Medicaid Restrictions on Gilead's Sovaldi Illegal, Should Be Lifted, Study Says

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By Nathaniel Weixel

June 30 — State Medicaid plan restrictions that prevent patient access to the hepatitis C drug Sovaldi (sofosbuvir) may be illegal, according to a study released June 30.

The overwhelming majority of states restrict access to Sovaldi for people who inject drugs, for those receiving drug dependency treatment and for alcoholics. According to the study, published in the Annals of Internal Medicine, the restrictions may violate federal Medicaid law, which requires states to cover drugs consistent with their Food and Drug Administration labels. None of the restrictions on coverage “seem to meet the criteria for permissible restrictions,” study researchers concluded.

Sovaldi, the brand-name drug manufactured by Gilead Sciences Inc, can cost $1,000 per day when purchased wholesale, which equals $84,000 for a 12-week course of treatment. Due to its high cost, states have put restrictions on which patients can get their treatment covered by Medicaid. The study recommended that the restrictions be removed: “apart from potentially being a human rights violation, they do not make (economic) sense in terms of clinical, public, and long-term health.”

Study author Robert Greenwald, director of Harvard Law School's Center for Health Law and Policy, told Bloomberg BNA June 30 he expected some restrictions but was surprised at the extent of some state policies.

“I've never seen anything like it,” Greenwald said. “They're so far from what the clinical guidelines call for.”

An estimated 80 million to 150 million people worldwide have chronic hepatitis C. If left untreated, the disease can lead to cirrhosis, liver failure, cancer and even death. Rates of advanced liver disease complications, associated health-care costs and liver disease–related mortality are rising worldwide. In combination with other drugs, Sovaldi can deliver cure rates of at least 90 percent.

Greenwald noted the study examined criteria in Medicaid fee-for-service programs only—not in Medicaid managed care organizations. Managed care organizations may impose their own restrictions, he said. For example, a 2014 study commissioned by a managed care trade group found 35 states with managed care plans require prior authorization before Medicaid patients can access Sovaldi.

Coverage Limitations

The study examined policies in 41 states and the District of Columbia in 2014 with known Medicaid reimbursement criteria for Sovaldi. According to the report, restrictions based on liver disease severity are common, with three-quarters of states restricting sofosbuvir to people with advanced liver damaged called fibrosis, or the more severe cirrhosis.

The study found 37 states (88 percent) had reimbursement restrictions based on drug or alcohol use. Eight states (19 percent) required that all patients be evaluated for substance use disorder or alcohol dependence, and 21 states (50 percent) required a period of abstinence from drugs or alcohol use or abuse for all patients.

Most Americans with hepatitis C are Medicaid eligible. Each state has wide discretion in administering its own Medicaid program, but states must follow some federal standards. According to the study, these include covering all FDA-approved drugs—whose manufacturers participate in Medicaid's prescription drug rebate program—consistent with FDA labeling, and not discriminating in drug coverage.

The restrictions are denying people coverage, Greenwald said in an interview. They're “clearly a violation of the law. The Medicaid program needs to address those disparities of access. The [treatment] decisions need to be left between patients and providers,” not states and insurance companies that focus on cost, he said.

Matt Salo, executive director of the National Association of Medicaid Directors, told Bloomberg BNA June 30 he doesn't think what states are doing is a violation of the statute.

“It is well within the rights of state Medicaid programs to establish limitations and protocols on coverage for all sorts of reasons, ranging from concerns around medication adherence, to effectiveness (both cost and comparative),” Salo said.

Some Progress

Greenwald said by restricting coverage for Sovaldi, states are saving upfront costs but are paying more in the long term, as the costs of hepatitis C continue to rise. In addition, he said those upfront costs are actually dropping, whether by market competition or by the 23 percent Medicaid drug rebates plans are entitled to.

While some payers have negotiated ample rebates, they have not altered their reimbursement restrictions, the study said.

According to Greenwald, some states—including Connecticut, Pennsylvania, California, Massachusetts and New York—have been making progress in lifting some of the restrictions. Massachusetts in particular has relatively unrestricted access, he said. Most of the movement has happened very recently, and Greenwald said he's optimistic more states will follow.

To contact the reporter on this story: Nathaniel Weixel in Washington at

To contact the editor responsible for this story: Janey Cohen at

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