California Could Spend Billions on Hep C Drugs for 10% of Residents

If 10% of Californians who have hepatitis C are treated with newer, more effective yet costly specialty drugs, projected costs over the next 12 months would be $4.77 billion, with $2.05 billion of that spent on the state-funded population. That’s one of the findings of a study conducted by The Taylor Feldman Group for the California Association of Health Plans that was released last month.

If a 30% discount on the drugs is applied, costs for 10% of all residents would be $3.34 billion, of which $1.43 billion would be spent by the state-funded population, which includes people in prisons, state hospitals and programs such as the Medi-Cal managed Medicaid program, the California Public Employees’ Retirement System (CalPERS) and the AIDS Drug Assistance Program.

The study, titled Hepatitis C Specialty Drugs: Prevalence, Treatment and Cost Projections for State of California, includes five treatment regimens: eight, 12 and 24 weeks for Harvoni (ledipasvir/sofosbuvir), and 12- and 24-week regimens of Sovaldi (sofosbuvir) and ribavirin. Although it acknowledges that there are various drug combinations available, analysts chose those two Gilead Sciences Inc. drugs because they are “currently holding a 90%+ market share.”

“With a host of potentially six-figure priced drugs due to hit the market this year, this report shows how just one new treatment can blow a hole in state and federal budgets,” said Charles Bacchi, president and CEO of the California Association of Health Plans. “These findings illustrate that this pricing trend is not sustainable for our state, its taxpayers and our public programs.”

The California Department of Health Care Services on July 1 released its treatment policy for hepatitis C management. The conditions that identify people for treatment include the following:

-METAVIR score of F2 or greater.
-People with liver cancer who have a life expectancy of more than 12 months.
-HIV co-infection.
-Hepatitis B co-infection.

Other policies include 28-day quantity limits and lab testing that verifies baseline hepatitis C virus-RNA level and genotype, and follows current American Association for the Study of Liver Diseases/Infectious Diseases Society of America guidelines.

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