State Governments May Spend $55 Billion on Hepatitis C Medications

Jul 17, 2014
Unprecedented high drug costs will force major financial tradeoffs for state budgets.
  • Medicaid
  • Hepatitis C

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

Burden to State Budgets

There is no doubt that Sovaldi is a breakthrough therapy, but unfortunately, it is also likely to break state budgets. Since healthcare for so many hepatitis C patients is funded by state programs, each citizen will be shouldering the unprecedented cost burden. The unsustainable pricing of this medication has essentially become a tax on all Americans.

According to the 2013 Drug Trend Report, the U.S. will spend 1,800% more on hepatitis C medications in 2016 than it did in 2013. No major therapy class has experienced this high of a spending increase in the 21 years we’ve measured drug trend data.

State-By-State Analysis

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. The other top five states in terms of highest total projected spend are Texas, Florida, New York and Illinois.

Potential Cost of State Funded Hepatitis C Treatment

The largest per capita expense will be paid by the State of Louisiana. An estimated 18,000 state-funded chronic hepatitis C patients reside in Louisiana, and providing the new medicine to these patients will cost the state $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 spend will be Delaware ($265), Mississippi ($259), Oklahoma ($223) and Texas ($200).

Financial Tradeoff

As a result of paying for the new treatment regimen, states legislatures may need to make financial tradeoffs elsewhere within Medicaid, prisons or other important public programs.

  • For Florida, Georgia, Illinois and Nevada, each state’s anticipated Medicaid spend on hepatitis C medications is equivalent to 9% of its annual Medicaid budget.
  • Compared to what they spent last year educating a public school student, Utah and Arizona are projected to spend 10 times more to provide medication to a state-funded hepatitis C patient.
  • Thirteen states, led by Georgia and Louisiana, may spend more on hepatitis C medications than they spent last year on transportation.

Download the full state-by-state report.

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