Harvard Law decries Medicaid drug practices, spurs class-action suit in Washington state

Originally published by Boston Business Journal on February 19, 2016. Written by Jessica Bartlett.

Harvard Law School has filed a class action lawsuit against the state of Washington’s Medicaid program, challenging a provision that denies expensive Hepatitis C to many patients enrolled in the program.

The university also has hinted that its Center for Health Law and Policy Innovation may also take legal action against Medicaid insurers in Massachusetts, where restrictions on using expensive hepatitis C drugs are common.

The Washington lawsuit’s proposed class of plaintiffs includes Harvard as well as patients who say they were denied hep C medications as mandated by the state’s Medicaid program. The Washington State Health Care Authority currently restricts access to certain Hepatitis C drugs, such as Harvoni, to Medicaid members only with severe liver damage.

“Washington is in our view a first step in solving a much bigger national problem,” said Kevin Costello, director of litigation for the Center for Health Law and Policy Innovation at Harvard Law School. “It’s a small piece of a large puzzle. There are plenty of other points, both litigation and policy and regulation-based, that have to be worked on at the same time.”

The hepatitis C drugs, known as direct-acting antiviral medications, have gained notoriety not only because they cure people affected with the disease, but because of their lofty pricing. For example, a course of treatment for Harvoni runs $94,500. Harvoni is made by Gilead Sciences (Nasdaq: GILD).
The lawsuit was filed jointly with Columbia Legal Services and Sirianni Youtz Spoonemore Hamburger. Costello estimates that there are several thousand Washington residents on Medicaid who have been denied access to Hepatitis C drugs.

The lawsuit is the second to be filed nationally against a state Medicaid program, Costello said, noting there is also a lawsuit against Indiana’s Medicaid program. Harvard is not involved with that case.

Harvard said additional legal action may be targeted at local Medicaid insurers, some of whom have restrictions for direct-acting antivirals. Costello said patients enrolled directly through MassHealth have unrestricted access to drugs like Harvoni, however patients covered by managed Medicaid insurers restrict access.

“It’s not OK to MassHealth members — one in fee for service and one in a managed care organization — to have disparate benefits provided to them because of the avenue they receive their benefits. We think that violates the law,” Costello said.

The Harvard Center for Health Law and Policy Innovation, as part of the Massachusetts Viral Hepatitis Coalition, wrote a letter to Massachusetts Attorney General Maura Healey on Jan. 11 requesting she investigate the benefit differences for MassHealth members. Costello said the Center is also investigating other enforcement options.