Update: Gilead Must Pay Merck $200 for Hep C Patents, Jury Finds
March 28, 2016 – Gilead was ordered by a California jury last week to pay Merck & Co. $200 million for patent infringement over sofosbuvir, one of the active ingredients in Harvoni, according to the Chicago Tribune. The verdict follows a prior jury finding which validated Merck’s claims that its scientists were responsible for early breakthroughs that led to the development of the Harvoni and Sovaldi, drugs that helped Gilead become the world’s leading biotechnology firm.
What is Harvoni?
Manufactured by Gilead Sciences, Inc., Harvoni (generic: ledipasvir and sofosbuvir) is a Hepatitis C treatment drug. Hep C is a life-threatening liver disease that is contracted through high-risk activities such as needle sharing or sexual contact with an infected person. Complications of Hepatitis C may include liver failure, severe infections and even death.
Harvoni was approved by the U.S. Food & Drug Administration (FDA) on October 10, 2014. According to reports, the medication cures over 90% of Hep C patients in as little as 8 weeks with minimal side effects. The only problem is the expense – Harvoni costs about $1,000 per pill, or around $100,000 for a 12-week regimen, the dosage required for a cure.
Denied Insurance Claims
Because of Harvoni’s cost, insurance companies have set restrictions on Hepatitis C patients who are approved for treatment with the drug. Plaintiffs allege they have had their Harvoni claims denied on grounds that treatment isn’t “medically necessary,” according to insurers.
In one lawsuit filed against Anthem Blue Cross, the plaintiff was allegedly denied coverage for Harvoni because her liver was not damaged enough to warrant treatment, despite repeated letters from her doctor. This complaint and others like it allege that insurers breached their contractual duties by failing to provide coverage for medically necessary treatment. Harvoni lawsuits further allege breach of good faith and negligent infliction of emotional distress. Complaints filed in California also allege insurance companies deny treatment to increase profits, in violation of state laws.
Here are some examples of insurance company restrictions on Harvoni treatment coverage:
Anthem Blue Cross/Express Scripts – Guidelines revised Oct. 15, 2014:
- Anthem covers Harvoni for adult patients with genotype 1 chronic Hepatitis C infections and compensated liver disease with a liver fibrosis staging score of 3 or 4, but not 0-2.
UnitedHealthcare Insurance Company (UHIC) – Guidelines effective Oct. 15, 2014:
- UHIC limits the use of Harvoni coverage to patients with genotype 1 chronic Hepatitis C infections who have advanced liver disease with a staging score of 3 or 4, but not 0 -2.
HealthNet – guidelines effective October 28, 2014:
- Health Net’s interim guidelines for Harvoni provide coverage for patients with genotype 1 chronic Hepatitis C infections who have not failed previous treatments which included sofosbuvir, and who have fibrosis diagnosed by liver biopsy or non-invasive test corresponding to METAVIR score of 2-4, but not 0-1.
Certain individuals may have their insurance claim preempted by the Employee Retirement Income Security Act, or ERISA. Policyholders who aren’t likely to have a preempted claim are those who have coverage through a government, church or other religious entity, or are self-insured through Medicare, Medicaid or the Veteran’s Administration (VA).
What Role do Insurance Companies have in Treatment Decisions?
A lawsuit recently filed in California state court has prompted a debate that is likely to be central to all Harvoni denied insurance claim lawsuits: what role do insurance companies have in treatment decisions, and how much of a role does cost play?
Most prescription drugs have less costly generic alternatives available; however, some treatments are unique and without peer. If that medication happens to be expensive, and there is no generic, does an insurer have the right to deny treatment simply because of cost?
High Cost of Harvoni Reflects Pricing System Flaws
The stratospheric price Gilead charges for Harvoni has forced insurers to ration the drug, reserving coverage for patients with the most advanced liver disease.
“The goal-line-stand approach of parceling out this treatment is not optimal from a public health perspective,” said Peter Bach, director of the Center for Health Policy and Outcomes at the Memorial Sloan Kettering Cancer Center (MSKCC). Despite the criticism, Back acknowledges that insurance companies and public healthcare agencies consider the high pricing necessary due to budget constraints. Without restrictions, the cost of hep C medications alone could lead to soaring insurance prices and limit the ability of healthcare agencies to provide service to millions of clients.
The high price of Harvoni reflects what Gilead interprets as potential demand and the value of reducing the cost of liver disease in untreated patients, which theoretically produces “significant savings to the healthcare system over the long term,” the company said.
However, Bach sees this is self-serving rationalization. “These prices are determined through a profit-maximizing algorithm, and whatever rationale there is for them is fit to the price.”
Gilead to Negotiate Hep C Treatment Prices
In response to public outcry over its prices, last year Gilead began negotiating discounts for public agencies and private insurance companies of up to nearly 50% to “encourage wider access,” according to a company executive. Anthem announced in January that it had reached an agreement with Gilead “effectively lowering” its Hep C treatment costs. However, there has been nothing to support this since Harvoni was approved.
Hepatitis C Denied Insurance Claim Lawsuit
The issue of the insurer’s role in Hepatitis C treatment is the basis of a Harvoni Denied Insurance Claim Lawsuit filed against Anthem Blue Cross by plaintiff Shima Andre on May 15, 2015. Andre, a West Hollywood resident, alleges there is nothing in the explanation of benefits for her insurance policy suggesting that Anthem has the right to withhold treatment due to expense. Instead, the lawsuit contends that Anthem simply requires that a drug be medically accepted and approved, and not more expensive than comparable medications.
Which Harvoni isn’t, because there is essentially no comparable drug available. Since it was approved last October, doctors began prescribing Harvoni immediately because of the wonderful success it showed in clinical trials. In just over 10 weeks on the market, Harvoni generated more than $2 billion in sales.
Andre maintains that Anthem should honor its insurance policy by approving a medically necessary treatment option. Whether or not Harvoni is more expensive than it should be is irrelevant to the plaintiff.
According to the complaint, Anthem “applied a more restrictive test…in an effort to increase company profits by limiting the number of patients who would qualify for this life-saving medication.” The denial letter Anthem sent Andre “does not cite to any provision of the [explanation of benefits] in support of this standard,” according to the lawsuit.
Andre further contends that physicians employed by Anthem to review her appeals lacked expertise in treating Hep C, and that the insurer has restricted Harvoni treatment to patients with advanced liver scarring. The case is: Andre v. Blue Cross of California et al., Case No: BC582063, in the Superior Court of the State of California, County of Los Angeles.
Health Groups File Lawsuit Against FDA Over Hepatitis C Drug Trial Data
On June 25, the FDA was sued by 2 health advocacy groups seeking disclosure of clinical trial data that helped Gilead win approval for Harvoni and Sovaldi, according to the Wall Street Journal. In the complaint, Yale University’s Global Health Justice Partnership (GHJP) and the Treatment Action Group (TAG), an AIDS non-profit, said the public and medical communities deserve more information about the Hep C drugs to make informed decisions regarding their use.
Health advocates and groups like the World Health Organization (WHO) have called for the disclosure of clinical trial data, even if it were to compromise patient confidentiality or trade secrets. According to the lawsuit, the exorbitant cost of Harvoni and Sovaldi strain state budgets and force insurance companies to restrict patient access.
The plaintiffs allege that Gilead ignored their request for trial data, while the FDA said it would require up to 2 years to decide whether disclosure is proper. That’s too long, the groups contend.
“Unless defendants disclose the requested information, hundreds of thousands more patients will be treated with drugs whose safety, efficacy, and cost effectiveness cannot be fully studied or understood,” the lawsuit said.
The lawsuit is: Treatment Action Group et al v. FDA, U.S. District Court, District of Connecticut, No. 15-00976.
Sales Soar for Gilead’s Hep C Treatments
Despite increased competition, Sovaldi and Harvoni generated nearly $5 billion in sales for Gilead during Q2, according to the Wall Street Journal. Both products rank among the most successful drug launches in history, largely the result of their high cure rates, minimal side effects and massive price tags. Click here to learn more.
Harvoni Approved in Japan
The Japanese Ministry of Health, Labour and Welfare has approved Harvoni for the suppression of viremia in patients with genotype 1 chronic Hepatitis C Virus infection with or without compensated cirrhosis, according to Seeking Alpha. Japan has one of the highest rates of liver cancer in any industrialized country, resulting primarily from HCV. Over 1 million people suffer from chronic Hepatitis C in Japan, of which 70–80% are infected with the genotype 1 strain of the virus.
Harvoni, Sovaldi Could Cost CA Gov’t $512M per year: Report
Harvoni and Sovaldi could cost the California state government $512 million a year — or up to $5.1 billion in total — according to the California Association of Trade Plans (CATP). Even with insurance and government help, the cost of these drugs seems to dictate a business model with a high-end clientele. Click here to learn more.
Gilead Restricts Access to Hep C Treatment Medications
Gilead has reportedly limited enrollment in its Support Path Assistance Program, which is designed to help patients obtain access to Harvoni treatment when their insurance company won’t cover the drug. Under the program, patients who have insurance but do not meet the insurer’s criteria will not be eligible for coverage. Click here to learn more.
Harvoni Vs. Viekira Pak
For Hepatitis C patients whose insurance plans do not cover Harvoni, treatment may come in the form of AbbVie’s Viekira Pak or Technivie, cheaper drugs that cause a host of serious side effects including fatigue, nausea, itching, insomnia and weakness. Making matters worse, the FDA announced on Oct. 22 that at least 26 patients reported severe liver injury from Viekira Pak or Technivie, including at least 10 cases ending in liver transplantation or death due to liver failure. Contrast this to Harvoni, which so far carries only one serious risk, a slowing of the heart rate (bradycardia).
Gilead Pricing Scheme Slammed in Senate Report
December 1, 2015 – Gilead Sciences put profits ahead of patients in pricing its groundbreaking Sovaldi and Harvoni Hepatitis C treatments, according to a Senate Finance Committee report released today. The company knew that more patients could have been treated if the drugs were priced cheaper; instead, it refused to lower the price or offer meaningful discounts in order to maximize profits, the investigation found. Click here to learn more.