JAMA: Hep C drugs could add $300 to every American's insurance premium

The payer panic over the cost of Gilead Sciences' ($GILD) pricey-and-wildly-successful hepatitis C drug Sovaldi has been well documented. But now, one of the two biggest pharmacy benefits managers in the U.S. says the debate over Sovaldi's $1,000-per-pill price is a symptom of a bigger anxiety.

Specialty drugs, in two words. So, not just the new generation of highly effective, highly expensive hep C drugs, but a whole raft of drugs that stand to burden the U.S. healthcare system. And with that in mind, payers are going to have to develop an entire menu of ways to control their spending on pricey meds, CVS Caremark ($CVS) CMO Troyen Brennan and CSO William Shrank say in a JAMA commentary published online Monday.

As the two authors point out, it's not just the price of Sovaldi that's the trouble. The drug is highly effective and promises to save money on pricey hep C complications. "[T]he more important issue is the number of people eligible for treatment," the commentary notes. "Sofosbuvir is not really a per-unit cost outlier but is a 'total cost' outlier because of its high cost and very large population eligible for treatment."

That's millions of people, and many billions of dollars. "The simple math is that treatment of patients with HCV could add $200 to $300 per year to every insured American's health insurance premium for each of the next 5 years," the authors write.

Is it any wonder that insurers are trying all sorts of things to avoid the cost? Barring Sovaldi from formularies in spite of new treatment guidelines. Treating only the sickest patients. Demanding, in the case of Medicaid programs, additional state funding just to cover its cost. With more pricey specialty meds rolling out all the time, payers will be looking these and other strategies to save money. Consider, for instance, the state of Arkansas' choice to bar some cystic fibrosis patients from using Kalydeco, Vertex Pharmaceuticals' ($VRTX) $300,000 treatment.

"Effective approaches to control costs for high-priced medications need to be developed and evaluated to ensure broad, equitable, and appropriate use of these new interventions in an already stressed healthcare system," the commentary states. Any ideas?

- see the CVS Caremark release
- get the JAMA commentary

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