Editor's note:This article is the fourth installment in BioPharma Dive's "Unblinded" series, focusing on individuals who play central roles in key events in the biopharmaceutical field. Click here to view other articles in the series.here。

After three years of effort, Rebekah Gee finally got Louisiana—one of the poorest and unhealthiest states in the U.S.—the attention of the pharmaceutical industry. Now, the rest of the country is beginning to listen to the model's message.

Earlier this summer, Louisiana officially launched a new drug payment model. Under the agreement, Gilead granted the state a five-year license to supply its hepatitis C drug Harvoni without quantity limits for treatment of the state's Medicaid and prison populations. In exchange, the state pays approximately $60 million annually, an amount roughly equal to Louisiana's total spending on hepatitis C treatment last year.

As state health secretary, Gee has been pushing this plan for the past three years. She told BioPharma Dive in an interview that public pressure and political lobbying were effective strategies in bringing the pharmaceutical industry back to the negotiating table.

"This is a David-and-Goliath battle," Gee said. "We are a small state, a poor state, and our leverage is extremely limited."

Meanwhile, Gilead is one of the largest pharmaceutical manufacturers in the U.S. and the absolute dominant player in hepatitis C treatment.

Gee built a broad support network that included national figures such as billionaire philanthropist John Arnold, drug pricing expert Peter Bach, and Louisiana Republican Senator Bill Cassidy. By the time the hepatitis C plan took shape, even the pharmaceutical industry itself hadexpressed support。

Some policy experts believe Louisiana's practice may be a precursor to more states adopting similar models across more disease areas. Others commend Gee's efforts but also caution that the workload required to overcome bureaucratic and political challenges should not be underestimated.

"This is just one state, one drug company, and it took a lot of time from many talented people to get to this point," said Wendell Primus, chief health advisor to House Speaker Nancy Pelosi, at a recent Brookings Institution event on the Louisiana model. Primus added that a national solution would be more effective in bringing about broad change.

To a large extent, the agreement reveals the challenges of introducing a new payment system into a deeply entrenched, highly regulated system.

Although the plan has been widely dubbed the "Netflix model," Gee herself rejects that nickname, describing it instead as a "modified subscription model." The contract is not directly with Gilead, nor for the branded Harvoni, but rather with Asegua Therapeutics, a newly formed Gilead subsidiary that sells an authorized generic version of the drug. Additionally, the agreement uses a supplemental rebate agreement to avoid triggering Medicaid's best price regulations—often a deal-breaker in pharmaceutical transactions.

If Louisiana—one of the poorer U.S. states—can make it work, Gee says other states certainly can too. Washington state, for example,recently reached a similar agreement for AbbVie's hepatitis C drug Mavyret。

Joshua Sharfstein, vice dean of the Johns Hopkins Bloomberg School of Public Health, has worked closely with Gee over the past few years. He said Gee's choice to surround herself with experts and push them toward creative solutions was crucial.

"A lot of times, people too quickly slide into the path of 'what's conventionally possible,'" said Sharfstein, a former FDA deputy commissioner, in an interview. "Rebekah has always been thinking big."

A long road to negotiation

In 2016, after John Bel Edwards won the gubernatorial election, Gee became Louisiana's health secretary. The first two letters she received upon taking office conveyed the same message—the Centers for Medicare & Medicaid Services (CMS) and patient advocates both urged Gee to expand access to hepatitis C treatment.

At the time, the state was struggling to afford Harvoni for its poorest populations. Gilead launched the drug in 2014 with a list price of $94,500. Like many states facing budget-balancing pressures, Louisiana restricted use to the most severe and advanced cases through prior authorization requirements.

Just months after Louisiana became one of the few Southern states to begin expanding Medicaid under a new Democratic governor, Gee decided to prioritize hepatitis C action.

While Gee was building her coalition, the National Academy of Sciences was simultaneously studying national approaches to eliminating hepatitis B and C. That expert panel recommended a subscription model in early 2017.

Around the same time, Gee encouraged Sharfstein to convene an expert panel to assess Louisiana's situation. The panel concluded that a subscription model was preferable but also noted that if drugmakers were unwilling to participate voluntarily, the federal government could consider using a century-old law to strip their patents.

That alternative drew national media attention in May 2017, and shortly afterward Gee received a call from John Arnold. Arnold, co-founder of the Houston-based philanthropic organization Arnold Ventures, has a particular focus on drug pricing issues. Gee said Arnold wanted to support her hepatitis C cause.

By 2017, the market landscape had quietly shifted. Gilead's hepatitis C drug sales peaked at nearly $20 billion in 2015 but then declined sharply in subsequent years as new patient treatment starts slowed and new competitors emerged.

Even with the company's weakened position, negotiating with Gilead was still a "delicate dance"—striking a deal affordable for the state budget while avoiding demonizing a company once seen as a symbol of excessive drug pricing.

One state, one drug, or a new strategy?

Although Louisiana and Washington state have adopted the model, broader adoption is far from guaranteed.

Neeraj Sood, a health economics professor at the University of Southern California, pointed to the lengthy implementation timeline as a major obstacle.

"When I talk to states, many are reluctant to take any action because they are intimidated by the timeline," Sood said at a Brookings event in July. Sood served on the National Academy of Sciences panel that designed the national subscription model in 2017.

Additionally, Gilead's executive director of public policy expressed skepticism about the scalability of the Louisiana model to other states.

"I don't think there is a one-size-fits-all solution at the state level," said Gilead's Rekha Ramesh. "What works for Louisiana may not work for another state."

Despite these challenges, the idea has shown resilience. In addition to Washington state, ten other states have expressed interest through the National Governors Association. Gee said she has received calls from about a dozen states since the model launched, and the UK is alsotesting a subscription modelto incentivize antibiotic development.

Ronny Gal, an analyst at investment research firm Bernstein, told BioPharma Dive earlier this year that he expects other states to adopt subscription models because of their public health value. Gal added that for drugmakers, the steady revenue stream from such deals is also attractive.

"We can't say no"

While experts weigh the potential of the idea, Gee faces the challenge of making Louisiana's money count by rapidly scaling up treatment—combined with large-scale public education and testing.

The agreement did not change the structural problems facing state Medicaid programs. One of the biggest issues is the lack of negotiating power for state governments outside of pharmacy benefit managers (PBMs) and managed care plans.

"Whatever their list price is, we have to pay it; we can't say no," Gee said of pharmaceutical companies' products.

For hepatitis C, Gee found a new way to negotiate, even if she can't say "no." But overall, the current system makes it difficult to lower rising drug prices.

"Drug prices are high mainly because policymakers created a system that allows them to be high," she said. "I think it's a mistake to simply blame for-profit pharmaceutical companies."