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This week, NPR and the Center for Public Integrity have been reporting on lobbying by pharmaceutical companies in states across the country. We have found a system rife with conflicts of interest that make it hard for states to control costs in their Medicaid programs. But in Louisiana, one of the poorest states in the U.S., a deal is in the works that may change how the state pays for one very expensive medication that thousands of residents need. And in the long term, this deal could change how states and drug companies work together to rein in drug prices. Here's NPR's Alison Kodjak.
ALISON KODJAK, BYLINE: To get a sense of what happens when high drug prices and tight state budgets mix, Louisiana is the place to go. The state has been in a budget crisis. Lawmakers held three special sessions this year, and the Medicaid budget was a major target. Rebekah Gee is the state's health secretary.
REBEKAH GEE: Medicaid is a big program. My budget, for example, is about half the state budget of Louisiana.
KODJAK: And the fastest growing part of that budget is drug prices. And that's why Gee is looking for a better deal. And she's starting with hepatitis C, one of the most vexing illnesses in her state.
GEE: Hep C is the leading infectious disease killer of our time.
KODJAK: But, she says, it doesn't have to be.
GEE: We can fix an infectious disease. We have eradicated polio in Afghanistan. Why can't we eradicate hep C in Louisiana?
KODJAK: Gee says the only barrier is money because there are a bunch of drugs available today that cure hepatitis C. The first hit the market a few years ago with a budget-shattering price tag of more than $80,000. The price has gone down since then but it still cost tens of thousands of dollars to treat Hep C. Of the 35,000 people in Louisiana who have the virus and who depend on the state for their health care, only 388 got treatment last year.
GEE: To me, that is unacceptable, but it's also unacceptable for me to pay over $700 million and have to cut primary education, gut our payments to universities and decimate the health care delivery system for just one disease condition. It shouldn't have to be that way.
KODJAK: Louisiana has put strict limits on who gets treated, and those restrictions have real effects on patients.
CHERYL JOHNSON: My name is Cheryl Johnson (ph). I'm 52 years old, and I live in Baton Rouge.
KODJAK: Johnson lives in a little brick house on the outskirts of the city. It's decorated with family pictures and knick-knacks.
JOHNSON: I love those little things.
KODJAK: She works part-time as a bus driver, and to earn a little extra, she makes gift baskets at home.
JOHNSON: I put skin softener, bubble bath. I do balloons and everything.
KODJAK: It's not a lot of money so she depends on Medicaid for her health care. Back in 2002, she was diagnosed with hep C.
JOHNSON: I contracted hepatitis C from IV drug using. I'm a recovering addict. So yeah, I used to shoot drugs.
KODJAK: The drug use started when she was a teenager, but she says she went through treatment and she's been clean since 1992. Twenty-six years on, though, she's still fighting the virus.
JOHNSON: I have fibrosis on my liver. You know, just scarring. It's not bad, bad yet, but, it's bad enough.
KODJAK: She's gone through four courses of treatment to try to rid her body of hep C using older medications that aren't all that effective.
JOHNSON: It takes the virus away for a while, but then it come back.
KODJAK: And, the drugs come with side effects.
JOHNSON: Lose a lot of weight. You lose your hair. Your bones ache.
KODJAK: Until now Johnson hasn't been sick enough to qualify for treatment with the new drugs under Louisiana's strict rules. But health secretary Gee has an idea that could change that.
GEE: This is our idea. Why don't we take the money we have, you know, what we're spending in corrections, what we're spending in Medicaid, what we're spending for uninsured, and let's pull it together and maybe add a little bit as a sweetener and give it to companies and say, OK, for this price, give us as much drug as we can use, and let's cure hep C.
KODJAK: The drug companies, she says, have nothing to lose.
GEE: In our state, the 34,600 people that are not getting treatment, these companies aren't making a dime, not a penny off these people. So why should they care if we treat them?
KODJAK: So she went to Gilead Sciences, which makes some of the best-selling hepatitis C treatments, and she told them that together they could eradicate the disease in Louisiana.
GREGG ALTON: I mean, this is what's great about Rebekah. She is really dynamic.
KODJAK: That's Gregg Alton, senior vice president of Gilead.
ALTON: We would love to help her out here.
KODJAK: Alton and Gee have met several times to try to work out details of what they refer to as a subscription or Netflix-model of paying for the drugs. Louisiana would agree to a fixed amount of money over several years, and Gilead would provide them with all the medication the state needs. In the first years, the state will get more drugs than they pay for. In the later years, as fewer people need treatment, Gilead would get extra money. Talking to them both, it's clear there's no agreement yet on how much money that would be or for how long, but both suggest a deal is close.
ALTON: I think there is a pretty good meeting of the minds between Gilead and the state of Louisiana, or, at least, the governor and Rebekah right now. Ideally, we'd have something in place this year.
KODJAK: And that would be good news for Cheryl Johnson and more than 34,000 other Louisianans. Alison Kodjak, NPR News.
[POST-BROADCAST CLARIFICATION: In this report, Rebekah Gee says polio has been eradicated in Afghanistan. Her point was that efforts to reduce the number of cases there have been effective. But, in fact, there have still been a small number of cases in that country in recent years.] Transcript provided by NPR, Copyright NPR.