Louisiana Chooses Asegua to Partner for "Netflix" Subscription Model for HCV Treatment

March 27, 2019

Louisiana's Departments of Health and Corrections announced this week their selection of Asegua Therapeutics, a generics subsidiary arm of Gilead Sciences, as their pharmaceutical partner for the state’s “Netflix” subscription model for hepatitis C virus (HCV) treatment. Asegua won the deal over Merck and AbbVie, which each submitted bids for the subscription model.

The Louisiana Departments of Health and Corrections announced this week their selection of Asegua Therapeutics, a generics subsidiary arm of Gilead Sciences, as their pharmaceutical partner for the state’s “Netflix” subscription model for hepatitis C virus (HCV) treatment. Asegua won the deal over Merck and AbbVie, which each submitted bids for the subscription model.

This alternative payment model, the first of its kind, was first announced on August 10, 2018, by the Louisiana Department of Health, who explained that HCV infections are a public health crisis within the state. Though highly effective antiviral treatment exists that can largely cure patients with HCV, the price of the treatments remain high, and Medicaid patients and the Department of Corrections population are unable to access the therapies.

Under this model, instead of paying for each prescription individually, the state would pay a subscription fee to the drug company whereby the state would then receive unlimited access to the drug, similar to how consumers pay a monthly fee to stream unlimited television shows and movies.

After allowing for public comment on the subscription model, Louisiana’s Department of Health announced in January 2019 that it would move forward with the subscription model and would be taking bids from drug companies.

“The next step is to complete the contract between Asegua and our agency. We were extremely pleased that 3 manufacturers offered proposals, with the plan submitted by Asegua offering us a clear path forward to offer a hepatitis C cure to our most vulnerable patients,” said Rebekah Gee, MD, MPH, FACOG, secretary of the Louisiana Department of Health in a prepared statement.

With this partnership, the Louisiana Departments of Health and Corrections will have 5 years of unrestricted access to Asegua’s HCV treatment. The state’s goal is to treat 10,000 patients with HCV by the end of 2020, which accounts for nearly a quarter of its infected population on Medicaid and in prison. In 2018, the state only treated about 1000 patients with hepatitis C at a cost of $35 million, without accounting for undisclosed rebates.

According to Gee, the goal is to enter into an agreement for a subscription model fee that does not exceed the amount the state spent in 2018.

The announcement of Asegua winning the deal with Louisiana is particularly noteworthy due to the stir its parent company, Gilead, caused a few years ago with the release of its brand name HCV treatment, sofosbuvir (Sovaldi). The drug launched at a price tag of $84,000 for a 12-week course of treatment, for which the company faced immediate backlash. The public scrutiny the company received was intense, and the Senate Finance Committee began what would become an 18-month investigation into the drug's cost. After reviewing more than 20,000 pages of company documents, the committee concluded that “it was always Gilead’s plan to max out revenue, and that accessibility and affordability were pretty much an afterthought,” said Senator Ron Wyden, D-Oregon, in a news conference.

For its part, Gilead disagreed with the committee's conclusions, stating that the price was “in line with previous standards of care.” The company also explained that it has created programs to help uninsured patients and those requiring financial assistance access the treatments.

However, due to increased competition within the space, Gilead’s hepatitis C sales have taken a significant hit. Its loss of market share loss reached a point that the company began launching authorized generics of its own brand name products “in an effort to boost access and reach new patients.”

Gee has said she expects to have a contract in place by June 1, with the official start of the subscription model anticipated just 1 month later, on July 1, the start of its new fiscal year.

The news of this innovative model has inspired at least 1 other state to consider implementing something similar. State officials in Washington are considering a comparable deal, instead with a winner-take-all contract. Under the contract, Washington is willing to open up hepatitis C treatment across 4 state agencies, including all of its Medicaid beneficiaries and incarcerated person population, as well as employees covered by the state health plan, opening up treatment access to nearly 30,000 patients.

Additionally, Washington officials also asked that bidders include details on outreach and screening as well as pricing. Proposals are due this month, with a winning bidder announced sometime in April.