Gilead, Louisiana to strike Netflix-style payment deal for hep C drug

Louisiana officials will strike a deal with a Gilead Sciences subsidiary to supply hepatitis C medication under a Netflix-style payment model, according to STAT.

Under the model, Asegua Therapeutics will supply hepatitis C treatments to the state Medicaid program and Department of Corrections in return for subscription-based payments. The state will pay a fixed dollar amount for unlimited access to the medication for five years. A finalized contract is expected June 1.

Asegua, the Gilead unit, will provide Louisiana with an authorized generic version of Epclusa, its top-selling hepatitis C treatment.

The pricing model aims to limit the amount the state pays for hepatitis C treatments, while also treating more individuals. The Louisiana Health Department hopes to treat more than 10,000 people by the end of 2020 and keep the total spending on hepatitis C drugs to $35 million or less, the collective amount Medicaid and the Louisiana Department of Corrections spent in fiscal year 2018.

The state began exploring a subscription-based model in response to budget concerns.

The Netflix-style model is being explored in other countries. Australia is working its way through a five-year agreement in which several drugmakers were paid a lump sum of $766 million for an unlimited volume of hepatitis C drugs. The deal was signed in 2015. Using the Netflix-style payment model for purchasing hepatitis C drugs is expected to lower patient costs in Australia by 85 percent.

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