By: Marcus J. Hopkins, Blogger
HEAL Blog has consistently covered the cost of new Direct Acting Agents (DAA) used to treat Hepatitis C (HCV), as well as the impact those prices have had on state Medicaid and AIDS Drug Assistance Programs (ADAPs). What we haven’t really covered is how those costs have impacted Medicare and the Medicare Part D program.
In addition to writing for HEAL Blog, I also serve as the Project Director for the HIV/HCV Co-Infection Watch. Last year, we looked into expanding our reporting of HCV drug coverage to include Medicare Part D markets, and what we found was that it was simply too much data to fit into an already then-76-page report. In June, I went ahead and looked at coverage for the Part D Standalone drug plans, and wound up scouring 923 different plans across the country and in five territories. What I discovered was that 922 plans covered the two most expensive HCV drugs on the market at that time – Sovaldi and Harvoni (Gilead).
That translates into staggering figures for Medicare Part D expenditures, as outline in reports from the Centers for Medicare and Medicaid Services (CMS). In 2014, spending on the three most-prescribed HCV drugs – Sovaldi, Harvoni, and Olysio (Janssen) – totaled $4.665 billion (CMS, 2016). Preliminary data obtained by the Associated Press (AP) from CMS estimate that the cost of HCV drugs to Medicare in 2015 nearly doubled, coming in at roughly $9.2 billion (Alonso-Zaldivar, 2015). This figure comes despite the introduction in 2015 of HCV therapies with lower Wholesale Acquisition Costs (WACs) than the $87,000 Sovaldi or $94,500 Harvoni.
Since the introduction of Sovaldi and Olysio in 2013, HCV drugs have consistently ranked in the top ten drug expenditures for Medicare Part D, as they have for Medicaid and the Veterans Administration (VA). The primary difference is that both Medicaid and the VA pay lower prices for the drugs as a result of state Medicaid negotiating power and the VA’s “Best-Price” rule that requires pharmaceutical companies to provide drugs at the lowest possible price. Medicare, however, is prohibited from negotiating drug prices as a result of the Medicaid Modernization Act (2003) that established Medicare Part D. One of the main provisions of the Act states that, “…in order to promote competition,” the Health and Human Services (HHS) Secretary “…may not interfere with the negotiations between drug manufacturers and pharmacies and prescription drug plans.”
Democrats have long attempted to pass legislation that would amend this provision, and may have found a new, not-so-secret weapon – President Donald Trump (Tribble, 2017). He has repeatedly stated that he believes Medicare should have this power, much to the consternation of Tom Price, Trump’s own Secretary of Health and Human Services, and Republicans, who have long held that Medicare negotiating drug prices amounts to Federal tyranny, Big Government, and anti-“Free Market” practices. But, even those Republicans are balking at the high cost of HCV drugs.
HEAL Blog will continue to watch in the coming months how this situation plays out, but we can be certain that, like every Trump initiative, the path will be fraught with confusion, disarray, and uncertainty.
- Alonso-Zaldivar, R. (2015, November 13). Medicare will spend $9 billion on Hepatitis-C drugs this year. Washington, DC: The Associated Press. Retrieved from: http://www.pbs.org/newshour/rundown/medicare-will-spend-9-billion-on-hepatitis-c-drugs-this-year/
- Centers for Medicare and Medicaid Services. (2016, August 18). CMS releases new prescription drug cost data. Baltimore, MD: U.S. Centers for Medicare and Medicaid Services. Retrieved from: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-08-18.html
- Tribble, S.J. (2017, March 09). Trump, Dems Look For Common Ground On Drug Prices. Washington, DC: Kaiser Health News: Repeal & Replace Watch. Retrieved from: http://khn.org/news/trump-dems-look-for-common-ground-on-drug-prices/
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.