Managing Editor's Memo

Payment Does Not Come Easily When Miracles Don't Come Cheap

Frank Diamond

At a price of $84,000 for a 12-week regimen, Sovaldi and its recently approved corporate relative, Harvoni (fixed-dose combination of sofosbuvir and ledipasvir), will tax the capabilities of health plans with that unending question: Who pays? Or, rather: How can it be covered?

Our cover package by Contributing Editor Joseph Burns starts by asking how or whether health plans can get a reasonable return on investment for these and other miracle drugs. Ideas abound. Peter B. Bach, MD, an attending physician at the Memorial Sloan Kettering Cancer Center, thinks that it might be possible to set rates at the cost per year of life gained.

Benjamin Isgur, director of PwC’s Health Research Institute, says that huge upfront costs could be balanced by better outcomes down the road. The $1,000 pill a patient takes today might prevent the $580,000 liver transplant later. To which the health plan might ask: Will this patient still be in our plan? But HCV past or present, would any plan want such a member?

Joe’s coverage then shifts to the considerable problem of how to treat patients with these drugs without bankrupting them. Health plans might consider linking coinsurance levels to members’ ability to pay, says F. Randy Vogenberg, PhD, RPh, a member of Managed Care’s Editorial Advisory Board. “Maybe the employer could eliminate the medication coinsurance for the employee making $15,000, and maybe the one making $150,000 has some type of coinsurance indexed to salary,” Vogenberg suggests.

This is at a time when consumers are increasing their clout. A recent study in Health Affairs mentions the pressure to cover drugs for Gaucher’s and Fabry’s diseases. The study states, “Well-organized patient advocacy groups appropriately ensure that others hear the [patients’] message that receiving the medications is a matter of life or death. And payers have chosen to accept the usually high spending required for them.” For now, anyway.


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