Louisiana has struck a deal to improve access to a Hepatitis C cure so expensive that some people only acquire the drug once they already have liver damage.
Gilead Sciences, the owner of Hepatitis C cure Epclusa, will now provide an unlimited supply of the generic version of the drug to people covered by Medicaid and in Louisiana’s state prisons. Asegua, a subsidiary of Gilead making the generic, will supply the drugs.
The list price of Epclusa is $74,760; the generic is priced at $24,000. Medicaid receives a discount price, but in many states, including Louisiana, Medicaid only approves the treatment after Hepatitis C causes severe liver damage because of its astronomical cost.
Under the deal, dubbed the “Netflix model,” Louisiana will pay for the Hep C cure up to a negotiated spending cap in exchange for an unlimited supply of the drug over five years. The state will then receive a rebate from Gilead for all its expenses above that cap.
The Louisiana Department of Health first chose Gilead as a partner for the deal back in March, after three drug companies submitted proposals to the state. Since then, negotiations stalled, to the point that the agreement nearly fell through entirely. But this week, the deal closed, Louisiana Secretary of Health Rebekah Gee confirmed to VICE News.
Gee said she hoped to not spend more than $30 million — the cost of treating only 326 people last year, according to the state’s Department of Health. The pricing cap won’t be announced until next week, but Gee told VICE News that Gilead agreed to a higher amount than that. Louisiana will hold an official signing on the deal next week, according to Gee.
“We need to get our money’s worth,” Gee said. “Our goal is 10,000 [treated people] next year, but we’ll have to hit a lot less than that to make it work.”
Gee estimated that around 40,000 people on Medicaid in Louisiana suffer from Hepatitis C, a chronic liver disease spread through blood. It’s the most widespread infectious disease in the U.S. The CDC estimates 2.4 million people in the U.S. were living with Hep C in 2016, the latest year with data available.
Louisiana hopes to use the deal to attempt to eliminate the disease entirely.
As Hep C most commonly spreads through shared needles, the opioid epidemic has only made its prevalence worse. The CDC estimates that 41,200 people were infected in 2016.
The cure for Hepatitis C is still relatively new. When Gilead released Harvoni, the successor to its first cure, Sovaldi, in 2014, the drug was groundbreaking; previous treatments required weeks of invasive therapy, and didn’t guarantee a cure. But Harvoni immediately sparked controversy because of its high price — a 12-week course of a pill runs nearly $100,000.
The price prompted a Senate investigation, which found Gilead, knowing full well the cost would keep the cure out of reach of most people, had priced the drugs to maximize revenue.
Since that investigation, the company has not escaped further controversy. Just last month, Democratic Congresswoman Alexandria Ocasio-Cortez grilled Gilead CEO Daniel O’Day over the high price of HIV drug PrEP at a congressional hearing on prescription drug prices in May.
Gilead’s deal with Louisiana will allow the drug-maker to block AbbVie and the other manufacturer of Hep C drugs, Merck, out of the market of Medicaid patients in the state. Australia struck a similar deal in 2015, and Washington state reached an agreement earlier this year with AbbVie to provide Hepatitis C drugs to the state.
VICE News Tonight on 7:30 p.m. ET on HBO for more.
Correction 6/21 3:25 p.m.: An earlier version of this story incorrectly identified the number of people suffering from Hepatitis C in Louisiana. That number has been updated.
Cover image: People are testing free Hepatitis C tests in front of the Sao Paulo State Federation of Industries building on Avenida Paulista, west side of the state capital, on Friday (27). Photo: WERTHER SANTANA/ESTADAO CONTEUDO (Agencia Estado via AP Images)