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Pharma pushing states to cover high-cost drugs

Written by Diane Archer

When it comes to drug innovations, many would argue that pharmaceutical companies serve the public less well than hoped for. When it comes to marketing innovations or initiatives that drive greater profits, pharmaceutical companies serve themselves far better than one might imagine. Bloomberg News reports on how Pharma is pushing states to cover high-cost drugs.

Pharmaceutical companies are giving significant financial support, hundreds of thousands of dollars, to advocacy and other non-profit groups. It’s another way to boost drug company profits. The non-profit groups are bringing lawsuits against states that restrict access to high-cost prescription drugs for their Medicaid populations.

The non-profits’ goal seems worthy–lift restrictions on critical drugs and ensure that everyone has access to them. But, the drug company’s strategy is more than a little concerning.

First, the strategy makes the non-profits beholden to the pharmaceutical companies that support them. It keeps them from arguing that the federal government should be negotiating and/or setting prescription drug prices. Moreover, if the advocates win their lawsuit against the states, it could threaten state budgets.

In Washington, the suit is focused on getting the State to pay for Gilead’s hepatitis C cure for all of its Medicaid patients, not only the sickest ones. And, the judge on the case already has ordered the State to provide treatment to all Medicaid hepatitis C patients until there is a ruling. As a result, Washington’s budget for this curative treatment has gone from $24 million in 2015 to $222 million in 2017.

Stat News reports that Colorado is the latest state to be sued for restricting access to hepatitis C drugs for their Medicaid patients. The suit claims that denying these drugs to Medicaid patients is illegal and violates standard medical care.

If the plaintiffs prevail, one possible silver lining is that Congress will face even greater pressure to control drug prices. The federal government pays for a large percentage of state Medicaid expenditures. The federal government is projected to spend $174 million  of the $222 million budgeted for the curative treatment by Washington State alone.

And that’s separate and apart from the Medicare program’s expenses for this drug. In 2014 (the latest available data), Sovaldi, sold by Gilead and used to treat hepatitis C, accounted for less than one percent of all Medicare Part D prescriptions nationwide but ranked number one in terms of total sales among all drugs (>$3.1 billion dollars).

If the federal government does nothing, Gilead is sure to get the better of all of us. One Morgan Stanley analyst projects Gilead’s revenue could grow by $30 billion over three years if states are required to lift all restrictions on the use of its hepatitis C drug. Shouldn’t the federal government, which spent tens of millions of dollars in funding the research that led to the development of Gilead’s hepatitis C treatments, insist on negotiating its price on behalf of the American taxpayer? That’s what Democrats and Republicans alike are asking for.

Here’s more from Just Care:


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