You can add Colorado to the list of states being sued for refusing to widen access to the hepatitis C medications in its state Medicaid program.
The lawsuit, which is seeking class action status, was filed on behalf of two Colorado citizens on Monday in response to a longstanding policy by the state Medicaid program to restrict coverage only to people with the most advanced stages of liver disease, such as cirrhosis.
The state “illegally restricts” access to medically necessary treatment “that can be provided only by” the available hepatitis C drugs, the lawsuit states. The state also “violates” standard medical care and “flaunts the clear instructions and warnings” of federal officials. The suit was filed by the American Civil Liberties Union and the Center for Health Law and Policy Innovation at Harvard Law School.
The lawsuit comes amid increasing pressure on public and private payers to loosen coverage restrictions on the hepatitis C medicines. These new types of treatments began arriving in early 2014 and boast very high cure rates, but are also costly, ranging in price from $54,600 to $94,500, depending upon doses and regimen, although this is before rebates or discounts are applied.
High cure rates prompted many physicians to write prescriptions — notably, for the Sovaldi and Harvoni drugs sold by Gilead Sciences (GILD). Drug makers and their supporters have argued the near-term spending saves money down the road on treating liver failure or liver cancer, and on liver transplants. But payers have complained the medicines are straining their budgets, and some instituted coverage restrictions.
Since 2013, the Colorado Medicaid program spent $26.6 million treating 326 hepatitis C patients, or about $82,000 per person, according to the state Department of Health Care Policy and Financing, which oversees the program. Last month, a department spokesman told us that if the state were to cover every eligible Medicaid patient with hepatitis C, it would cost $237 million.
State restrictions are under fire, though. Last November, the Obama administration wrote state Medicaid programs they may be violating federal law by restricting access to hepatitis C medicines. And last May, a federal court judge ordered the Washington state Medicaid program to lift coverage restrictions.
After the American Civil Liberties Union last month threatened to sue Colorado officials, the state Department of Health Care Policy and Financing loosened restrictions so that more people would be eligible for coverage under the Medicaid program.
The state determined that more patients would be covered for the drugs depending on the severity of their disease. Now, up to 70 percent of roughly 14,450 people who are diagnosed with chronic hepatitis C are eligible, a department spokesman told us.
However, the lawsuit contends the move did not go far enough and argued there should be no restrictions. The lawsuit argues the medicines do not reverse the disease, so treatment should be provided sooner rather than later; the disease can progress quickly in some patients, suggesting treatment should not be delayed; and common testing methods do not always produce accurate results.
A spokesman for the state Department of Health Care Policy and Financing declined to comment specifically about the lawsuit
We should note that Harvard’s Center for Health Law and Policy Innovation is funded, in part, by three drug makers — Gilead, Bristol-Myers Squibb, and Johnson & Johnson (JNJ). These companies account for between 20 percent and 25 percent of the center’s budget, according to Kevin Costello, the center’s litigation director, although he did not know the size of the annual budget.
However, he maintained that industry support is only used for education and policy advocacy, and that litigation efforts are funded separately by Harvard Law School and private philanthropists. “We have a firewall here,” he said. The center’s industry funding was first reported by Bloomberg News.
As Bloomberg noted, the center’s Director, Dr. Robert Greenwald, last year helped persuade other members of the Presidential Advisory Council on HIV/AIDS to urge federal regulators to call restrictions on hepatitis C drugs “unreasonable and discriminatory.” The council was also urged, however, to seek transparency into drug pricing and negotiations.
Nonetheless, Matt Salo, the executive director of the National Association of Medicaid Directors, questioned the industry funding.
“The access to the medicines is inextricably linked to cost and we would not be having these conversations if the manufacturers hadn’t priced the drugs out of reach,” he said. “Clearly, prices are coming down, in large part, because there’s competition and access is going up, partly because of lawsuits.
“But the (funding) is unseemly,” he continued. The company is “doubling down on tools to keep their prices and profit margins and funding different avenues to do that, when what they should really be doing is making drugs affordable in the first place.”
An attorney for the ACLU in Colorado told us the organization has not accepted industry funding. An attorney for the law firm that also represents two two plaintiffs also said industry was not underwriting the firm’s work.
A Gilead spokeswoman says the company “has not provided funding to support the current hepatitis C-related litigation against the state of Washington or any of the other similar lawsuits that have been filed across the country. It’s not a surprise, however, that some of the same organizations that we have funded in relation to outreach and education on behalf of HCV patients would also advocate for reducing any barrier a patient may face to accessing care.
She added that Gilead has not played “any role” in the litigation, but believes restrictions on “how sick a Medicaid beneficiary has to be to receive treatment are bad for patients, bad policy, and unlawful with respect to Medicaid.”