Why Louisiana is pursuing Netflix-style payments for hepatitis C treatments

Louisiana officials will proceed with establishing a Netflix-style payment model for hepatitis C treatments, STAT reports.

Under the model, drugmakers supply hepatitis C treatments in return for subscription-based payments. The state would pay a fixed dollar amount for unlimited access to the medication for five years. The program would only apply to state Medicaid beneficiaries or incarcerated patients.

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.

"This subscription model effectively caps the state’s spending on expensive hepatitis C drugs and creates an incentive to treat as many infected people as possible. For the drug manufacturer, this model would guarantee fixed revenue for a contracted period of time and allow the drug manufacturer to expand their product reach into populations that otherwise would not have received treatment," Louisiana Gov. John Bel Edwards told STAT.

The state has been looking into a subscription payment model, among other proposals, for more than a year to help  eliminate hepatitis C in the state without spending more on the cost of the medications.

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