Strategy involves making deal with manufacturer for a lump-sum payment in return for 100 percent rebate
TUESDAY, May 15, 2018 (HealthDay News) — A novel purchasing strategy could dramatically reduce the costs of medications for hepatitis C virus (HCV), according to an Ideas and Opinions piece published online May 15 in the Annals of Internal Medicine.
Noting that new treatments could reduce incidence of HCV by 90 percent by 2030, but that these treatments are unaffordable for most patients and insurers, Neeraj Sood, Ph.D., from the University of Southern California in Los Angeles, and colleagues address ways to mitigate this problem.
The authors suggest a novel contracting strategy whereby the state would make a deal with one company that manufactures a drug for a lump-sum payment, in return for which the company would provide a 100 percent rebate on drug purchases for the state’s Medicaid recipients during the contract. The deal would result in an increase in treatment, as the state would have no additional costs during the contract, and an increase in the profits of the company. The deal takes advantage of competition and decouples the revenue from the pill price. The lump-sum payment allows the company to increase revenue without limiting access. In order to achieve cost savings, states would have to restrict the use of drugs that are not subject to the lump-sum payment.
“This purchasing strategy may dramatically increase access to drugs for HCV infection in the Medicaid program without increasing state and federal costs,” the authors write.
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