VA’s Hep Crisis

The Department of Veteran Affairs outsources and rations hep C treatment

by Larry Buhl

waving_flag[dropcap]T[/dropcap]he newest class of antiretroviral drugs has sparked a revolution in the treatment of hepatitis C, but for the Department of Veterans Affairs, this success has come with big challenges.

While the VA contends that the new drugs have cured as many HCV patients in the past fifteen months as the old regimens cured during the previous fifteen years, demand for the meds has surged and is leading to an enormous budget shortfall.

That shortfall could be more than $2.5 billion, the VA said in June, and although not all of it is due to unanticipated demand for life-saving hep C meds, hepatitis C treatment has been responsible for most of the gap.

Although the new antiretroviral drugs are being sold to the VA at a discount, at $600 per dose, VA officials had severely under-budgeted treatment because they didn’t know exactly what the new drugs would cost. They contend that because VA’s budget is set about a year in advance, they were not able to set an accurate price for the meds, which include sofosbuvir, approved in late 2013 under the brand names Sovaldi and later as Harvoni.

The VA’s response, starting in May, was to shift some of its hepatitis C patients to private providers to cut costs. Selected patients will be offloaded to the new Veterans Choice Program, a $10 billion program created to help reduce wait times for treatment by letting veterans seek care from providers outside the VA system.

The shift to private providers through the VA’s Choice Plan helps the VA to pay for hepatitis meds with bailout money from the Veterans Access, Choice and Accountability Act, a $16.3 billion funding and reform measure passed last year. About $10 billion of that money was earmarked for private care, but the Choice Plan has largely been untapped.

The money was intended to ease the backlog of veteran appointments for healthcare. But the decision to use it to offset the cost of hepatitis meds was not part of the original plan. Under the new plan, hepatitis C patients who already started treatment in the VA system will be allowed to remain there, but facilities that can’t afford to buy the drugs for new patients will now refer them to the Choice Program.

In addition, 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.

VA responded to critics of the controversial move saying it’s a temporary solution until the beginning of the next fiscal year and that it had no choice in order to treat vets with hepatitis C and stay in the black.

“It is essential that Congress pass legislation to provide the requested budget flexibility by the end of July 2015,” VA Deputy Secretary Sloan Gibson wrote.

“This is necessary to replenish critical operations funding that VA had to reallocate from other medical services programs to sustain Care in the Community, after those funds were depleted. If these program funds are not restored, VA will face shutting down hospital operations during August 2015.”

The VA also established new criteria for who can receive the latest hepatitis C meds. Patients with advanced—but not end-stage—liver disease get priority, but those with a life expectancy of less than a year or who have a strain of hepatitis resistant to antiviral drugs will not be eligible for treatment.
The new measures are drawing criticism from veterans advocates, including Tom Berger, executive director of the Veterans Health Council at the Vietnam Veterans of America. In an op-ed in the Congressional watch publication “The Hill,” Berger called on Congress to allocate more funds immediately for hep C care and demanded that the VA not ration care. In other publications Berger has said offloading some hep C patients onto the Choice program will worsen, not improve, wait times.

The New York Times reported in June that the wait times for care at VA facilities were fifty percent higher than in June, 2014, at the height of the Administration’s problems.

The VA estimates that 180,000 U.S. patients are being treated for hepatitis C through the Administration and that the majority of them contracted it during their service in the Vietnam War.

Hepatitis C is far more common among Vietnam-era veterans than younger veterans due to transfusions and blood contact in combat and training. While one in ten veterans overall have the infection—still higher than the general population—more than six in ten Vietnam veterans have the infection. According to internal records, about 3,000 veterans died in VA care in 2014 from complications brought by hepatitis C.


Larry Buhl is a radio news reporter, screenwriter, and novelist living in Los Angeles. His podcast on employment issues, “Labor Pains,” can be found at