The Impact of Premium-Priced Market Entrants on MCO-Run Medicare and Medicaid Plans
The groundbreaking therapies for the Hepatitis C virus (HCV) promise high cure rates for millions of Americans afflicted with chronic infection. But these drugs have also strained the public insurance sector, prompting concern among managed care organizations (MCOs) that the high costs of the new direct-acting antivirals (DAAs) will endanger the financial viability of their Medicaid and Medicare Advantage plans. Daunted by the $84,000 price tag of Gilead’s Sovaldi (sofosbuvir) when the first interferon-free therapy hit the market in 2014, many MCOs have been responding with limitations on coverage, forcing prescribers to navigate long prior authorization requirements. The introduction of new DAAs, including Gilead’s Harvoni (sofosbuvir/ledipasvir) and AbbVie’s Viekira Pak ombitasvir/paritaprevir/ritonavir + dasabuvir), has led to significant price relief through competitive contracting. Nevertheless, HCV drug costs, combined with the magnitude of the demand, continue to pose a financial concern to MCOs, particularly in light of the wave of expensive specialty drugs emerging from the pipeline.