What if we treated medication like a Netflix subscription? In a time where drug prices are being scrutinized by both state and federal legislation, Louisiana is in the final stages of creating an innovative model to tackle the issue. The state will pay a flat rate, or subscription fee, to access a hepatitis C medication and the manufacturer would provide the drug to every sick patient covered by the state without limit – in the same way that you pay Netflix a flat rate for its entire media collection and then watch as much as you want without limit.
Hepatitis C is currently the deadliest infectious disease in the United States: More than 3 million Americans are living with chronic hepatitis C, and almost 20,000 Americans died from hepatitis-related complications in 2014. Louisiana certainly feels this mortal burden; almost 35,000 Louisiana residents covered by Medicaid have the virus.
Why are so many Americans, and Louisianans in particular, suffering from something we have the cure to? One major factor is that the disease does not typically present itself in an obvious fashion, and the early stages of hepatitis C do not have noticeable symptoms. The other primary factor, predictably, is the price of the cure. The list price of the most effective hepatitis C drug, which was first marketed a little over six years ago, can run into the tens of thousands of dollars. Due to the insanely high cost of the treatment, only 15% of Americans have been treated since the drug was created, and less than two percent of those 35,000 Louisianan Medicaid recipients were successfully treated last year.
While the rest of the country focuses on cost transparency and pharmacy benefit managers, the Bayou State had to consider drastic measures. In 2017, the Louisiana Department of Health declared hepatitis C to be “a lethal and contagious infection causing a public health crisis.” Governor John Bel Edwards (D-LA) decided to pursue this unconventional “Netflix model” after seeing how effective it was in treating Hepatitis C in Australia. According to the New England Journal of Medicine, the Australian government was able to treat 93,000 more Australians over five years than they could have with their traditional arrangement while saving the government around $4.9 billion. “A subscription model is flat,” Louisiana’s top health official, Rebekah Gee, noted. “The idea is that we take our spend now. … Let’s say it’s $35 million: We’ll give [the drug company] that or less, and we get unlimited access.” It almost seems too good to be true, but the numbers tell the story of an incredibly efficient system where the state, the patients, and the manufacturer are all satisfied. The state can budget the cost over several years, and tens of thousands of patients can access the medicine and get cured, significantly decreasing long-term health obligations.
In March, Gee proudly announced that the state entered into a subscription model deal with Asegua Therapeutics for their hepatitis C drug Epclusa, a deal which is expected to be finalized by July 1. With this deal, the Department of Health hopes to treat more than 10,000 patients by the end of 2020, with the end goal of eradicating the disease within the state – all while spending less than $35 million. “I’ve had conversations with a number of governors to make sure they’re aware of what we’re doing,” Governor Edwards told reporters. “And if and when we’re successful, we’re going to have something worthy of emulation and replication around the country.”