Louisiana's 'Netflix' deal for hepatitis C drugs wins bids from AbbVie, Gilead and Merck

Officials in Louisiana are moving forward with a "Netflix" model for purchasing hepatitis C drugs. (Stuart Seeger/Flickr/CC BY 2.0)

States across the U.S. have taken on high drug prices with new laws, proposals and Medicaid rules, many of them unpopular with the pharma industry. Not so in Louisiana, where a “Netflix” payment model for hepatitis C drugs has top players eager to participate.

AbbVie, Gilead Sciences subsidiary Asegua Therapeutics and Merck & Co. submitted bids for the state’s “Netflix” proposal, which is designed to treat tens of thousands of hepatitis C patients—some covered by Medicaid, others in the state’s prisons—for a fixed cost, Louisiana’s Department of Health said.

Presentations on the proposals are set for later this month, with negotiations to follow in April. Louisiana is aiming to sign the purchasing deals in June.

Under the “Netflix” model, Louisiana would partner with at least one drug company for unrestricted access to new hepatitis C drugs to cure an estimated 39,000 people in the state’s Medicaid and prison systems.

RELATED: Louisiana seeking comments on 'Netflix' model for hepatitis C drugs

The state has touted the idea as a way to benefit drugmakers and states alike. Both sets of patients now have limited access to treatment, and pharma companies can establish new business by bidding on the contracts, Louisiana has said. For the state, the “Netflix” model allows it to purchase an unlimited amount of drugs for a fixed cost, making budget-planning easier. And patients will gain access to curative drugs and avoid future complications from the infection.

And Louisiana isn’t the only one pursuing the drug procurement model. Washington is also moving forward with a similar plan, but took the idea a step further by offering a “winner-take-all” bidding process. For its part, Louisiana said it plans to partner with “one or more” drugmakers.

RELATED: Washington takes 'Netflix' hep C drug pricing further with winner-take-all bidding

Louisiana's efforts come amid a national debate on drug prices. Many states have taken the issue into their own hands, but Louisiana's proposal stands out for having industry support. Also in the last few years, hepatitis C drug prices have fallen considerably due to new competition. Thanks to those lower net prices, Gilead Sciences last year said it'll roll out generics to its own big-selling Epclusa and Harvoni through its new subsidiary Asegua, a move that'll lower some patients' out-of-pocket costs.