Hep C patient sues Blue Cross for blocking access to Harvoni

It had to happen: A patient denied the latest hepatitis C drugs has sued her insurance company. In this case, it's Anthem Blue Cross, and the California plaintiff says her plan blocked her from treatment because she's not sick enough to qualify under its rules.

That's not unusual; ever since Gilead Sciences' ($GILD) Sovaldi won approval--and an $84,000-per-patient sticker price--health plans have been balking at the cost. Even after negotiating big discounts on the meds this year, some insurers are limiting coverage to patients in more advanced stages of the disease. And some Medicaid programs aren't paying for the meds at all.

Shima Andre sued Anthem ($ANTM) after she tried and failed to get access to Gilead's Harvoni, a follow-up combo pill to the original, single-agent Sovaldi. It's priced at $95,000 per 12-week treatment course, but for many patients, it's the only drug necessary to knock out a disease that previous required several meds, including the difficult-to-tolerate interferon.

Anthem said she'd have to wait until a liver biopsy showed scarring at a specified level. As hepatitis C progresses, it damages the liver, eventually triggering cirrhosis and even liver cancer. Filed in Los Angeles Superior Court, Andre's lawsuit alleges breach of contract and seeks unspecified damages.

It might seem that Andre has time to wait. But she wants to have a baby. "I want to have a child, I want to enjoy motherhood, but I can't until Blue Cross approves my treatment so that I can be cured of Hep C," Andre said. "Blue Cross isn't just interfering with my health; their decision is preventing me from having a child."

Attorney Ricardo Echeverria

Andre's attorneys claim that Andre's insurance policy doesn't give Blue Cross the authority to withhold treatment this way. "Blue Cross is simply putting profits over patients," Andre's attorney, Ricardo Echeverria, said in a statement.

If Andre's legal bid succeeds, that would be bad news for insurers trying to limit their costs on hepatitis C, which ran into the billions last year as patients sought treatment with the new generation of therapies. And that's a lot of insurers; despite the steep discounts Gilead and rival drugmaker AbbVie ($ABBV) offered to gain a spot on their formularies, many plans--including Medicaid plans--are only letting patients with advanced liver damage get the meds.

"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," Matt Salo of the National Association of Medicaid Directors told the Wall Street Journal recently.

Needless to say, Andre's lawsuit could have a completely different effect for Gilead, AbbVie and other drugmakers preparing to launch in the hep C market. Broader access equals bigger sales--though it might trigger tougher price negotiations for 2016.

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