Specialty Drugs & Umbrella Drinks


A new drug that successfully treats Hepatitis C is being hailed as a breakthrough, but is also stirring fierce debate for it’s $84,000 price tag………Compounding the issue surrounding HCV drugs is the fact that India, Egypt, and Brazil may pay just 1 percent of the U.S. price tag for Sovaldi……………..Iran, Kenya, Burma, and Mozambique have negotiated the price of $900 for a course of Sovaldi,…..“It’s unfortunate that American patients, employers, and taxpayers aren’t currently being offered a more reasonable price for Sovaldi,” he said. “It’s an issue of both public health and public solvency.”

Editor’s Note: Specialty drug costs can “break the bank” of any employer sponsored medical plan. And, specialty drug costs are hitting more and more plan sponsors these days, a growing phenomenon. We have several clients whose drug costs have soared as a direct result of specialty drug pricing. One patient, for example,  is incurring specialty drug expenses of over $150,000 per year. One group’s Rx spend now represents almost 40% of the total plan spend per year as a direct result of specialty drugs.

Dumping a patient into a public exchange is one solution to getting rid of the risk which is not illegal under PPACA, as far as we can tell (click on link below):

Business Savior – Self Insurance & Shifting Sick Workers To Exchanges

In the case of Sovaldi, perhaps a stipulation in an employer’s plan document to state that the Plan will cover Sovaldi only in India, Iran, Brazil, Egypt, Kenya or Burma. There is nothing in PPACA that specifies where drugs must be covered, is there? Kind of like an EPO or HMO – your covered but only through specified providers who happen to be located in ……..Or how about Reference Based Pricing – “We will pay $900 towards the cost of a full course of treatment of Sovaldi, you pay the difference if any.”

A plan sponsor may offer to pay for the trip  to Brazil, including beach side resort, five star accomodations,  for the duration of the treatment. Since Sovaldi is so inexpensive in Brazil, even with  air fare, lodgings and meals a plan sponsor can save 70% or more. In fact, the patient could even be given a cash reward too along with  free, unlimited number of umbrella drinks while under treatment…………….

Life can be paradise as a patient these days. On the other hand, we don’t want to encourage at risk life styles do we?

“Rather than import the drug, let’s export the patient!” – Homer G. Farnsworth, M.D.

New Hep C Drug Sovaldi Ignites Fierce Pricing Debate – Kristen Fischer

A new drug that successfully treats Hepatitis C is being hailed as a breakthrough, but is also stirring fierce debate for it’s $84,000 price tag.

Sovaldi Pricing Debate

A new drug to treat Hepatitis C (HCV) is stirring concerns about expenditures for specialty drugs. Namely, should a company be allowed to charge patients more for a drug in the U.S., while patients in other countries can receive it at a steep discount?

The debate involves Sovaldi, a drug that is currently approved in the United States, the European Union, Canada, New Zealand, and Switzerland. It’s made by Gilead, a California-based drug company. Sovaldi boasts a cure rate as high as 95 percent, but the medication costs $1,000 a day—or $84,000 for a full 12-week course.

Read More: First Hepatitis C Treatment Guidelines Issued by the WHO »

Hepatitis C Drugs Come with a High Price Tag

According to pharmacy benefits manager Express Scripts’ 2013 Drug Trend Report, the U.S. will spend 1,800 percent more on HCV medications by 2016 than it did last year due in part to Sovaldi.

A 14.1 percent rise in specialty drug spending last year was the lowest in the past six years, but is expected to rise significantly. For the first time, specialty drug spending in 2013 accounted for more than a quarter of the total that Americans spent on pharmaceuticals. Express Scripts expects the spending on specialty drugs go to up 63 percent between 2014 and 2016.

No major therapy class has experienced this large a spending increase over the 21 years that Express Scripts has measured drug trend data.

“Never before has a drug been priced this high to treat a patient population this large, and the resulting costs will be unsustainable for our country,” said Steve Miller, M.D., chief, medical officer at Express Scripts, in a press release. “The burden will fall upon individual patients, state and federal governments, and payers [like Express Scripts] who will have to balance access and affordability in a way they never have had to before.”

According to this report from the U.S. Centers for Medicare and Medicaid, the cost to treat all Americans who have hepatitis C with Sovaldi would cost $227 billion—it currently costs $260 billion a year for all drugs bought in the country.

Compounding the issue surrounding HCV drugs is the fact that India, Egypt, and Brazil may pay just 1 percent of the U.S. price tag for Sovaldi. According to Doctors Without Borders, China and Ukraine may not get such a steep discount. Iran, Kenya, Burma, and Mozambique have negotiated the price of $900 for a course of Sovaldi, Isabelle Meyer-Andrieux, a Doctors Without Borders adviser, told the media.

The World Health Organization (WHO) recently called for Sovaldi and Johnson and Johnson’s Olysio—both treatments for HCV—to be the first-line treatments for HCV, but acknowledged that the cost of the drugs would be a major hurdle. Sovaldi costs more than Olysio, which runs $66,360 for a 12-week course.

On Thursday, Merck and Co. announced that its two HCV drug candidates had a 98 percent cure rate in a mid-stage trial. AbbVie is also expected to premier a hepatitis C drug competitor within the next year.

Related News: 5 Treatments That Cost You (And America) Tons of Money »

Can Competitors Lower Costs?

Dr. Channa R. Jayasekera of Stanford University Medical Center who published a position paper on treating HCV in low-income countries said all of the new direct-acting antivirals (DAAs) like Sovaldi are costly, which might be a reflection of the costs associated with developing the drugs—as well as manufacturer’s profit motives.

“I would speculate that the initially publicized prices of these drugs in the U.S. are higher than will be their eventual negotiated prices, and that prices will [come to an equilibrium that] the market is willing to bear—particularly as more manufacturers enter the fray,” he said.

Jayasekera believes that a comparison between costs in the U.S. and in lower-income countries is not helpful. Without government intervention in low-income countries, manufacturers can set the cost to the target market, they can license generic versions of the drug before the patent expires, and the cost of the generic is set by that manufacturer, not the company holding the patent.

Gilead is currently in talks with several Indian drug manufacturers to license generic versions of Sovaldi. One Indian drug maker has moved to preemptively block Gilead’s patent protection for Sovaldi in India entirely.

“The burden of HCV is far greater in some lower income countries and therefore these drugs are, effectively, ‘essential medicines’ in those settings,” Jayasekera said. He added that treating HCV in those countries may have positive outcomes, in the same way that anti-HIV drugs have helped emerging economies.

“I do not think that treating HCV should be made into an ‘either-or’ proposition between the U.S. and other countries,” he added. “I think it is remarkable that some pharmaceuticals have voluntarily set up these initiatives, for instance without the mass outcry that was needed to achieve the same with HIV therapies.”

Jayasekera said that more work needs to be done globally to build initiatives that can help make drugs more affordable.

David Whitrap, director of corporate communications for Express Scripts, acknowledged that countries getting steep discounts from Gilead have high levels of poverty, but noted that the disease affects lower-income patients in the U.S., too.

“It’s unfortunate that American patients, employers, and taxpayers aren’t currently being offered a more reasonable price for Sovaldi,” he said. “It’s an issue of both public health and public solvency.”

His company has formed a coalition to refuse to cover the drug on its formularies until a viable competitor drug reaches the market. He said the company has the responsibility to work toward a more reasonable price point for its clients and patients. Express Scripts has dropped drugs from their formulary due to high costs in the past.

“Never before has this sort of coalition mindset been needed than it is now if we want the country to sustain a pharmacy benefit,” Whitrap said. “The total potential cost of Sovaldi is truly unprecedented.”

The Medicare/Medicaid Connection

Even in states not expanding their Medicaid coverage per the requirements of the Affordable Care Act, Express Scripts anticipates that a greater awareness of Medicaid coverage is likely to have a dramatic effect on Medicaid prescription drug spending in the future.

The cost of Sovaldi is preventing some state-operated Medicaid programs from making the treatment available to patients. One issue is that low-income Medicaid patients are more likely to have the disease than people with private insurance, according to a study from the Centers for Disease Control and Prevention (CDC).

“You’re talking about a condition that is going to be concentrated in low-income, minority patients,” J. Mario Molina, chief executive officer of Molina Healthcare, which helps 11 states manage pharmacy benefits for 2.1 million Medicaid patients, told Bloomberg.“You’ve got socioeconomic class issues here that we don’t have with cancer.”

According to Bloomberg, WellPoint Inc., which oversees Medicaid claims for 4.4 million patients in 19 states, says it will only approve a combination treatment of Sovaldi and Olysio for patients with advanced stages of the disease.

Michael Weinstein, president of the AIDS Healthcare Foundation, recently asked state Medicaid directors to block the drug from their formularies.

“Gilead has set a new benchmark for unbridled greed with its outrageous price for Sovaldi—a price that some pharmacy industry sources suggest represents a retail markup of 279,000 percent over the cost of actually producing the drug,” he said.

Life After Hepatitis C: It’s No Longer a ‘Death Sentence’ »

Gilead: Our Price Reflects the Drug’s Value

Gilead believes the price of Sovaldi reflects the value of the medicine—and part of that value is that it can shorten treatment duration and potentially prevent the development of HCV complications like liver cancer, a company spokeswoman said.

The cost of the entire HCV regimen of 12 weeks of Sovaldi with interferon and ribavirin is consistent with, and in many cases less than, the cost of the previous protease inhibitor-based drug regimens—with shorter duration of therapy, increased tolerability, and greater efficacy, the spokeswoman said.

She said that the American Association for the Study of Liver Diseases (AASLD) and the Infectious Diseases Society of America (IDSA) guidelines, which were updated upon approval of the drug by the U.S. Food and Drug Administration (FDA), recommend it as a preferred treatment for multiple patient groups.

The representative said that Gilead has a patient assistance program for the drug, including a co-pay coupon program that could limit monthly out-of-pocket costs to as little as $5 a month for some low-income patients. The Support Path Patient Assistance Program will provide Sovaldi free of charge for eligible patients without insurance options.

Gilead has also provided support to an unnamed independent non-profit organization that provides assistance for eligible federally insured and privately insured patients who need help covering out-of-pocket medication costs.

Hepatitis C By the Numbers

The WHO says that about 150 million people worldwide have HCV, which damages the liver. In the U.S., about 2.7 million people are affected.

Currently, less than a quarter of Americans with chronic HCV have had or are receiving treatment. In Europe, just 3.5 percent of patients of are being treated. Dr. Stefan Wiktor, who crafted the WHO report and serves as Team Lead of the WHO’s Global Hepatitis Programme, said that very few HCV patients in other countries are getting treatment.

Read More: FDA Approves New Hepatitis C Treatment   See also – http://mobile.reuters.com/article/idUSBREA3A0CL20140411?irpc=932



From a TPA

Just got hit with these this week, one patient had both filled at a cost of a little over $50,000 to the plan. Our PBM isn’t suppose to fill any Rx over $1500 without our authorization so it was quite a surprise to process the semi monthly claims and see these two. Luckily member has not taken them yet and we are trying to return them.

 The real rub though is how ACA has impacted the way we handle these drugs. Both have patient assistance programs that would eat 20% or more of the cost. Our last option pre-ACA was to put a 20%(or amount equal to assistance) co-pay on the drug knowing with the card the member would really only pay $10. Now with ACA OOP limits that would technically make the plan illegal even though the plan and member know they wouldn’t really have to pay more than $6350. The OOP cap, even when bogus, will be a goldmine for Pharma

From a Physician

The rediculous pricing of the drug reminds me of a proposal I have made in the past that we should arrange a “drug cruise” with all the meds ordered prior to departure and dispensed in international waters. Why not have a good time while having treatment? There could also be health lectures while at sea.  Harvey

From a PBM Representative

Makes me ponder how we can encourage patient driven medication importing. Kind of like the Canadian pharmacy scenarios but from other countries. However, the risk of counterfeits would be huge.