The Texas Health and Human Services Commission,
which oversees Medicaid, had proposed a policy to allow the drug,
Sovaldi, to be used mainly for sicker patients such as those whose
hepatitis C had developed into advanced liver disease, according to
state documents reviewed by Reuters.
As with most state Medicaid programs, an outside committee of
pharmacists and doctors in Texas meets quarterly to review new drugs
and recommend policies to the program's director. The agency had
been planning to begin offering coverage in July if the committee
recommended the policy at its Thursday meeting.
"The board asked state staff to meet with stakeholders, including
gastroenterologists, about the criteria, whether it was too strict,
and the prior authorization process," Texas Health and Human
Services Commission spokeswoman Stephanie Goodman said. In the
interim, Medicaid patients in Texas will still not be prescribed the
"We're looking at our options and how that will affect our timeline
to get the drug covered," Goodman said.
A Gilead spokeswoman declined to comment.
The deliberations in Texas, one of the most populous states and home
to a relatively large number of hepatitis C patients, underline the
difficulties of state health officials in deciding how to cover the
Gilead treatment. It would have been the first major state to craft
a policy. Discussions are continuing in California, Colorado and
Virginia among others.
The Texas move has also tabled a plan that the state had hoped could
be in place by July in which it would make supplemental payments to
insurers to help offset the high cost of the drug.
Texas is among states including California and Florida asked by
insurers who manage Medicaid plans to pay for the treatments
directly, a move they said was needed because they would otherwise
lose money on their contracts.
Leerink managed care analyst Ana Gupta said that the Texas per-use
payment could be a viable approach to compensating insurers in other
"It covers the use of the drug while still potentially limiting the
utilization only where medically necessary," Gupta said. She said
the price tag to insurers may be $8 billion for eligible patients in
Medicaid and similarly structured plans such as those sold on the
Sovaldi has become the focal point for a global outcry over the
price of novel medicines, attracting criticism from the World Health
Organization, doctors' groups, state officials and insurance
industries. Sovaldi is the first drug to provide a true cure for
most patients who take it, but its cost could reach more than $200
billion if widely used in the United States, posing huge risks to
state budgets and insurers' financial results.
[to top of second column]
Gilead Sciences received U.S. regulatory approval for the treatment
in December. Many patients are prescribed the drug in combination
with another new drug, Johnson & Johnson's Olysio, pushing the
treatment cost to around $150,000.
Gilead shares, which have been hit by questions over
Sovaldi's price in recent weeks, rose as much as 4 percent on
Friday. The company reported new data on a combination therapy
CARVING OUT THE DRUG
One of the country's largest insurers, WellPoint Inc, told investors
last month that it was in talks with state Medicaid agencies about
these high costs.
"Our view is pretty simply it either needs to be covered in the
rates and covered quickly or you have to take it out of managed care
and put it into fee for service and pay for it that way," said
Richard Zoretic, president of WellPoint's government business
Some patient advocates prefer the second approach because it could
encourage better access to the drug.
"There is this
basic bar in Medicaid where they do have to cover the drug. The
question is who is going to get it and what will the rules around
that be," said Anne Donnelly, director of healthcare policy at
Project Inform based in San Francisco.
For instance, Texas' policy on use of the drug this year appears to
be stricter than the policy adopted in Oregon. Its pharmacy
committee has recommended limiting the use of Sovaldi to patients
who have moderate to severe fibrosis of the liver whereas Texas was
targeting advanced liver disease.
State Medicaid programs, funded by both state and federal
government, set the policy for drug use in their fee-for-service
programs. Coverage can differ because the vast majority of patients
are in plans managed by private insurers that heed the state's
recommendations but may also have their own practices.
(Reporting by Caroline Humer; editing by Jonathan Oatis and Grant
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