The new hepatitis C treatment Sovaldi has driven debate over drug costs for close to a year, but it's also been a case study in access and coverage in public payer programs.
A new study, by Viohl & Associates for Medicaid Health Plans of America, shows the great variation and uncertainty across the country in how policy makers and managed care organizations are covering the drug from Gilead Sciences.
Of the 37 states that use Medicaid managed care organizations, 28 include pharmacy benefits contracts and most, 22 states, give MCO flexibility in preferred drug lists. Only four, Colorado, Florida, New Hampshire, and Texas, require MCOs to align with Medicaid fee-for-services formularies and nine states require partial alignment in certain classes.
As such, the emergence of Sovalidi and its $80,000-plus per-treatment price leaves a patchwork of state Medicaid policies that can be confusing for beneficiaries with hepatitis C infections thinking about trying to use the highly-curative medication.
Of the 17 states with Sovaldi listed as preferred, 14 require prior authorization for the drug, and seven require quantity and duration.
Of those 14, according to the report, most require candidates for the drug to undergo a liver biopsy to determine the severity of the disease, an investigation that can cost more than $2,500. (Abdominal ultrasound has also emerged as a severity monitoring tool, and as a way to buy time until Sovaldi's price comes down or similarly-successful competitors become available.)
Some states are also using additional restrictions.
In Illinois, a state with a large Medicaid population and a population at risk for hep C, the state Medicaid program requires prospective patients to meet 25 different criteria, including advanced stage diagnosis and drug or alcohol abuse abstinence.
In Florida, Medicaid covers Sovaldi depending on the patient's genotype (which can be correlated with response to the drug) and co-infection status, with two state-mandated prior authorization periods.
Alaska's Medicaid program requires candidates to have abstained from the use of illicit drugs and alcohol for a minimum of three months, as verified by a urine test.
The breakthrough drug Sovaldi -- a rare medication that can actually cure a disease -- has sparked a fractious debate about the cost of pharmaceuticals, especially new biologic and speciality medications that treat complex conditions like arthritis and cancer.
With speciality medications growing in use and development, the patchwork management of Sovaldi coverage in Medicaid -- in which states are trying to limit utilization until prices fall -- may be a window into the future of coverage for biopharmaceuticals.
While pharmaceutical companies and advocates defend prices like $84,000 for Sovaldi as justified for research costs and for the traditional treatments (like transplants) that can be provided, insurance advocates like Medica Health Plans of America's CEO Jeff Meyers argue that the drug still needs to be made more affordable.
Soon commercial insurers and Medicaid programs alike will be facing the challenge in how to cover Gilead's new all-oral Sovaldi option, called Harvoni.