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A federal lawsuit alleging price gouging by the maker of hepatitis C drug Sovaldi mirrors a growing struggle to contain hepatitis C-related workers compensation prescription costs that can reach up to $150,000 per claimant.
While Sovaldi, which entered the market a year ago, is a highly effective treatment that can cure patients of hepatitis C — unlike other treatments for the chronic liver infection — employers should carefully monitor its use to determine whether cheaper treatments are available or appropriate, experts say.
In the class action suit filed Dec. 9 in U.S. District Court in Philadelphia, the Southeastern Pennsylvania Transportation Authority in Philadelphia says it has paid more than $2.4 million for Sovaldi prescriptions for its employees in 2014.
The agency accuses Sovaldi's maker, Foster City, California-based pharmaceutical company Gilead Sciences Inc., of “selectively charging exorbitant prices” for Sovaldi, and is seeking unspecified restitution and monetary damages against Gilead for alleged unjust enrichment, violations of the Patient Protection and Affordable Care Act and other claims.
Gilead Sciences did not respond to requests for comment.
While the SEPTA suit relates to group health payments for Sovaldi, workers comp payers also are seeing rising costs related to the drug.
Pharmacy benefit manager Express Scripts Inc. said spending for hepatitis C medications in workers comp increased 135% in the first six months of 2014 compared with the same period in 2013. About 66% of that increase is attributed to Sovaldi prescriptions, the company said in a statement.
The cost increase occurred despite a reduction in the number of pharmacy prescriptions for hepatitis C medications at Express Scripts, where workers comp claims for the disease fell to 79 in the first half of 2014, down from 92 in the first half of 2013, according to the PBM's data.
Health care workers, emergency first responders and other workers who are regularly exposed to bodily fluids are most likely to file for workers comp benefits related to hepatitis C.
“Sovaldi is priced at an orphan drug price for a population that is not an orphan drug population. So it's priced really at a premium that we can't sustain,” said Brigette Nelson, senior vice president of workers compensation clinical management for Express Scripts in Cave Creek, Arizona.
So-called orphan drugs are medications used for illnesses that affect only a small subset of the population.
Hepatitis C treatment costs can soar higher when Sovaldi, which costs $84,000 for a 12-week course of treatment, is paired with another new hepatitis C drug called Olysio, which is made by Titusville, New Jersey-based pharmaceutical company Janssen Therapeutics and costs $66,360 for a 12-week course of treatment. The U.S. Food and Drug Administration approved both drugs in late 2013.
The medications often are used together to help increase the chances of curing a patient's hepatitis C infection, said Phil Walls, chief clinical and compliance officer at Tampa, Florida-based PBM Matrix Healthcare Services Inc., which does business as myMatrixx.
Trying to limit drug costs for hepatitis C under a workers comp claim can be tricky. Experts agree that Sovaldi and other newer treatments are more effective than older, cheaper hepatitis C medications that include longer courses of treatment, have more side effects, require patients to take multiple doses a day and less likely to cure patients of the disease.
“We're not disputing that Sovaldi is a much better drug, because it is better tolerated than the previous therapies. It's just the cost that we're concerned about,” Ms. Nelson said.
Additionally, an effective course of Sovaldi treatment could prevent hepatitis C patients from developing conditions that need much costlier courses of treatment that employers would be responsible for paying under a workers comp claim, said Jamie Harer, pharmacy product manager for third-party administrator Sedgwick Claims Management Services Inc. in Orange, California.
“If this illness goes untreated, it can lead to cirrhosis of the liver, it can lead to liver failure, it can lead to liver cancer,” Ms. Harer said. “All of these things require a liver transplant.”
Employers should work with their TPA or PBM to create prescription drug formularies that would automatically flag a claim for Sovaldi and initiate a review of whether the drug is appropriate for certain patients, Ms. Harer said.
For example, patients recently exposed to bloodborne pathogens may be effectively treated with prophylactic antiviral medications that can prevent infection and are much less costly than Sovaldi and other hepatitis C treatments, she said.
Mr. Walls said claim payers should consider using specialty drug pharmacies to fill prescriptions for Sovaldi or other hepatitis C drugs, since such pharmacies specialize in helping patients to adhere to drug treatments.
Proper adherence can make sure that a Sovaldi drug course works the first time, preventing a patient from needing to do another expensive round of the treatment in the future, he said.
“You really need to be compliant with your therapy in order for the drug to be as effective as possible,” Mr. Walls said.
Ms. Nelson of Express Scripts said the company —the nation's largest PBM — is pushing Gilead and other hepatitis C drug makers for more competitive prescription prices.
“That's the next step that needs to happen so that people have access to drugs at a cost that can be sustained,” she said.