Lawsuits Force States to Give Outrageously Expensive Drugs to Medicaid Patients
Policy + Politics

Lawsuits Force States to Give Outrageously Expensive Drugs to Medicaid Patients


Many states, still reeling from the $100,000 price tag of providing biologic drugs to combat the deadly Hepatitis-C virus, continue to restrict access to the drugs to millions of veterans and low-income residents.

However, the preliminary findings of a long-term Medicaid access study released on Monday documented a sharp decline in the number of states that restrict the use of Sovaldi and Harvoni -- the two most effective drugs for treating the disease -- to patients with the most serious advanced stages of liver disease or damage.

Related: Medicaid Spending Could Soar After New Ruling on Hepatitis Drugs

Moreover, many states under pressure from the federal government and the federal courts are loosening up other restrictions, such as denying coverage to patients who continue to abuse alcohol or drugs or who are deemed by physicians to have little chance of benefitting from the costly treatment. The study was produced by Harvard University Law professor Robert Greenwald and the National Viral Hepatitis Roundtable.

Greenwald said in a statement that in comparing the new report’s findings to a 2014 hepatitis C treatment access report he published with a team of researchers, “We find that many states have reduced discriminatory practices.”

For example, of the 34 states with known criteria for obtaining Medicaid coverage in 2014, more than 90 percent or 31 states limited access to Hepatitis-C virus treatment to only those suffering advanced liver diseases or cirrhosis. By comparison, of the 43 states with known criteria in 2016, just 22 states required that patients have at least advanced “fibrosis” or liver disease to qualify for treatment. But that was still half of all applicants who sought Medicaid coverage for treating a potentially lethal disease.

“Disappointingly, we also find that restrictions persist in many states, despite our hope that with established treatment guidelines, clear guidance from the CMS [Centers for Medicare and Medicaid Services], and successful litigation, we would see far more progress in eliminating discriminatory hepatitis C treatment restrictions,” he added. 

Related: Budget-Strapped States Are Rationing Hepatitis-C Drug Treatment 

State Medicaid officials generally bridle at the suggestion that they are endangering the lives of many seriously ill Americans by rationing the availability of Sovaldi and Harvoni, in order to control their overall annual costs of providing health care to lower income patients.  Yet soaring drug costs have become an overriding consideration for many state Medicaid officials and have triggered calls in Washington for a crackdown on the drug industry’s marketing practices.

Thirty-three states spent $1.3 billion a year before rebates to treat the disease with Sovaldi, according to data released in December 2015 by Sens. Charles Grassley (R-IA), and Ron Wyden (D-OR) after an 18-month investigation. Those costs have continued to mount, although precise figures are hard to come by.

Gilead Sciences, the manufacturer of the biological medication, boasts of Sovaldi and Harvoni cure rates of as high as 95 percent, in comparison with 40 percent for less advanced treatments. But those drugs can cost between $83,000 and $95,000 retail for a full course of treatment. That forced many states to curb their expenditures by imposing tougher criteria to qualify for the drugs.

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

“By requiring patients to demonstrate serious liver damage before they can be treated for HCV, Medicaid programs are forcing individuals to wait until their health worsens in order to access the cure for HCV,” according to the new report.

The new study credits states with becoming more transparent in disclosing the ground rules they use for determining who can qualify for the Hep-C drug treatment. However, the authors give most of the credit to the CMS and the courts for pressuring state Medicaid programs to loosen their criteria for providing Hep-C treatment.

“States that have reduced or eliminated restrictions have done so as the result of litigation, threat of litigation, or strong advocacy by community leaders and health providers,” Ryan Clary, executive director of NVHR and co-author of the report, told The Fiscal Times. “The CMS guidance has been instrumental in putting states on notice and for advocates to use when pressing for expanded access. Many other states continue to ignore or reject the CMS guidance.” 

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

In a groundbreaking ruling last May, a federal judge in Seattle held that Washington state’s Medicaid system must end a year-old policy allowing only patients with the most severe cases of hepatitis C infections access to the relatively new but very expensive treatments.

The preliminary order came in response to a class-action lawsuit filed in February on behalf of two clients of Washington’s Medicaid program known as Washington Apple Health and nearly 28,000 other Medicaid enrollees suffering from various states of hepatitis C.