Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Medicaid Programs Balance Legal Challenges and High Drug Prices

By Marissa Evans, CQ Roll Call

September 27, 2016 -- Medicaid programs are facing legal pressure to allow beneficiaries with deadly hepatitis C to have access to high-priced specialty drugs, but the costs could wreak havoc on state budgets.

Colorado recently became the latest state to face legal action. The American Civil Liberties Union's (ACLU) 26-page lawsuit filed on Sept. 19 through the U.S. District Court in Colorado calls on the courts to force the state to fully fund Medicaid beneficiaries' hepatitis C drugs without restrictions.

ACLU lawyers wrote in the lawsuit that the state's limited coverage of specialty drugs was illegal according to the guidelines of the joint federal-state health insurance program for the poor and disabled. The restrictions, they said, "forces stricken individuals to wait for treatment until they have suffered measurable, and potentially irreparable and irreversible liver damage."

Medicaid enrollees in Colorado are "being unduly subjected to a second-class standard of health insurance coverage for the sole reason they are poor," ACLU officials wrote in the Colorado lawsuit.

Colorado is one of many states grappling with how to pay for expensive specialty drugs without breaking their Medicaid budgets. While drugs like Harvoni and Sovaldi have been lauded as lifesavers for patients living with hepatitis C, states have been alarmed at the $84,000 and $94,500 price tag for the respective treatments. Medicaid programs across the U.S. last year were only able to treat 700,000 enrollees infected with hepatitis C—or 2.4 percent of affected beneficiaries, according to a Senate Finance Committee report released Dec. 1.

Some states have turned to special restrictions for Medicaid beneficiaries' access to the hepatitis C drugs. States have implemented various roadblocks including limiting treatment to beneficiaries with severe liver damage, requiring patients to abstain from drug and alcohol abuse and requiring specialty providers to prescribe the drugs.

Trish Riley, executive director for the National Academy for State Health Policy, said in an interview that the lawsuits are "the perfect storm" of what could happen with states battling limited budgets with high drug prices. 

"States can't afford to do this," Riley said. "We have to figure out are there other ways to reduce the costs of these drugs and the majority of states are limiting access but these court cases will obviously have them all at attention."

The ACLU lawsuit pointed to similar pressures in Delaware, Florida, Massachusetts, and New York that caused the states to reverse course on drug restrictions.

Washington state Medicaid enrollees living with hepatitis C saw relief from the courts after a federal judge instituted a preliminary injunction on May 27 ordering the Washington Health Care Authority to start providing the drugs without any restrictions based on severity of the disease. The state's appeal was denied on Sept. 13. Last week, the agency posted the court ruling on its website, saying that if patients "have been denied new drugs to treat hepatitis C or have not tried to get the new drugs, you may want to consult with your doctor."

The federal Centers for Medicare and Medicaid Services (CMS) wrote in a Nov. 5 guidance that they were concerned about the restrictions and that states should "examine their drug benefits to ensure that limitations do not unreasonably restrict coverage of effective treatment." The agency pointed to pharmacy and therapeutics committees and drug utilization review boards as potential alternatives to restrictions.

"The effect of such limitations should not result in the denial of access to effective, clinically appropriate, and medically necessary treatments," CMS said in the guidance of the restrictions.

Publication Details