For Golden State, a $1 billion tab from Big Pharma to Treat One Disease

cdc-hepc-testCalifornians have gotten an unpleasant taste of the policy complexities caused when Big Pharma sets sky-high prices for life-changing drugs: State health officials say they need to set aside $1 billion to pay for increasing numbers of qualified patients on the state’s Medi-Cal program to receive a costly new treatment for Hepatitis C.

Two drugs, Sovaldi and Harvoni, have been hailed for their positive outcomes in treating Hep C, a blood-borne liver destroying disease. Until recently, it was chronic, largely untreatable, and often led to the deaths of patients who often acquired their infection due to sharing needles for illegal drug use.

California has 14,300 hepatitis C patients on Medi-Cal, the state’s Medicaid program, and they’re eligible for therapies because they’re enrolled in managed care programs in which the state pays commercial insurers sums for care. California and the federal government will join in paying for the Hep C drugs and treatment.

That hasn’t stopped state legislators from fuming about the cost−anywhere from $54,000 to $84,000 per patient, just for their drugs.

And while that’s less than it has been−the state had been paying insurers more than $100,000 for Hep C patients in managed care−it’s still a giant tab for taxpayers, even in a state with the world’s ninth largest economy.

The upside is that, after therapy, the patients may see their viral loads reversed sufficiently that they’re, effectively, clear of a chronic, debilitating, and fatal condition.

The trade-off of their improved health at such extreme cost isn’t right, lawmakers say, including one senator who observed of Big Pharma’s huge charges for its medications: ”Every [company] should have a right to make a profit, but not an excessive profit to the extent that it costs taxpayers not only in tax dollars but also in premium dollars.”

Some policy experts see treatment of Hep C, in particular, falling in cost, partly because other drug companies are entering the market with alternatives to the pricey, existing products.

Big Pharma and California lawmakers are warring over costs, including pending legislation requiring makers “to disclose drug price increases of 10 percent or more, as well as the introduction of drugs costing more than $10,000 per year or course of treatment. It would also require health insurers to report how much of each premium dollar is spent on prescription drugs.”

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