Louisiana’s Department of Health recently announced that Gilead’s subsidiary Asegua Therapeutics has been selected as the pharmaceutical company for hepatitis C procurement model.

Arafa Salam, PhD, Pharma Analyst at GlobalData, a leading data and analytics company, offers her view on the cost savings realized by this innovative procurement strategy:

“The strong competition for patient share in the hepatitis C space has allowed Louisiana to challenge big pharma into providing substantial discounts. The procurement model aims to treat around 10,000 Medicaid-enrolled and incarcerated individuals by the end of 2020.

“If Louisiana is able to achieve its treatment targets under the annual budget of $30m, after rebates, it would represent a huge saving compared to traditional reimbursement models. Assuming standard Medicaid rebates treating this patient population would cost an estimated $120m annually, this deal could potentially represent upwards of a 75% discounted rate for Louisiana’s Department of Health.

“Louisiana’s Department of Health will now begin to complete a contract with Asegua Therapeutics to supply its hepatitis C treatment, the authorized generic version of Gilead’s pan-genomic direct-acting antiviral (DAA) Epclusa, with an overall cure rate of 98% for hepatitis C. By providing access to this model to two patient populations, with low treatment rates, access to cures for hepatitis C, this procurement model – if implemented on a larger scale across the US by state-level health agencies – may in the short-term help dampen the overall decline in hepatitis C drug revenues while at the same time improving treatment access.”