Some describe a slew of new hepatitis C drugs as “game-changers” or “revolutionary.” But lawmakers are still waiting to find out their price tag.
OLYMPIA — Just as lawmakers start figuring out how to pay for the prohibitively expensive new hepatitis C drugs described as “game changers,” the treatments may be getting cheaper.
The new medications, which can cure the chronic liver disease, started coming on the market in late 2013 and have had retail costs as high as $94,500.
And because many of the estimated nearly 28,000 hepatitis C patients covered by state health care are poor or in prison, the state has been projected to spend up to $177 million through 2017 on the new treatments.
Costs of new hepatitis C medications
New hepatitis C medications are expected to cure more patients, but are pricey, according to recent projections.
Supplemental fiscal 2015:
Department of Corrections: $8.17 million
State Medicaid: $66 million
Total: $ 74.17 million
2015-17 budget cycle:
Special Commitment Center: $588,000
Dept. of Corrections: $12 million
State Medicaid: $90 million
Total: $102.58 million
Source: Washington state Office of Financial Management
But as other, similar drugs gain approval by the U.S. Food and Drug Administration, the costs for Washington state could come down. One company, Gilead Sciences, has announced it would start providing discounts of an average of 46 percent on one of the drugs, known as Sovaldi, according to a report in Kaiser Health News. Sovaldi previously retailed for up to $84,000 for a full course of treatment; the company’s more recent hepatitis C drug, Harvoni, costs up to $94,500 for a full course of treatment.
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The state does get some discounts, but the possibility of even lower prices would be good news for budget writers. About $74 million of the projected spending is to cover costs in the state’s 2013-15 supplemental budget, but deep discounts could reduce the projected $102.5 million in drug costs for the state for the 2015-17 budget cycle.
The money for hepatitis C must be found just as state lawmakers struggle to come up with funding for court-mandated education and mental-health programs, as well as a voter initiative that called for smaller class sizes.
Not everyone is ready to hail the new treatments as “miracle” drugs. Detractors point to studies showing some patients having relapsed while using some of the drugs.
Others have criticized the drug companies for selling treatments too expensive to be widely made available to patients. At least right now, because of the original cost projections, Washington’s Health Care Authority (HCA) is planning to allow only the sickest patients covered by state health care — most through Medicaid — to get access to the drug.
“If your child got hepatitis C, you wouldn’t want to wait until their liver was scarring before you could treat them,” said Steve Miller, chief medical officer for Express Scripts, a prescription-management company.
Quality of life
Hepatitis C spreads from one person to another through infected blood, and many become infected while sharing drug needles. Advanced patients who develop cirrhosis, or heavy liver scarring, have up to a 5 percent chance each year of getting liver cancer, according to Dr. John Scott, a researcher and professor at the University of Washington’s School of Medicine.
“The only thing you can do at that stage is a liver transplant or they die,” said Scott, a doctor who also practices at Harborview Medical Center’s Hepatitis and Liver Clinic. “And liver transplants are really expensive.”
Scott describes earlier hepatitis C medications, which ranged between $30,000 and $50,000, as “like low-grade chemo.” Those medications also aggravated mental illnesses like depression and gave patients trouble with their blood counts.
In the state prison system, the new treatments are considered a boon to inmates suffering from advanced hepatitis C.
“As far as quality of life and allowing for people to live for years longer, it’s a good thing to do,” said Kevin Bovenkamp, assistant secretary for the health-services division at the state Department of Corrections.
Sovaldi, which the FDA approved in December 2013, is described in the drug company world as a “blockbuster.” In 2014, Sovaldi racked up $10.3 billion in sales, according to manufacturer Gilead’s earnings reports.
In a statement, Gilead called its prices fair and noted that it provides discounts to some patients and drugs free of cost to others who don’t have insurance.
“We believe the prices of Harvoni and Sovaldi reflect the value of the medicines,” read the statement. “Unlike long-term or indefinite treatments for other chronic diseases, Harvoni and Sovaldi offer a cure at a price that will significantly reduce hepatitis C treatment costs now and deliver significant health-care savings to the health-care system over the long-term.”
Though the HCA says it can’t disclose exactly how much the state is paying for such treatments, it already gets about a 20 percent discount on the drugs, according to Dr. Daniel Lessler, chief medical officer for the HCA.
And not all patients need the full 12-week treatment course, bringing the cost down further, according to Lessler.
The state estimates there are 21,000 hepatitis C patients covered through Medicaid, about 4,000 who are state employees, and 2,700 inmates — 16 percent of the state’s prison population. But because of the cost, the HCA is planning to use the drugs only on patients with advanced hepatitis C, including patients with cirrhosis.
In reaching that decision, Lessler said the HCA also consulted with a set of national guidelines, experts within state government, the University of Washington, and medical and pharmacy directors.
That policy proposal will be voted on in a meeting of the state’s Medicaid Drug Utilization Review Board on Feb. 25 in SeaTac.
The director of a watchdog organization says drugs like Sovaldi are overhyped and may not cure hepatitis C as well as claimed.
“This drug tends to be talked about, like, ‘we can cure hepatitis C,’” said Dr. Adriane Fugh-Berman, director of PharmedOut, a Georgetown University Medical Center watchdog project. “But up to a quarter of people [treated] can relapse.”
Fugh-Berman cites a report by the Center for Evidence-based Policy, based out of Oregon Health & Science University. Released in May, the report evaluated studies made on the active component in Sovaldi and Harvoni, known as sofosbuvir. According to the report, “there is evidence that relapse rates may be substantial, ranging from 5 percent to 28 percent even among patients who are fully treated with these regimens.”
That report also criticizes the studies on sofosbuvir that it evaluated. Those studies “were small, included populations that were healthier than the general hepatitis C population, were of short duration and had limited follow-up,” reads the report. “In many of the studies, the manufacturer was responsible for recording and reporting adverse events.”
Lessler describes the center’s report as “an important contribution to the conversation,” but not the only one.
“Beginning in March of last year, virtually every journal that I picked up had new evidence, compelling evidence of the effectiveness” of the new drugs, he said.
Nonetheless, the HCA will be tracking how successful the drugs are and could adjust how it uses the drugs, he said.
The HCA doesn’t yet know whether Washington state will get additional discounts for Sovaldi, according to HCA spokeswoman Amy Blondin.
The HCA is taking rebate proposals from the drug companies to see what kind of prices the state can get, according to Blondin. Those proposals won’t be opened until after the Feb. 25 Drug Utilization Board meeting, after which HCA will do a cost analysis on which treatments should be used.
But, “if we got a large discount, and the Legislature had already budgeted the amount we originally estimated based on our criteria without the rebates, then … we could treat more patients,” Blondin wrote in an email.
Sen. Bruce Dammeier, R-Puyallup, said he is excited about the new medicines, but noted that they aren’t vaccines and people cured of the disease could get it again.
Dammeier, vice chairman of the Senate Health Care Committee, said he hopes that market competition will nudge down prices.
As for whether charging up to $94,500 for medications was appropriate, Dammeier said he didn’t want to speculate.
“I don’t know if they’re making obscene profits on this,” Dammeier said, “or whether they’re just covering the costs on research.”