States limit access to hep C meds amid pricing battle

As hep C drugmakers such as Gilead Sciences ($GILD) and AbbVie ($ABBV) continue to duke it out for dominance, there is one piece of the market both sides are battling to claim: state Medicaid programs.

Competition between Gilead and AbbVie has allowed states to negotiate discounts of 40% or more for the drugs, a move that should help states widen coverage for the meds, The Wall Street Journal reports. But most states are still hesitant to open access to all eligible patients and will continue to limit access to individuals with advanced liver damage, Matt Salo, executive director of the National Association of Medicaid Directors, told the newspaper.

"Total costs will go up," Salo said. "While we're fortunate that the price per pill has come down from $1,000, it's still too high to provide complete access for the millions of infected patients in this country."

Take Gilead's Sovaldi, for example, which has a list price of $84,000 per treatment course. States spent a total of $1.08 billion on the drug during the first 9 months of 2014, representing 82% of all hep C drug spending, according to the WSJ story. But Texas, which has the third-largest Medicaid population after California and New York, did not spend anything on Sovaldi during the first 9 months of the year. "Price was the biggest issue" affecting coverage, a Texas state spokeswoman told the WSJ, adding that the state has made AbbVie's hep C combo Viekira Pak available to patients with advanced disease.

California spent about $86 million on the drug in the first 9 months of 2014, but is singing a similar tune to Texas when it comes to administering benefits. Doctors in the state say some insurers are denying hep C meds to patients with the most advanced stages of the disease, the WSJ reports. The state said it received reports about "inappropriate denials" but that "the majority of the denials were appropriately made," Anthony Cava, spokesman for the California Department of Health Care Services, told the newspaper.

Meanwhile, hep C drugmakers continue to face pushback from PBMs and lawmakers over sky-high prices for meds. Last year, Express Scripts ($ESRX) CMO Steve Miller ignited a pricing war by selecting AbbVie's Viekira Pak as its preferred hep C treatment. And even though Gilead has responded with a few deals of its own, discounting has already taken a bite out of the company's 2015 revenue forecast.

- read the WSJ story (sub. req.)

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