Tag Archives: Medicare

What is WAC and is it Outdated?

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

Every time we mention Hepatitis C (HCV) drugs, we talk about price; specifically, we speak about “Wholesale Acquisition Costs” (WACs), and how that company-designated measure sets the baseline for pricing throughout the healthcare landscape. But, the reality of pharmaceutical pricing is far messier than just the WAC cost. In response to last week’s HEAL Blog entry regarding HCV drugs and Medicare, one quite savvy worker within the public healthcare arena rightly noted that “nobody really pays that price,” which brings up a couple of equally (if not more important) questions: (1.) If nobody pays that price, why is it even used; and (2.) Why does no one actually pay those prices?

A WAC “…is, with respect to a pharmaceutical or biological, the manufacturer’s list price for the pharmaceutical or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of pharmaceutical or biological pricing data (PharmaLink, n.d.).” That definition is pretty loaded, because it really spells out the ingredients (and the problems) in the drug pricing sausage that is so frustrating to advocates and patients, alike. What one program, insurer, or individual pays for drugs may or may not be the same price paid by another, and that makes determining the actual cost of drugs problematic.

Flow chart demonstrating the confusing nature of the Wholesale Acquisition Costs

Photo Source: National Academy of Sciences

Pharmaceutical companies like to bandy about the phrase, “What the market will bear,” in relation to how they price their products, which isn’t really a fair statement, because they essentially have a captive market. They know that the products they manufacture are going to be purchased by government healthcare programs like Medicare, Medicaid, Ryan White Part B, and the Veterans Affairs (V.A.), and that those programs are essentially (and sometimes literally) required to provide their products to their clients. Outside of the U.S., in more civilized First World healthcare climes, private insurers are essentially nonexistent, as Universal Healthcare Coverage is the norm, and they can set the price they’re willing to pay, manufacturer be damned. So, “what the market will bear” really ends up meaning, “How much we can get U.S. government programs to pay without kicking up too much of a fuss.”

When the aforementioned reader says that we know it to be the case that “nobody really pays that price,” he’s 100% correct. Medicare programs are Federally-funded, state-administered programs, meaning that all fifty states, the District of Columbia, and the territories all have the ability to individually negotiate directly with manufacturers to get drug rebates and discounted prices, meaning that each individual program may pay entirely different prices, and those prices are not public information, due to existing Trade Secrets laws that prevent that data from being released from official sources. The V.A. automatically gets the “best price,” meaning that they’ll ostensibly pay the lowest price, so they’re not really in the equation. Medicare Part D, however, is a different kettle of fish, because it is essentially a market of private insurers who are reimbursed through the national Medicare program for their expenditures, and price negotiations are, for better or worse, left up to those private insurers’ employees. According to research, while having more insurers on the Part D marketplace lowers costs to consumers, the Medicaid approach of state employees doing the negotiating actually works out to be cheaper than those “Free Market” solutions.

Because the WAC is a baseline measure against which all discounts and rebate agreements are measured, it makes determining the actual end price of drugs very difficult to determine publicly, and frankly, it’s a terrible model for the U.S. to continue participating in if programs are expected to exist in perpetuity. At some point, “what the market will bear” will become “What tuned-in Americans are willing to tolerate.”

References:

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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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Hepatitis C and Medicare Part D

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

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.”

President Donald J. Trump

Photo Source: UPI

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.

References:

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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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Data Analyses Indicate HCV Treatment for All Saves Money; Part 2

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

Last week, HEAL Blog discussed some of the thinking behind a “Treatment for All” paradigm for dealing with America’s burgeoning Hepatitis C (HCV) problem. The argument put forth in the study released in the American Journal of Managed Care (AJMC; Younossi et al, 2017) suggests that adopting a policy of treating every HCV-infected client on government-funded healthcare rosters will ultimately lead to long-term cost savings by reducing the incidence of multiple co-morbidities, such as cirrhosis, hepatocellular carcinoma, and the number of liver transplants. This is a position that advocates (including HEAL Blog) have been arguing for years – since the release of Sovaldi (Gilead) and Olysio (Janssen) in 2013. The pharmaceutical companies who manufacture Direct Acting Agents (DAAs) to treat HCV have been arguing this position, as well.

Read Part 1, “Data Analyses Indicate HCV Treatment for All Saves Money

All of these parties are coming up against the stark reality of the budgetary process. Rather than being calculated based on long-term expenditures, they are calculated using estimated yearly expenditures using the amount of money given to them by the Federal and state governments – resources that are limited, and unlikely to increase without significant increases in tax revenues generated by tax hikes (business, corporate, and personal) or some unexpected increase in profits that comes out of nowhere. Medicaid directors and drug purchasing officials have repeatedly made the claim that treating everyone on their rosters infected with HCV will outstrip their pharmacy budgets several times over. Tom Burns, head of drug purchase for the Oregon Health Authority in 2014, said in an interview that “…Oregon can afford to wait” to see how other HCV drugs develop, and that “…the vast majority [of the 5,600 clients infected with HCV] could wait while we figure out a policy that doesn’t bankrupt this state” (Millman, 2014).

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

Affordable Healthcare

This line of thinking has been echoed by virtually every state’s Medicaid program. The Centers for Medicare and Medicaid Services (CMS), however, didn’t buy that line, and in 2015 issued an official guidance that reminded Medicaid programs that they are required by law to cover these drugs under section 1927(b) of the Social Security Act (CMS, 2015). Furthermore, states facing litigation related to treating HCV patients have found little sympathy from the Judicial Branch. In May 2016, Federal U.S. District Court Judge John C. Coughenour ordered Washington state’s Medicaid provider to cover HCV drugs for all patients by granting a preliminary injunction that forced the state Health Care Authority (HCA) to halt a 2015 policy that restricted access to the drugs based on a fibrosis score (Aleccia, 2016). This injunction was in response to a class action lawsuit against Apple Health, Washington’s Medicaid program, on behalf of two clients and 28,000 other enrollees. Another Federal U.S. District Judge, Robert Mariani, ordered the Pennsylvania Department of Corrections (DOC) to provide HCV treatment to well-known inmate, Mumia Abu-Jamal (Moran, 2017). While his ruling applied only to Abu-Jamal, the judge went on record, stating that the DOC’s interim protocol for treating HCV “…presents deliberate indifference to the known risks which follow from untreated chronic Hepatitis C.”

The report in the AJCM found that if Medicaid in the U.S. continues its use of restrictions to treatment, the estimated total cost of treating the HCV cohort will come to $9.7 billion, with the majority of costs (50.4%) attributable to downstream costs of care (i.e. – hospitalization costs, outpatient costs, and non-Harvoni pharmacy costs). Conversely, treating all Medicaid patients with Chronic HCV using Harvoni led to a 39.4% savings – $3.8 billion – over the model time horizon and decreased the relative proportion of total costs attributable to downstream costs of care to 18.3% (Younossi).

While most of the cost savings were related to downstream medical cost offsets, even the pharmacy costs attributed to Harvoni treatment over non-Harvoni treatment decreased 2%, from $4.84 billion to $4.75 billion. This is due in part to the 9,618 patients in the cohort potentially eligible for an 8-week regimen of Harvoni to achieve a Sustained Virologic Response (SVR), rather than the traditional 12-week regimen. Treating all Medicaid patients with Harvoni led to a 19.8% savings per SVR, given that earlier treatment of HCV resulted in better health and cost outcomes (Younossi).

Though this analysis is a fantastic tool, another harsh reality is the [potential] repeal and replacement of the Affordable Care Act (ACA). It was announced, last week, that the Fiscal Year 2018 budget resolution has been put on hold, pending the repeal of the ACA (Shutt, 2017). This means that any type of Federal budgeting process for Medicaid (as well as the Centers for Disease Control, and other domestic spending programs) has stalled for the foreseeable future, leaving virtually everyone involved in those organizations in the lurch, waiting for their fates to be handed down to them. Most HIV and HCV advocates, however, are heartened by Tom Cole (R-OK) saying, “We thought it was wrong when Democrats said for every increased dollar on defense, you had to increase domestic. It’s just as wrong to say for every increase on defense you have to cut domestic.” He finished that statement, however, by saying that he believes those increases should be offset on “…the entitlement side of the ledger.” That statement is considerably LESS heartening.

References:

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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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Veteran’s Administration $1.5 Billion for HCV to Expand Coverage

By: Marcus J. Hopkins, Blogger

Veterans Administration logo

Photo Source: VA

The Veteran’s Administration (VA) has requested $1.5 billion in the Fiscal Year 2017 (FY2017) budget in order to treat more veterans for Hepatitis C (HCV). This move comes after the announcement in March that the VA would be expanding treatment protocols to include all veterans in its health system with the virus, regardless of age or progression into liver cirrhosis (Kime, 2016). This coverage expansion was covered in the HIV/HCV Co-Infection Watch Report in April, and was recently reported in the Journal of the American Medical Association (JAMA) in the September edition.

With more than $2 billion appropriated for new HCV drugs during the past two years, the VA has treated 65,000 veterans for the virus (Wentling, 2016). One of the primary concerns expressed by veterans’ groups – Disabled Veterans (dot) Org, in particular – has been the rationing of care to only those whose liver fibrosis scores met what they feel are arbitrary measures that focus more on saving money, rather than saving lives. Tom Berge, head of the Vietnam Veterans of America (VVA) health care panel, went so far as to say the following: “When I found out that they were prioritizing the treatments, that’s when I said they were death panels (Krause, 2016).” The “death panels” claim is reminiscent of political arguments against single-payer or Universal healthcare coverage, wherein bureaucrats essentially decide which people would live or die, based on a set of predetermined markers.

The rationing of treatment to the sickest or most financially able to pay is nothing new – public and private insurers and payers, alike, have utilized these formulae and markers in an effort to reduce costs while still maintaining the visage that they “cover” drugs, even if actual utilization on the part of patients is low. With HCV drugs, in particular, many Medicaid and ADAP programs have indicated in their respective Preferred Drug Lists (PDLs) and formularies that they cover the new Direct Acting Agents (DAAs) that are currently considered to be the Standard of Care (SOC) for HCV, only to have the Centers for Medicare and Medicaid Services (CMS) release a guidance in November 2015 reminding Medicaid programs that “cost” was not an acceptable reason to deny coverage. Certain states – Arizona, for example – openly stated that they would not be following said guidance.

The VA currently estimates that 107,000 vets have undiagnosed or untreated HCV (Wentling, 2016), with Vietnam War-era veterans born between 1945 and 1965 being one of the demographics most likely to have been infected, as this generation (generally referred to as “Baby Boomers”) may have been the recipients of blood transfusions and organ transplants prior to the discovery and screening of blood for HCV. It wasn’t until 1992 that widespread screening of the blood supply began in the United States.

While this demographic is a target for HCV screening, most new HCV infections occur as a result of sharing syringes or other equipment to inject drugs (Centers for Disease Control and Prevention, 2016). Veterans are particularly susceptible to prescription opioid and heroin addiction. According to VA officials, roughly 60% of those returning from deployments from current engagements in the Middle East and 50% of older veterans suffer from chronic pain. That’s compared to about 30% of Americans, nationwide. Additionally, veterans are twice as likely to die of accidental opioid overdoses than non-veterans. Prescriptions for opioid drugs rose by 270% over a twelve-year period by 2013 (Childress, 2016). This places veterans at particular risk of contracting HCV as a result of Injection Drug Use (IDU).

Though the cost of treating HCV are currently astronomical, on a national scale, the VA does benefit from a requirement that drug manufacturers provide the system with the “best price,” though those discounts are currently shielded by Trade Secrets laws that specifically forbid programs from publicizing any deals, discounted prices, or pricing arrangements struck between pharmaceutical companies and payer programs. But, we have asked of our veterans that they make sacrifices to ensure our continued freedom and safety; is any price too high to ensure their continued health and wellbeing if and when they return from battle? I think not.
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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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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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Behind the Scenes at Hepatitis, Inc.

By: Marcus J. Hopkins, Blogger

The Hepatitis Appropriations Partnership (HAP) and the National Viral Hepatitis Roundtable (NVHR) hosted a panel discussion on Wednesday, July 29th, 2015, in Washington, D.C. to discuss the burgeoning Viral Hepatitis crises in the United States. The purpose of the roundtable was bring together Hepatitis advocacy groups, national organizations, drug manufacturers, and government officials to help attendees gain a better understanding of the political, medical, and social landscapes upon which the Hepatitis game is played.

If that last statement sounds glib and slightly nefarious, it should – the meeting, at times, became quite contentious, as these roundtables frequently do. Any time you put a large number of people together in one room, each of whom answer to different stakeholders, tempers tend to flare, emotions run high, and civility can take a backseat. This is the nature of the high stakes game of addressing infectious disease action plans, policies, and expenditures.

Perhaps the biggest issue that faces those attempting to address Viral Hepatitis (VH) is one of clarity – virtually every representative in the room made some argument that their biggest hurdle was the lack of comprehensive information of one sort, or another.

From the Centers for Disease Control and Prevention (CDC) Division of Viral Hepatitis’ perspective, the information gap centers primarily around the lack of consistent surveillance techniques, data, and reporting:

Each state collects data about Hepatitis differently…if they collect data, at all. Because the CDC has yet to specifically define how to track VH, each state has its own interpretation of how they monitor and account for the virus. Some states track acute Hepatitis, others track chronic cases, and some simply don’t track the virus at all. As a result, attempting to gain a realistic and accurate understanding of the breadth and scope of the epidemic is incalculably difficult.

From the perspective of the Centers for Medicaid and Medicare Services (CMS), the information gap centers around the cost of treatment:

What differentiates Medicaid from Medicare is that the latter is a national federal program, making it much easier to plan for the cost of treatment. Because Medicare is legally prohibited from bargaining for better drug prices, the cost of drugs is stable, across the board – it is easily quantifiable and expenditures can be accurately tracked.

Medicaid, however, does not benefit from a national infrastructure – it is 56 different programs, each of which has its own negotiated pricing agreement with pharmaceutical companies. This means that there could ostensibly be 56 different prices being paid for the same drug. This makes quantifying the cost the Medicaid on a national level much more difficult.

Complicating the process is the fact that publicly releasing the prices being paid by each Medicaid program is prohibited by law. As a direct result, Federal monitoring of drug costs must rely on antiquated pricing averages – Average Wholesale Cost (AWC), Wholesale Acquisition Cost (WAC), and National Average Drug Acquisition Cost (NADAC) – which do not accurately reflect the prices that are actually being paid.

An additional frustration for CMS is the lack of transparency on the part of pharmaceutical companies. These private entities are extremely secretive about the formulas they use to determine the price of their drugs. This lack of clarity has become a hot topic, in recent years, thanks in no small part to the high price of HCV therapies.

Participants at the meeting, when attempting to ask why releasing the actual prices being paid by Medicaid programs, were met with the argument, “Well, the pharmaceutical companies aren’t being transparent about why their drugs cost so much.”

These types of non-answers leave everyone with a bad taste in their mouths. The CMS is unhappy, because advocates and organizations keep needling them for information they cannot legally release;

Advocates are frustrated, because no one will explain why it’s illegal to release this information to the public, as Medicaid is a taxpayer-funded program, and this information should be made available without filing a Freedom of Information Act (FOIA) request.

Hepatitis organizations are frustrated by the lack of accountability this type of answer exemplifies. CMS’ response attempts to take the onus of responsibility and place it directly upon pharmaceutical companies, despite the argument made by pharmaceutical companies that, as private entities, they are entitled to their proprietary information. As a result, HCV organizations find themselves attempting to get specific pricing answers from both private and public entities, both of whom redirect those requests to the other.

A big issue that kept resurfacing throughout the roundtable was the lack of clarity around why the Medicaid Prior Authorization (PA) requirements are more rigorous for HCV therapies than for virtually every other disease or condition. Again, because there are 56 different Medicaid programs, each program has its own set of PA requirements, some of which have come under heightened scrutiny.

One of the more onerous requirements involves behavioral or lifestyle prerequisites in order to receive approval for treatment. According to several representatives present, some of these requirements include abstinence from alcohol consumption and/or intravenous drug use. The apparent thinking behind these restrictions is that treatment is too expensive to “waste” on clients who will simply be re-infected at a later date.

This places HCV in the unique position of being one of the only conditions for which treatment is predicated upon whether or not those infected are exhibiting certain behaviors. Perhaps the best comparison made by one of the participants was to HIV treatment – how would the conversation go if receiving treatment for HIV was predicated upon whether or not the client abstained from sexual activity?

From the Office of Management and Budget (OMB), the lack of clarity revolved around the disparity in funding levels between HIV and VH:

In a very informative set of slides, the OMB representative provided estimated infection rates – HIV – 1.17 million; VH – 3.6 million – versus the funding levels for those respective diseases. Funding for HIV far outstrips that for VH, despite the cost of a curative treatment being lower (meaning a one-time cost, for most patients, versus a lifetime expenditure for many Medicaid/Ryan White clients).

What the OMB rep also accurately pointed out is that, in the world of disease funding, every cause is very protective of the money funneled to their particular cause, and HIV advocates, in particular, are loathe to even discuss the possibility of reallocating HIV funds for us in VH initiatives.

From my own perspective, the incredulity expressed over the spending disparity between HIV and VR is somewhat misplaced. We’ve been dealing with HIV for almost 35 years, and for the first half of those years (at least), HIV was seen as a death sentence for anyone unfortunate enough to become infected. It should, therefore, come as no surprise that more funds are allocated for HIV, than for VH.

Additionally, the viruses have fundamentally different “infection-to-death” timelines, when left untreated. HCV, as an example, is a relatively slow-acting disease – as one person so aptly phrased it, “When someone is diagnosed with HCV, the narrative is, ‘They’ve got maybe another 30 years.” HIV, however, poses far greater risks to patients who go untreated, as the nature of the virus leaves its host highly susceptible to death by way of secondary infection.

This explanation, however, rarely provides a true sense of urgency and understanding to people who are not infected with HIV, not involved in the community, aren’t as educated about the virus, or who are only looking at numbers on a page. As many times in as many ways as people can explain the peril, until HIV actually has an impact upon someone, it’s very difficult to comprehend the nature of the threat.

All of these issues of clarity boil down to one significant sticking point – resources are scarce. Neither the Federal nor state governments has the money or the manpower to actively pursue a comprehensive plan of attack on VH issues.

Surveillance is bad, data is incomplete, and, realistically, that situation isn’t likely to change any time soon. Testing, reporting, and tracking all cost money – money that just isn’t there to spend.

Programs tasked with treating or paying for HCV treatments are focused more on immediate, short-term costs, rather than looking at early, fast-acting, easily tolerate curative treatment in terms of long-term savings. With Conservative austerity policies being the flavor of the week, that’s unlikely to change in the current political environment.

Those austere spending policies in place, everyone’s “piece of the pie” is what it is – if you give more money to VH, it has to come from somewhere else, and no one’s willing to forego their own dollars. And, regardless of how many people say we “…need to ask for a bigger pie,” the political reality is that we’re more likely to get a smaller pie, after the dust settles. That is unlikely to change.

It’s a sad reality to face, but the big issue is money, on every front, and no one has a clear picture of how to get more of it; moreover, without transparent pricing information, we’re unlikely to wind up with a clear strategy for how to spend what money is there.

Lest one think that I left this roundtable feeling enervated and hopeless, that’s not the case. Rather, I find myself more dedicated to continuing the course of my research efforts, and doing my best to refine them; to finding better ways to get around the CDC’s lack of clear reporting requirements in order to provide a hopefully clearer picture of the “real” state of the HCV epidemic in the U.S. For those of us who have dedicated our lives to serving the HIV community, transitioning over to HCV is a natural step, resources be damned.

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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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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.

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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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