Sovaldi is a new wonder drug that can cure Hepatitis C — but each pill costs $1000!
That’s a real headache for Medicaid health insurance programs. Maybe the health managers could take aspirin to cure that– it’s a lot cheaper than Sovaldi. But it won’t solve the problem of how they’re going to pay for the treatment.
According to a report in Forbes, it’s the Medicaid program which is being hit badly because so many of the patients who need Sovaldi tend to come from low income groups and couldn’t possibly afford $1000 a pill without the support of government insurance. The drug, which was developed by Gilead Sciences, has proven very effective in treating Hepatitis C, a disease affecting some 3 million people in the U.S.
Jeff Myers, president and chief executive officer of Medicaid Health Plans of America, told Forbes,“This is going to be a monumental problem for Medicaid and our plans.”
It is estimated that Medicaid patients could account for up to 30 percent or more of the patients who are or will be taking Sovaldi. This translates to a cost of $1 billion or more just this year,
“Medicaid cannot handle that kind of charge,” Myers said.
The total cost of the full course of treatment is up to $90,000 per patient says a Fox News article. But, it also points out that the treatment is successful in 90 percent of cases. Unfortunately, Medicaid was simply not prepared to handle this level of expenditure. One suggestion is to limit the use of Sovaldi to the sickest patients. Another is to develop some type of alternative financing plan.
Myers said that it’s been 30 years since they had to face a similar situation when they launched a series of effective – but expensive – treatments for HIV cases. At that time, a special state program was created. It was called the AIDS Drug Assistance Program, or ADAP.
Myers added: “Eventually, you are going to have to have some kind of ADAP structure. You have other drugs coming on board. It doesn’t appear that you are going to have a significant price reduction anytime soon.”
An additional factor is that the demand for Sovaldi follows an influx of patients in over 20 states who have expanded Medicaid under the Affordable Care Act.
Gilead has been criticized for its pricing strategy by private insurers. The largest private insurer in the U.S., United Health Group, says that Sovaldi has already cost it $100 million. In addition to UHG, Medicaid programs are now contracting with other private health insurance companies like Aetna, Humana, Centene and Molina.
At $1000 a pill, the costs for Sovaldi could run into the billions!