At The Crossroads: How Will Medicare Grapple With Hep C?

Nov 21, 2014

My recent story about the high cost of new hepatitis C treatments focused on the difficulty of deciding who gets these new drugs now and who has to wait. That's because, while new drugs like Sovaldi and Harvoni (both made by Gilead) promise to cure a lot of people, they're so expensive we simply couldn't afford to treat everyone who's infected right now. I looked at how Rhode Island's Medicaid agency is grappling with this question, by restricting treatment to patients with the most advanced liver disease, and placing some other requirements on patients, such as being drug free for at least six months prior to being approved for treatment.

All the experts I've been speaking with for this series tell me that Medicaid covers a disproportionate number of people infected with hepatitis C; it's a disease, in many ways, of the disenfranchised. But it's also been called the disease of a generation, baby boomers - people born between 1945 and 1965 (and if that's you, get tested!). They'll soon age into Medicare.

The costs of not treating hepatitis C could mount as well. In the same issue of Health Affairs, another analysis found hospitalizations from untreated hepatitis C tripled between 2004 - 2011.

And that's a challenge the program will have to deal with sooner rather than later, one that's been overlooked in the discussion about the high cost of new hepatitis C treatments, said Tricia Neuman, senior vice president of the Kaiser Family Foundation and director of the program on Medicare policy.

Neuman says the concern is that Medicare will soon have to bear even more of the cost of treating hepatitis C. She penned an analysis in the journal Health Affairs, recently, and I caught up with her about her findings.

“There are an estimated 350,000 people on Medicare with hepatitis C," Neuman told me. "Medicare is encouraging people to get tested for hepatitis c. And as baby boomers age onto Medicare, if they haven’t been treated and cured before they’ve aged on to the program, there will be even more people on Medicare with hepatitis C.”

Costing billions of dollars, depending on how many get treated. What’s more, the federal government is not allowed to negotiate drug discounts for Medicare. Not so with Medicaid, which gets an automatic 23 percent discount. And the VA recently negotiated a 44 percent discount on the drugs from Gilead.

So Neuman thinks Medicare could be facing some tough decisions soon.

She estimated that if a certain percentage of boomers gets treated while on Medicare, the new drugs could cost between $2 - $6 billion dollars.

That doesn't paint the full picture, though. The costs of not treating hepatitis C could mount as well. In the same issue of Health Affairs (October 2014's issue about the rising cost of specialty pharmaceuticals), another analysis found hospitalizations from untreated hepatitis C tripled between 2004 - 2011. Seventy seven percent of those hospitalized were boomers. If you look at total charges for hospitalizations in which the primary diagnosis was hepatitis C, total spending is up to $3.5 billion a year. But if you look at total spending on hospitalizations for advanced liver disease (cirrhosis, for example), the primary cause of which is hepatitis C, spending is up to $70 billion a year.