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Continuing public concerns over high-priced hepatitis C drugs are taking a new twist as Louisiana’s top health official proposes using an obscure federal patent law to get the medicines at a much lower cost. If successful, other states could reap the benefits.
Covering treatment for the 35,000 uninsured and Medicaid-dependent residents with hepatitis C would cost the state $764 million given current drug costs, a staggering sum that would have to be pulled from schools, public services and infrastructure programs. Louisiana’s budget runs to $31.2 billion a year, but its discretionary programs, such as health care, account for $3.6 billion.
“We don’t have the resources,” said Rebekah Gee, the state’s health secretary.
Gee wrote to one of the nation’s leading public health experts last month to explore tapping a 1910 patent law that gives federal regulators the power to appropriate inventions and use a product in the interest of the public good. In the 1960s and early 1970s, the Defense Department used the law to buy dozens of medicines at lower costs.
Joshua M. Sharfstein, an associate dean at the Johns Hopkins Bloomberg School of Public Health, took Gee’s query to other top academic and legal health specialists. Their meeting ended with the group concluding that Louisiana should pursue action under U.S. Code Section 1498.
“This is the path that would be the most viable to be able to get what you need for people in Louisiana,” said Sharfstein, a former deputy commissioner at the Food and Drug Administration.
Under the law, the Trump administration could sidestep patents and contract with a generic supplier to provide a lower-priced version of expensive antiviral drugs such as Sovaldi and Harvoni, which are made by industry leader Gilead Sciences.
The government would have to pay the drugmaker only reasonable compensation and prove, per the statute, that using the product benefits the government. A favorable ruling for Louisiana would mean the strategy could be used by any state.