UnitedHealth Group Q1 Hepatitis C Drug Spending Reached $100M

UnitedHealth Group spent $100 million — significantly more than expected — on hepatitis C drugs during the first quarter of this year, according to a Kaiser Health News report.

UnitedHealth executives discussed the first-quarter results on a call with financial analysts yesterday, according to the report. A new hepatitis C pill, Sovaldi, drove the high spending. Sovaldi is seen as highly effective but comes with a price tag of $80,000 per treatment. The drug is putting fiscal pressure on payers that didn't account for its price in 2014 premiums, according to the report.

Yesterday, the UnitedHealth reported its net earnings in the first quarter of fiscal year 2014 fell 7.8 percent, from approximately $1.2 billion in 2013 to $1.1 billion this year. Medicare Advantage cuts due to the healthcare reform law and sequestration led UnitedHealth Group to exit markets, adjust networks and reduce product offerings and benefits this year. Additionally, the company's first-quarter income tax rate increased more than five percentage points year-over-year to 42 percent because of nondeductible health insurance taxes and reinsurance fees under the PPACA.

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