At The Crossroads, Part 4: New Hep C Drugs Promise A Cure, For A Big Price

Nov 20, 2014

This year marks the 25th anniversary of the discovery of the hepatitis C virus. Since then, people with hepatitis C have had limited – and not very effective – options for treatment.

Until now.

Revolutionary new treatments have hit the market in just the last few months. But they’re so expensive health insurers are balking at the price.

Part four of our series “At the Crossroads: The Rise of Hepatitis C and the Fight to Stop it” looks at the high cost of these new treatments and who’s paying for them.

Kim is 49 years old. She lives in Johnston, Rhode Island. We’re not using her last name to protect her privacy. Every week she makes the short trip to a clinic in Providence for a box of methadone.

“Yeah, it’s a locked box so nobody can get access to the medication. Because it’s very strong.”

The medication helps her stay away from heroin, which she says she quit eight years ago. But while she was deep in her addiction, Kim says she shared needles with friends. She remembers when the doctor diagnosed her with hepatitis C.

“What’s Hep C? I’ve never heard of that one before. Well, we just found out about it ourselves. And we don’t think it’s anything to worry about. And that was less than two decades ago.”

That was a pretty common message about hepatitis C back then. But watching friends succumb to this disease over the years made Kim realize it is something to worry about. Hepatitis C attacks the liver, and can lead to cirrhosis or even liver cancer. It now kills more people than HIV.

“I’ve seen a man close to six-foot three, big guy, whittle down to nothing and die. All because he had hep C. He just suffered. And I don’t want to be the one to have to suffer.”

She might not have to. Kim couldn’t take what’s been the standard treatment for hepatitis C –weekly injections of a drug called interferon – because of the side effects. Also because interferon fails more than half of patients who take it. But as of this year there are new treatments that Kim could take, treatments that would probably cure her. If she could get them. For the moment, it’s not likely. Kim’s insurance –Medicaid - is only approving the new drugs for people with the most advanced liver disease from hepatitis C. And Kim’s not there…yet.

“That’s like picking and choosing, who am I going to save today. Who should I give CPR to? I have four people here who have had a heart attack, who should I give CPR to? It doesn’t make sense.”

It doesn’t make sense to people who have been living with a chronic, sometimes fatal, infection for decades. Not when there are unprecedented new options on the table. The FDA recently approved several new drugs to treat hepatitis C. They’re called direct-acting antivirals, which means they target the hepatitis C virus, rather than using a more roundabout route to fight the infection. It’s still early days for these new drugs, but reports about their effectiveness – with cure rates of more than 90 percent – are tantalizing health professionals and patients alike.

That cure comes at a steep price. Sovaldi costs $84,000 dollars for a 12 week course. Harvoni costs $94,000 dollars for a full course. Both are made by pharmaceutical giant Gilead.

“Gilead has put Medicaid agencies and other insurers and other providers of medical services into a very tough position," said Deidre Gifford, MD, director of Rhode Island’s Medicaid agency.

She says Gilead has put her in a tough position because of the number of people on Medicaid who have chronic hepatitis C, and could benefit from these new drugs. But the state simply doesn’t have the $220 million dollars she estimates it would cost to treat them all now. The only option, she says, is to ration the treatment.

The FDA has approved dozens of so-called specialty drugs recently. Most are costlier than standard treatments, and most target a relatively small patient population suffering from a rare condition. But hepatitis C is far from rare.
Credit Jake Harper / RIPR

"We need to weigh the calculus of treating everybody versus treating those we know are going to go on to develop complications from the infection. And certainly the price that Gilead has chosen to put on this medication is unfortunately part of that calculus at this point and time.”

At a recent hearing in the Rhode Island statehouse, Gifford testified her agency will need to spend about $50 million dollars on hepatitis C treatments in 2015.

“As you know, the cost for these new drugs is significant….”

She told lawmakers the cost of these drugs is the primary reason her agency will be over budget. Lawmakers asked, can we get a break on the price? By law, Medicaid gets an automatic 23 percent discount. Gifford testified she and other states have been trying to negotiate an even better deal but that Gilead isn’t cooperating. In an emailed statement Gilead said Rhode Island “has been extended a range of supplemental rebates for consideration.” In other words, the company has offered some additional discounts on its latest drug, Harvoni, but  it wouldn’t say how much of a discount, or what kind.  Bottom line, the company says, their drugs offer a cure for a price that’s lower than some of the standard, less effective treatments. And less than the cost of not treating hepatitis C at all.

But with millions of Americans living with chronic hepatitis C, many of them covered by Medicaid, most states will find it impossible to pay for the drugs to treat all of them, right now. So Medicaid agencies across the country are grappling with these questions: Who gets the medications? Who has to wait? How do we decide?

One way is to put the sickest patients at the top of the list, and ask others with less advanced liver disease to wait. Rhode Island is also limiting who can prescribe these medications, says Gifford.

“So in order to prescribe this medication you need to submit an application to the state.  And the application talks about what your specialty is.”

Gifford says prescribers must be liver specialists or have a lot of experience treating hepatitis C. Plus, patients will be asked to sign a contract saying they’ll stick with the treatment.

“We are also asking that if an individual is known to have an issue with alcohol abuse or injecting drug use that that individual be engaged in treatment prior to receiving the medication.”

...Or be drug free for at least six months. The policy is even stricter in other states. Pennsylvania requires 12 months without drug use, and so does Illinois. Some states require toxicology screening to confirm a patient is drug free. These requirements have stirred the pot. Patient advocates say it’s discriminatory, that we wouldn’t ask a lung cancer patient to give up cigarettes, or a patient on expensive heart medications not to eat cheeseburgers.

Meanwhile, patients are waiting. And an everyday army of nurses does battle with the mountain of paperwork it takes to get them the new drugs. Providence infectious disease nurse Sheila Tumilty sorts through pages of prior authorizations, a form most insurers require before approving the drugs.

Nurse Sheila Tumilty in her clinic in Providence, RI.
Credit Kristin Gourlay / RIPR

“When I’m finished with one person’s file, it ends up being a pretty thick stack of papers.”

Multiplied by all her patients in this busy clinic, and it’s reams of paperwork.

“It’s everything from the original script, all the way through depending on what their needs are prior authorization forms, sometimes clarification forms, medical necessity letters…”

She’s having some success getting free drugs for patients through pharmaceutical company programs for the poor. But as insurers try to manage the high costs, many more patients must wait their turn. The situation frustrates her.

“It feels like intentional barriers are set up to try to not get these medicines for patients. They make it so complicated and so onerous you could almost see someone saying, ‘Forget it, I’ll wait ‘til something simpler or easier comes out.’ But these folks need to be treated, so…”

So she keeps trying.

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Next up in our series "At the Crossroads," new hepatitis C treatments may be expensive, but are they cost effective?

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This series was supported by The California Endowment Health Journalism Fellowships, a program of the USC Annenberg School for Communication and Journalism.