(Adds analyst quote, Gilead declines comment and background)
By Caroline Humer
April 11 Texas is reconsidering whether to
impose strict limits on Gilead Sciences' $84,000
hepatitis C treatment for patients on the state's Medicaid
health plan for the poor, at the urging of outside advisers, a
state official said on Friday.
The Texas Health and Human Services Commission, which
oversees Medicaid, had proposed a policy to allow the drug,
Sovaldi, to be used mainly for sicker patients such as those
whose hepatitis C had developed into advanced liver disease,
according to state documents reviewed by Reuters.
As with most state Medicaid programs, an outside committee
of pharmacists and doctors in Texas meets quarterly to review
new drugs and recommend policies to the program's director. The
agency had been planning to begin offering coverage in July if
the committee recommended the policy at its Thursday meeting.
"The board asked state staff to meet with stakeholders,
including gastroenterologists, about the criteria, whether it
was too strict, and the prior authorization process," Texas
Health and Human Services Commission spokeswoman Stephanie
Goodman said. In the interim, Medicaid patients in Texas will
still not be prescribed the drug.
"We're looking at our options and how that will affect our
timeline to get the drug covered," Goodman said.
A Gilead spokeswoman declined to comment.
The deliberations in Texas, one of the most populous states
and home to a relatively large number of hepatitis C patients,
underline the difficulties of state health officials in deciding
how to cover the Gilead treatment. It would have been the first
major state to craft a policy. Discussions are continuing in
California, Colorado and Virginia among others.
The Texas move has also tabled a plan that the state had
hoped could be in place by July in which it would make
supplemental payments to insurers to help offset the high cost
of the drug.
Texas is among states including California and Florida asked
by insurers who manage Medicaid plans to pay for the treatments
directly, a move they said was needed because they would
otherwise lose money on their contracts.
Leerink managed care analyst Ana Gupta said that the Texas
per-use payment could be a viable approach to compensating
insurers in other states.
"It covers the use of the drug while still potentially
limiting the utilization only where medically necessary," Gupta
said. She said the price tag to insurers may be $8 billion for
eligible patients in Medicaid and similarly structured plans
such as those sold on the Obamacare exchanges.
Sovaldi has become the focal point for a global outcry over
the price of novel medicines, attracting criticism from the
World Health Organization, doctors' groups, state officials and
insurance industries. Sovaldi is the first drug to provide a
true cure for most patients who take it, but its cost could
reach more than $200 billion if widely used in the United
States, posing huge risks to state budgets and insurers'
Gilead Sciences received U.S. regulatory approval for the
treatment in December. Many patients are prescribed the drug in
combination with another new drug, Johnson & Johnson's
Olysio, pushing the treatment cost to around $150,000.
Gilead shares, which have been hit by questions over
Sovaldi's price in recent weeks, rose as much as 4 percent on
Friday. The company reported new data on a combination therapy
CARVING OUT THE DRUG
One of the country's largest insurers, WellPoint Inc
, told investors last month that it was in talks with
state Medicaid agencies about these high costs.
"Our view is pretty simply it either needs to be covered in
the rates and covered quickly or you have to take it out of
managed care and put it into fee for service and pay for it that
way," said Richard Zoretic, president of WellPoint's government
Some patient advocates prefer the second approach because it
could encourage better access to the drug.
"There is this basic bar in Medicaid where they do have to
cover the drug. The question is who is going to get it and what
will the rules around that be," said Anne Donnelly, director of
healthcare policy at Project Inform based in San Francisco.
For instance, Texas' policy on use of the drug this year
appears to be stricter than the policy adopted in Oregon. Its
pharmacy committee has recommended limiting the use of Sovaldi
to patients who have moderate to severe fibrosis of the liver
whereas Texas was targeting advanced liver disease.
State Medicaid programs, funded by both state and federal
government, set the policy for drug use in their fee-for-service
programs. Coverage can differ because the vast majority of
patients are in plans managed by private insurers that heed the
state's recommendations but may also have their own practices.
(Reporting by Caroline Humer; Editing by Jonathan Oatis and