Bowing to pressure, seven commercial insurers reached an agreement on Tuesday with the New York attorney general to remove barriers to coverage of pricey hepatitis C medicines.
The health plans — Empire BlueCross BlueShield; Affinity Health Plan; Excellus BlueCross BlueShield; HealthNow; Independent Health; United Healthcare/Oxford, and MVP Health Care — will eliminate restrictions that require their members to have an advanced stage of the disease, such as liver scarring, before treatment would be considered medically necessary. And coverage cannot be denied based on alcohol or drug use.
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The move is the latest effort to force public and private payers to revise their coverage of the treatments, which boast very high cure rates but also high price tags. The hepatitis C treatments — which include two Gilead Sciences medications — range in price from $54,600 to $94,500, depending upon doses and regimen, although this is before any rebates or discounts are applied.
The price tags helped fuel a national controversy over the cost of prescription medicines, an issue that is the focus of congressional hearings and a talking point in the presidential campaign.
For their part, the drug makers have consistently maintained their medicines offer good value because they lower the potential for long-term costs of treating liver disease, liver cancer, and transplantations. But as we have previously written, public and private payers have complained that the medications are budget busters, and many have taken steps to restrict coverage.
This explains the pushback.
Two weeks ago, for instance, New York Attorney General Eric Schneiderman filed a lawsuit against another insurer, Capital District Physician’s Health Plan, for refusing to pay for the drugs unless patients had an advanced stage of the disease. The health plan, which has about 450,000 members in upstate New York, has disputed the claims.
Over the past year, consumers have been also fought back by filing their own lawsuits against insurers in California and Washington, as well as the Medicaid program in Washington and the Massachusetts prison system. In some instances, insurers have responded by relaxing their coverage restrictions on hepatitis C treatments. One example is Anthem Blue Cross in California.
Another state official, meanwhile, has pursued a different strategy to lower the cost of hepatitis C drugs. Earlier this year, Massachusetts Attorney General Maura Healey threatened to sue Gilead for violating consumer protection laws if the drug maker refuses to lower its prices. A source familiar with the matter says that talks were held last month and remain ongoing.