Pricey hep C drugs force insurers into ethical dilemma

Since the introduction of two expensive drugs that treat hepatitis C last year, insurers have been forced to make some tough ethical decisions regarding which members can receive the medicines.

If the 3 million people estimated to have hepatitis C received the drug treatment, which has a price tag of about $100,000 per person, it would cost up to $600 billion a year. So insurers are deciding whether to allow access to only the sickest members with the virus, reported Kaiser Health News.

This ethical dilemma extends beyond hepatitis C, since specialty drugs make up less than 1 percent of all prescribed drugs but account for more than 25 percent of healthcare spending.

"This is the tip of the iceberg," Steven Pearson, president of the nonprofit Institute for Clinical and Economic Review, told KHN. "We have about a year or two as a country to sort this out" before more specialty drugs hit the market.

Long Beach, California-based Molina Healthcare, which administers Medicaid plans in 11 states, is caught up in the predicament. "For the price of Sovaldi for one patient, we could provide health insurance through Medicaid for [up to] 26 people for an entire year," Molina CEO J. Mario Molina told KHN. "There's no question it is a very efficacious drug. But it's just who gets it and when."

For now, the insurer isn't offering the hep C drugs in most cases. Instead, Molina asked state officials to directly cover the costly medicines and is waiting to hear their decision before making any choices, FierceHealthPayer previously reported.

Based on UnitedHealth's most recent financial reporting, Molina is saving millions of dollars by holding off on full coverage of the hepatitis C drugs. UnitedHealth said it spent $100 million on hep C treatments during this year's first quarter.

What's more, specialty drug use is expected to be higher among new consumers who signed up for coverage through health insurance exchanges than those enrolled in commercial plans, previously reported FierceHealthPayer

To learn more:
- read the Kaiser Health News article