States Worry Price of Hepatitis C Drug Could Break the Bank

A new breakthrough drug for treatment of hepatitis C is raising concerns among state Medicaid officials that despite its revolutionary effectiveness, it is simply unaffordable within current budgets, The Washington Post reported.

The drug, Sovaldi, costs $84,000 per person for a 12-week treatment course. Oregon officials estimate the state would be on the hook for $360 million to provide for the Medicaid beneficiaries affected by the disease, a cost comparable to what the state spends on all prescription drugs combined that it administers to roughly 600,000 people.

Oregon and several other states are considering limiting access to the drug, which would treat the disease affecting more than 3 million people in the United States.

Though the healthcare market has often absorbed expensive specialty drugs, the issue of Sovaldi is different because the disease disproportionately affects lower-income people who qualify for government assistance.

With the advent of Obamacare, the costs will be compounded as millions more people will qualify under the expansion of Medicaid. The example of Sovaldi comes in the context of a broader debate about how far the government should go to make sure the poor have access to the best available treatments, the Post reported.

"The purpose of healthcare and the purpose of the Affordable Care Act was supposed to provide — and now mandates — access to quality and affordable treatment," Ryan Clary, executive director of the National Viral Hepatitis Roundtable, a patient group partly sponsored by drugmakers, told the Post.

"They're now finding that they're not able to get cured for the condition that'd been keeping them from being in the healthcare system."

Hepatitis C kills roughly 15,000 Americans each year and is most commonly spread through needles, leading to chronic liver disease, cirrhosis, or cancer, if left untreated.

Before Sovaldi, the only treatment for hepatitis C was through a combination of daily drugs and up to 48 weeks of weekly injections with intense negative side effects — with the cure rate just 50 percent, according to the Post.

By comparison, Sovaldi's shorter treatment course is more manageable, and has far fewer severe side effects, according to the Post. And some argue that despite its initially high price tag, there will be cost savings over the long term as patients will avoid expensive hospitalizations and costly liver transplants.

The makers of the drug, Gilead Sciences, believe the drug's effectiveness will eventually outweigh cost concerns, even as insurers and lawmakers are scrutinizing its pricing and putting pressure on the company to justify it.

"We believe that over time the healthcare system will save a lot of money by these patients being healthy again," John Milligan, president and chief operating officer of Gilead Sciences, said on an earnings call Wednesday night, according to the Post.

For the time being, Oregon's Medicaid program is administering the drug to the sickest patients while it considers a policy that avoids "bankrupting" the state, the Post reported.