VA using Choice Program to pay for Hepatitis C drugs

Now that the U.S. Department of Veterans Affairs is shifting some of its hepatitis C patients to private providers to cut costs, some of the 135 Central Oregon veterans diagnosed with the disease will be sent to a private provider for care. What’s unclear is how many.

VA officials recently announced the overwhelming demand for the effective, yet cripplingly expensive hepatitis C medications unveiled last year has outpaced their drug budget’s capacity to provide the drugs.

The new solution is to funnel patients through the Veterans Choice Program, a roughly $10 billion program designed to reduce wait times by allowing veterans to get care from private providers outside the VA system.

“We have the clinicians in the system that can treat the patients. What we don’t really have right now is money to buy the additional drugs,” said Dr. James Tuchschmidt, the VA’s acting principal deputy under secretary for health.

The VA budgeted about $3.5 million to pay for the drugs during the federal government’s fiscal year 2014 and another $650 million for fiscal year 2015, which ends Sept. 30, said Dr. Thomas Lynch, the VA’s assistant deputy under secretary for health for clinical operations. But the VA’s budget is set about a year in advance, so VA officials budgeted before knowing exactly what the new drugs would cost, which turned out to be more than they had planned for, he said.

An estimated 180,000 U.S. veterans receiving care through the VA have hepatitis C — many of whom contracted it during their service in the Vietnam War. More than 3,000 of those are in the VA Portland Health Care System, which includes 10 outpatient clinics in Oregon, including one in Bend.

Hepatitis C is a viral infection that attacks the liver, but many people don’t find out they have it until two or three decades afterward, when the scarring on their liver has progressed to an advanced stage. More than 19,000 Americans died of hepatitis C in 2013, according to the U.S. Centers for Disease Control and Prevention.

The disease is most commonly transmitted through injection drug use in the U.S., but can also be spread through receiving donated blood, needlestick injuries in health care settings or being born to an infected mother, according to the CDC.

A temporary solution

The VA covers Harvoni, the blockbuster specialty drug by Gilead Sciences that costs nearly $100,000 for a 12-week treatment. It also covers Viekira Pak by AbbVie, which costs about $83,000 for a 12-week treatment.

The drugs boast dramatically higher cure rates than their predecessors, which caused flu-like symptoms and other side effects so severe they prevented most people from completing their regimens.

Patients who already started treatment in the VA system will be allowed to remain there, Tuchschmidt said. But facilities that can’t afford to buy the drugs for new patients will now refer them to the Choice Program, he said.

Tuchschmidt pointed out it’s only a temporary solution until the beginning of the next fiscal year. He said the law that provides money so veterans can receive treatment outside the VA gave the VA broad authority to use it for any type of medical needs the agency couldn’t provide.

The VA has asked Congress for authority to pull up to $500 million from the Choice Program in the current fiscal year specifically to pay for hepatitis C medications for patients receiving care within VA facilities.

“I am very hopeful at this point that Congress will give us that broader authority to use the Choice dollars specifically to help with this so we don’t just send patients out to the Choice Program,” Tuchschmidt said.

Trouble with Choice

What’s not clear is how patients funneled through the Choice Program will receive the medications.

The Bend outpatient clinic, like all VA outpatient clinics, does not have its own pharmacy. As it works currently, drugs are either mailed to patients from the Portland system’s main pharmacy in Vancouver, or patients pick them up at a private pharmacy and the VA reimburses them, said Dr. Michael Chang, who directs the Portland VA system’s hepatitis C clinic.

“As veterans access Choice, how do we get these extraordinarily expensive medicines through the mail to their door? That process is evolving right now,” he said.

Chang, the VA’s acting section chief for gastroenterology and hepatology, also said he doesn’t know yet which private providers in Central Oregon will take hepatitis C patients through the Choice Program.

News of the VA’s reliance on the Choice Program for hepatitis C treatment is troubling to some. Veterans nationwide complain of bureaucratic roadblocks, undue rejections and hours on hold with TriWest — the company the VA hired to run the program.

More than a dozen veterans called or emailed The Bulletin after it published an article describing problems with the program. Federal officials have said publicly that Choice suffers from low demand, but veterans assert that demand is not the issue, functionality is.

Troy Wise, a 68-year-old Army veteran, recently received an operation on his hand at St. Charles Bend through the Choice Program. The procedure went fine, but getting to that point was a mess, he said. After the surgery, he said he picked up his medications from a private pharmacy and didn’t bother trying to get reimbursement from the VA.

Wise said he would support the VA’s idea of funneling hepatitis C patients to the Choice Program, but he expects problems.

“If it makes it work, I’m all for it,” he said. “I am a little skeptical that that’s how the process will work. That’s just too optimistic, I think, for any of the experiences we’ve had.”

With the change, the VA established new criteria around which patients will be able to receive hepatitis C treatment. Patients will get priority if they have cirrhosis of the liver, irreversible scarring that eventually leads to liver failure, increased pressure in the vein that carries blood to the liver and liver stiffness, among others.

Patients with a life expectancy of one year or less, irreversible brain damage, a hepatitis C strain resistant to antiviral drugs or end-stage liver disease will not be eligible for treatment through the VA, according to the new guidelines.

Many commercial insurance companies and Oregon’s Medicaid program, known as the Oregon Health Plan, require that patients have advanced liver disease before they’ll cover the medications, Chang said. The VA’s criteria are less stringent, he said.

Demand in the Northwest

The VA is far and away the country’s largest provider of hepatitis C treatment, Chang said. Demand for hepatitis C drugs in the VA’s Northwest region ranks seventh out of 21 regions in the country, and Florida, Texas and California have the largest number of patients requesting the medications, he said.

“We certainly have a higher population of prevalence of hepatitis C compared to other places,” he said.

Nearly 6 percent of VA patients have hepatitis C, compared with about 1 percent of the general population, Lynch said.

Research has shown Vietnam veterans have a particularly high prevalence of hepatitis C, and they’re less likely to have contracted the virus through drug use than the general population, and more likely to have contracted it during their military service, according to an article published last year in the Journal of Community Health. Many contracted hepatitis C after receiving contaminated blood through blood transfusions, others were exposed to contaminated blood on the battlefield and others through sharing needles.


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