Health Care

May 1, 2014

Expensive hepatitis C drug presents Medicaid payment quandary for SC

The challenge facing SC Medicaid program managers is how to balance Sovaldi’s up-front cost ($84,000) while also considering the health of hepatitis C patients. Criteria for payment to be released in the next few weeks.

A new drug that’s extremely effective in treating hepatitis C costs $84,000 per patient, but it can prevent much more costly medical expenses down the road.

The challenge facing state Medicaid program managers is how to balance Sovaldi’s up-front cost while also considering the health of hepatitis C patients. South Carolina’s Department of Health and Human Services plans to release its criteria to determine when it will pay for Sovaldi for hepatitis C patients in the next few weeks, said Bryan Amick, the agency’s pharmacy director.

Solvaldi was approved by the U.S. Food and Drug Administration in December. In studies, it has shown a 90 percent cure rate for newly infected hepatitis C patients when used in a combination with two other drugs.

“If you are going to treat somebody for hepatitis C, these new drugs are absolutely the way to go,” Amick said.

The nuance is when to treat patients with Sovaldi. Government health agencies certainly can’t afford the expensive treatment for everyone who has hepatitis C. The Centers for Disease Control and Prevention estimate about 1 percent of the population has chronic hepatitis C. In South Carolina, that would be about 47,000 people.

One government assessment estimates 20 to 30 percent of those with the disease are covered by Medicaid. Using simple math, that adds up to hundreds of millions in potential Medicaid costs.

But hepatitis C is anything but simple. Some who have the virus don’t recognize the symptoms — fever, fatigue, loss of appetite, joint pain and jaundice – when they first contract the virus and develop hepatitis C. About 60 to 70 percent of people infected with the virus develop the chronic version that lasts a lifetime and can lead to deadly liver disease, according to the CDC.

The most common way the hepatitis C virus is spread in the U.S. is through the sharing of hypodermic needles by drug users, but it can be spread through many other contacts with infected blood.

Providing Sovaldi for every hepatitis C patient would be like doing open heart surgery on every person who has heart problems, said Tony Keck, director of the S.C. HHS. On the other hand, providing the Sovaldi-based drug combination to someone with early symptoms might prevent years of liver disease and costly medical care.

The situation has Medicaid plans and insurers nationwide groping for the right balance. Colorado’s Medicaid agency announced in February that it would not approve new Sovaldi requests until it does more review of the drug’s impact. California, Florida, Louisiana and Michigan announced they would consider approving the drug on a case-by-case basis.

While coming up with a set policy, South Carolina has paid for “a couple million dollars” in Sovaldi treatments, Amick said. He suspects all of those cases would have been approved for the drug under the policy currently under consideration.

“Doctors aren’t rushing to prescribe a very expensive drug” that they don’t have much experience with, Amick said.

But as more hepatitis C patients get the drug, and if it continues to be an effective treatment, more doctors likely will adopt its use.

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