State prison systems are unable to lock up savings by using new hepatitis C treatments because they can’t afford the high price tags.
Less than 1 percent of more than 106,200 inmates in 41 state prison systems were treated as of January 2015 with a new batch of revolutionary medicines, and most prison systems were unable to receive discounts available to other government agencies, according to a study published Wednesday in Health Affairs. The authors surveyed departments of corrections in all 50 states.
“Despite claims by manufacturers that nobody pays the full price, if anybody is paying through the nose for these drugs, it is state prisons,” said Gregg Gonsalves, the lead author of the study and codirector of the Yale Global Health Justice Partnership. “They have some of the highest infection rates in the country and so have extraordinary need, but pay astronomical prices.”
About 17 percent of those incarcerated in state prisons are believed to be infected with hepatitis C, compared with about 1 percent of the general US population.
The medicines — three of which are sold by Gilead Sciences (GILD) — cost between $54,600 to $94,500, depending upon doses and regimen, although this is before rebates or discounts are applied. Despite the hefty price tags, drug makers and others argue that the medicines yield 90-plus percent cure rates, which in the long run, cost less than treating liver cancer or transplants.
But the study found that the prices paid by state prison systems for a 12-week regimen of Gilead’s Sovaldi and Harvoni — the most widely used treatments at the time the study was conducted — varied widely. As of Sept. 30, 2015, the cost for Sovaldi ranged from $43,400 to $84,000, while the cost for Harvoni was anywhere from $44,400 to $94,500.
By contrast, a US Senate Finance Committee report issued last year after investigating Gilead pricing strategies noted that the Federal Bureau of Prisons, the US Department of Defense, and the US Department of Veterans Affairs receive at least a 24 percent discount on the drugs. And Medicaid receives a 23 percent discount.
“Without increased discounts or funding, price may remain a barrier to expanding the use of direct-acting antivirals in state correctional facilities,” the study concludes.
[UPDATE: A Gilead spokeswoman wrote us to say the company “provides discounts to prison systems, sometimes directly, or through pharmacy-benefit managers or multi-state purchasing groups. The rates we offer are competitive with commercial health insurance rates.”]
The cost of the hepatitis C treatments has been a key factor in the debate over prescription drug prices. Before Gilead faced new competition from AbbVie (ABBV) and Merck, the company faced bitter complaints from public and private payers. Despite increased choices, the World Health Organization reported that the cost last year for two Gilead drugs remained out of reach for people in many poor countries.
Such discrepancies in prices offered prison systems and other government agencies have been noted previously, although this is the first such study to quantify the extent to which inmates in state prison systems are going untreated as a result of the cost. Lawsuits, meanwhile, have been filed in at least four states — Massachusetts, Minnesota, Pennsylvania, and Tennessee — by inmates seeking treatment.
At least $39.8 million was spent yearly on hepatitis C treatment by the 41 state departments of corrections that reported data on spending. In all, the study found the departments spent a median of 6 percent of their annual drug spending on hepatitis C drugs. And 16 states devoted 10 percent or more of their drug spending to hepatitis C drugs, and eight states devoted 20 percent or more.
Ironically, a study published last year found that the United States can save money if prison inmates are screened and treated for the disease. If more inmates are treated, the disease would be less likely to spread within prisons. Beyond that, hepatitis C would be less likely to spread in the wider population once inmates are released.
Depending upon the screening and treatment scenario, the study concluded that the costs associated with hepatitis C could be reduced anywhere from $260 million to as much as $760 million, according to the study, which was published in the Annals of Internal Medicine
To cope with the costs, prison systems are employing various tactics to reduce spending. For instance, 41 states reported that patients are treated with the medicines based on the seriousness of their disease, and many considered the length of a patient’s remaining prison sentence in triaging patients for hepatitis C treatment. The prison systems also assess risky behavior that can lead to reinfection.
Some are also pursuing discounts through the 340B Drug Discount Program, a federal program that offers discounted prices to eligible health care organizations with sizable low-income, vulnerable patient populations. Although state prisons do not qualify for the program, they can partner with qualified health centers. And 13 states indicated they try to obtain the drugs through procurement groups.