SAN FRANCISCO (CN) — Patients must amend their class action accusing Blue Shield of California of unjustly denying coverage for Harvoni, a revolutionary, and expensive, cure for hepatitis C, a federal judge said Wednesday.
Lead plaintiff Aram Homampour sued Blue Shield of California in October 2015 for refusing to cover Harvoni, a one-a-day pill that can cure hepatitis C in as little as eight weeks with little to no harmful side effects.
Although Blue Shield has twice changed its policies to expand coverage of the drug since the lawsuit was filed, Homampour says the company "hedged its bets" on delaying coverage to increase profits.
At a cost of $99,000, the 12-week treatment approved by the FDA in 2014 was shown to cure hepatitis C in 95 to 99 percent of patients during clinical trials.
During a Wednesday hearing, U.S. District Judge William Orrick said he was inclined to dismiss claims for injunctive relief because the insurer has changed its policies to expand coverage of the drug.
But Orrick found it too early to dismiss claims for recovery of ill-gotten profits Blue Shield allegedly obtained by denying coverage in the past.
"I think it's premature to foreclose it," Orrick said.
Blue Shield attorney John LeBlanc argued that the plaintiffs cannot sue one of two named defendants — Blue Shield Life and Health Insurance Co. — because the actual insurer is California Physicians Service dba Blue Shield of California, an HMO benefit plan.
"They are totally separate companies," LeBlanc said. "One's a health plan covered by the Health and Safety Code. The other is an insurance company covered by the Insurance Code."
But plaintiffs' attorney Timothy Rozelle said his clients have shown a clear connection between the two corporate entities because they shared the same guidelines and process "to categorically deny" coverage for Harvoni.
LeBlanc claimed that a January ruling from the U.S. Supreme Court, Montanile v. Board of Trustees of the Nat'l Elevator Industry Health Benefit Plan, prohibits the plaintiffs from masking their claim for damages as a claim for equitable relief.
"That might be a strong argument on summary judgment," Orrick replied. "I'm not sure this is the time to foreclose plaintiffs' claim. I understand what you're arguing, but I think it's a little early."
Lead plaintiff Marina Sheynberg filed a similar class action against Anthem Blue Cross and its affiliated insurance companies in the same court in July 2015.
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