Runaway drug price hikes squeeze Washington's budget

Whether you realize it or not, you are covering the exorbitant costs of prescription drugs, no matter what you're paying at the pharmacy.

A KING 5 investigation found taxpayers are covering the costs of rising drug prices which are also putting a strain on the Washington State Health Care Authority budget.

The state blames drug prices for 69 percent of their increased spending on managed care plans in 2016.

Prescription data obtained by KING 5 from the State Health Care Authority for their fee for service in managed care plans showed a significant chunk of the state's spending is attributable to two drugs which treat Hepatitis C. Those drugs are Harvoni and Sovaldi.

In May, a federal court ordered the State Healthcare Authority to provide the drugs to anyone on Medicaid.

Debi Nelson of Burien, Wash. is one of the early recipients of the drug thanks to that ruling.

"I am celebrating. I am cured of Hep C," Nelson said.

Nelson said she has lost friends and relatives who couldn't afford the treatment.

The wholesale acquisition cost for a full course treatment of Sovaldi is $84,000 and for Harvoni $94,500.

By September, Washington taxpayers had spent over $145.9 million treating just over 8,700 patients, a reduced rate provided to the government.

"I mean it's just amazing. It's the price of a luxury car. We call it a BMW in a bottle," said Dr. John Scott, who specializes in infectious diseases at the University of Washington, School of Medicine.

Dr. Scott said the innovation has significantly improved the cure rate of people diagnosed with Hepatitis C to nearly 100 percent, but he added the effectiveness of the drug doesn't justify the price.

"Gilead believes the prices of Sovaldi and Harvoni reflect the innovation of the medicines.  Unlike treatment for other chronic diseases, Sovaldi and Harvoni offer a cure," said Gilead Public Affairs Director Mark Snyder in a statement. "The one-time cost of Harvoni or Sovaldi pales in comparison to the lifetime costs associated with treating HCV.

Snyder added that Gilead provides "steep discounts" to patients who could not otherwise afford the drug.

"What they are doing is completely legal, but it is completely unethical in my opinion. They are charging it because they can."

Looking at claims for prescriptions through September 15, KING 5 discovered a list of about 30 pricey drugs for conditions like Hepatitis C, diabetes, and HIV, responsible for nearly half of the $1,131,659,368 in tax dollars the state has spent on medications but only 13 percent of the prescriptions written.


Meanwhile, other countries are spending exponentially less on these same medications.

The World Health Organization studied the price of Harvoni and Sovaldi in 30 countries and found 17 of those countries, including the UK and Canada, paying about $30,000 less than the US for the same drug.

Snyder explained international prices are, "flexible, tiered pricing based on a country's local economic conditions, as well as disease burden." 

"I think the market for drug pricing is broken," said Daniel Lessler, Chief Medical Officer at the Health Care Authority.

As a state, Lessler can't negotiate lower prices on behalf of Washington taxpayers; the Health Care Authority has to accept the terms prices set for Medicaid by the federal government.

"It's going to take more and more state dollars to cover the cost of these drugs," Lessler said.

State Senator Reuven Carlyle, D-Seattle, and 31 other lawmakers recently wrote the State Health Care Authority asking it to intervene immediately on behalf of taxpayers and find ways to lower prices or increase transparency "to the extent possible under the current federal law."

However, two medical summits held in response to that letter this year have resulted in ZERO solutions out of Olympia.

"It's completely upside down, and backward it makes no sense," Carlyle said. "We have failed the taxpayer categorically, and we simply have got to do a better job."

Lessler said the Health Care Authority continues to examine what cost saving measures they could legally take.

Lawmakers in Washington considered at least eight bills in the last legislative session to increase transparency around drug pricing and to limit the costs to taxpayers.

None of them passed, but Carlyle says he is preparing for another round of that same fight this January.

Copyright 2016 KING


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