Costly Vertex Drug Is Denied, and Medicaid Patients Sue

Kalydeco, a $300,000-a-Year Cystic Fibrosis Treatment, Sparks Legal Battle in Arkansas and Shows Dilemma States Face

By Joseph Walker, WSJ
July 16, 2014 10:30 p.m. ET

LITTLE ROCK, Ark.— Vertex Pharmaceuticals Inc. VRTX +0.31% 's $300,000-a-year cystic-fibrosis drug has sparked a legal battle here, where the state's Medicaid program is restricting access to the expensive therapy.

In a lawsuit filed in Arkansas federal court last month, three people suffering from the fatal lung disease allege Medicaid officials have for two years denied them access to Kalydeco because of its cost. The plaintiffs allege state officials have violated their civil rights under federal law governing Medicaid, the government-run insurance plan for the poor.

The patients all meet the eligibility criteria established by the Food and Drug Administration when it approved Kalydeco in 2012, including the presence of a rare genetic mutation it is designed to correct. But Arkansas officials have said the patients must prove their disease has failed to benefit from older, less-expensive therapies, a policy their doctors say contradicts treatment guidelines.

Arkansas officials declined to comment on specific allegations but said they are mainly restricting access because existing data don't support the drug's use as a first option. Cost also appears to be a factor: Emails obtained by the patients' attorneys show officials discussing Kalydeco's cost, and their worries about the expense of future cystic fibrosis drugs.

(More here.)