UnitedHealth Group Pays $100 Million Bill For New Hepatitis C Drug Coverage

By John Lavitt 12/15/14

The ultra-high cost of Gilead's effective hepatitis drug is hurting the bottom line of insurers.

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Handling the insurance coverage of over 85 million Americans, UnitedHealth Group was hit hard on their bottom line by the price of the new Gilead hepatitis C drug regimen Sovaldi. As the nation’s largest insurer, which handles a bevy of commercial health plans plus privately run Medicare and Medicaid plans, UnitedHealth Group recently paid a $100 million bill for Sovaldi, the new expensive treatment for hepatitis C by Gilead Sciences.

As a direct result, UnitedHealth Group reported a first-quarter drop in profit of $31.7 billion in revenue. Although the excellent cure rates of the new treatment may save insurers money in the long run by keeping their customers healthier, it is hitting UnitedHealth hard in the pocket today. “The price is exceptionally high," said Gail Koziara Boudreaux, CEO of UnitedHealth’s insurance business. "[T]he cost has to be addressed.”

Although UnitedHealth Group Chief Executive Officer Stephen Hemsley also pointed fingers at the Affordable Care Act, part of such finger pointing is the wider coverage that must be provided for hepatitis C treatment. According to an earnings call transcript, Hemsley pointed out that, “The ACA’s impacts on 2014 have been immediate and significant.” Without question, however, the negative wild card that truly affected the profound earnings drop were the costs of the HCV drug regimen.

But the wild card in UnitedHealth’s earnings was a $100 million bill for a new, expensive treatment for hepatitis C. Sovaldi, as developed by Gilead Sciences, is really expensive, costing $84,000 for a course of treatment, or $1,000 a pill. With the ACA prohibiting insurers from medical underwriting—charging sicker people more, or refusing to cover them entirely—Hepatitis C patients are taking advantage of the opportunity to finally access the help they need to save their lives. Ultimately, UnitedHealth Group’s financial loss is a true gain to many people that finally have been cured of the deadly viral infection.

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Growing up in Manhattan as a stutterer, John Lavitt discovered that writing was the best way to express himself when the words would not come. After graduating with honors from Brown University, he lived on the Greek island of Patmos, studying with his mentor, the late American poet Robert Lax. As a writer, John’s published work includes three articles in Chicken Soup For The Soul volumes and poems in multiple poetry journals and compilations. Active in recovery, John has been the Treatment Professional News Editor for The Fix. Since 2015, he has published over 500 articles on the addiction and recovery news website. Today, he lives in Los Angeles, trying his best to be happy and creative. Find John on Facebook, Twitter, and LinkedIn.