Is Medicaid Denying a Life-Saving Cure Based on Cost?
Policy + Politics

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

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A new study has found that the majority of state-run Medicaid programs are creating formidable barriers to patients with the potentially deadly Hepatitis C virus from being treated with new wonder drugs that can cost as much as $1,000 a pill. The joint study by researchers from Harvard Law School, Brown University’s Department of Medicine, Rhode Island’s Miriam Hospital, and the Kirby Institute of Australia was published Tuesday in the Annals of Internal Medicine.

The study shows that 74 percent of the 42 state Medicaid programs for which information was available allow the drugs to be used only when Hepatitis C has already caused liver damage or has advanced to the even more serious stage of cirrhosis. Additionally, the vast majority of states and the District of Columbia include drug- and alcohol-based restrictions on payments for the drug, including abstinence and drug screening.

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The report is the most authoritative evidence to date that government officials struggling with mounting drug costs are being forced to make life and death decisions over who can qualify for the new drug treatment and who can’t. About 3.2 million Americans are infected with Hepatitis C – although for many the symptoms haven’t materialized yet – and every year there are about 17,000 new infections, according to government figures.

Without treatment, the Hepatitis C virus can result in liver failure, liver cancer or even death.

Robert Greenwald, a professor at the Harvard Law School’s Center for Health Law and Policy and a co-author of the study, said that he began the research with the idea there were restrictions in place but that he didn’t anticipate the breadth of these restrictions.

“I think there is evidence that they are rationing based on cost,” Greenwald said in an interview on Tuesday, adding that “the sad reality” is that states are withholding treatment to many despite receiving rebates or discounts from the drug manufacturers of 23 percent or more.

Related: Cash-Strapped VA May Start Rationing Some Treatments

“The real story here is that we have this tremendous opportunity,” Greenwald said. “We have a cure for the number one communicable disease killer in the United States. More people die from HCV than any other communicable disease in this country ... and yet we have failed to develop a national plan and state plan to make sure we are really promoting access to this cure.”

Since the U.S. Food and Drug Administration began approving the new specialty drugs in December 2013, state-run Medicaid programs, Medicare, the Department of Veterans Affairs, the federal prison system and other government agencies have reported huge increases in spending to provide the new drugs to low income Americans, seniors, veterans, prison inmates and others.

Greenwald and other health care experts contend that most Medicaid coverage restrictions for Sovaldi violate federal Medicaid law, which requires states to cover drugs consistent with their FDA labels.

"Federal Medicaid law requires coverage, yet reimbursement criteria for Medicaid programs effectively deny access," Lynn E. Taylor, director of the Miriam Hospital’s HIV/Viral Hepatitis Coinfection Program at Brown University and co-author of the new study, said recently. "The denial of treatment by most states violates the spirit of the law.”

Related: Costly Hepatitis C Drug Makers Face New Fire 

Matt Salo, executive director of the National Association of Medicaid Directors, denied that the states were in violation of the law, but agreed with the basic findings of Greenwald’s report. “I think it’s a fair assessment of what the states are doing,” he said. “The only piece that we would take issue with is their conclusion that it somehow violates Medicaid law.”

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