$1,000-a-pill hepatitis C drug to hit taxpayers hard

VA will get discount, but treatment still might cost $64,000.

Costing $1,000 a pill, a new hepatitis C drug considered a cure by some experts could place a big financial burden on patients as well as taxpayers who help cover veterans, prison inmates, low-income people and the elderly.

The Veterans Health Ad- ministration, which provides coverage and medical care to 173,000 veterans with the virus, calls itself the nation’s largest single provider of hepatitis C care. Officials there said that while they must balance government resources with the needs of veterans, they see the drug Sovaldi as an opportunity to improve and save lives.

“I actually see this not as something we’re worrying about — ‘Oh, my God, are we

going to go bankrupt?’ — but I think this is a huge opportunity,” said Dr. David Ross, director of the administration’s HIV, Hepatitis and Public Health Pathogens Program.

Hepatitis C affects 2.7 million Americans and can lead to scarring of the liver (cirrhosis), a liver transplant and even death. It is mainly spread by contact with blood, and veterans are at an increased risk because of exposure to blood on the battlefield, as well as to contaminated needles for tattoos or drug use, Ross said.

Federal health officials recommend hepatitis C screening for everyone born between 1945 and 1965, the group accounting for up to 75 percent of the cases.

Sovaldi is one of two new hepatitis C drugs approved late last year by the U.S. Food and Drug Administration that Ross called “exciting.”

It doesn’t have the harsh side effects that are common with the standard drug treatment with interferon, which often is combined with another drug, ribavirin. Side effects can include fatigue, flu-like symptoms, nau- sea, depression, rash, anemia and more.

“The holy grail is getting rid of interferon because it is so toxic and it has to be given by injection,” Ross said. “Sovaldi by itself is pretty well-tolerated.”

It costs $84,000 for a regular 12-week course of treatment. The other new hepatitis C drug, Olysio, has a $66,000 price tag for 12 weeks.

Sovaldi’s approval is “a watershed moment in hepatitis C,” but the cost is “a shock,” said Alan Franciscus, executive director of the Hepatitis C Support Project in Sacramento, Calif.

“Sadly, it will also prevent some people from receiving treatment,” said Franciscus, who added that he was cured of the disease about 10 years ago after a 70-week regimen with interferon and ribavirin. “It would be a shame to have this wonderful drug available that will save hundreds of thousands of lives, but those who need it will not be able to afford it because their insurance will not cover it.”

Officials at the Veterans Health Administration are discussing the implications of these costs but don’t have estimates on how many would be eligible for the drug and how much that would cost, Ross said. So far, just about 115 veterans, including some in Central Texas, are receiving the drug, said Mike Valentino, the administration’s chief consultant for pharmacy benefits management services. Prescribing criteria are being developed, he said.

The Texas Medicaid program, which mainly covers low-income residents, isn’t covering Sovaldi or Olysio yet, said Stephanie Goodman, a spokeswoman for the state’s Health and Human Services Commission. It must first develop criteria for that coverage.

“We’re also developing estimates for the number of Medicaid clients with hepatitis C who would be good candidates for treatment with the new products,” she said. “That information will allow us to estimate the cost to Medicaid once we add the drugs to the list of those covered by the program.”

The Veterans Health Administration is concerned about the cost, Valentino said, and “we’re obviously aware that is going to cost a lot of money. We are discussing that internally and trying to figure out what impact that’s going to have on the system.”

But, he added, “it’s a mistake to talk about the extreme cost of these drugs and prioritizing patients. If a veteran needs this treatment, they’re going to get it.”

Valentino said his agency would get a 24 percent discount on the drugs, which would take the cost of Sovaldi down to $760 a pill.

While that would bring the cost of a 12-week treatment course down to $63,840, the price is comparable to some very expensive cancer drugs, Valentino said. Asked if the cost is unreasonably high, Valentino and Ross said costs are difficult to compare.

Others health care leaders have been more outspoken. In some published reports, health care executives and patient advocates have accused Sovaldi’s manufacturer, Gilead Sciences, of pricing the drug in a way that would enable it to re- coup billions of dollars it paid to acquire another company.

Gilead spokeswoman Cara Miller said via email that the cost is consistent with other hepatitis C treatment costs and, in many cases, is cheaper because of the drug’s effectiveness, ability to be tolerated and shorter treatment time.

“Sovaldi is a short-term treatment that results in very high cure rates that can avoid future costs related to disease progression or treatment failure,” Miller said. “What is clear in the treatment guidelines is that the older therapies were not sufficiently effective or tolerable to continue to be used as the standard of care in light of these new treatment advances.”

Gilead provides financial assistance to eligible patients who need help paying for the drug. Some might pay as little as $5 per month — or could get it free, Miller said.