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Hepatitis C drug costs leave many without care

Larry Day took medications that cured him of hepatitis C.Suzanne Kreiter/Globe staff/Globe staff

Twenty years ago, Larry Day learned two dangerous viruses were circulating in his body, HIV and hepatitis C. Both infections came from needles shared during his years as an injecting drug user.

Only one caused him big problems: hepatitis C. That virus destroyed his kidneys, an uncommon complication. Over time, he knew, hepatitis C could lead to cirrhosis and liver cancer. So when drugs came on the market promising to cure him, Day — by then free of illicit drugs — was eager to give them a try.

But his Medicaid insurance plan said no. He could get the drugs only if his liver was damaged, and his liver was still in good shape.


The restrictions Day faced violate a federal directive, run contrary to medical guidelines, and undermine an opportunity to stop the spread of an infectious disease. But MassHealth, as the Massachusetts Medicaid program is known, is not alone in putting up obstacles to hepatitis C drugs.

Hepatitis C treatment costs tens of thousands of dollars per patient. The illness progresses slowly over decades, so most states’ Medicaid programs control costs by treating the sickest first and requiring others to wait.

The conflict over hepatitis C drugs, such as Sovaldi and Harvoni, heralds a challenge likely to persist into the future, as new drugs for other illnesses thrill doctors and patients with their effectiveness — and scare health plans with their prices.

Hepatitis C is a big concern for government, because it disproportionately affects low-income people, who are more likely to be on Medicaid, and prisoners, whose care is also the state’s responsibility. An estimated 3 million to 5 million Americans, and 67,000 to 100,000 people in Massachusetts, are infected with hepatitis C, although only half know it.

After months of appeals, Day, who lives in Boston and whose HIV infection is controlled by medication, got the hepatitis treatment. His doctor, Arthur Y. Kim at Massachusetts General Hospital, persuaded the insurance company that managed his Medicaid coverage to pay for the treatment. Kim argued that Day’s liver was at heightened risk from hepatitis C because of medications he takes to prevent his body from rejecting a transplanted kidney.


So last summer, the 58-year-old swallowed one pill a day for three months, and when he was done, the virus was gone. When Kim told him hepatitis C was in his past, Day recalled, “I was like, ‘Are you kidding? How cool is that!’ ”

Rarely do physicians get to tell patients they have been cured of a chronic illness — but that is what happens for more than 90 percent of hepatitis C patients who take the drugs. The previous treatments cost more, had severe side effects, and worked only 40 percent of the time.

“This is transformative for people,” said Dr. David S. Yassa, an infectious-disease specialist at Beth Israel Deaconess Medical Center. “In many ways, it’s one of the most rewarding things that you can do.”

But while some get the cure, many others have to get sick before they can get better. The majority of Medicaid programs require evidence of liver damage before they approve treatment. Patients who are turned away often wait in the shadows, because hepatitis C primarily strikes people who injected drugs.

“Stigma plays a huge role in this,” said Ryan Clary, executive director of the National Viral Hepatitis Roundtable, an advocacy group. “If it were another disease that didn’t have the same sort of stigma, I don’t think we’d have the same conversation.”


A Boston woman in her 60s, who became infected during what she described as a brief flirtation with drugs 20 or 30 years ago, agreed to an interview but didn’t want even her first name published. She said MassHealth/Neighborhood Health Plan would not cover her treatment because she remains healthy, so she lives with hepatitis C and hopes for the best.

“I’d think they would want to prevent me from becoming sick,” she said.

Baby boomers who used drugs in their youth, or who had blood transfusions before a screening test became available in 1992, could produce an epidemic of liver disease as they age. Massachusetts law says primary care physicians must offer a hepatitis C test to all patients born between 1945 and 1965.

Another age group presents new reason for concern — young people who inject drugs. In Massachusetts, hepatitis C infections among 15- to 29-year-olds increased 37 percent from 2007 to 2014, even as the number of cases overall remained steady.

Yet the MassHealth managed care organizations, along with half of the nation’s Medicaid programs, will pay for the drugs only if a person has stopped using alcohol and illicit drugs, for fear patients will be reinfected. Health professionals estimate only 2 percent become reinfected. Meanwhile, drug users who remain untreated may continue to spread the illness.


The US Centers for Disease Control and Prevention estimates that 60 to 70 percent of people infected with hepatitis C will develop chronic liver disease, 5 to 20 percent will develop cirrhosis, and 1 to 5 percent will die from liver cancer or cirrhosis. The CDC reported last month that liver cancer is among the few cancers increasing in prevalence — and half of liver cancer cases are caused by hepatitis C.

The first of the new hepatitis C drugs — Sovaldi, approved in late 2013 — is famous for its list price of $1,000 a pill, or $84,000 for the 12-week course of treatment. But Medicaid programs never pay that much. They get an automatic 23 percent discount, and negotiate additional rebates beyond that. Those negotiated prices are kept secret, but advocates estimate states pay roughly $40,000 to $45,000 per course of treatment.

Even at the discounted price, the drugs are proving to be budget busters. “The plans lost millions of dollars,” said Lora Pellegrini, president of the Massachusetts Association of Health Plans. So the plans set limits, meaning the drugs would go only to those already sick.

Robert Greenwald, faculty director of the Center for Health Law and Policy Innovation at Harvard Law School, in February led a class-action lawsuit against the state of Washington, asserting its Medicaid program was illegally rationing hepatitis C drugs.

In Massachusetts, he has written MassHealth officials asking to collaborate on ways to make the drugs more available. But state officials have rebuffed him, because, he said, they don’t want to admit “that it’s all about costs. . . . They know that’s not a legitimate grounds on which to deny people treatment.”


Greenwald called the state’s approach baffling. The state, he said, pays $10,000 a year to keep a person with HIV healthy for decades, but balks at a one-time $40,000 payment to cure someone of hepatitis C.

But Dr. Steven D. Pearson, president of the Institute for Clinical and Economic Review, a nonprofit that evaluates the value of medical treatments, said state Medicaid programs are taking a reasonable approach to a dilemma that causes them “honest anguish.”

“Any effort to try to treat the vast majority of patients is financially impossible,” he said. “This disease doesn’t progress rapidly. . . . There’s no great emergency to treat right away.”

But doctors who advocate treatment point out that waiting for liver damage comes at a high price: The damage remains even after those patients are cured of hepatitis C, and the patient is forever at risk of liver cancer and needs lifelong monitoring.

“As a provider, to have to sit across from a patient who has this infection and to tell them, ‘I’m so sorry, your liver isn’t sick enough yet. I can’t treat you,’ — it’s crazy,” said Dr. Stacey Trooskin, an infectious-disease specialist at Drexel University College of Medicine in Philadelphia.

Trooskin and other advocates in Pennsylvania persuaded the state to remove the requirement that patients show they have abstained from drugs and alcohol. The state also eased requirements for liver damage.

In Connecticut, starting last July 1, Medicaid patients with hepatitis C don’t have to be sick or sober to get the drugs.

“This saves untold suffering and expense in the long run for our enrollees and taxpayers in general,” said David Dearborn, spokesman for the Connecticut Department of Social Services .

In Massachusetts, Mass-Health Director Daniel Tsai declined comment.

His spokeswoman, Michelle Hillman, said in an e-mail the agency has recently launched a renewed effort to extract further rebates from manufacturers.

In January, Merck introduced a fourth drug in the same class, priced lower than its predecessors, raising hopes that competition will drive down prices.

Asked whether Massachusetts will consider lifting the restrictions, Hillman would say only that MassHealth seeks “a sustainable, cost-effective approach to covering MassHealth members who need treatment for hepatitis C infection.”

In contrast, the US Department of Veterans Affairs announced last month it would pay for hepatitis C treatment for all infected veterans, regardless of the condition of their livers, at a cost of $1 billion in the current fiscal year.

The restrictions states have imposed, although common, are not allowed by Medicaid rules, according to a notice in November from the US Centers for Medicare & Medicaid Services. The agency referred state officials to guidelines for professional medical organizations, which recommend treating all patients with hepatitis C, except those expected to die within a year.

It also objected to inconsistent policies within a state’s Medicaid program, as happens in Massachusetts. One-third of MassHealth enrollees face no restrictions on access to hepatitis C drugs. But two-thirds have their care managed by six insurance companies, each with its own set of requirements. As a result, from December 2013 through January 2016, MassHealth paid to treat 2,830 hepatitis C patients among the one-third with no restrictions, but only 1,600 from the rest of the population.

All told, MassHealth spent $318.5 million in federal and state dollars on hepatitis C drugs during those 26 months. (The annual MassHealth budget is $15.4 billion.)

Dr. Benjamin Linas, a Boston University researcher who has studied the cost-effectiveness of hepatitis treatments, said Medicaid programs are exaggerating the financial risk, because people are slow to seek treatment.

“The root cause of the entire problem,” Linas added, “is the fact that pharmaceutical manufacturers decided to price those drugs for maximal profit.”

In January, Massachusetts Attorney General Maura Healey warned Gilead Sciences Inc. that its high prices for Sovaldi and Harvoni “may constitute an unfair trade practice in violation of Massachusetts law.”

But the manufacturers defend their pricing. Gilead said in a statement the company “responsibly and thoughtfully” priced its drugs to be less expensive than previous treatments. The company also said it has worked with MassHealth “to offer pricing which allows the state to treat all eligible patients.”

Dr. John B. Wong, chief of the Division of Clinical Decision Making at Tufts Medical Center, said the controversy points to a bigger issue: “How do you strike the balance between providing incentives for innovative breakthrough drugs like Sovaldi, which is an incredible achievement — how do you preserve that incentive and also preserve access?”

Felice J. Freyer can be reached at felice.freyer@globe.com.