A cure at what cost? More states easing restrictions on Hepatitis C treatments

For years, Valerie Green just wasn't feeling right. She was in a constant state of fatigue but couldn't figure out what was going on. Neither could doctors. That was until a specialist ran a series of blood tests last year, and one came back positive for Hepatitis C.

"I was fairly shocked because I wasn't that knowledgeable about the disease. Everyone knows it's not a good thing, it effects your liver," Green recalled. "It was pretty scary."

What happened next put Green in the middle of a controversial, and now shifting, landscape when it comes to coverage of Hepatitis C treatment. In Delaware, that's meant experiencing some of the most restrictive rules in the country to, as of this summer, some of the most lenient.

New treatments offer new hope

Green, who's 56 and lives in Millville Del., isn't exactly sure how she contracted the virus. Hepatitis C (HCV) is mainly spread through blood to blood contact. These days, the most common mode of transmission is through sharing needles or other equipment used for injecting drugs. For baby boomers, especially, many may have also been exposed before the virus was screened out of the blood supply, beginning in 1992. Green thinks she got infected from a blood transfusion 30 years ago, when she gave birth to her son.

But the idea that someone like Green could have lived with the virus for decades and not know it isn't all that surprising. Hepatitis C is often referred to as a "silent" disease because most people who are chronically infected don't actually show symptoms (about a quarter of those infected naturally clear the virus). Over time, HCV can damage the liver and result in serious long-term health problems.

It's the leading cause of liver cancer and liver transplants in the United States. In 2014, the Centers for Disease Control and Prevention reported that nearly 20,000 people died from HCV complications, surpassing the number of deaths from 60 other infectious diseases, including HIV, combined.

After getting over that initial shock of the diagnosis and the stigma often associated with the disease, Green was relieved to finally pin down the actual problem.

"I was like, 'Wow, I really am sick, I knew it. I knew something was wrong.' It was validation," she remembered thinking. "Now the next step was, let's get it fixed."

Green had good reason to be optimistic.

Two and a half years ago, new drugs entered the market that completely transformed the treatment landscape for Hepatitis C. These direct-acting antivirals boast greater than 90 percent cure rates and minimal side effects for the most common types of HCV. And because earlier treatments were less effective and came with serious side effects, many providers and patients had held off on treatment, period, until these new drugs became available.

Green has Medicaid in Delaware. After receiving her Hepatitis C diagnosis, her doctor submitted the paperwork required to get these new medications. But Green's excitement only lasted two weeks.

"That's when my first denial came back," she recalled. "That was based on, I don't meet their recommendations of not being sick enough."

A cure with a catch

The new Hepatitis C drugs have come with a big catch: the price tag. It's difficult to know the exact cost — public and private payers negotiate private agreements with drug companies — but one of the main drugs, Sofosbuvir (the brand name is Sovaldi), has been listed at $1,000 a pill before discounts. It's taken once a day for up to three months, often in combination with other drugs, making the cost of a cure upwards of $100,000.

"It would not be feasible, financially, for us to treat everybody in our membership who has the diagnosis," said Stephen Groff, Medicaid director for the state of Delaware. "It would have broken the budget quite frankly. This is a situation where we had high cost, high volume — it's just not a good combination."

Medicaid officials elsewhere have echoed that sentiment.

While other cancer drugs might be even more expensive, the scope and scale of Hepatitis C has put state Medicaid programs, in particular, in an ethical and fiscal bind. More than 100 million people worldwide are chronically infected with Hepatitis C, including an estimated 2.7 to 3.9 million people in the United States. Studies have found the prevalence is higher among Medicaid populations.

Delaware is a small state, but Groff estimates that upwards of 2,000 residents with Medicaid coverage have been diagnosed with Hepatitis C. Last year, the state spent more than $13.5 million to treat 141 people who were chronically infected, representing six percent of the state's total drug spend for the year.

In nearby Pennsylvania, 1,889 people with Medicaid received treatment in 2015, costing about $145 million, or about seven percent of the state's total annual drug spend, according to the Medicaid office.

To determine who qualifies for the treatment, Pennsylvania, Delaware and other states require prior authorization. They base this on a Metavir system, or fibrosis scale, to prioritize treating patients with the most severe liver damage. A score of zero to one indicates minimal fibrosis, while four signals cirrhosis, or severe scarring and decline in liver function.

States limiting treatment amid budget concerns

Delaware limited eligibility to those with a score of four on that scale.

"We felt like we needed to get this drug out to individuals who we knew had an immediate need for a drug," said Groff.

That response didn't sit well with patients like Green, who applied again for the drugs and was again denied. While she experienced other symptoms that she attributed to her disease, like fatigue and nausea, her liver was healthy. She applied for several grants from outside organizations, but one that she really needed required a big co-pay from her primary insurer, Medicaid, which wasn't going to happen.

"Why make me wait? It's rationing, pure and simple in my mind," she said, referring to the Medicaid denial. "You know day in and day out that your liver is progressively getting worse and worse and worse and worse, and it's not going to get better until you have this drug to eradicate this virus. And you have an official saying, you're not sick enough, you can't have the medication. So it's extremely frustrating."

An analysis of pharmacy prescription data in Delaware, Pennsylvania, New Jersey and Maryland through April of 2015 found that people with medicaid were much more likely turned down for coverage of these new Hepatitis C drugs compared to Medicare or other private insurers. Medicaid rejections neared 50 percent.

Hepatitis C typically progresses slowly, but critics of such policies contend that making someone with Medicaid wait until they get sicker to qualify for a cure spells discrimination.

"Instead of state Medicaid programs embracing the idea that now we have a cure for the number one communicable disease killer in the U.S., we saw many programs implement unprecedented restrictions on access to treatment," said Robert Greenwald, director of the Center for Health Policy & Innovation at Harvard Law School.

Greenwald argues Medicaid covers a poorer, more vulnerable population that's being unduly denied treatment. He's been tracking Medicaid policies, and last year, he found that three quarters of states limited one of the main drugs, Sovaldi, to people with advanced liver disease.

"If we had a cure for Alzheimer's or cancer or M.S. at $30,000, we would not be in the same situation we're currently in," he said. "People would be storming the White House and legislators, demanding access to a cure. We as a nation should try to figure out how to meet those costs. It's myopic to think about pharmacy line items."

He draws a comparison to HIV.

"We consider it a tremendous victory that we have transformed HIV and we pay about $15,000 a year for the rest of a person's life," he said. "For HCV, the treatment is about $30,000 - that's proprietary info, it's hard to know the exact price that public and private insurers pay - but at $30,000, we can now cure a person."

If someone's cured, they can't transmit the virus, either.

Drug companies, which set the price, have long argued that it's worth the value: these drugs represent a one-time treatment that cures someone of a disease, and with that, curbs the need for costly liver transplants down the road. Plus, it costs a lot of money to develop the drugs.

Another study out last year also makes the case for the cost effectiveness of the new drugs, but concludes that more resources would be needed to treat patients.

Beyond Hepatitis C, mounting prescription drug costs have prompted national and international debates over drug costs. In general, it's on the rise. Both Republican and Democratic presidential candidates have addressed this in their platforms.

Changing Landscape

Since the initial wave of these new drugs entered the market in late 2013, the scientific, political and economic environment has been shifting. That, and several lawsuits, has spurred some states and private insurers to rethink their policies.

A year ago, Pennsylvania Medicaid's fee-for-service program eased its restrictions on Hepatitis C treatment, making those with "less severe" liver disease eligible. The state also removed a rule that a patient has to be drug or alcohol free for six months before qualifying for treatment. Patients coinfected with HIV are automatically eligible.

In recent months, Florida and New York expanded access to the drugs through their medicaid programs. Massachusetts lifted its restrictions this month.

Last March, the Department of Veterans Affairs announced it would treat all veterans with Hepatitis C, regardless of their liver disease status. It's been reported that several private insurers, including UnitedHealthcare and some Blue Shield plans, have started covering treatment for people who fall into any stage of the liver disease.

So why the changes?

For one, new medical guidelines have affirmed the new drugs' effectiveness and recommend early treatment.

In response, Medicare has eased its restrictions.

Last November, the federal government reminded states of their obligation to provide treatment that meets certain medical standards.

More drugs have entered the market, adding more competition. Health officials have also been pushing drug manufacturers to lower their rates and offer more rebates.

Several lawsuits have challenged state policies and the drug manufacturers' prices.

A class action lawsuit (one that Greenwald's center has been involved in) in Washington state resulted in a federal district judge ordering Medicaid to drop its restrictions on HCV treatments, ruling that the previous policy was not consistent with Medicaid requirements that treatments be covered based on medical needs.

The state attorney general in Massachusetts had also threatened to sue one of the manufacturers, Gilead Sciences, over drug prices and has since secured more rebates.

In Pennsylvania, a Medicaid spokesperson attributed the changes in its policy last year to updates in national and international treatment guidelines, evaluation of more clinical trials, and infectious disease specialist recommendations.

In May, the state's pharmacy committee also backed removing all liver disease restrictions for treatment. The state is currently reviewing what additional funds would be available if such a policy is implemented and how the additional costs would be absorbed in the budget.

"We have not made any final decisions yet," said Ted Dallas, Pennsylvania's Secretary of Human Services.

All in all, about a dozen states have either eliminated or reduced their restrictions in the last year, according to Greenwald, who's continuing to research state Medicaid policies.

"There's a movement. It's happening. It's slowly happening," he said. "It should be happening faster, given changes in drug pricing."

The pendulum swings in Delaware

Back in Delaware, the state lowered its eligibility to a fibrosis scale level of three in April. It also loosened some of its other qualifying criteria.

Then last month, the state set in motion a policy that would phase out any liver damage criteria. By January of 2017, eligibility will drop to a fibrosis score of two, and then to zero by January of 2018. In the meantime, those who demonstrate treatment is "medically necessary," regardless of a fibrosis score, will qualify for treatment.

"I would say this is always where we wanted to go and where we knew we were going and we're just happy we're getting there a little faster," said Groff, adding that he's hoping that people don't file in at once to get treated.

Groff estimates they'll treat between 600 and 700 people in the coming year, with the state spending as much as $40 million. He thinks drug rebates from manufacturers and federal Medicaid matching funds will offset a lot of the added cost.

"The landscape has changed significantly over the last three years," he said, adding that initially, the state faced too many unknowns. Now more evidence for the drugs have come out, along with more drug options. "The cost of the drugs themselves has come down considerably now that we have competition in the marketplace. The manufacturers are also willing to negotiate supplemental rebates with states. So that substantial reduction in costs is making it more feasible for us to have open access."

Doctors like Bill Mazur welcome the updates. He's an infectious disease doctor with the state prison system and with Christiana Health Care system. Since the new drugs came out, Hepatitis C has turned into his primary focus.

"The conversations with patients sometimes were a little uncomfortable because I couldn't inform them how long their wait would be," said Dr. Mazur.

Now he has an answer for patients with Medicaid.

Looking ahead, Mazur does worry about whether the health system has the capacity, whether there are enough of him to treat everyone who's infected.

Kelly McNelis, a clinical pharmacy specialist at Christiana Care Health System's community program and colleague of Mazur's, estimates that since the policy change, they've started three newly eligible people a week on the treatment.

"It's been lovely," said McNelis, "It was so disappointing to have to tell someone you know you're healthy now, we'd like to treat you now, but we have to wait until you get a little sicker before we can treat you."

As for Valerie Green, who was diagnosed with Hepatitis C last year and denied treatment, she's optimistic she'll be approved for treatment this time around. She had been preparing a lawsuit with Greenwald's group, but they've tabled it. She recently re-applied for treatment.

"I was very excited," she said. "Hopefully, I'll feel great, and I won't have these symptoms any longer and I can get back to leading a normal life."

For her, that includes working again, raising awareness about the disease and the resources that are available to get tested and treated, and taking part in one of her favorate pastimes...walking on the beach.