Subpoenas Served

By: Marcus J. Hopkins, Blogger

For over two years, HEAL Blog has covered issues related to access and the cost of Direct Acting Agent (DAA) Hepatitis C drugs for not only lower income patients, but patients across virtually every tax bracket. In addition to our work at the blog, we also work hard to bring information about access and coverage in the monthly HIV/HCV Co-Infection Watch, which has largely been focused on serving as an informational portal for Ryan White and Medicaid clients who rely upon those programs to provide them with comprehensive medical treatment.

During this time, we have seen access to these drugs on the part of payers nominally increase – Ryan White and Medicaid programs, as well as private insurers, supposedly expanding coverage to include the new DAA drugs – but, there have always been whispers, and sometimes shouts, alleging that, despite the promises to cover these new drugs, few patients actually receive drugs from these programs. When questioned on why patients aren’t receiving the coverage they’ve been offered, payers consistently repeat the same refrain: “If we treated everyone, we’d be broke.”


New York State Attorney General, Eric Schneiderman (Source: Fox News)

This response, however, has not settled well with New York State Attorney General, Eric Schneiderman. After concerns that there are some insurance companies that are restricting coverage of these medications, Schneiderman has issues subpoenas to 16 health insurance companies to provide information on their coverage of HCV drugs. Specifically, he has asked for documents explaining how they decide who should and should not be covered for specific treatments.

Essentially, Schneiderman is asking these companies to justify why some patients are deemed worthy of treatment, while others are denied, a tactic which may force both public and private payers to take more aggressive action in dealing with the high cost of newer medications, not only for HCV, but for a whole host of other conditions in the specialty drugs market.

Under the current model of pharmaceutical pricing, payers have to negotiate discounts with the manufacturers, and those discounts and rebates are currently protected by trade secret laws that essentially prevent payers from making those negotiated prices available to the public. Some payers have limited access to drugs, which they then restrict to the sickest patients, and sometimes, even with the discounts, they cannot afford the drug.

The secretive nature of these negotiations is an issue of great concern to HIV and HCV advocates, because without specific pricing information, there is little room to effectively advocate for expanding funds to a specific amount to cover the costs of these drugs. Assuming that each client with HCV requires only a single 12-week regimen, how many 12-week courses can actually be afforded given each program’s respective budget, and how many patients will actually receive treatment?

In response to Schneiderman’s subpoenas, Leslie Moran of the New York Health Plan Association has stated that they “…do not take into consideration the impact of excessive and unsupported pricing of these drugs.” She’s not wrong. While the subpoenas specifically request documentation explaining why some patients merit treatment, there’s little real effort to address the root of the problem – a total lack of transparency in how manufacturers determine the price of their products.

Even on the Federal level, there’s been little effort on the part of elected officials to address this virtually opaque process. There have been a handful of Congressional hearings related to the matter, but few politicians have specifically spoken about legislative actions they plan to take that would force transparency in these decisions. In fact, there’s little political will to do so, which leaves matters in the hands of patients and AIDS Service Organizations (ASOs) to file ballot initiatives and class action suits designed to force payers – not the manufacturers – to provide coverage, regardless of the costs associated with treatment.

While Schneiderman’s attempt to address the issue of access to these drugs is certainly to be applauded as an excellent step to expanding availability, they do not go to the heart of the matter: the drugs simply cost too much. Payers are right to argue in their own defense that paying for coverage for these drugs, even with discounts, is simply unfeasible and unsustainable, given the base Wholesale Acquisition Costs (WACs) established by the manufacturers, themselves.

And so, we are yet again at an impasse; Schneiderman should be seen as attempting to fix a problem and payers are a part of the problem, but they are not the cause of the problem. Until we have sufficient and binding legislative action that forces manufacturers to justify their pricing decisions, we have little chance of combating the continual increase in healthcare costs.

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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