- Publisher:
- Publication:2015/3/31
Industry watchers knew Medicare would be shelling out a whole lot more on hepatitis C treatments last year, thanks to new-and-improved drugs. But just how much more did it cough up?
Some $4.5 billion, that's how much. According to ProPublica, Medicare spending on the newcomer meds amounted to more than 15 times its 2013 total of $286 million. Two new stars from Gilead ($GILD) were among the main culprits, with $84,000-per-treatment-course Sovaldi accounting for more than $3 billion of the bill. The company's Harvoni, though it only hit the market in October, cost Medicare $670 million, while the charge for Johnson & Johnson's ($JNJ) Olysio--often taken with Sovaldi--rang in at $821 million.
Medicare's Part D drug-coverage program isn't exactly used to that kind of spending wave, ProPublica points out. In the program's 9 years, it's benefited from patent-cliff spending slowdowns as generic competitors took down major sellers, including Pfizer's ($PFE) Lipitor, and Sanofi ($SNY) and Bristol-Myers Squibb's ($BMY) Plavix.
The result? Taxpayers will bear the brunt of the new costs of treating Medicare's hepatitis C patients. But patients will likely pay more, too, thanks to higher deductibles and maximum out-of-pocket costs for many of Medicare's 29 million seniors and disabled enrollees.
Drugmakers have made the case that their pricey new meds are ultraeffective and cheaper than the alternative--liver transplants and other expensive care that hep C patients can require down the road.
![]() |
Steve Miller |
But those points haven't pacified payers, some of who have taken the issue into their own hands. Steve Miller, CMO at pharmacy benefits manager Express Scripts ($ESRX), has led the charge, recently igniting a pricing war by inking an exclusive pact with Gilead rival AbbVie ($ABBV).
And the crusade against high prices may not end with hepatitis C. Miller has already hinted at plans to bring the same tactics to the up-and-coming field of PCSK9 cholesterol fighters, as well as to cancer meds with lofty sticker prices.