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Medicaid cost cut comes with a price

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Illinois

* This new drug has been a miracle for people with Hepatitis C…

With nearly a 95 percent cure rate in clinical trails, Sovaldi is being hailed as a major breakthrough for a disease that more than 3 million Americans carry. The drug’s price tag, though, is spooking health insurers and state Medicaid programs at a time when there’s a heightened effort to diagnose the liver disease.

* The Tribune had a story this week about strict limitations placed on Illinois Medicaid patients…

The high price of Sovaldi drove Illinois Medicaid’s hepatitis C spending to $22 million for the fiscal year ending June 30, 2014, up from $6.7 million the previous year, according to the Illinois Department of Healthcare and Family Services.

Facing higher costs, Medicaid officials stopped paying for any but the sickest patients to get the new drugs, drawing criticism from some liver doctors who have said the state is preventing them from properly treating their patients. […]

In addition to limiting Sovaldi to the sickest patients, the Illinois Department of Healthcare and Family Services has set two dozen criteria for who can get the drug, including requiring that patients have no evidence of drug or alcohol abuse in the last 12 months and barring treatments not approved by the Food and Drug Administration.

Spending on hepatitis C treatment dropped from $1 million per week to about $200,000 per week after the department adopted the restrictions, said Dr. Arvind Goyal, the department’s medical director. […]

The state did not start keeping track of how many patients it denied Sovaldi until October, Goyal said. For the month of October, 43 of 50 patients who requested the treatment were denied, according to the department.

The problem is that state policy could be increasing state costs down the line, when denied Medicaid patients wind up hospitalized.

* And, of course, Americans are getting the shaft…

Although Sovaldi cures hepatitis C in more than 90% of those who for whom it has been prescribed, the 12 week course of treatment in the U.S. is $84,000, which comes to $1,000 a pill.

While curing hepatitis C saves lives and prevents a lot of downstream healthcare costs for patients who, without this drug, could ultimately develop liver cancer or require a liver transplant, payers and politicians are in an uproar for a variety of reasons, not the least of which is that the drug is priced much higher in the U.S. than in the rest of the world. For example, in Europe, where the government negotiates the price, Sovaldi’s price tag is on the order of $55,000/patient.

While Gilead’s pricing strategy in the U.S. can be challenged, it has certainly taken a responsible approach to Sovaldi pricing in poorer countries. In Egypt and most recently in India, the cost of Sovaldi is going to be only $900/patient

posted by Rich Miller
Tuesday, Nov 18, 14 @ 10:42 am

Comments

It’s time that government starts running like a business. In business, one could show that spending a sum today would save a larger sum down the line, the sum would be spent today. Particularly when patients health and the bottom line align, government should make smart, long term decisions when considering what treatments will be offered to those in its care.

Comment by Sportsfans Tuesday, Nov 18, 14 @ 10:53 am
This is not intended as a “snarky” comment, but when companies try to play the market like this, it creates opportunities.

$84,000 for a US cure vs. $900 in Egypt? Setting aside Egypt in particular, patients can likely fund a very nice trip to an Asian country (assuming Egypt prices) and be treated for less than $7,500 (including travel and a five star hotel).

Comment by Downstate Tuesday, Nov 18, 14 @ 10:55 am
Can’t wait to see just how much FUN the Republicans in the Legislature have crafting a budget and actually having to vote YES.. serious issue here, that i highly doubt the Rauner campaign ever covered..

Comment by Not Rich Tuesday, Nov 18, 14 @ 10:58 am
Blago tried buying drugs from other countries but ran into a little problem with FDA. Perhaps Rauner will come up with the idea of sending IL Medicaid patients to Egypt for treatment.

Comment by Norseman Tuesday, Nov 18, 14 @ 11:08 am
This comes down to drug companies more concerned about better for their profit or humanity.

Comment by 3rd Generation Chicago Native Tuesday, Nov 18, 14 @ 11:16 am
3rd Gen– Private companies are supposed to be concerned with their profit margins. We have government to make sure that they don’t gouge their customers…

Comment by Soccermom Tuesday, Nov 18, 14 @ 11:34 am
Actually, the news in this area is changing literally daily:

Link is: http://blogs.wsj.com/pharmalot/2014/10/14/if-abbvie-discounts-its-hep-c-drug-would-pricing-reach-a-tipping-point/

There’s a whole new Hepatitis C treatment from AbbieVie that is supposed to show real promise (#3 coming into the market), but is a combo treatment and there are ‘interactions’ as they say, but it looks good.

Price? Well, it’s going to get interesting. Betting is that prices will be dropping, as there’s going to be lots of competition.

Price fixing over lifesaving drug treatments when there are 3 competing treatment regimens?

Dangerous turf.

Anyway, the article is very informative.

Comment by Judgment Day Tuesday, Nov 18, 14 @ 11:50 am
SportsFan: had to chuckle.

If only more private businesses were run as you described! They have the same problem as the public sector — stakeholders killing them over short-term results. Or “reduce current spending at all costs.”

Comment by walker Tuesday, Nov 18, 14 @ 11:51 am
I’m going to go out on a limb and guess that Gilead is not providing the drug to patients in India and Egypt at a loss out of the goodness of their corporate heart. Following that logic, they’re profiteering to the tune of more than $83,100 per patient in the United States.

And people wonder why health care costs are skyrocketing.

Comment by Joe Bidenopolous Tuesday, Nov 18, 14 @ 11:54 am
Yes, Soccermom, but the Tea Party-types and other assorted right-wingers scream “socialism” when the government tries to do its part of that equation you set out.

Comment by Concerned Tuesday, Nov 18, 14 @ 12:01 pm
The United States government, although a major provider of health care insurance through the VA, the armed services, federal employees, Medicare, and Medicaid, is barred by law from seeking to negotiate savings of scale with pharma companies.

By law, the government, the biggest prescription drug customer in the world, pays what Big Pharma charges them, case closed.

That’s your free-market system at work.

Give that a think the next time you start waxing ridiculously on the danger to the economy of a minimum wage bump.

Comment by Wordslinger Tuesday, Nov 18, 14 @ 12:14 pm
LOL, when seeing all this talk about Drug companies profiting at the expense of patients. Who do you think pays for all the costs associated with developing the drug? The cost to develop these drugs can cost millions and millions of dollars. I guess, it just falls out of the sky and appears in the drug company checking account. Please! Not saying there isn’t some middle ground here.

Comment by Apocalypse Now Tuesday, Nov 18, 14 @ 12:15 pm
This is a disadvantage of not having a single payer health care system.

Comment by Sir Reel Tuesday, Nov 18, 14 @ 12:18 pm
So this is where the Democrats got the model for how to set-up the medical cannabis program in Illinois. Rich investors getting even more rich out of the pockets of the patients in need, many of whom are poor. If only we could legally grow Sovaldi in our closets to avoid to price gouging…

Comment by Jeff Trigg Tuesday, Nov 18, 14 @ 12:52 pm
When it comes to health care ,Repubs’ favorite topics are Medicaid overspending and death panels. Denying these medications to the medically indigent comes closer to “death panels” than anything the Affordable Care Act does. And cutting Medicaid spending is neither painless nor moral.

Comment by Truthteller Tuesday, Nov 18, 14 @ 1:07 pm
“This is a disadvantage of not having a single payer health care system”
——————–

Would not matter. Unfortunately. All single payer does is give big pharma a single point to direct all their lobbying. And they are good at it. And they win. And that’s not going to change anytime soon.

You do realize that some of Big Pharma’s greatest supporters are East / West coast legislators, right? From Blue states.

You aren’t going to win this fight by comparing prices from places like Egypt to the US.

Btw, it’s NOT a free-market system at work. Not even close. It’s a classic “crony capitalist” system at work. And the regulators (FDA in this case) have been captured by the crony capitalists (Big Pharma).

Comment by Judgment Day Tuesday, Nov 18, 14 @ 1:09 pm
The Big Pharma lobbyists need a patsy: the USA.

Comment by Cook County Commoner Tuesday, Nov 18, 14 @ 1:52 pm
The Veterans Administration is also experiencing a large surge in demand for this drug and unexpected cost increases.

Comment by Formerly Known As... Tuesday, Nov 18, 14 @ 2:02 pm
Big Pharma has an army of lobbyists and money to spend. There is a reason our government doesn’t negotiate prices for what they provide.

Comment by Anonymous Tuesday, Nov 18, 14 @ 2:21 pm
And that law prohibiting the government from using its buying power to negotiate with the drug companies? Yes, that was brought to you by George W. Bush. Welfare is only good if it is going to big companies and big campaign contributors.

Comment by Concerned Tuesday, Nov 18, 14 @ 2:58 pm
Huh! You mean you can’t just cut government funding for things without hurting people? Jeez, it would have been good to know that back in the day. Oh well, someone else’s job now.

Comment by steve schnorf Tuesday, Nov 18, 14 @ 5:06 pm
AN. JD, you make no sense, even on your own silly terms.

Why are the same drugs, from the same companies, so much cheaper in other countries?

Why is it the responsibility of American taxpayers, by law, to give up the leverage of being the biggest customer of multi-national, publicly traded corporations?

Why is it that American taxpayers and consumers are the only ones to subsidize the “research” of multi-national corporations who sell fheir products all over fhe world and, for the most part, pay no taxes here and have no loyalty to this country?

You watch a lot of Cable talk “news”. I get it.

But if you can’t spot the chump the first time the deal goes round, you’re it.

Comment by Wordslinger Tuesday, Nov 18, 14 @ 5:26 pm
Well at least the new governor has experience with lifesaving drug price gauging.

Comment by Robert the Bruce Tuesday, Nov 18, 14 @ 5:43 pm
The government is a major funder of research and development of new drugs along with pharma, so we should have a say in the cost since we help to underwrite the cost for products they profit from

Comment by illlinifan Tuesday, Nov 18, 14 @ 8:00 pm
Word, if that’s the best you can do - well, you really need to up your game.

First off, I don’t watch cable. I get my info. from working in areas or talking to people who have to get it done. Not types who get to sit around thinking up great thoughts.

If you can’t tell, I’m certainly not in favor of how the current system runs. But I’m not into blaming stereotypes, like you apparently are. You should dig a little harder. You might find some stuff out beyond the usual talking points.

As a point, I ended up talking (today) to a ‘nobody’ who has a family member with Hepatitis C and this particular drug. She runs a blog for people afflicted with this particular disease, and there’s actually a lot more to this story than people like you realize.

This drug (and the others like it), so far at least, are only effective in a very regulated and monitored treatment regimen. It’s intrusive, it’s ‘combination therapy’ involving several drugs, there are many debilitating side effects during the treatment protocol, and it’s considerably more than $84k in total.

Normally it runs probably closer to $150k when all said and done, and takes more than a year from start to finish. And the process is intrusive.

And the blunt truth is, you have to follow the rules if you want to have any chance of success.

Now the good news is, there is success. Real success. To a point where for all practical purposes, Hepatitis C is eradicated from a patient’s system as the optimal result. But you have to follow the treatment protocols, and you will find that you are signing up for a complete upheaval in your life. But the good news is, it’s a chance to live. A normal life. And a good chance.

But here’s the hard part. If (and btw, it’s still limited data) you don’t follow the treatment protocols and fail, your odds of success the second go around are way lower. And sometimes it just doesn’t work.

If you are a potential patient and have got red flags about following the treatment protocol, you’re going to have a hard time getting into a program. That’s the simple cold truth.

It’s not all about the money. Now, are the costs too high? I sure believe so. But here’s the real point - this isn’t like some antibiotic.

Btw, the person I was talking to was really skeptical about the $900 reported price. Seriously skeptical. They’d certainly like to see it. If it’s $900 per treatment, that’s a different story. Then there’s a cost reduction, but nowhere near what you think.

If those were the actual prices ($84k vrs. $900), she said there would already be a substantial flow of patients over to Egypt for treatment. Or a ‘gray market’ inflow coming back into the US (or Canada, or Mexico). The so-called price just didn’t ring true to her.

Just sayin. There’s a lot more to this story.

An interesting sidenote. She said that if Vlad Putin wanted to break the economic sanctions, forget gas and oil. It’s medical services like Sovaldi where the Russians could make a real breakthrough.

Don’t be too surprised if there’s some interesting trade developing between India (which has a substantial generics pharmaceutical trade) and Russia. This could get really fascinating.

Comment by Judgment Day Tuesday, Nov 18, 14 @ 11:22 pm