Costly cures: effective but very expensive drugs are forcing state Medicaid directors to make some tough decisions.

• Author: Booth, Michael
• Position: HEALTH CARE

One of the deadliest infectious diseases in the nation now has a lifesaving cure. But the drug boasts a price as astounding as the medicine is miraculous. Millions of patients could benefit; yet if too many of them show up for treatment too fast, the cost would bust the budgets of straining Medicaid programs across the nation.

Hepatitis C. Around 3.5 million Americans have this troubling public health threat although half of them don't know it. Without treatment, it eventually attacks the liver and can cause liver cancer and cirrhosis and require a liver transplant. Close to 20,000 people died from it in 2014, more than the total combined number of deaths from 60 other infectious diseases, including HIV, pneumococcal disease and tuberculosis.

But at around $50,000 currently per person, the cure is far from the reach of many. Courts have ruled the states have to offer the drug to everyone, with legal advocates finding enormous leverage in the federal government's rule that states must pay for all treatments that are "medical necessities."

A Tangled Tale

It's a tangled tale involving every branch of government and private industry, one that the most inventive professor of ethics would be hard-pressed to think up. But this is no ivory tower imaginary scenario. The battle over hepatitis C is an all-too-real human problem--"and a math problem," as one Medicaid expert puts it--sparking furious political, executive and legal skirmishes in several states.

Colorado is among the latest to experience this clash between patient advocates and Medicaid directors and their legislative leaders who must carefully steward tight state budgets. Delaware, Florida, New York, Washington and elsewhere also have had to wrestle with hepatitis C payment rules.

"There are people falling through the cracks right now who really need help," says Colorado Representative Joann Ginal (D). "We should be able to help everybody, but prices are going up and our budget is only so big ..."

The agonizing choices for Medicaid departments promise only to pile up in coming months and years. Treatments are being developed for other debilitating conditions, such as muscular dystrophy and sickle cell anemia.

That's good news for patients, says Matt Salo, leader of the National Association of Medicaid Directors. He calls it "a Renaissance for treatments of long-untreatable illnesses."

The bad news, however, is the collective price tag. The new drugs are coming with potential retail prices between $300,000 and $500,000 for each patient's treatment.

Hep C Sets the Bar

Nowhere do the numbers pile up faster than with hepatitis C. Colorado's dilemma reached its height last year when the state Medicaid department said it couldn't afford the hepatitis C cure if all 10,000 Medicaid clients testing positive for the virus sought treatment. The department told legislators it had already spent $26.6 million on the cure for 326 patients. Treating everyone would cost $ 1.14 billion more, the department says, a budget-busting amount in a state that currently supplements Medicaid's federal funding with $2.6 billion of its own money.

Many people testing positive for hepatitis C have no symptoms for years. So Colorado, like some other states, sought to limit the expensive drug treatment to patients with more severe symptoms, like liver scarring, whose disease progression "score" has reached reached at least three, on a nationally accepted four-point scale of the disease.

That idea was not received well by patients, advocacy groups and many public health experts who decried the notion that limiting a drug with so much potential to cure disease could be considered a solution. They pointed out that patients can have debilitating fatigue, aches and other symptoms long before they...