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Medicaid insurers struggle to pay for pricey drugs


Medicaid insurers are struggling to pay for pricey drugs, leading some to request states to increase payments so they can run their plans. Meanwhile, some states are deciding restrict the expensive medications.

In Massachusetts, Medicaid insurers are facing more than $140 million in losses so far this year, which they largely attribute to paying for Sovaldi, the new hepatitis C drug that costs $1,000 per pill, plus there are almost 190,000 new members, the Boston Globe reported.

For example, Boston-based Neighborhood Health Plan said it has a $99 million six-month operating loss and it attributed $10 million of that deficit to covering Sovaldi claims. And Medford-based Network Health, which lost $16 million in the first half of the year, cited Sovaldi as a large reason for its shortfall.

Although the insurers said they expected Sovaldi's release to the market and knew their members would be disproportionately prescribed the drug, they said they were unaware it would cost so much, the Globe noted. A full course of treatment for one patient costs about $84,000 and takes about 12 weeks.

Because of that high price tag, some state Medicaid programs in California, Florida, Louisiana and Oregon are choosing to restrict the specialty drug by using prior authorizations that often require patients to be in the worst stage of hepatitis C and otherwise drug-free, reported Governing.

The issue of paying for Sovaldi is particularly relevant to Medicaid because a majority of the roughly 3.2 million people with hepatitis C have Medicaid insurance coverage.

A recent report says Sovaldi will drive up Medicare Part D spending--to the tune of up to almost $6 billion next year, and insurers claim the drug will have the same effect on Medicaid, FierceHealthPayer previously reported.

To learn more:
- read the Boston Globe article
- see the Governing article

Related Articles:
Report: Medicare Part D spending will soar from hep C drugs
Insurer initiatives temper rising healthcare costs
Insurers urge Gilead rivals to discount hep C drugs
Report questions safety, efficacy of pricey hepatitis C drug Sovaldi
AHIP slams pharma for taking advantage of insurers
Pricey hep C drugs force insurers into ethical dilemma