How reconsidering pricing strategy could help save more hepatitis C patients

Hepatitis C treatment experts are recommending a revised pricing strategy implemented at the state level that could help a greater number of affected patients access the treatment, according to a report published in Annals of Internal Medicine.

"These innovative therapies can cure hepatitis C, but the high costs put them out of reach for the most vulnerable populations," said lead report author Neeraj Sood, PhD. "We wanted to come up with a better solution where we dramatically improve access to cures, control drug spending but still maintain incentives for the development of new cures."

The researchers targeted the novel pricing strategy at state policymakers, outlining ways to leverage competition among drug manufacturers. The strategy aims to save states money and ensure a greater number of patients can be treated.

"Increasing prices raises incentives for pharmaceutical innovation but limits patient access. This is the crux of the problem," Dr. Sood said. "Negotiating on revenues rather than price is the answer. Revenue-based contracting allows us to increase profits and incentives for innovation without limiting access."

In the report authors' proposed model, states would leverage resources to make a deal with one pharmaceutical company, offering a lump-sum payment over a contracted period. Although the negotiated amount would be higher than the expected revenue for any one company over the contracted period, it would still be less than the total amount the Medicaid program would pay to all the drugmakers distributing the treatment.

In return, the drug company would agree to provide a full rebate on drug purchases for the population who were specified to receive the cure, such as patients on Medicaid or prisoners with hepatitis C, making the treatment essentially free of additional cost. Additionally, it would allow states to expand patient access to the treatment while maintaining their budget.

"Our concern is that the public health burden of hepatitis C infections will continue to grow even though we have a cure if we don't implement innovative financing programs," Dr. Sood added.

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