Some state Medicaid programs continue to restrict access to hepatitis C drugs

Written by Ed Silverman on October 23, 2017; Published by STAT.

Over the past three years, state Medicaid programs have done a much better job of disclosing information about access to expensive hepatitis C medicines and fewer are restricting treatment to patients, according to a new analysis.

In 2014, 12 states did not make public their criteria for treatment, but all 50 states now do so (although one state, New Jersey, does not disclose specifics for treating different stages of the disease). And in the past three years, 17 states dropped restrictions to access based on a patient’s stage of liver disease, which has been a key test for determining treatment. In 2014, all 50 states had restrictions.

Nonetheless, a fair number of states continue to impose various restrictions that impede access to treatment, even though prices for the medicines have started to fall, according to the authors of the analysis, who argue this violates federal law and runs counter to treatment guidelines and a notice from the Centers for Medicare and Medicaid Services (here is a state-by-state report card).

“There is progress, especially when it comes to restrictions for treating advanced liver disease,” said Robert Greenwald, who heads the Center for Health Law and Policy Innovation of Harvard Law School, which conducted the analysis and has filed lawsuits against two state programs over restrictions. “Over 65 percent of states continue to have liver disease restrictions, and nearly one in four states require patients to have advanced liver disease before treatment. It’s not something to be proud of.”

Two years ago, CMS officials warned state Medicaid programs against “imposing conditions for coverage that may unreasonably restrict access” to hepatitis C drugs. Placing restrictions may be “contrary to the statutory requirements” of a federal law that requires state Medicaid programs to pay for all medically necessary treatments, they wrote.

At the same time, the American Association for the Study for Liver Diseases and the Infectious Diseases Society of America issued guidelines that counseled physicians to “treat all patients as promptly as feasible.” However, the groups acknowledged that physicians may have to take into account the cost of the hepatitis C medicines when deciding whom to treat first.

The issue has gotten the attention of the National Governors Association, which is planning a meeting later this year to explore strategies for lowering costs, notably for hepatitis C drugs. Meanwhile, though, patient advocates are angry that federal and state officials are turning an indifferent eye to a substantial public health problem that will linger for years.

Figures vary, but a study released two years ago by the Milliman consulting firm found that, of the nearly 2.7 million Americans living with hepatitis C, about 457,000, or 17 percent, are on Medicaid. To what extent that subsides is uncertain, but Wall Street analysts, for instance, have noted that a groundswell of people who are infected with the chronic disease have already been treated.

But last week, the AIDS Institute, a non-profit that also focuses on hepatitis C treatments, wrote a letter to CMS officials and urged them to enforce the 2015 state notice and prevent state Medicaid programs from restricting access. One point the group makes is that there is a “misconception” about pricing, since at least one newer drug carries a much lower list price, which should ease the strain on state budgets.

The “continued false statements about the price of the cure and its impact on their budgets inject untruths into the debate on drug pricing, while distracting from the fact that people who need treatment are being kept from it,” the AIDS Institute wrote. “If state Medicaid programs want to save money, increasing restrictions is not the answer,” since prices are starting to fall.

The drug, called Mavyret, is sold by AbbVie (ABBV) and carries a $26,400 list price. This is well below the $84,000 price tag for Sovaldi, a Gilead Sciences (GILD) drug that was the first in the new generation of hepatitis C medicines. At the time the $1,000-a-day pill was launched nearly four years ago, the cost alarmed private and public payers, since the high cure rate triggered a wave of people seeking treatment.

Despite arguments that the newest medicines — Gilead subsequently sold Harvoni, and AbbVie also debuted Viekira Pak — would lower long-term health care costs, the near-term expense for treating a surge of people quickly strained budgets. Many state Medicaid directors responded by implementing restrictions which, in turn, prompted the CMS warning and, later, lawsuits against a few states.

Last year, the Washington state Medicaid program was ordered to lift restrictions on coverage in response to a lawsuit filed by state residents who claim the drugs are “medically necessary.” The Center for Health Law and Policy Innovation has been involved in pursuing litigation against state Medicaid programs in Colorado and Missouri. And the American Civil Liberties union filed a suit in Indiana.

“It’s true that we’re in a new environment with significantly lower prices with the new AbbVie drug. And there’s the automatic 23 percent rebate for Medicaid,” says Ryan Clary of The National Viral Hepatitis Roundtable, an advocacy group that backed the new analysis and also accepts industry funding. “But while competition has led to some change, most change has been due to advocacy or litigation.”

We asked the National Association of Medicaid Directors and the Medicaid Health Plans of America, a trade group for Medicaid managed care plans, for comment and will update you accordingly.