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

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  • Cherla, Avi
  • Howard, Natasha
  • Mossialos, Elias

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.

Suggested Citation

  • Cherla, Avi & Howard, Natasha & Mossialos, Elias, 2021. "The ‘Netflix plus model’: can subscription financing improve access to medicines in low- and middle-income countries?," Health Economics, Policy and Law, Cambridge University Press, vol. 16(2), pages 113-123, April.
  • Handle: RePEc:cup:hecopl:v:16:y:2021:i:2:p:113-123_1
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    References listed on IDEAS

    as
    1. Azzopardi-Muscat, Natasha & Schroder-Bäck, Peter & Brand, Helmut, 2017. "The European Union Joint Procurement Agreement for cross-border health threats: what is the potential for this new mechanism of health system collaboration?," Health Economics, Policy and Law, Cambridge University Press, vol. 12(1), pages 43-59, January.
    2. Zhang, Anwen & Nikoloski, Zlatko & Mossialos, Elias, 2017. "Does health insurance reduce out-of-pocket expenditure? Heterogeneity among China's middle-aged and elderly," Social Science & Medicine, Elsevier, vol. 190(C), pages 11-19.
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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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