Great news in Louisiana. A new pricing model was approved about two weeks ago for the Hepatitis-C anti-virals. The state will be engaging a single manufacturer for a no marginal cost subscription model of the Hep-C cures for two large populations at need. The state Secretary of Health explains some more in the Health Affairs blog:
Here’s how a subscription-based payment model works: At its foundation, it is an agreement between the state and a pharmaceutical manufacturer in which the state commits to contracting with a pharmaceutical manufacturer and spending a capped amount on that manufacturer’s hepatitis C medication, in exchange for universal access to the drug for a particular population. In effect, Louisiana would gain access to needed medications, while the selected drug manufacturer would be guaranteed a set level of revenue. The medications would then be used to treat those infected in the state’s Medicaid and incarcerated populations….
Over a five year period, the manufacturer will provide as many doses as the department of corrections and the state Medicaid program demands. One additional dose will cost nothing. Since there are a number of near substitutes for Hep-C cures, the state was able to get a bid price of less than $10,000 per cure. Compared to only six years ago, that is an incredible discount.
This program structure has a couple of important attributes. First and most directly, it will alleviate a lot of suffering directly. People who were at the bottom of the list to get access to these drugs will get access to the drugs. Secondly, a lot of future infections may be averted as people who would have passed the disease along will no longer be carrying the virus. It is a harm mitigation strategy as well as a curative strategy. Finally, it is a creative use of market forces to bring the cost of a cure down significantly.
This is worth watching.