Louisiana Testing New Payment Model For Hepatitis C Drugs

Louisiana is set to become the first state to adopt a new way to pay for expensive hepatitis C treatments. According to an announcement from Louisiana Gov. John Bel Edwards (D), the state is going to move a payment model that would allow the state to essentially pay a subscription fee to a drug company instead of paying for each prescription individually. The plan was originally announced last July and the Louisiana Department of Health (LDH) sent out an official solicitation this week to find a hepatitis C drug manufacturer to partner with.

Under the new plan, the LDH would enter into an agreement to pay the drug manufacturer a set amount for five years for medication in exchange for unlimited access to the drug initially. The alternative payment arrangement is similar to how consumers pay a monthly fee to stream unlimited television shows and movies and has become known as the “Netflix model.” Louisiana wants the annual subscription fee to based on the amount that would have been budgeted to treat the disease for that year. Last year, the state spent $35 million treating roughly 1,000 people.

Hepatitis C is a viral infection that can lead to chronic liver disease. The virus is spread by direct contact with an infected person’s blood. There is currently no vaccine available for this virus. However, the new treatments for hepatitis C can cure 85 to 100 percent of patients, according to the LDH.

The development of a new generation of treatments for hepatitis C earlier in the decade has created a rare public health opportunity to cure people of the liver-damaging disease. The ultimate goal of the state is to be able to treat 10,000 people with hepatitis C by 2020. That number represents about a quarter of the patients with hepatitis C in its Medicaid and prison population.

Louisiana has already been testing interest in the idea through a request for information. Health secretary Rebekah Gee said that Gilead Sciences, the maker of several hepatitis C treatments, and AbbVie, maker of a competing treatment, have both expressed support for the plan. Drug companies can now submit bids for the contract. It is hoped that a contract will be in place by July.

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