State Governments May Spend $55 Billion on Hepatitis C Medications Unprecedented High Drug Costs to Force Major Financial Tradeoffs for State Budgets
ST. LOUIS, July 17, 2014 /PRNewswire/ -- State legislatures will need to find billions in their budgets to purchase costly new hepatitis C therapy, according to a new state-by-state analysis released today by Express Scripts (NASDAQ: ESRX).
More than 750,000 Americans with chronic hepatitis C receive state-funded healthcare through Medicaid or the prison system. Given the pricing that drug manufacturers are currently offering to these public programs, Express Scripts projects states will spend more than $55.2 billion if they are to provide all of these patients the latest therapy regimen of Sovaldi® and ribavirin.
"There is no doubt that Sovaldi is a breakthrough therapy, but unfortunately, it is also likely to break state budgets," said Steve Miller, M.D., Chief Medical Officer at Express Scripts. "Since healthcare for so many hepatitis C patients is funded by state programs, each citizen will be shouldering the unprecedented cost burden. The unsustainable pricing of this medication has essentially become a tax on all Americans."
In its Drug Trend Report released earlier this year, Express Scripts forecast that the U.S. will spend 1,800 percent more on hepatitis C medications in 2016 than it did in 2013. No major therapy class has experienced this high of a spending increase in the 21 years Express Scripts has measured drug trend data.
According to the new analysis released today, the impact is already being felt in California, where the state is expected to spend $6.6 billion if it treats all 93,000 of its Medicaid enrollees and prisoners who are estimated to have chronic hepatitis C. The other top five states in terms of highest total projected spend are Texas ($5.3 billion), Florida ($3.8 billion), New York ($3.6 billion) and Illinois ($2.3 billion).
The largest per capita expense will be paid by the State of Louisiana. An estimated 18,000 state-funded chronic hepatitis C patients reside in Louisiana, and providing the new medicine to these patients will cost the state $1.4 billion, or $294 for every man, woman and child living in Louisiana. The other top five states in terms of highest per capita spend will be Delaware ($265), Mississippi ($259), Oklahoma ($223) and Texas ($200).
As a result of paying for the new treatment regimen, states legislatures may need to make financial tradeoffs elsewhere within Medicaid, prisons or other important public programs.
- For Florida, Georgia, Illinois and Nevada, each state's anticipated Medicaid spend on hepatitis C medications is equivalent to nine percent of its annual Medicaid budget.
- Compared to what they spent last year educating a public school student, Utah and Arizona are projected to spend 10 times more to provide medication to a state-funded hepatitis C patient.
- Thirteen states, led by Georgia and Louisiana, may spend more on hepatitis C medications than they spent last year on transportation.
"HCV treatment costs are expanding at a rate that is simply not sustainable for the Medicaid program," said Jeff Myers, President and CEO of Medicaid Health Plans of America, the trade group representing the Medicaid managed care industry. "The current treatments, along with the all-oral medication coming in October, threaten to drive the price to a point at which the states unfortunately will be forced to make tradeoffs to manage the very large population that is infected with this life-threatening disease."
Each state's Medicaid enrollment for 2013 was obtained from the Henry J. Kaiser Foundation, and each state's 2012 prison population was obtained from the United States Bureau of Justice Statistics. The pricing of Sovaldi and ribavirin incorporates the 23 percent discount that all drug manufacturers must provide the Medicaid program.
About Express Scripts
Express Scripts (NASDAQ: ESRX) manages more than a billion prescriptions each year for tens of millions of patients. On behalf of our clients — employers, health plans, unions and government health programs — we make the use of prescription drugs safer and more affordable. Express Scripts uniquely combines three capabilities — behavioral sciences, clinical specialization and actionable data — to create Health Decision Science℠, our innovative approach to help individuals make the best drug choices, pharmacy choices and health choices. Better decisions mean healthier outcomes.
Headquartered in St. Louis, Express Scripts provides integrated pharmacy-benefit management services, including network-pharmacy claims processing, home delivery, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services.
SOURCE Express Scripts