RD637 - A Review of Subscription-Based Payment Model for Hepatitis C Medications

Executive Summary:

Hepatitis C is a viral infection that can cause serious health problems including cirrhosis (or scarring of the liver), cancer, and death. The Hepatitis C virus (HCV) is the most common blood borne viral infection in the United States. Compared to the non-institutionalized population, offenders in state prisons bear much of the burden associated with the disease. Hepatitis C is spread mainly through drug injection use, and since 20 to 55 percent of state offenders have injected drugs (Beckman et al., 2016), treating this population can prevent community transmission. Providing HCV treatment to state inmates therefore presents a unique opportunity to reduce the nation’s Hepatitis C epidemic. Historically, many prisoners have not received treatment due to the high cost of direct-acting HCV antivirals as well as insufficient provider capacity to treat infected individuals. Two states (Louisiana and Washington) are attempting to address these issues by entering into subscription payment arrangements with pharmaceutical manufacturers. Through these arrangements, the states are seeking to purchase antivirals at reduced prices in an effort to treat as many people as possible.

The subscription payment model represents one option for purchasing HCV antivirals, and the 2020 General Assembly directed the Virginia Department of Corrections (VADOC) to report on the feasibility of using it in the Commonwealth’s correctional system. To that end, VADOC staff collected documents on Hepatitis C and the subscription payment model and interviewed staff in Louisiana, Washington, and the National Governors Association. Based on the review, three key findings were identified. First, because only two states have entered into subscription arrangements with drug manufacturers, there is limited evidence for assessing the effectiveness of the subscription model at lowering antiviral costs while improving HCV treatment outcomes. Second, implementing the subscription model requires the participation of multiple state agencies to generate patient volumes of roughly 30,000 individuals as well as access to adequate numbers of providers to treat individuals in the target populations. Third, VADOC already purchases HCV antivirals at substantially reduced cost through the federal 340B Drug Discount Program and a direct contract with a drug manufacturer. Considering the narrow scope of this report, VADOC’s limited access to providers, and that VADOC is already purchasing HCV drugs at reduced cost, the General Assembly may wish to defer consideration of the subscription model until more information is available on its effectiveness or direct a second study that examines the model’s feasibility across multiple state health care agencies.