Louisiana to Request Federal Intervention to Bring Down HCV Treatment Costs

Louisiana’s Secretary of the Department of Health, Rebekah Gee, MD, MPH, recently suggested that she will ask the federal government to intervene to reduce the cost of hepatitis C treatment in the state, according to a recent Washington Post report.

“Louisiana is looking at innovative mechanisms that will allow us to treat those affected in an economical fashion, drastically reducing the long-term costs associated with untreated hepatitis C,” Dr Gee said in a recent press release. “The populations affected may be privately insured individuals, persons enrolled in Medicaid, and some currently uninsured. The goal of the Louisiana Department of Health is to increase access to these effective treatments across the total population spectrum.”

Dr Gee’s “innovative mechanism” is a federal law, 28 USC §1498, which gives the federal government the power to employ a medical patent for government use. Under the law, the government could nullify patents of pharmaceutical companies to reduce the costs of treatment. According to the Post report, it could reduce the cost of hepatitis C treatment from $94,500 for a curative 12-week regimen to $1,000. 

The Pharmaceutical Research and Manufacturers of America (PhRMA), a leading lobby for drugmakers, said during a request for public comment, that this proposal could impact investments in future life-saving research. 

“Bringing new treatments and cures to patients is time-consuming, risky, and expensive. PhRMA submits that it would be a mistake for the state of Louisiana to rely on section 1498 in an effort to reduce the cost of hepatitis C drugs,” Joanne Chan, JD, MPH, assistant general counsel at PhRMA said during public comment. “Disregard for patent rights will discourage innovation. Like innovators across the spectrum of American industries, biopharmaceutical companies make the substantial R&D investments that yield new and improved medicines in reliance on a legal regime that provides protection for any resulting intellectual property. In particular, PhRMA’s members rely on patents to protect their inventions and provide an opportunity to recover their R&D costs and fund new research.”

Ms Chan also pointed out that the high costs of curative hepatitis C treatments need to be considered in terms of how the treatments impact future costs.

“Hepatitis C drugs can significantly reduce health care costs over time,” she said. “Before pursuing a section 1498 strategy, PhRMA urges the State of Louisiana to reconsider its cost assessment of hepatitis C drugs. Without such drugs that can cure hepatitis C in as little as 12 weeks, hepatitis C patients would continue to require hospitalization and other costly health services over the course of decades, resulting in an estimated $21.5 billion in medical costs nationwide over the ten-year period from 2015 to 2025 if untreated.”

Dr Gee responded to PhRMA’s comments in a recent press release.

“I also appreciate the comments from the pharmaceutical industry and other stakeholders expressing concern about this interpretation of 28 USC §1498 and the impact of these recommendations on economic interests and innovation,” she said. “I was disappointed that those opposed did not offer an alternative approach to help Louisiana residents obtain Hepatitis C treatments at affordable prices, however our Department will continue to consult with additional stakeholders as we move forward with our consideration for a solution.”  —David Costill