FDA Approves Harvoni, Another Expensive Hepatitis C Drug

Demand for the treatment is likely to surge in Medicaid because the drug reduces side effects and requires fewer office visits, presenting a problem for state budgets.
by | October 10, 2014

The Food and Drug Administration has approved yet another expensive but highly effective hepatitis C medication, which Medicaid experts and insurers warn could ignite demand because it’s easier to take and comes with fewer side effects than other medications used to treat the disease.

Harvoni is now the first once-daily medication that can cure hepatitis C in as few as eight weeks without injections or other pills that can cause flu-like symptoms, anxiety and a host of other side effects. It comes from California-based Gilead Sciences, which introduced the hepatitis C drug Sovaldi in late 2013 at a cost of about $84,000 for a 12-week regiment. When paired with other drugs (that can induce painful side effects), Sovaldi showed a cure rate of more than 90 percent in FDA trials, but its high price tag sparked Congressional inquiries and moral dilemmas for states, which shoulder much of the burden for hepatitis C treatment through their Medicaid programs.

“By providing very high cure rates in as little as eight weeks and completely eliminating the need for interferon and ribavirin, which are challenging to take and tolerate, Harvoni significantly advances treatment for patients with the most common form of hepatitis C in the United States,” said Nezam Afdhal, the director of Hepatology at Beth Israel Deaconess Medical Center and a main investigator in the FDA’s clinical trials, in a statement.

Harvoni also boasted a clinical success rate of 94 to 99 percent in FDA trials.

Hepatitis C is a viral infection that eventually leads to liver failure, cancer or other life-threatening health problems. In the developed world, it’s most commonly spread through intravenous drug use. Many of the estimated 3.2 million people living with hepatitis C in the United States are poor, imprisoned or elderly, which means the cost of care falls disproportionately on Medicaid and Medicare. One analysis put the potential cost of Sovaldi to states at $55 billion if they covered their entire hepatitis C populations.

The pricing for Harvoni is different, though. About 40 percent of patients, those with less advanced cases, could take the drug for eight weeks at a cost of $63,000. More typically, patients will take a 12-week supply at $94,500, according to the company. High-cost, specialty drugs are a rapidly growing market -- and a growing issue for states.

When Govering last reported on Sovaldi, about half of the states were requiring “prior authorization” for the use of Sovaldi, essentially creating lists of criteria that patients must meet before a doctor can prescribe the drug. Those criteria commonly require that patients be in the worst stage of hepatitis C, which is cirrhosis, and that they be drug-free for a period of time.

Today, some 37 states require prior authorization, according to a report commissioned by the Medicaid Health Plans of America, a trade group representing insurers that contract with states to manage their Medicaid programs. That report details some of the more severe requirements from state Medicaid agencies, such as a rule in Alaska requiring people with hepatitis C to be drug-and-alcohol free for a minimum of three years before getting Sovaldi.

“It has grown and it has grown substantially, because even in the state where there is no decision or they don’t have a Medicaid [preferred-drug list], we know they’re considering moving in that direction,” said Jeff Myers, the group’s CEO.

But the issue for state budget makers is a likely uptick in demand, says Myers and Matt Salo, who heads the National Association of Medicaid Directors. Many patients and doctors were aware of Harvoni’s potential when Sovaldi was released, and many decided to wait for it because it reduces side effects and doesn’t require repeated office visits for the therapies that accompany other hepatitis C treatments, Salo said.

“We’ve known that the first nine months of the availability of the hepatitis C cure was not the thing that was going to get 3 million people treated,” he said.

Many of those doctors will encourage their patients to take the opportunity presented by Harvoni -- rightly so, Salo said. But there’s still an undeniable problem for state budgets, even if the costly drug prevents things like liver transplants later on, because those costs will surge in the near term.

“No physician is going to want to say to a patient, ‘No, go without it’ [because the state faces a budget situation],” Salo said. “That’s not their job.”