More scary hep C cost estimates: Medicare Part D to take a $2.9B-plus hit next year

Gilead's Sovaldi--Courtesy of Gilead

Before Gilead's ($GILD) hep C wonder drug Sovaldi even hit the market, payers started lamenting what the costly med would do to their budgets and bottom lines. Now, a new study has quantified the financial hit, at least where Medicare Part D is concerned: Sovaldi and its next-gen brethren could hike Part D spending by billions of dollars next year alone.

The actuarial firm Milliman forecasts a federal spending increase somewhere in the range of $2.9 billion to $5.8 billion in 2015 at the hands of hepatitis C high-flyers, it said in a recent report commissioned by U.S. payers. And as a result, Part D premiums could rise by as much as 8.6%.

"The study shows taxpayers will bear the lion's share of the increased drug costs for Medicare Part D beneficiaries taking hepatitis C drugs," Pharmaceutical Care Management Association CEO Mark Merritt said in a statement.

These findings are just the latest to point the finger at Sovaldi, which costs $84,000 per 12-week course of treatment, and the field of hep C candidates expected to join it on the market in the near future. A recent JAMA commentary, written by two CVS Caremark execs, predicted that HCV patients could add $200 to $300 per year to every insured American's health insurance premium for each of the next 5 years.

But while insurance holders may be bearing part of the burden, payers are none too happy with the costs they're incurring themselves. Medicaid programs have demanded additional state funding to cover Sovaldi's cost; PBM Express Scripts has begun forming a coalition to exclude the drug until competitors hit the market and drive prices down; and the list goes on.

But as Sovaldi's defenders have repeatedly stressed, there's a good reason for that eye-popping pricetag. The treatment cures 95% of all patients, saving the cost of further therapy--like liver replacements, in some cases--down the line.

"Over time, these new medicines can transform the face of hep C in the U.S. by dramatically reducing the sickness and death associated with the disease," the California Healthcare Institute, a pharma-backed group, wrote in a recent report. "Treating the U.S. hep C population with these new drugs, as opposed to the previous standard of care, could save the lives of thousands of people."

- read the release
- see the report from the California Healthcare Institute (PDF)