Louisiana pioneers plan to curb costs of med­i­ca­tion

The Washington Times Weekly - - National Upgrades Planned For Truman Library - BY SHEN WU TAN

Louisiana has be­come the first state to use a sub­scrip­tion plan to cover med­i­ca­tion costs for pa­tients on Med­i­caid or in jail in an ex­per­i­ment that health care pol­icy an­a­lysts say could serve as a na­tional model for manag­ing ris­ing drug prices.

The state will pay $60 mil­lion a year over the next five years to gain un­lim­ited sup­plies of a cure for hep­ati­tis C. With a goal of serv­ing 80% of its in­fected res­i­dents, Louisiana be­gan treat­ing its first pa­tients un­der the sub­scrip­tion plan.

“The ba­sic idea here is, ‘Let’s give these prof­its upfront to the phar­ma­ceu­ti­cal firm but also dra­mat­i­cally im­prove ac­cess be­cause price is not a bar­rier,’” said Neeraj Sood, a pro­fes­sor at the Univer­sity of South­ern Cal­i­for­nia’s Sol Price School of Pub­lic Pol­icy.

Less than 3% of Med­i­caid pa­tients and 1% of in­mates have ac­cess to the cure, Mr. Sood said dur­ing a panel dis­cus­sion at the Brook­ings In­sti­tu­tion.

Drugs for com­bat­ing hep­ati­tis C, which can se­verely dam­age the liver, can cost more than $70,000 for a three-month course of treat­ment.

Re­bekah Gee, sec­re­tary of the Louisiana Depart­ment of Health, said the state is aim­ing to treat 32,000 peo­ple within five years.

Although she was un­sure about the cost sav­ings, Ms. Gee said the sub­scrip­tion plan could save the state hun­dreds of mil­lions of dol­lars while pro­vid­ing more treat­ment to those suf­fer­ing from the dis­ease.

“We have a cure, and it is un­ac­cept­able that in this day and age we can­not pro­vide it and have peo­ple suf­fer­ing, bleed­ing in­ter­nally and dy­ing un­nec­es­sar­ily be­cause of the price — just sim­ply un­ac­cept­able,” she said.

Louisiana struck a deal with phar­ma­ceu­ti­cal firm Gilead Sciences, pro­ducer of the hep­ati­tis C cure called Ep­clusa, which costs $74,760. A sub­sidiary of Gilead will pro­vide the state with a generic ver­sion of the drug cost­ing $24,000.

Ms. Gee said the state was bur­dened with a $2 bil­lion deficit yet had a high de­mand for hep­ati­tis C drugs.

The Cen­ters for Dis­ease Con­trol and Pre­ven­tion, us­ing its most re­cent data, es­ti­mated that there were more than 41,000 acute hep­ati­tis C cases in the United States in 2016. More than 18,000 deaths re­lated to hep­ati­tis C were re­ported that year. An es­ti­mated 3.5 mil­lion peo­ple in the U.S. live with chronic hep­ati­tis C, ac­cord­ing to the CDC.

A cure for the blood­borne virus was de­vel­oped in 2014.

Mr. Sood said cur­rent pric­ing sys­tems for lifesaving med­i­ca­tions prevent most peo­ple who need them from ac­quir­ing them.

Jason Shafrin, se­nior direc­tor of pol­icy and eco­nomics for Pre­ci­sion Health Eco­nomics, said the fun­da­men­tal prob­lem with drug prices is the high cost for a phar­ma­ceu­ti­cal com­pany to create the first pill, but the com­pany’s costs and the drug’s price de­crease with more pro­duc­tion.

The sub­scrip­tion model avoids the high costs, Mr. Shafrin said, be­cause prices are capped at an amount that gives drug man­u­fac­tur­ers in­cen­tives to in­no­vate.

Other pro­pos­als to ad­dress ris­ing costs in­clude a fed­eral plan to match in­ter­na­tional prices and Pres­i­dent Trump’s ex­ec­u­tive or­der for drug man­u­fac­tur­ers to display prices in their ad­ver­tis­ing.

Wen­dell Primus, a se­nior pol­icy ad­viser on bud­get and health is­sues for House Speaker Nancy Pelosi, Cal­i­for­nia Demo­crat, said he thinks Mr. Trump and his team want to lower drug prices but they do not have the author­ity to do so.

He called Louisiana’s plan “truly ex­cit­ing” but said he thinks Big Pharma will “ar­gue very hard” against such drug price ne­go­ti­a­tions. He noted that it took Louisiana more than two years to im­ple­ment its sub­scrip­tion plan.

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