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Report: State Governments May Spend $55 Billion on Hepatitis C Medications

High drug costs to force major financial tradeoffs for state budgets

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 by Express Scripts.

More than 750,000 Americans with chronic hepatitis C infection receive state-funded health care through Medicaid or the prison system. Given the pricing that drug manufacturers are currently offering to these public programs, Express Scripts estimates that states will spend more than $55.2 billion if they are to provide all of these patients with the latest therapeutic regimen of Sovaldi (sofosbuvir, Gilead) and ribavirin.

According to the new analysis, released July 17, 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 infection. The other top five states in terms of highest total projected spending 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 Louisiana, according to the report. An estimated 18,000 state-funded chronic hepatitis C patients reside in that state, and providing the new medication to these patients will cost $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 spending will be Delaware ($265), Mississippi ($259), Oklahoma ($223), and Texas ($200).

“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 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.”

To compose the report, Express Scripts obtained each state’s Medicaid enrollment for 2013 from the Henry J. Kaiser Foundation. In addition, each state’s 2012 prison population was obtained from the U.S. Bureau of Justice Statistics. The pricing of Sovaldi and ribavirin incorporated the 23% discount that all drug manufacturers must provide the Medicaid program.

Source: Express Scripts; July 17, 2014.

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