Tag Archives: ADAP

The 2016 Election, and What This May Mean for Healthcare

HEAL Blog is the recipient of the ADAP Advocacy Association’s 2015-2016 ADAP Social Media Campaign of the Year Award
By: Marcus J. Hopkins, Blogger

The passage of the Affordable Care Act (ACA), also known as Obamacare, included a provision that gave states the option to expand Medicaid coverage in order to cover citizens whose incomes were above the Federal Poverty Level (FPL), but whose incomes still present a significant barrier to purchasing health insurance. Of the 50 United States and the District of Columbia, 32 states (including DC) have opted to expand their Medicaid programs. Nineteen states have opted not to expand access.

Expanding access to Medicaid is an essential piece of the ACA, as it was designed to help increase the number of people with access to affordable healthcare. Because the ACA envisioned low-income people receiving coverage through Medicaid, it does not provide financial assistance to people below poverty for other coverage options. As a result, in states that do not expand Medicaid, many adults fall into a ”coverage gap” of having incomes above Medicaid eligibility limits, but below the lower limit for Marketplace premium tax credits (Garfield & Damico, 2016). Since the expansion of Medicaid under the ACA, 73,137,154 Americans were enrolled in Medicaid/CHIP as of August 2016 (Henry J. Kaiser Family Foundation, 2016).

There are an estimated 2.6 million Americans who currently fall into that coverage gap, and of the states that did not expand Medicaid, four states represent 64% of those people (TX – 26%, FL – 18%, GA – 12%, NC – 8%). When looking at the geographic distribution of those 2.6 million Americans, 91% are in the American South (Garfield & Damico, 2016). Demographically, 46% are White non-Hispanics, 18% are Hispanic, and 31% are Black, and over half are middle-aged (age 35-54) or near elderly (55 to 64). Additionally, the majority of people in the coverage gap are in poor working families.

Donald J. Trump

Photo Source: NBC News

President-elect, Donald J. Trump, as well as the incoming Republican-led Congress and Senate, have openly stated that their first priority, at the beginning of the next legislative session, is the repeal of the ACA. There are very few comprehensive plans being proffered to replace the ACA, and healthcare professionals, providers, payers, patients, and advocates, alike, are currently unsure about the future of the expansion, and whether or not that aspect of the ACA will be retained in the forthcoming repeal.

It bodes poorly for those existing people infected with viral hepatitis, especially Hepatitis C (HCV), who stand to lose coverage if the Medicaid expansion does not survive the repeal, even with the existence of drug manufacturer and private Patient Assistance Programs (PAPs). In order for those PAPs to be accessed, however, people must first know about them; without the aid of social workers, healthcare aides, and advocates, people living with HCV are unlikely to find out about these PAPs, unless this information is provided to them by a doctor or nurse.

An additional concern exists for those recipients of the Ryan White Program. Over the past eight years, HIV/AIDS advocates and policy wonks have been in a near-constant debate about whether to reopen the Ryan White Care Act for reauthorization to address some of the ways in which the current law has not necessarily aged well, in terms of keeping up with newer treatments, costs, and funding paradigms. The concern over the past five years has been that the Republican-controlled Congress would “gut” the bill, cutting out many of the provisions upon which organizations and patients have come to rely. With repealing the ACA having played such a large role in this year’s election, concerns about reopening the act are likely to deepen, rather than abate. It is important to note that many states include HCV therapies under their AIDS Drug Assistance Program’s drug formularies.

The HEAL Blog  will pay close attention to both programs, as well as other HIV and HCV-related issues throughout 2017.



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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When the Standard of Care Isn’t Standard Procedure

By: Marcus J. Hopkins, Blogger

This past week, I has the privilege of attending the ADAP Advocacy Association’s AIDS Drugs Assistance Program (ADAP) Regional Summit in Birmingham, AL. This was the sixth such meeting since 2011, with the previous year’s meeting having been held last year in Atlanta, GA. These summits are designed to discuss issues involving state-administered ADAPs that face specific regions, and three times now, this meeting has focused on the South.

This Southern focus is no accident: of the top ten states with the highest incidence of new HIV infections in 2014, Southern states fill five of those spots — including Florida, Georgia, Louisiana, North Carolina, and Texas (Kaiser Family Foundation, 2015). In addition, these states face significant barriers – endemic poverty, geographic barriers to care, inadequate Federal and state funding for assistance programs, and endemic distrust of authority and medical professionals – that largely prevent them from providing low- or no-cost HIV treatment and medications for low-income patients.

Map of the United States, with the southern states highlighted in red

Photo Source: Dialect Blog

In addition to leading the nation in regional HIV infections, the South also leads the nation in opioid prescribing. Of the top ten states for opioid prescriptions per 100 people, nine of those spots are occupied by Southern states (Centers for Disease Control, 2014). Alabama, host of this year’s Regional ADAP Summit, currently boasts the highest rate – 142.9 opioid prescriptions per 100 people. States with higher opioid prescribing rates inevitably have more Injection Drug Users (IDUs), which bodes poorly for the burgeoning rate of new HCV infections in these states. In 2015, the CDC released a report linking the increase in new HCV infections to IDUs under the age of 30 (CDC, 2015). The prescribing data, IDU rates, and HCV infection rates combine to create a bleak omen for the South’s burgeoning co-infection crisis.

ADAPs were created to serve the healthcare needs of people living with HIV for whom primary insurance coverage was essentially impossible to find. Combine a lack of access to adequate coverage with the high cost of HIV Direct Acting Agents (DAAs), and lower-income people living with HIV faced (and continue to face) seemingly insurmountable costs of care.

ADAPs are Federally-funded through a grant process; once those funds are allocated to each state (using a formula to determine the amount of ADAP funds each state is awarded), each state is then responsible for operating their own ADAP on the state-level, resulting in a sad-but-true adage: “When you’ve seen one ADAP, you’ve seen one ADAP.” This state-level administration of the program creates a massively uneven landscape, with no one state offering the same services or formulary coverage – what’s true in Tennessee may not be true in Alabama, or Georgia, or North Carolina.

Southern ADAPs almost all fail to provide coverage for the current standard of care for HCV (Infectious Diseases Society of America, 2016), which includes only newer Direct Acting Agents (DAAs) – Sovaldi, Harvoni, Olysio, Viekira Pak, Daklinza, Technivie, and Zepatier – for treatment, as opposed to the poorly tolerate ribavirin- and Pegylated interferon-based treatment regimens. Of the seventeen states that make up the American South, only three offer coverage for one or more HCV DAAs (AR, VA, & TN), while five states – all of which have very high HCV infection rates – offer no coverage, whatsoever (FL, GA, KY, LA, & TX). The remaining states provide coverage only for last decade’s poorly tolerated treatment regimens.

These older regimens often have very high failure rates for curing HCV – achieving a Sustained Virologic Response (SVR) – largely because they are so poorly tolerated that many patients simply cannot complete the regimen before they abandon treatment. In addition to being more easily tolerate, the newer DAAs have much higher success rates in achiever SVRs. This means that patients are more likely to successfully complete their treatments in a single go, rather than repeatedly failing using older regimens. With so few Southern ADAPs providing coverage for these DAAs, clients are much more likely to remain co-infected and continue to drain precious financial resources through repeated unsuccessful treatments.

There are, however, significant costs associated with these DAAs. Each of these drugs boast some of the highest Wholesale Acquisition Costs (WACs) in the pharmaceutical industry. Zepatier, the newest DAA on the market, currently sports the lowest WAC of the pack at the comparatively low price of only $54,000 for twelve weeks of treatment. Even with negotiated pricing and rebate deals between ADAPs and drug manufacturers that may lower those costs by up to 80% off the WAC, many ADAPs, Southern or otherwise, find themselves unable to afford the cost of coverage, leaving ADAP recipients to fend for themselves in an attempt to pay for treatment.

Under the Affordable Care Act (ACA), states were asked to voluntarily expand their Medicaid programs, which would have allowed Ryan White Part B ADAP programs to shift a significant number of their clients off of their rosters and onto their states’ Medicaid programs. However, this voluntary expansion plan ended up working out exactly as expected: the states that most needed the Medicaid expansion to address their healthcare needs ended up being the states that opted not to expand their programs. Of the seventeen Southern states, only seven states have expanded their programs, only three of which (AR, KY, & LA) fall in the area commonly referred to as the “Deep South.”

In these non-expansion states, ADAPs and their clients continue to face barriers related to coverage of the HCV DAA drugs. Of the nineteen states whose legislatures (or governors, via executive order) have opted not to expand Medicaid, only five (ME, OK, SD, TN, & VA) off expanded DAA coverage, while seven (FL, GA, KY, LA, NE, TX, & UT) offer no coverage, whatsoever. The remaining seven states (AL, MS, MO, NC, SC, WI, & WY) provide the outdated, ribavirin- and Pegylated Interferon-based treatments.

Further complicating issues of coverage is that many ADAPs (including Alabama’s and Louisiana’s) have decided to pay for their clients to enroll in private insurance plans through the ACA, rather than pay directly for their care. This can be considerably problematic, because it essentially ties drug coverage to whatever plans are available and their respective formulary coverage. These formularies vary from payer to payer, and in many Southern states, options can be limited to only a handful of insurance providers; in some states, those options are essentially monopolies.

What makes these insurance formularies problematic for ADAP clients is that many plans categorically shunt many of the HIV and HCV DAA and combination therapy drugs into higher tiers that require patients to pay exponentially higher co-pays to fill prescriptions; and, again, each state’s respective ADAP determines whether or not those co-pays are paid for by ADAP funds or left up to the patient.

Anecdotally, my personal Highmark West Virginia Blue Cross/Blue Shield provider currently has an HIV formulary that does not reflect the current standard of care for HIV, covering only a single single-pill regimen (Atripla), which is no longer being actively prescribed. When I contacted Highmark to inform them that their formulary is outdated and needs to come into compliance with ACA non-discrimination requirements, I was told that I was welcome to seek coverage with another insurer. As of April 15th, 2016, I filed a complaint with the Department of Health and Human Services Office of Civil Rights to begin an investigation into the provider.

While ADAPs go a long way toward helping lower-income HIV patients afford the cost of care and treatment, co-infected clients still face significant hurdles when trying to address their HCV-related care. This situation is slowly being ameliorated, as more state ADAPs add DAAs to their respective formularies. That said, there are still myriad obstacles to overcome in order to ensure that all lower-income HIV and HIV/HCV co-infected patients receive the care they need in order to live a happy, healthy, and productive life.


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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Co-Paying the Piper

By: Marcus J. Hopkins, Blogger

One of the biggest changes for many lower income patients under the Affordable Care Act (ACA) has been the transition to paying co-pays for their medical care. For patients living with HIV, this has been exceptionally difficult in states whose Ryan White Part B programs – the AIDS Drugs Assistance Programs (ADAPs) – have opted to pay for their clients’ insurance premiums, rather than simply directly paying for services as they’re administered. What this means for patients is that, where they once never had to worry about doctors’ visits or paying for medications, depending on their state of residence, they may not be responsible for paying co-pays for services.

To the average American with a stable, if thinly stretched, income, this may not seem like a big deal; but, to those of us living with HIV/AIDS on fixed or fluctuating incomes, this distinction may create an additional barrier to care that may not have existed, prior to now. It can be difficult to explain to people how, when one’s income is already low, paying $20-$30 for a visit to the doctor requires foregoing other basic necessities such as food or a utility bill put off until later; paying $100 for your HIV medications every month can mean that you no longer have enough to afford rent.

People who live without a chronic disease often fail to see the hardships presented with treating that disease. Outside of simply the cost of treatment, there are additional social and emotional issues at play. Having to rely on government assistance for any reason is frequently derided in our nation as a weakness; a moral failing that renders the recipient incapable of taking care of themselves. As such, there is often a guttural sense of shame and humiliation that accompanies having to rely on these assistance programs. It is this component that is so often left out of the conversation.

More than just the psychosocial aspect of seeking assistance, the reality is that, when a patient discovered their HIV-positive status, they are often unaware of the options that exist, in the way of coverage. Now that people with pre-existing conditions can no longer be barred from insurance coverage, many simply assume that private insurance is the only option available to them. In states where Medicaid services have not been expanded to include coverage for people living with HIV, many patients are unaware of the existence of the Ryan White or ADAP programs that are in place to provide assistance for lower income patients who cannot afford the cost of treatment.

Even with these programs in place, their assistance does not meet the Federal requirement for insurance coverage, and clients whose incomes are higher than the maximum allowed for exemption from the penalty for not having private insurance are often left to foot that bill, as well. This is one of several reasons why many ADAP programs are switching their coverage over to paying for private insurance, rather than a direct payment model.

For lower-income patients still having trouble paying for treatment, even with insurance, Patient Assistance Programs (PAPs) exist that can help to partially or totally defray the costs. These programs are, however, largely unknown to people outside of the “know,” as it were – if you don’t “know” about them, you don’t know about them, and oftentimes, you only find out about them through random word of mouth. Sadly, many ADAP programs’ employees are unaware of these programs, and aren’t able to provide adequate information about either their existence or the requirements for applying.

One such program – the Patient Access Network (PAN) Foundation – has long served this purpose for people who are underinsured living with HIV. The maximum award level is $7,500 per year. Patients may apply for a second grant during their eligibility period subject to availability of funding.

Unfortunately, funds available through this program have been depleted. As of March 14th, 2016, patients seeking assistance for HIV are being encouraged to go to the Patient Advocate Foundation (PAF) for assistance. Individuals who have been recently approved for grants through the PAN Foundation will not be affected. When needing additional assistance or to re-enroll, individuals are encouraged to check back with PAN to determine if the fund has been re-opened and/or to seek additional support through PAF.

LOGO: Patient Advocate Foundation

While the funds at PAN for HIV assistance have been exhausted for 2016, there are still funds available for patients who are mono- or co-infected with HCV at both PAN and PAF; one only needs to apply separately for assistance with that specific condition, as funds for HIV drugs do not carry over to HCV without an additional application.

Additionally, it should be made clear that these programs are not designed for the uninsured; rather, they are designed for the underinsured – those who carry some form of insurance, but for whom co-pays are unaffordable. It is also crucial to understand that these programs cover only the costs associated with drug co-pays; office visits and other non-pharmaceutical costs are not covered, and are left up to the individual and/or the Ryan White funds allocated to their clients.

For more information about PAF, and how it differs from the National Patient Advocate Foundation, please visit www.patientadvocate.org.


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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The ACA Took My Security Away

By Marcus J. Hopkins, Blogger

I’ve gone on record several times that I’m no fan of the Affordable Care Act (ACA). Several provisions of the act have rubbed me the wrong way since its passage, most of all the requirement that everyone purchase health insurance – a product that can be offered at any price, with no caps on the premium. This year, I finally purchased coverage under the marketplace, after two years of having qualified for Medicaid in the state of West Virginia, and I find that my frustrations are further justified.

I have been a client of WV’s AIDS Drugs Assistance Program for three years, now, and have, for the most part, been satisfied with the services they provide. When I found out that they would cover the price of health insurance premiums, I made the leap, and following their advice, signed up for the plan that seemed to best serve my needs.

President Obama signing the Affordable Care Act

President Obama signing the Affordable Care Act.

I did my research, spending hours looking at the three different plans they would pay for, checking the formularies (which were identical) to ensure that my HIV medication – Stribild – would be covered by the prescription plan. I tried to ensure that my monthly premium would remain low enough to be affordable, so I would pose the least amount of burden on the program, to reserve money for others who require more assistance than I.

Imagine my surprise, then, when I checked to see how much my prescriptions would be, and couldn’t find a price for my medication on their website. After calling Highmark West Virginia’s customer service line, I was told that my drug was “covered,” per se, but that I would be paying $100/month out of pocket for it. The customer service representative (CSR) suggested an alternative therapy – Atripla – which is no longer being actively prescribed, because it’s a ten-year-old drug, and there are better options.

Infuriated that I had gotten so much wrong about my coverage, I called my local ADAP representative to see what I should do, only to find out that there wasn’t really much. They will pay for the cost of medications, but it requires approval from the ADAP director, with whom I’ve had little luck getting in contact for the past year. Also, I was now responsible for paying the co-pays for visits and any associated bills for labs.

These are the kinds of problems that ADAP and Ryan White were designed to solve for people. I have, in the past, touted the wisdom of ADAP paying for primary insurance premiums for its clients as a way to defray some of the costs associated with treatment, but now I see the folly – each visit will cost me $30, because my doctor is a specialist; each month, I’ll be shelling out over $100 for medication; God only knows how much labs are going to cost.

For the first time since I qualified for Ryan White, I find myself panicked, because these were problems that I’d never had to face since I gained access to the program. The insecurity and financial worry – how will I afford my treatment; will I be able to still pay my bills just for life, much less for meds – Ryan White was supposed to be there to help me face those concerns.

Finally, after over a week of waiting for a response from either my local representative or my ADAP director, I decided to advocate for myself, and ended up turning to the Patient Access Network (PAN) Foundation – a Patient Assistance Program (PAP) designed to help people afford the cost of medications. I filled out an application online in fewer than ten minutes, and was approved immediately. Sure, there were extra steps involved in added a secondary insurance to my local pharmacy, but it all worked out for me, and now, I won’t have to worry about the cost of medications.

Now…whether or not I’ll have to cover the $30 visit fee for each visit has yet to be seen. I am grateful to the PAN Foundation for stepping up to help out where my ADAP program has failed. I cannot recommend their service enough, and encourage all people who are facing similar concerns to check them out at the link below this paragraph.


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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HCV Workshops

By: Marcus J. Hopkins, Blogger

September 2015 will mark the ADAP Advocacy Association’s (aaa+) 8th Annual ADAP Conference — A National Conversation about the Ryan White CARE Act and the AIDS Drug Assistance Programs — an event that brings together patients, advocates, activists, program coordinators, and government administrators to discuss issues relevant to the AIDS Drugs Assistance Program (ADAP). The conference is filled with educational and networking opportunities designed to unite all parties in the conversation about what is most important to people living with HIV/AIDS for whom access to ADAP is a vital part of their survival.

Prior to the start of this year’s conference, two free pre-conference workshops are available on September 24th, 2015, focusing specifically on the burgeoning healthcare crisis that is HCV. These two workshops – Nightmare in Appalachia: How Co-Infection is Disproportionately Impacting Rural Communities and Tactical Changes: Why Comprehensive Harm Reduction Policies Work – will feature a group of panelists (myself, included) who will help to lend some level of insight and expertise to what can often be a confusing situation of which to keep track.

I am very honored to be included on this panel, and look forward to bringing my own experiences dealing with access issues in the Appalachian region. With the recent reveal of the White House strategy to further investigate the root causes and potential solutions to the HCV epidemic sweeping across several states, it seems the perfect time to hear the perspective of someone who not only advocates for Appalachians living with HIV and HCV, but who also lives and works in the area

Having lived for most of my life in and around the Appalachian Region, I can personally attest to the unique challenges people living in this geographically unique region of the United States face when attempting to access low-cost, quality healthcare services. There are many issues working in tandem to create seemingly insurmountable barriers to healthcare:

  • Higher incidence and concentration of poverty
  • Fewer local and regional healthcare options
  • Lower healthcare-related education levels (AKA – Healthcare IQ)
  • Generational and traditional distrust of authority/government institutions
  • Physical geography (distance and ease of travel to healthcare locations)
  • Rampant and resurging stigmata related to health conditions

When people speak of Appalachia, many write the area off as a lost cause. Generations of poverty, drug and alcohol abuse, and social immobility have largely prevented many short-term healthcare initiatives from taking hold. Furthermore, most of the Appalachian states have governments leery of accepting or establishing long-term healthcare initiatives and programs designed to work over time, rather than produce immediate results.

It’s often difficult for people to understand how issues of access really do hamper the ability of Appalachians living with HIV and HCV to receive testing, treatment, and rehabilitative services. This is something I hope to bring to these workshops, and I look forward to helping shed some light on the difficult road ahead.

CLICK HERE to register for the pre-con workshops, or to learn more about them.


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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Trade Secrecy and Public Payers

By: Marcus J. Hopkins, Blogger

This past month, I attended the Hepatitis Appropriates Partnership (HAP) and National Viral Hepatitis Roundtable (NVHR) meeting, as well as the National Alliance of State and Territorial AIDS Directors (NASTAD) Technical Assistance (TA) conference in Washington, D.C. To both of these events, I went as a representative of the Community Access National Network (CANN), but I also went as “myself.”

Going as “myself” is a complicated task, no matter the location, as I have several informational gaps in my knowledge about the finer points of crafting policy, and going to these conferences often leaves me feeling like something of a fraud. I haven’t finished my education (and at this point, don’t really have the time to do so), and even then, I wasn’t going to school to study public policy – I was going for Health Communication in an effort to better increase my ability to adequately assist lower- and middle- income people living in Appalachia to access comprehensive healthcare for HIV.

So, when it comes to these meetings, I often find myself nodding along and saying, “Absolutely,” a lot, even when I have no idea what the heck the person is talking about; in the performing arts world, we call this, “Fake It, Until You Make It.” And so, I often leave sessions and conferences with more questions than when I entered, because in order to keep up, I have to almost immediately figure out what’s going on around me.

Perhaps, that is why I was tapped to serve in my capacity with CANN – I’m not just a very good writer (if I do say so, myself), I am also a patient. As such, I can safely say that, despite being a very knowledgeable and informed patient, I still have several information gaps – like many patients. There are some very basic pieces of information that I, as both a patient and a consumer, feel that I should know – that everyone should know – so that I can better advocate for myself.

The one thing that stuck out to me more than anything else during these meetings (in the context of “myself”) was that there is virtually no transparency when it comes to the world of pharmaceutical pricing. As an advocate for open governance, I’ve always been a firm believer that if my tax dollars are being used to pay for something, I have a right to know how they’re being used. This is the basic tenet of public governance –“How’s the money being spent, and how much of it is being spent on what?”

This is where things become interesting. As I reported in the last HEAL Blog, “Behind the Scenes at Hepatitis, Inc.,” certain laws prevent the Centers for Medicare and Medicaid Services (CMS) from discovering the actual price being paid by the 59 AIDS Drugs Assistance Program (ADAP) and 56 Medicaid programs for Hepatitis C (HCV) medications. Furthermore, beyond a single Federal statute, each state may or may not have its own statute that prevents those programs from discussing with any other state the price they’re paying for drugs.

Basically, we have a system in which private companies (in this case, pharmaceutical companies) have the right to enter into negotiations with both privately and publicly funded payers and enter into pricing and rebate agreements with them in total secret, and all of this is legally protected as a Trade Secret, making that information not only invisible to the public, but invisible between the states. This is, according to Pratap Khedar, a principal at pharma marketing consultancy ZS Associates, “…a very efficient free market…between the insurance company and the pharma company” (Herper, 2012).

For the private insurance companies, this seems fair – they are two privately held entities who can and should be able to enter into bargaining proceedings as manufacturer and buyer. This is the cornerstone of the free market – “I have a good to sell; let’s negotiate on the price.” These entities absolutely should be allowed to keep the amount that they pay per unit confidential.

It is, however, with the public payer/private manufacturer secrecy that I have a serious problem. With any other government office, whenever a deal is struck between a private company and the government, the amount the government has agreed to pay, as well as a breakdown of that agreement, are generally subject to public records and Freedom of Information Act (FOIA) requests. With pharmaceutical companies, however, this is not the case.

“Congress has created a system so that even the states, which buy tens of millions of dollars worth of these drugs, have no idea what we pay on a per-unit basis,” said the Democratic former Montana Govenor, Brian Schweitzer (Cross, 2011).

“Actually, Schwierzer does know what the state pays – but, before acquiring the information last summer, had to have his chief counsel sign a written agreement not to disclose it publicly,” reported Mike Dennison of the Billings Gazette (Cross).

Schweitzer came across the information in the summer of 2010, when he was attempting to compare what Montana’s Medicaid program was paying for drugs compared to the cost in Canada (Cross), but discovered in the process that, while he, as the governor of the state of Montana, could access that information, he could not share what his state’s Medicaid was paying at a price-per-unit level – he could only give very broad estimates based on Wholesale Acquisition Costs (WACs) or Acquisition Wholesale Prices (AWPs).

For those readers who are unfamiliar with those two measures, either the AWP, the WAC, or occasionally the Direct Price (DIRP) is the price that is published for the public. Whenever someone says, “Sovaldi (Gilead) costs $87,000 for twelve weeks of treatment,” they are quoting one of those numbers.

What most consumers – particularly those with lower incomes, knowledge levels, healthcare knowledge, or interest in the information – don’t know or understand is that those prices are practically meaningless, as virtually no payer (insurers, private or public) actually ever pays those prices. Instead, they negotiate with pharmaceutical companies and drug manufacturers in order to pay a lower, undisclosed amount, achieving those low numbers either by direct pricing agreements, or by entering into rebate programs.

Rebate programs in the pharmaceutical world operate much as they do in the commercial retail world – the payer pays the pharmacy to fill the prescription, the pharmacy fills the prescription and reports back to the payer, the payer submits a rebate form to the manufacturer, the manufacturer receives the rebate forms and cuts a check for an undisclosed dollar amount, and that check is sent back to the payer.

With both the agreements and the rebate programs, the idea is volume – those states/payers who pay to fill more prescriptions than other states/payers are more likely to receive much more generous pricing and rebate arrangements. For national private insurance companies and pharmacies (Wal-Greens and CVS, for example), this is a great deal, as they can pay to fill several thousands or millions of prescriptions each month.

The rub comes with public payer options, like Medicaid and Ryan White, Part B (ADAP). Ostensibly, this type of closed loop free market should benefit them, as well; instead, the states who are in the direst circumstances – primarily those states that are largely rural, an Appalachian state, are in the South, or are lower-income – end up with the worst pricing arrangements.

Take the example of Stribild (Gilead):

When I lived in California, my ADAP coverage lapse, and there was a period of time where I had to wait for my application to be approved for the new year, during which I ran out of medications. I asked my AIDS Healthcare Foundation (AHF) pharmacy if I could purchase the pills from them, individually, out of pocket, and they agreed to do so at the price of $68 per pill.

So, I did the math:

  • $68/pill x 30 pills/bottle = $2,040/bottle
  • $2,040/bottle x 12 months/year = $24, 480/year

When I first moved to West Virginia, I had to apply for ADAP in my new state. In the application process, they inquire as to how much my current prescriptions cost, which led me to ask the pharmacy for the cost of my prescriptions. After needling them for over an hour, they finally gave me an estimated price of $37,000/year.

Again, I did the math:

  • $37,000/year / 12 months/year = $3,083.33/bottle
  • $3,083.33/bottle / 30 pills/bottle = $102.78/pill.

Did you catch that trick?

The state of California, whose economy is comparable to that of the entire nation of Brazil, pays $68 per unit, while West Virginia, whose economy is comparable to that of the landlocked Eastern European nation of Belarus (best known for its Stalinist architecture and the KGB Headquarters overlooking Independence Square), pays an estimated $102.78/pill (Tippett, 2015).

“But, this,” one might say, “is the nature of business. States who don’t purchase as much of any good will ultimately end up paying more that those states who do.”

This argument does and should hold true for private payers; for public payers, however – particularly Federally-funded public payers – this should never be the case.

Yet again, we are faced with the dual realities of an insurance-based healthcare market and Federally-funded, but state-administered public health programs. The richest states are more likely to benefit, while the poorest states end up paying a higher price for access to treatments than those who live in more urban areas. In a nation where all citizens in all fifty states and the outlying territories are supposed to have equal access and opportunity, there is little parity.

So, what does this mean for poor states’ Medicaid and ADAP budgets? Basically, they get screwed, because, even though they ostensibly have fewer overall clients to serve, they end up paying more for medications than their richer counterparts.

Why I bring up the public payer issue relates to a recent initiative sponsored by AHF in the state of Ohio that would require Ohio agencies and publicly-funded entities from buying prescription drugs at higher prices than what the U.S. Department of Veterans Affairs pays (Associated Press, 2015).

The way this legislation is worded leads voters to think, “Well, the VA must be getting a great price on these drugs! We wouldn’t skimp on healthcare for our nation’s veterans! THIS IS AMERICA!”

As such, it is likely to achieve the adequate number of signatures to force a vote in the Ohio legislature, and potentially go directly to voters if the legislative body fails to act within four months.

The reality, however, is that, because payers cannot legally reveal, either to the public or to each other, how much they actually pay for medications, certain entities may, in fact, pay less than the VA through their own negotiations. This means that the initiative could, in effect, mean that Medicaid and OhDAP could be paying more, if they’re forced to pay the VA price.

The sponsors of the initiative, AHF and its president Michael Weinstein, fully know that this is the case, which makes this proposal a rather open attempt to force a single pharmaceutical company – Gilead – to reduce its drug prices, as well as to enter into pricing negotiations with ADAP programs.

Gilead, the maker of the popular drugs Stribild (HIV), Truvada (HIV, PrEP), Sovaldi, and Harvoni, have weathered a fair amount of criticism in the last few years, mostly in relation to its drug pricing practices. While they have, in the past, attempted to allay the fears of lower-income patients who were denied coverage, the company went forward with a plan to strictly tighten the qualifying requirements for their HCV Patient Assistance Program (PAP), Support Path, in July of this year. This was largely in response to the continued, yet unofficial, practice by insurance companies of sending their client to Support Path to get their medications for free, straight from Gilead, after agreeing to reduced prices and rebates.

What frustrates me the most about this entire situation is my belief that every publicly-funded entity should be held accountable for how our money is spent, up to and including the specific prices these organizations pay for goods and services. Instead, pharmaceutical companies with virtually limitless resources, all but write Federal and state Trade Secrets statutes themselves; they should just start sending their bought and paid-for elected officials out onto the floor wearing their company logos on their backs. As a result, it’s very unlikely that we’ll see any forward momentum on this issue.



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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Footing the Bill

By Marcus J. Hopkins, Blogger

As a society we need a way of determining what is a reasonable price at the time of introduction of a new drug,” said Stephen Schondelmeyer, a University of Minnesota professor who specializes in pharmaceutical economics. “We have expanded coverage, but we haven’t done anything to control costs on the pricing side.” (Alonso-Zaldivar, 2015)

Truer words are rarely spoken in the world of healthcare coverage. In a time of unprecedented increases in “covered” Americans, the promised “savings” haven’t really materialized, either for payers or for consumers. Rather, the spending on specialty medications has increased so exponentially that both private and public payers are finding themselves faced with difficult choices, when it comes to what coverage can be offered for the amount that consumers pay.

For private insurers, the answers are simple: increase premiums, expand and strengthen prior authorization criteria to restrict access, and place the drugs in the highest available tiers with the highest drug co-pays. For public insurance programs, such as Medicaid, Medicare, and the AIDS Drug Assistance Program (ADAP), the solution is not so clear cut.

For Medicare, specifically, Federal law currently prohibits the program from negotiating with drug manufacturers for lower prices. As recently as February 2015, the Obama Administration requested authority to negotiate prices for Medicare, in large part because of the price of high-cost specialty drugs, such as Sovaldi (Gilead), Olysio (Janssen), Harvoni (Gilead), and Viekira Pak (AbbVie) (Morgan, 2015).

LOGO: Centers for Medicare & Medicaid Services

Photo Credit: Medicare Learning Network

Both Medicaid and Ryan White programs can negotiate for drug prices, but even still, those negotiations are largely kept secret, and the true cost is rarely shared with the public. For that reason, we rely on two measures to express the cost of drugs on the American market: the Wholesale Acquisition Cost (WAC) and the Average Wholesale Price (AWP). Even with those standards in place, nobody actually pays those costs, due to various rebates, negotiations, and other pricing schemes, all of which is available only if you all but threaten them with the comfort of a nice set of thumbscrews.

In fact, getting actual pricing information based on what payers actually pay, often involves Freedom of Information Act (FOIA) requests from government agencies, and threats of lawsuits to get the same information from private insurers. Much of the problem is that no one really wants to show their hand, especially when it comes to the prices that they pay for specialty drugs, because doing so might disrupt some balance of the space-time continuum, creating a paradox, and the entire healthcare system would collapse.

…or maybe, something not quite so dramatic.

It’s likely because openly stating how much everyone is paying for drugs would result in one of two outcomes:

  • Each payer would be able to compare and contrast what they were paying for various drugs, and would thereby be able start a “race to the bottom,” creating a low-bidding war. In addition, the public would be able to see how well payers were bargaining in their own best interests, rather than consumers. In this case, both insurers and drug companies would be on the losing end of the battle, and it behooves them to keep information about payment schemes private.
  • It would be revealed to both the public and the payers exactly how much of the cost drug companies are willing to eat (through rebates and other scenes) just to get their drugs on the market, thus revealing that the whole pricing model companies use to determine drug prices is a farce. In this case, drug companies would be on the losing end, primarily, because they would finally have to publicly justify in quantifiable terms the costs of their medications.

In truth, either scenario could be nothing but a net “win” for consumers. So long as the American healthcare system continues to subsist in an insurance-based market, the only real weapon consumers have against being price gouged is open, honest, and accurate pricing information – a clear explanation of how drug prices are decided, a clear explanation of what each payer is actually paying, and how much drug companies are willing to forego in order to sell more of their drugs.

Without this information being made public, how can there really be a “free market?” How can consumers make a truly informed choice if this information is kept secret? That really is the crux to dismantling the insurance scam – making everyone reveal what they’re actually paying for drugs and services.

What Dr. Schondelmeyer asserted in the opening quote of this piece is absolutely correct: the Affordable Care Act has done a great job of forcing getting people into the health insurance market, but has done very little to deliver the “savings” it promised. We’re still paying more than virtually every other economic superpower for our healthcare, and still achieving subpar results.

Now, private insurers are arguing that the cost of covering these people has become so burdensome [to their profits and bottom lines] that they need to increase premiums by up to 40%. We have effectively handed over clients to private entities without ensuring that people will be able to pay their prices, leaving the “Affordable” part of the law’s title hanging in the wind.

For how much longer can our insurance-based healthcare system continue to operate without imploding upon itself? For how much longer will consumers continue to allow drug and service pricing scams to continue, before determining that there is a better way? Sadly, I don’t think there’s enough interest on the part of Americans to do anything about it…until they’re forced to foot the bill, themselves.



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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