Hepatitis C Drug Lawsuits Filed, Challenges Insurance Company Decisions

Published June 19, 2015

Consumers across the nation are starting to file lawsuits against insurers who deny them access to expensive new hepatitis C treatments.

Harvoni, the new treatment sold by Gilead Science and AbbVie, cures more than 90 percent of those infected with hepatitis C and costs $63,000 to $94,500, before any discounts, in the United States.

Two lawsuits allege Anthem Blue Cross refused to pay for individual women’s Harvoni treatments because it was not deemed “medically necessary.”

Dr. John Dale Dunn, an emergency physician and policy advisor to The Heartland Institute, which publishes Health Care News, says hepatitis C causes liver failure and liver cancer, resulting in a slow, painful death.

“Some people don’t show any symptoms for a long time, and it can be acquired innocently, so you can say innocent people are suffering,” Dunn said.

“Interferon was painful, but the new medications are supposed to be effective,” Dunn said. “However, there are the costs. The financial barriers to access medical care are always going to have to be considered.”

Cheaper Than Liver Transplants

Sally Pipes, president of the Pacific Research Institute, says health insurers like Anthem Blue Cross are being short sighted in denying payment for drugs effective at curing hepatitis C. 

“While Sovaldi, [another drug manufactured by Gilead to treat chronic hep C,] is expensive, costing about $94,000, it is inexpensive compared to the cost of covering a liver transplant, which runs in the range of $500,000, assuming a match is available,” Pipes said.

There are also nonmonetary costs for a patient undergoing major surgery, such as the cost of research and development for a drug company to develop innovative drugs such as Sovaldi, which run to approximately $1.2 billion, Pipes says. In addition, most new drugs never make it through the lengthy FDA approval process and clinical trials, so in order to continue developing new treatments, pharmaceutical and biotech firms have to be able to recover their costs from those that do finally reach the public.

“It is short sighted of insurers to deny such treatments,” Pipes said.

Short-Term Thinking

The hard lesson for many Americans to learn is coverage is not care, particularly since Obamacare handed the entire health care system over to managed-care plans, which by federal law are allowed to make “medical necessity” decisions in conflict with the interests and health of the patient, says Twila Brase, president of the Citizens’ Council for Health Freedom. 

And because patients no longer pay most medical bills, they and their doctors have little power over treatment decisions, she says. Insurers are more likely to deny expensive treatment requests because the enrollee they give a $63,000 drug this year may not be in the system next year, and hence they may never realize the cost benefits of that decision over the patient’s lifetime. 

“Fortunately, many Americans are finding and joining health-sharing organizations, which have far fewer barriers to care,” Brase said.

Matthew Glans ([email protected]) is a senior policy analyst at The Heartland Institute.