$1,000 Hepatitis-C Cure Might Send Health Insurance Rates Soaring

Hepatitis C

The new drug Sovaldi, which costs $1,000 a day, could wipe the Hepatitis C virus from the map. According to medical experts, the treatment has been found to cure 90 percent of patients with the liver disease within three months, with few side effects.

But a concern for those within the health insurance industry is the drug’s cost, which might cause health insurance rates to rise.

The Cost of Treating Hepatitis C

The Wire estimates a cost of $84,000 for a standard 12-week treatment of the power drug. If the virus isn’t contained within that time frame, the price of Sovaldi could go up to $168,000 for a 24-week regimen. But a liver transplant costs $175,000 and the next best drug, Incivek, costs $68,000 for a standard course.

With the drug being so exceptionally effective with minimal side effects, and the likelihood of doctors prescribing Sovaldi in the future to willing patients, health insurance companies are in for quite a bill.

Unless insurance companies can come up with a coverage solution that controls costs, it’s likely this drug will cut into profits. If that happens, health insurance companies might pass the cost onto consumers through spikes in health insurance rates.

Related: Expect Higher Health Insurance Premiums and Deductibles in 2014

Blockbuster Sovaldi Drug Putting Health Insurers on Guard

CBS MoneyWatch reports that health insurance company Molina Healthcare has been outspoken about the cost of this drug.

In an interview with Forbes, Mario J. Molina, chief executive of Molina Healthcare, said, “If you’ve got a patient who is advanced and has liver disease and is about to get a liver transplant, it makes sense to give [the Sovaldi] treatment,” Molina says. “…[W]hat do we do about everybody else? If everyone in the U.S. with hepatitis C were treated with Sovaldi at its list price, it would cost $227 billion compared with the estimated $260 billion spent a year in the country for all drugs.” 

According to the National Medical Association, more than 3 million Americans have chronic Hepatitis C. Additionally, of those with chronic Hepatitis C, an estimated 60 to 70 percent will develop ongoing liver disease and complications.

Photo credit: Tulane Public Relations