In major shift, Pa. to expand hepatitis C treatment for Medicaid patients

Under pressure from advocacy organizations that had threatened a lawsuit, the Wolf administration said Tuesday that it would expand Medicaid coverage for treatment of hepatitis C, a major change that many states have put off over fear of spiraling costs.

"Today's announcement means that thousands of vulnerable Pennsylvanians will soon have easier access to pharmaceuticals that can cure" hepatitis C, Department of Human Services Secretary Ted Dallas said in a statement.

Until now, state policy had been to wait until patients showed signs of liver damage before approving treatment. Allowing earlier treatment was recommended one year ago Wednesday by the department's Pharmacy and Therapeutics Committee. As time passed without a decision, observers wondered whether the state was trying to determine how to pay for the highly effective but costly new drugs that have made hepatitis C a curable disease.

New hepatitis C infections tripled in five years, the Centers for Disease Control and Prevention reported last week, driven largely by the opioid epidemic. The bloodborne hepatitis C virus is easily spread by sharing needles to inject heroin or crushed prescription pain pills.

But the virus can grow undetected for decades before causing chronic and sometimes life-threatening liver problems. An estimated 3 million Americans are living with chronic hepatitis C, about half of them undiagnosed. The new website HepVu estimated last month that 142,000 Pennsylvania residents are living with hepatitis C antibodies and 629 died of the disease in 2014, the latest estimates available. It said 91,000 New Jersey residents had antibodies and 446 had died that year.

New drugs that can effectively cure hepatitis C with minimal side effects began coming on the market several years ago but, as they cost tens of thousands of dollars per patient, many states limited their use to those whose disease had shown up on liver tests, and added other restrictions — barriers that exist for no other disease.

"Hopefully, what this means is I no longer have to tell patients that their liver isn't sick enough," said Stacey B. Trooskin, an infectious diseases physician and director of viral hepatitis programs for Philadelphia FIGHT, a nonprofit health and social services organization. Trooskin said she likely had dozens of patients who would now qualify for coverage.

She said that policymakers' fears that many Medicaid recipients would get tested and seek treatment were overblown. "In reality, it will be more like a trickle," she said.

Among those who said he would seek treatment is James Luongo, who suspects that he contracted hepatitis C from getting a tattoo or injecting heroin with a shared needle. He has twice been denied Medicaid coverage for treatment.

"I don't want to be contagious," said Luongo, 47, who lives with his ailing mother in Northeast Philadelphia and has been clean — in a methadone maintenance program — for 2½ years.

His Community Legal Services of Philadelphia attorney told him this week that he should be eligible for treatment soon.

Hepatitis C severity is categorized on a scale of F0 through F4, with F4 being the most severe. Previously, only patients with scores of F2 through F4 were eligible for treatment under Pennsylvania Medicaid unless they had other complications. Luongo is an F0.

Effective July 1, patients with scores of F1 will be covered, the state said in its announcement, and those with scores of F0 will be covered beginning Jan. 1, 2018.

About a dozen other states have loosened restrictions in the last few years, some under pressure from advocates. New Jersey eased its restrictions last year but only down to F2, which has not satisfied physicians or advocacy groups.

In his statement, Dallas thanked several organizations, including Harvard Law School's Center for Health Law and Policy Innovation, for their help "on finding a path forward."

The center has sued or threatened to sue several states to force decisions. It reached a settlement with Delaware last year.

Kevin Costello, the center's litigation director, said that the "overt threat of a lawsuit" had kept the pressure on Harrisburg to approve the change. Costello said it was not likely to be nearly as costly as some have predicted.

For that reason — as well as the tendency to budget for the short term — the possibility of future cuts to state Medicaid programs as Congress considers repealing and replacing the Affordable Care Act probably was not a significant impediment to Pennsylvania's decision to drop restrictions on hepatitis C coverage, he said.

The oft-quoted prices — $84,000 for a typical 12-week course of Gilead Sciences' Sovaldi, for example — have dropped with additional competition, Costello said, and state Medicaid programs have improved their negotiating tactics and applied substantial discounts. Indeed, a Gilead spokesman said in an email late Tuesday that "the average Medicaid price per bottle is now less than $10,000" — a total of $30,000 for 12 weeks — "for states that provide open access to all patients."

The Obama administration sent pointed letters to state Medicaid programs about requirements to cover treatment, and challenged pharmaceutical makers to lower prices.

In Pennsylvania, about 3,750 people infected with hepatitis C will likely be affected by the policy change, said Rachel Kostelac, a spokeswoman for the Department of Human Services. "The state's annual contribution to the Medicaid program is approximately $12 billion. The fiscal impact of this policy change is well below one-half of 1 percent of the state's current costs," Kostelac said in an email response to questions.

"The real problem here," said Gene Bishop, a retired internist and member of the advisory committee that recommended the change on May 17, 2016, is the pharmaceutical companies, which are charging "outrageous prices for life-saving treatment."

Bishop made last year’s motion recommending that the state’s Medicaid program cover treatment for all patients. It was supported by every practitioner on the committee and opposed by every member on the payer side, she recalled, adding that she had not expected the motion to prevail.