Kaiser, Citing Cost, Won’t Pay for Viagra

Reflecting a deepening split among health insurers, Kaiser Permanente, the nation’s largest HMO, said Friday that it won’t pay for the male impotence drug Viagra because its unprecedented popularity would make the coverage too expensive.

Kaiser also said it will cancel its existing coverage of other, less widely used therapies for treating erectile dysfunction.

Because many insurers are still wrestling with their decisions about Viagra, the position staked out by Kaiser--by far the biggest health maintenance organization in California, with more than 5 million members--could influence others to follow its lead.

Insurers that do decide to cover Viagra, moreover, may fear that a disproportionate share of impotent men will switch to their plans, leading to higher costs and more financial risk.

With unusual candor, a Kaiser official acknowledged that the company’s final decision was largely influenced by economic, rather than medical, considerations. The company claimed that covering Viagra for its members would cost “at least $100 million a year.”

In defending the decision, Kaiser officials had a clear message to deliver: Why should all Kaiser members have to foot the bill so some people can have more frequent sex?

One Kaiser official, Dr. Francis J. Crosson, asked rhetorically: “We could, of course, build the cost of Viagra into everyone’s premium, but is that the right thing to do?”

Kaiser’s decision contrasts with some other health plans, which are covering Viagra in cases where there is a demonstrated medical need. In California, at least three large HMOs plan to cover Viagra under certain circumstances.

Cigna Healthcare and Blue Cross of California are covering Viagra but limiting the number of pills that will be paid for per month. A spokesman for Health Net, another large HMO, said Friday that that plan will cover Viagra but has not developed specific coverage guidelines.

But another large national insurer, Aetna U.S. Healthcare, has said it will not pay for Viagra unless employers buy special coverage, the same policy announced by Kaiser.

Aetna told New York regulators earlier this month: “Simply put, having sexual relations is not a medical necessity.”

In announcing its decision, Kaiser officials said their estimate of $100 million a year was based on the plan paying for 10 pills a month for each patient, which is more than the six to eight pills per month that several insurers are covering.

Public sentiment appears to be as deeply divided as the insurers themselves.

A national survey released Friday found that about 49% of those polled favored covering Viagra, while 40% were opposed. By contrast, coverage of birth control drew 75% approval in the survey. Most insurers, but not all, cover birth control.

The poll was conducted by the Kaiser Family Foundation, a private health care charity. The Menlo Park, Calif.-based foundation is not affiliated with Kaiser Permanente.

Kaiser’s decision is likely to draw scrutiny from state regulators.

“It is probable that regulatory agencies might have a different opinion about what is the right thing to do,” said Crosson, executive director of the Permanente Foundation, Kaiser’s U.S. physician organization.

A spokeswoman for the California Department of Corporations, which regulates HMOs, said the agency “doesn’t take a position on drugs” but might review the Viagra issue if questions arose as to why a health plan wasn’t providing coverage for a federally approved drug.

Not surprisingly, Kaiser’s decision prompted criticism from the drug’s maker, Pfizer Inc., which pronounced itself “surprised and disappointed.”

Noting that Kaiser had covered other treatments for erectile dysfunction until the debut of the costly Viagra pill, spokesman Brian McGlynn said: “Until reversing its position, Kaiser was a progressive plan that recognized the medical need for treating this condition with federally approved pharmaceuticals.”

Doctors say many men already are paying for Viagra themselves while awaiting decisions by their insurers. But that would be difficult for the working poor.

Echoing the view of the medical community, McGlynn said erectile dysfunction is a “serious medical condition that can seriously diminish men’s self-esteem and affect their relationships.”

Kaiser’s Crosson stressed that Kaiser is not taking the position that sexual dysfunction is not a serious medical condition. The HMO will continue to cover all medical care associated with evaluating the disorder but won’t pay for drugs to treat it.

But he also said that a first-of-its-kind national panel it convened to review the Viagra issue “was unable to find a scientific or clinical basis for determining who should get Viagra and who should not.”

Panels of specialists advising other insurers have drawn a different conclusion. Blue Cross of California, for example, said its group of top academic and medical experts concluded that Viagra is medically necessary and should be covered. The insurer is covering six pills a month for patients with a demonstrated medical need.

Several critics suggested Kaiser’s own financial problems were a big factor in its decision. Kaiser lost $270 million in 1997 and is expected to lose more money this year. Its credit ratings were downgraded Friday by Moody’s Investor Service.