Insurers Fret Hepatitis

Insurers Fret Hepatitis C Pill Costs More Than ObamacareComment Now Follow Comments

Source:- Google.com.pk
As health insurance companies reveal much anticipated first-quarter earnings, it’s the unpredictable impact from the five-figure cost of new Hepatitis C treatments that are the subject of as much  Wall Street worry as the Affordable Care Act.

This week, UnitedHealth Group UNH -3.08% (UNH) executives spent more time answering questions about the mounting cost to the giant health insurance company and its customers of new Hepatitis C drugs than the rollout of the health law, which promises a boon of business to health insurers.

UnitedHealth, a perceived bellwether in the health insurance industry as the country’s largest publicly-traded health plan, disclosed that Hepatitis C prescriptions cost $100 million to the company in the quarter “across the Medicaid, commercial and Medicare part D” plans it sells.

UnitedHealth CEO Stephen Hemsley described the situation as a “rapid launch of an effective and very expensive new hepatitis C therapy.’

“The aggressive US pricing practices on this has been well publicized and continues to be quite controversial,” Hemsley said during a 70-minute call Thursday discussing the company’s first quarter earnings. “We are working diligently to ensure this medication is applied under clinically appropriate standards.”

At issue is the $1,000 per pill price of Sovaldi, developed by Gilead Sciences GILD +1.03%. (GILD) The company and its pricing strategy have come under intense criticism from insurers, government health programs and others.

The cost of a course of treatment has been pegged at more than $80,000. The market is large with the liver disease afflicting more than three million Americans.

And there are more Hepatitis C drugs to come, such as one expected to launch later this year by Abbvie (ABBV), the drug company spinoff of Abbott Laboratories ABT +1.43% (ABT). It’s unclear whether Abbvie (ABBV) will launch at a lower price, potentially causing some competition that would allow health plans to reign in some of the costs.

“We’re not discussing our pricing strategy before launch,” Abbvie spokeswoman Jennifer Smoter said. “We expect to launch in the US before the end of the year.”

Several other health insurance companies are reporting their first-quarter earnings in the coming weeks. Across the industry, the cost of Hepatitis C medications could run more than $1 billion in the first quarter alone.


Wellpoint, which owns and operates Blue Cross and Blue Shield plans, is scheduled to report its earnings April 30 and Humana HUM -3.73% (HUM) reports its earnings the first week in May. Other players to report are Aetna, which will report next week and Cigna, which will report May 1.

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