The ‘Netflix plus model’: can subscription financing improve access to medicines in low- and middle-income countries?

Abstract

At present, pay for prescription models are insufficient at containing costs and improving access to medicines. Subscription financing through tenders, licensing fees and unrestricted or fixed volumes can benefit stakeholders across the supply chain. Pharmaceutical manufacturers can reduce the need for marketing expenses and gain certainty in revenue. This will decrease costs, improve predictability in budget expenditure for payers and remove price as a barrier of access from patients. Inherently, low- and middle-income countries lack the purchasing power to leverage price discounts through typical price arrangements. These markets can realise substantial savings for branded and generic medicines through subscription financing. Procuring of on-patent and off-patent drugs requires separate analysis for competition effects, the length of contract and encouraging innovation in the medicine pipeline. Prices of competitive on-patent medicines and orphan drugs can be reduced through increased competition and volume. Furthermore, pooling expertise and resources through joint procurement has the potential for greater savings. Incentivising research and development within the pharmaceutical industry is essential for sustaining a competitive market, preventing monopolies and improving access to expensive treatments. However, technical capacity, forecasting demand and the quality of generic medicines present limitations which necessitate government support and international partnerships. Ultimately, improving access requires progressive financing mechanisms with patients and cost containment in mind.

Financing and Reimbursement Models for Personalised Medicine: A Systematic Review to Identify Current Models and Future Options

“…In financial-based models (Table 6 ), producers contributed to the cost of PM to reduce the financial uncertainty surrounding the introduction of a new therapy on the basis of agreed financial thresholds and price volumes [ 76 ], provision of rebates and discounts, or a certain number of treatment cycles for free, and utilisation caps that limit the number of reimbursed doses per patient [ 74 ]. Subscription-based, also referred to as Netflixlike, models that are based on lump sum payment to manufacturers in return for unlimited access for patients over a defined period, have been mentioned in the literature discussing potential reimbursement schemes for PM [ 78 , 80 ], as well as in papers describing reimbursement of interventions that are not PM [ 182 , 183 ]. However, their current implementation is limited to reimburse direct-acting antivirals for hepatitis-C virus in Australia and the state of Louisiana so far [ 182 , 183 ].…”

“…Subscription-based, also referred to as Netflixlike, models that are based on lump sum payment to manufacturers in return for unlimited access for patients over a defined period, have been mentioned in the literature discussing potential reimbursement schemes for PM [ 78 , 80 ], as well as in papers describing reimbursement of interventions that are not PM [ 182 , 183 ]. However, their current implementation is limited to reimburse direct-acting antivirals for hepatitis-C virus in Australia and the state of Louisiana so far [ 182 , 183 ]. Expanded risk pool models have been proposed for reimbursing PM as means to reduce financial burden as third-party public or private payers will cover some of the payment for expensive treatments, e.g., gene and cell therapies [ 79 ].…”

Off-Patent Biologicals and Biosimilars Tendering in Europe—A Proposal towards More Sustainable Practices

“…Another possible foreseen development in tender practices includes subscription-model tendering, where for well-defined patient profiles, medicine packages focussing on the broader therapeutic needs of the patient could be tendered. Some countries and regions (US, Australia, UK) are testing such subscription-based procurement models, also called the Netflix-model [51,52]. In this type of procurement model, purchasers pay a pre-agreed flat amount to the supplier, irrespective of the volume of medicines used [51].…”

Application of Managed Entry Agreements for Innovative Therapies in Different Settings and Combinations: A Feasibility Analysis

“…Can facilitate the treatment of large patient populations for drugs with low production but high unit costs [ 79 ]…”

“…Accurate forecasting may be difficult for payers as well as manufacturers, making it hard to establish an appropriate financing limit [ 79 ]…”