Are States Obligated To Provide Expensive Hepatitis C Drugs?

Discriminatory Restrictions?

Taylor’s study, published last summer, examined how state Medicaid agencies decide who will get Sovaldi, which is manufactured by the pharmaceutical company Gilead.

At least 34 states restricted treatment to patients who had reached an advanced stage of liver disease, as determined by the level of scarring on the liver. Thirty-seven states permitted their Medicaid agencies to determine whether the potential recipient was abusing alcohol or drugs, and some required some period of abstinence. And 29 states would only consider approval if the prescriber was a specialist in gastroenterology, hepatology, infectious diseases or liver transplantation.

Some state Medicaid agencies, such as Pennsylvania’s, have recently lifted the restrictions. A spokesperson for the state Medicaid office acknowledged that the policy change would result in a “significant fiscal challenge” and the state was pressing hard for any discounts that might be available.

Separate from the lawsuits, Massachusetts Attorney General Maura Healey, a Democrat, late last month threatened Gilead with an investigation of its possible “unfair trade practice in violation of Massachusetts law” if it doesn’t lower its prices for Sovaldi and Harvoni, which it also manufactures.

The drugmaker, which has consistently said that its hepatitis C drugs are worth the price because of their effectiveness, has asked to meet with Healey.

“Gilead responsibly and thoughtfully priced Sovaldi and Harvoni,” the company said.

Taylor said states’ restrictive practices are discriminatory because they aren’t applying the same standards to treatments for any other diseases. “We don’t withhold cancer treatment to only those with the most advanced stages of the disease,” she said. “We don’t deny smokers treatment for lung cancer.”

Many doctors point out that while the new hepatitis C drugs can arrest the disease, they cannot undo liver damage.

Stopping the Spread

Advocates for universal treatment also argue that treating patients sooner rather than later spares the health system the greater costs of treating liver cancer or undertaking transplants. It also prevents the spread of the infection to others.

Several medical societies, including the Infectious Diseases Society of America and the American Association for the Study of Liver Disease, recommend early treatment for hepatitis C. The American College of Correctional Physicians says that prison doctors should decide which inmates to treat based on medical evidence, not cost. It acknowledges, however, that to eradicate the virus in prisons, “We must be allocated adequate resources to implement the goal in a medically responsible way, including funding for disease surveillance, screening, medically appropriate evaluation and complete disease treatment.”

But paying for treatment for everyone now is unimaginable for states, which are required to balance their budgets every year, said Salo of the Medicaid directors group.

He said the penny wise and pound foolish argument isn’t relevant to the real world of state budget-making.

“It’s true if you take a time horizon of 30 years, but that’s not reasonable or rational or realistic in Medicaid,” he said. “We budget on a one-year or a two-year cycle.”

Several legal analysts said the plaintiffs in the Indiana lawsuit, which concerns Medicaid beneficiaries, might have a better chance than the prison plaintiffs in suits in Massachusetts, Minnesota and Pennsylvania.

“At first glance, I’d say the plaintiffs [in Indiana] have a strong case,” said Nicholas Bagley, a health law professor at the University of Michigan Law School. “I’ll be very curious to see what justification Indiana presents for their denials.”

The state said it could not comment on pending litigation.

John V. Jacobi, a professor at Seton Hall Law School who specializes in health policy, said the medical necessity standard does not apply to prisoners. The question in the prison cases, Jacobi said, will be whether the denial of the drugs qualifies as “deliberate indifference.”

Joel Thompson, an attorney with Prisoners’ Legal Services, who is representing prisoners in the Massachusetts case, said he thinks it does.

“People knew for years these new drugs were coming,” he said. “Prisoners were counseled for years away from the treatments that were then available because better stuff was coming with no side effects and a guaranteed cure. A fair amount of money got saved because of that, and it got saved at the expense of our clients, who only got sicker.”

By Michael Ollove, Stateline

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Stateline is an initiative of The Pew Charitable Trusts.