Litigation and Legislation May Force Lower Prices

By: Marcus J. Hopkins, Blogger

The past three years have brought many great tidings for those living with Hepatitis C (HCV): a total of seven new HCV-specific Direct Acting Agent (DAA) regimens have been released onto the market, all of which are far more easily tolerated than the ribavirin and Pegylated interferon-based treatments, and all of which sport Sustained Virologic Response (SVR) rates of above 90% in most HCV patients. We’re now looking at the release of at least one more drug from Gilead, this year, that will be pan-genotypic – it can be used in the treatment of any genotype of HCV – as well as the possibility of injectable treatments that can be used on a regular basis, and reduce reliance upon pills.

Image of a stethoscope wrapped around a $20 bill , laying next to an open medication bottle

Affordable Healthcare

But, the reality is that these medical and technological breakthroughs cost money. Lots of money, really; and there seems to be no one willing to accept responsibility for their part in creating a market where a Wholesale Acquisition Cost (WAC) – the “baseline” for a drug’s price, before discounts and rebates – of $54,000 for twelve weeks of treatment is seen as a welcome reprieve.

Since Sovaldi (Gilead) and Olysio (Janssen) hit the market in 2013, virtually every payer and patient in the medical field has had a beef with the cost of the medications. Public and private payers, both, have essentially gone out of their way to restrict access to these medications to only the sickest of the sick, creating moral and legal arguments that may force those payers to pony up, regardless of whether or not they can “afford” the price.

On the legislative front, both California and Ohio are considering similar pieces of legislation that would require all state-run health agencies to purchase drugs at the lowest price paid by the Veteran’s Affairs (VA), which would mean that the “private” contract between manufacturers and the VA would have to become transparent. This could be either a boon or a bust, as VA prices may not be the cheapest of all the prices being paid, or in some cases, could be significantly less than one agency is paying for treating a large swath of people. Essentially, all public payers would have to pay the same price, whether or not the pharmaceutical company likes it, which could mean both a decrease in profits for them, as well as either an increase or decrease in spending for the payers.

These legislative efforts, both of which are sponsored by the AIDS Healthcare Foundation (AHF), are essentially an effort to force pharmaceutical companies to show their hand on pricing. If they’re giving a significantly lower price to one agency over another, they risk their ability to haggle for higher payments from other agencies. It’s an attempt to essentially level the playing field, and to do away with the “trade secret” nonsense that prevents publicly-funded agencies from openly discussing and publishing the exact details of these agreements.

On the litigation front, two new class action lawsuits have been filed in Washington state, aimed at forcing both private and public payers to provide HCV drugs to patients, regardless of the prices set by the manufacturers. Since Sovaldi and Olysio hit the market in 2013, payers have consistently been accused of establishing and maintaining overly and intrusively strict pre-requisites before providing HCV drugs to patients. The restrictions became so rampant that Gilead effectively severed access to its once very generous Support Path Patient Assistance Program (PAP) in response to private and public insurers refusing to pay for the drugs (despite having reached a pricing agreement with Gilead), and instructing patients to “…just go get it for free from Gilead.”

Private insurers have never been the bastion of ethical business practices; it has long been conventional wisdom that insurance companies will do their best to refuse coverage, just to save a buck, all while jacking up premiums, deductibles, and out-of-pocket costs in the process. It, therefore, comes as no surprise that they would refuse to pay for drugs.

State Medicaid programs face a particularly tough road in this legal battle, as the Centers for Medicare and Medicaid Services (CMS) issued guidance in November 2015 specifically stating that Federal law requires them to provide these drugs regardless of the price. This came after several complaints were filed stating the state Medicaid programs were violating the law by refusing to provide access to these medications on the basis of cost, alone. Arizona’s Medicaid program has reportedly stated that they will not be complying with the CMS guidance. While Washington state’s Medicaid program, Apple Care, has not released any similar responses, it’s not unlikely that they are simply refusing (or unable) to act on it.

The reality is that the high cost of these medications honestly restricts payers from providing access to these medications. In the case of Washington state, were the program to cover treatment for every Medicaid patient with HCV, the cost is estimated to be triple the total pharmacy budget for Fiscal Year 2016 ($1 billion). So, while covering the cost of treatment for everyone is the goal, that goal may simply be unfeasible if current pricing structures remain the same.
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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

 

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