New York AG launches probe into insurers' coverage of hep C drugs--or lack thereof

New York Attorney General Eric Schneiderman

Insurers are grappling with the high cost of hep C meds from companies such as Gilead Sciences ($GILD) and AbbVie ($ABBV), often limiting access to the drugs to the sickest patients. Now, the New York state attorney general is investigating the matter, calling on 16 health insurance companies to answer questions about their hep C coverage.

New York Attorney General Eric Schneiderman's office is asking some of the country's biggest insurers--including Anthem ($ANTM), Aetna ($AET) and EmblemHealth---to hand over documents explaining how they make coverage decisions for the pricey hep C meds, Bloomberg reports.

Hep C drugs come with a promise of a cure, but also have list prices of about $1,000 a pill, or $84,000 per patient, in the case of Gilead's Sovaldi. Even including discounts that range to 40% or more, that cost is too much for some insurers to stomach, considering the high numbers of patients needing treatment. And some Medicaid programs have refused to cover the drugs at all.

Anthem is standing by its recent hep C coverage decisions, saying that it expanded patients' access to 6 of the newer oral treatments last year, company spokeswoman Jill Becher told FiercePharma in an emailed statement. "This decision was based on evolving medical evidence and unrelated to any regulatory inquiries," Becher said.

Unsurprisingly, the health insurance industry is not pleased about the recent probe. The New York AG's subpoena "is overly broad and does not take into account evolving guidance related to these new therapeutic classes of drugs," Leslie Moran, a spokeswoman for the industry group New York Health Plan Association, told the news outlet.

And some of the blame should be placed on drugmakers, rather than insurers, Moran said. The latest investigation "does not take into consideration the impact of excessive and unsupported pricing of these drugs--which has a negative impact on affordability of coverage," Moran said, as quoted by Bloomberg.

The probe adds fuel to the fire as patients push back at insurers over restricted access to hep C meds. Last month, two patients in Washington state sued insurers Group Health Cooperative and BridgeSpan for limiting coverage to pricey hep C treatments. Insurers think the drugs are too expensive to cover, so now patients will have to wait to get treatment, lawyers for the plaintiffs said at the time.

"When an insurer limits coverage only to its sickest members, it amounts to an irrational and short-sighted rationing of care. From the perspective of an individual living with HCV who is excluded from the cure, that care is the very definition of 'medically necessary,'" said Kevin Costello, litigation director at the Center for Health Law and Policy Innovation at Harvard Law School.

- read the Bloomberg story

Special Reports: The top 15 pharma companies by 2014 revenue - Gilead | Biopharma posts a chart-topping 41 new drug approvals in 2014 - Harvoni -Viekira Pak

Read more on