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The 'Netflix plus model': Can subscription financing improve access to medicines in low- And middle-income countries?

Cherla, Avi, Howard, Natasha and Mossialos, Elias (2020) The 'Netflix plus model': Can subscription financing improve access to medicines in low- And middle-income countries? Health Economics, Policy and Law. ISSN 1744-1331

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Identification Number: 10.1017/S1744133120000031

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.

Item Type: Article
Official URL: https://www.tandfonline.com/toc/zrhm21/current
Additional Information: © 2020 The Authors
Divisions: Health Policy
Subjects: H Social Sciences > HC Economic History and Conditions
R Medicine > RA Public aspects of medicine
H Social Sciences > HG Finance
Date Deposited: 31 Mar 2020 13:51
Last Modified: 29 May 2020 23:13
URI: http://eprints.lse.ac.uk/id/eprint/103904

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