6 Medicaid health plans in Michigan appeal state’s contract decisions

The radical inflation of pharmaceuticals the past several years, including specialty drugs, that has prompted Congress to hold hearings has also affected Michigan’s proposed fiscal 2017 budget.

To address rising pharmaceutical costs in the Medicaid program, Gov. Rick Snyder has proposed a one-time appropriation of $86 million to create a pharmacy reserve.

While no such hearings are scheduled in Lansing, congressional committees in Washington, D.C., want to hear from drug company CEOs about the basis for the spike in generic and specialty drug prices. Committees have focused on several generic drugmakers, including Turing Pharmaceuticals, Valeant Pharmaceuticals, Retrophin Inc. and Rodelis Therapeutics.

For example, the Cleveland Clinic said recently that sudden price hikes on generics Isuprel and Nitropress, sold by Valeant, have increased the health system’s total drug costs by $8.6 million annually.

According to the Michigan Budget Office, fiscal 2017 beginning Oct. 1 will require three major adjustments in state spending in Medicaid, Children’s Special Health Care Services and Healthy Michigan.

This is to help pay for:

  • hepatitis C treatment ($327.8 million gross, including $91.5 million in general funds);
  • cystic fibrosis treatment ($66.3 million gross, including $43.7 million in general funds); and
  • the pharmacy reserve fund ($86.1 million gross, including $30 million in general funds).

The funding recommendations were developed with the assistance of an advisory committee comprised of physicians and pharmacists.

Hepatitis C coverage for Medicaid patients began this year. The drugs cure patients about 90 percent of the time at an average cost of $46,600 per patient.

The committee recommended coverage be prioritized to people most severely affected by hepatitis C with a Metavir score of F3 and F4. Enrollees must complete a prior authorization process with a specialist prior to accessing this medication, the state said.

Michigan estimates about 7,000 Medicaid enrollees will access hepatitis C drugs in fiscal 2017.

The pharmacy committee also recommended that Michigan provide access to new pharmacy product Orkambi to eligible enrollees with cystic fibrosis. Orkambi is a drug that was demonstrated to be effective for individuals with a common form of cystic fibrosis who are 12 or older.

While not a cure, Orkambi also is quite expensive, costing $207,500 per year. Some 320 patients are expected to need the drug in fiscal 2017, the state said.

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