Budget-Strapped States Are Rationing Hepatitis-C Drug Treatment
Policy + Politics

Budget-Strapped States Are Rationing Hepatitis-C Drug Treatment

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Under the staggering cost of providing a state of the art drug to combat the deadly Hepatitis-C virus, as many as three fifths of state Medicaid programs have imposed tough restrictions on millions of low income patients and veterans seeking reimbursement for the treatment, which can cost as much as $100,000 for a single course of treatment.

Thirty-three states spent more than $1 billion a year to treat the disease with Sovaldi, according to data released last December by Sens. Charles Grassley (R-IA), and Ron Wyden (D-OR). Remarkably, even at that high level, that money could only treat 2.4 percent of Medicaid patients who were infected with the Hep-C virus.

Related: Is Medicaid Denying a Life-Saving Cure Based on Cost?

Although state officials bridle at this being described as pricey drug rationing, many states restrict the use of Sovaldi and Harvoni, the two most effective drugs for treating the disease, to patients with the most advanced cases of liver disease or who can provide certification from gastroenterology or liver transplant specialists that they need the treatment immediately. Medicaid bureaucrats deny the drug to people who continue to abuse drugs or alcohol or who are deemed to have little chance of benefiting from the treatment.

States are saving hundreds of millions of dollars annually by enforcing these drug rationing procedures and say they would bust their budgets if they had to pay for ‘wonder drugs’ to treat every Hep-C patient who applies for prescription drug coverage. Gilead Sciences, which manufacturers both biologic medications, touts cure rates of as high as 95 percent in contrast to 40 percent for less advanced treatments. But Sovaldi and Harvoni can cost between $83,000 and $95,000 retail for a full course of treatment.

Matt Salo, executive director of the National Association of State Medicaid Directors, told Pew Charitable Trust’s Stateline publication this week that having to make those drugs available to all those infected with hepatitis C “would blow up state budgets.”

“We would be spending more on this one drug than all other drugs combined,” Salo said. “There isn’t the capacity to do that.”

Related: Wonder Drugs Blow a $1 Billion Hole in VA’s Budget

But consumer and civil rights advocates who view rationing by Medicaid, Medicare, the Department of Veterans Affairs and other government agencies and programs as a matter of life or death are pushing back by seeking redress in the federal courts.

Stateline says these groups have filed class action suits in Indiana, Massachusetts, Minnesota and Pennsylvania, arguing that state Medicaid programs are obliged by law to cover the medication of any low-income person seeking the medical treatment. That’s because, under federal statute, states can only exclude a drug from its formulary if it is not prescribed for “a medically accepted indication” as determined by the Federal Drug Administration.

"If something is medically necessary, it's medically necessary and must be covered by the Medicaid program," said Gavin Rose, an attorney for the American Civil Liberties Union in Indiana, according to National Public Radio. He is representing Sarah Jackson, a former drug abuser who discovered she had hepatitis but couldn’t persuade Medicaid to cover the cost of a Harvoni treatment.

There are many legitimate reasons for the state and federal government to be parsimonious in funding new biologic drugs – including the possibility that some patients make poor candidates for treatment. Some doctors argue that while new Hep-C drugs can slow down or arrest the spread of the virus, they can’t reverse or undo the damage done to the liver.

Related: Cash-Strapped VA May Start Rationing Some Treatments

Still, creating long waiting lists can be dangerous, as the VA found out the hard way last year following the revelation that scores of veterans had died waiting to see a doctor.

Indeed, if they are put off for too long, “patients with less advanced Hep-C may develop cirrhosis, liver cancer or liver failure, which may necessitate a liver transplant,” according to Stateline. U.S. Centers for Disease Control and Prevention data show that 60 to 70 percent of those with Hep-C will develop chronic liver disease; that one in five will develop cirrhosis and another 20 percent will die of liver failure or liver cancer.

While there’s no way of telling how the court cases will go, one thing going for the plaintiffs is that the federal courts already have set a lower standard for health care in federal prisons, where officials can deliver the drug as they see fit, as long as they don’t demonstrate a “deliberate indifference to serious medical need.”