Emery LLP.
The case is Oakes v. Blue Cross & Blue Shield of Florida, Inc., case number 9:16-cv-80028, in the U.S. District Court for the Southern District of Florida.
Carl Schmid
Deputy Executive Director
The AIDS Institute
Washington DC
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