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New Hepatitis C Drug's Cost A Steep Climb For Colorado

Gilead Sciences, Inc.
Screencap of the website for Sovaldi, a new drug to treat hepatitis C.

Starting in June, Colorado’s Medicaid agency will cover a breakthrough hepatitis C drug on a case-by-case basis, while it decides who will qualify for the potentially life-saving drug, and who will not.

Sovaldi, which was approved by the Food and Drug Administration in December, has brought fresh hopes of a cure for the estimated 3.2 million Americans with chronic hepatitis C.

But its price tag of $84,000 per treatment – or $1,000 a pill – has put it out of reach for many Coloradans suffering from the disease, which has a bigger footprint in lower-income populations. Many people with the disease don’t know they are infected, but severe cases can lead to liver cancer and cirrhosis.

Hepatitis C is spread through the blood of an infected person. Once a risk in blood transfusions and organ transplants, the disease is now most commonly spread in the U.S. by sharing dirty needles for intravenous drug use.

The Centers for Disease Control and Prevention estimates that 15,000 Americans die each year from hepatitis C – similar to the numbers that die from AIDS.

"We absolutely, sadly, cannot afford to treat everyone with hepatitis C."

Faced with a $7.2 million bill after a short time of paying for the drug, Colorado’s Medicaid program put the brakes on covering Sovaldi early in 2014. Between late January and May, only four of the 43 Medicaid patients who applied to receive the drug received it.

The state Medicaid program will now take into account a list of factors when deciding which patients can receive the treatment, according to interim criteria that went into effect June 1. Among those excluded will be people who have already undergone treatment for the most common genotype of the disease in the United States, and some with a rarer form of the disease believed to be less responsive to Sovaldi.

Dr. Judy Zerzan, the chief medical officer at the Colorado Department of Health Care Policy and Financing, said final criteria – expected in August – are unlikely to be much different.

“With any new drug, we have to think about safety, efficacy and cost,” she said.

Zerzan raised concerns about the small size of most studies of Sovaldi, and the little-known potential for relapse. But cost is the main sticking point.

The Colorado Medicaid program last month called on the governor and lawmakers to put pressure on Gilead Sciences, Inc., the manufacturer, to lower its price for the drug.

In a May letter to Gov. John Hickenlooper [.pdf], the department raised concerns that covering the drug for all Medicaid clients with the disease would swallow the state’s entire pharmacy budget with appetite to spare.

It would cost between $506 million and $1 billion to cover the estimated 6,028 Medicaid clients in the state with a hepatitis C diagnosis, the department wrote. That is likely an underestimate, according to the letter, since it doesn’t take into account people who gained coverage under a recent expansion of Medicaid.

By comparison, Colorado’s entire pharmacy budget for fiscal year 2012-2013 was only $334 million, while the total state budget, including education, prisons and transportation, was $23 billion.


“We absolutely, sadly, cannot afford to treat everyone with hepatitis C,” Zerzan told Rocky Mountain PBS I-News. She describes her department’s approach as “how do we figure out who are most critical to treat right now, and who will benefit from it?”

Sovaldi is the first of a new generation of hepatitis C drugs expected to upend the market for the disease by offering all-oral treatments – as opposed to the injection-based – that are more effective and have fewer harsh side effects than existing treatments.

Small-scale studies of Sovaldi show a cure rate of more than 90 percent for common forms of the illness – a staggering success for a disease that can leave its victims with ravaged livers, requiring transplants.

Previous, less-effective treatments for hepatitis C relied on combinations including interferon, which can cause depression, anxiety, flu-like symptoms and fatigue.

Gilead beat competitors AbbVie and Merck to market with its pill, and reported Sovaldi sales of $2.27 billion in the first quarter of the year. FDA approval for competitor drug candidates, which may come before the end of the year, could put pressure on Gilead to lower its price.

Meanwhile, Gilead has come under pressure from U.S. legislators. Representative Diana DeGette, a Democrat from Colorado, was among members of Congress who sent a letter to the pharmaceutical company in March [.pdf] demanding to know how Gilead reached its price tag for Sovaldi.

“Our concern is that a treatment cannot cure patients if they cannot afford it,” the legislators wrote.

DeGette, who sponsored a bill that allows the FDA to fast-track breakthrough drugs like Sovaldi, told I-News that companies that take advantage of that law should incorporate its savings into their pricing.

“The whole issue of how they arrived at the $84,000 per treatment is really a critical issue,” said DeGette.

The congresswoman said Gilead hasn’t yet provided answers to the legislators’ questions about pricing. DeGette, who is the ranking Democratic member on the House Subcommittee on Oversight and Investigations, said if she doesn’t get answers from Gilead soon, she will ask the chairman to hold hearings.

Gilead spokeswoman Cara Miller told I-News that Sovaldi was priced to match the cost of prior regimens, and reduces the total cost of hepatitis C treatment when taking into account doctors’ visits and the costs of treating side effects.

Sovaldi “represents a finite cure, an important point to consider when comparing the price of a pill or bottle to the lifetime costs of treating a chronic disease,” Miller said in a statement.

Dr. Greg Everson is a University of Colorado Hospital hepatologist who conducted studies of Sovaldi with funding from Gilead. He’s a proponent of treating more people with Sovaldi, saying it may save money in the end.

“The focus on the price per pill is pretty short-sighted because we’re losing touch with really big issues,” Everson said. “Before this drug came out, we were spending a lot of money on hep C and not getting anywhere near these results.”

Cost comparisons remain contentious, though. Zerzan notes that the disease is slow-moving, and that most people with hepatitis C never deteriorate to the point of developing cirrhosis or liver cancer – the most expensive stages of the disease. She cites a study by the California Technology Assessment Forum that concludes that any savings would come from treating only the most serious cases.

Patient advocates note the human costs of leaving the disease untreated.

Colorado Medicaid’s criteria for covering Sovaldi “has created many questions about why some patients have access to care and why others do not,” said Joe McCormack, executive director of the Rocky Mountain division of the American Liver Foundation, which promotes liver health.

“My hope is that we can get to a place soon where all patients that would benefit from the new treatments would have access,” McCormack said.

Kim Bossley, a Longmont resident and a mother, is among the lucky few who have experienced the benefits of Sovaldi first-hand.

Bossley contracted hepatitis C at birth, when both she and her mother received blood transfusions. Her mother later died from the disease, and Bossley seemed to be on the same path. She had been through multiple failed treatments, suffering through side effects like hair loss, body sores, depression and extreme fatigue.

She had reached stage-4 cirrhosis by the time she enrolled in Everson’s study of Sovaldi last fall.

Within five days of taking the drug, the virus was undetectable.

“We cried a lot,” said Bossley, remembering that when she was given the diagnosis nine years ago, she was told there was no cure. “Watching my mom deteriorate from the disease was really tough, and then seeing the same symptoms in me.”

Bossley leads the Bonnie Morgan Foundation, which helps offset medical costs for people with hepatitis C. But she said her organization hasn’t been able to keep up with the towering costs.

“It’s heartbreaking for me to see so many people who need it,” Bossley said. She says the drug company and the insurers need to come together to find a way for more people to access the drug. “They struggle daily, while these people are dragging their feet.”

This report appears in partnership with Rocky Mountain PBS I-News. Contract Kristin Jones a kristinjones@rmpbs.org.

I-News is the public service journalism arm of Rocky Mountain PBS and works in collaboration with news media throughout Colorado.
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