Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

While pharmacy benefit managers are watching cable, patients are streaming Netflix

Keely McManamon
Policy
August 14, 2019
Share
Tweet
Share

Pharmacy benefit managers (PBMs) including Express Scripts, CVS Health, and OptumRX are the subject of intense criticism by virtually everyone in medicine and politics. While the purpose of PBM’s group purchasing business model was intended to contribute to lower drug costs and premiums, many of their customers have not experienced these benefits. Instead, many patients are choosing not to take their medications or take less than the prescribed amount.

PBM’s perceived association with escalating drug prices has achieved something rare: disdain at both ends of the political spectrum. PBMs have made enemies of everyone — including the AMA, which has been active in the fight to expose PBM’s convoluted market involvement, as well as the Trump Administration which has come out in favor of eliminating rebate transactions between pharma and PBMs.

Interestingly, Big Pharma isn’t too happy about the role of PBMs either.

Drug manufacturers have sided with the federal government, stating that they support eliminating PBMs from the supply chain. Pharma argues that their payments to PBMs have done nothing to help rein in drug prices or stop PBM’s endorsement of expensive brand-name medicines.

Enter a possible market-based alternative. A subscription-based payment model coined the “Netflix model,” is entering the pharma scene with impressive potential. CMS has just approved the Netflix model for hepatitis C therapy in Louisiana.

In Australia, a similar effort for hep C has been in place since 2015, successfully using the Netflix model to pay and supply drugs to cure infected individuals.

That’s right; there’s another way to enjoy Netflix without movies.

Basically, the Netflix model also makes use of group purchasing but without a middle man. Instead, public and private payers enter into a global contract with a drug manufacturer to provide an unlimited amount of drug therapies at a fixed price for thousands of individuals, who can access the therapy as often as needed. The arrangement is akin to purchasing a Netflix subscription and accessing unlimited streaming over the duration of the purchasing agreement.

The goal is to reach more patients with less of an individual financial burden. In the United States, the initiative is just starting to gain headway. JAMA outlined what the payment approach needs to be successful.

First, a combination of payers and stakeholders form a coalition to pool funds for an unlimited supply of drugs over a set amount of time.

Second, the pharma company providing the drug or drugs would have to agree to contribute to outreach efforts for patients.

And third, the drug manufacturers would have to cooperate to not only establish a price for the bundle but also enhance competition for a contractual bid.

Is it possible that the Netflix model could be a market-based alternative to PBMs by bypassing their involvement in the drug supply chain altogether? If this model expands, it is conceivable that pharmacies, insurance companies, self-insured businesses, value-driven clinically integrated networks and even populations of patients could do business directly with drug manufacturers using the Netflix model instead of using a middleman.

ADVERTISEMENT

The sizable subscription payment to manufacturers would be enough to ensure that pharma maintains the margins they need to stay in business while increasing price transparency. The model could be expanded to include a number of different therapies too, including HIV treatments, vaccines, and even insulin. The United Kingdom is also on board, believing that the Netflix model could push pharma to develop new antibiotics for antimicrobial resistance.

The Netflix model may be an alternative to PBMs, much like Netflix itself is a growing alternative to cable. It shows potential in lowering health care costs, could increase outcomes at the population level, and, like all good business models, could increase access while minimizing the role of the middleman.

PBMs won’t necessarily go away, but this is the kind of market-based alternative that, in the U.S., may make government involvement less necessary. If politicians, government, the AMA, Big Pharma and, most importantly, patients are looking for a drug financing alternative that has greater transparency and a greater chance of controlling costs, the Netflix model approach might be a step in the right direction. While not widely known, Netflix has a core company philosophy of “people over process.” This may be the approach needed for increasingly unaffordable pharmaceuticals: direct access using a people-friendly model over a middleman-driven process.

Keely McManamon is a graduate intern, Care Centered Collaborative at The Pennsylvania Medical Society.

Image credit: Shutterstock.com

Prev

The questions surgeons need to ask their seniors before surgery

August 13, 2019 Kevin 8
…
Next

Want resilience? Look to your patients.

August 14, 2019 Kevin 0
…

Tagged as: Medications, Public Health & Policy

Post navigation

< Previous Post
The questions surgeons need to ask their seniors before surgery
Next Post >
Want resilience? Look to your patients.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Related Posts

  • Are patients using social media to attack physicians?

    David R. Stukus, MD
  • Patients are captive pharmacy benefits manager consumers

    Beth Waldron
  • You are abandoning your patients if you are not active on social media

    Pat Rich
  • A love letter to patients

    Marcie Costello
  • Patients are not passengers

    Christopher Noll, RN, MSN
  • Expensive Medicare patients aren’t who you think

    Peter Ubel, MD

More in Policy

  • How locum tenens work helps physicians and APPs reclaim control

    Brian Sutter
  • Why Medicaid cuts should alarm every doctor

    Ilan Shapiro, MD
  • Why physician voices matter in the fight against anti-LGBTQ+ laws

    BJ Ferguson
  • The silent toll of ICE raids on U.S. patient care

    Carlin Lockwood
  • What Adam Smith would say about America’s for-profit health care

    M. Bennet Broner, PhD
  • The lab behind the lens: Equity begins with diagnosis

    Michael Misialek, MD
  • Most Popular

  • Past Week

    • 2 hours to decide my future: How the SOAP residency match traps future doctors

      Nicolette V. S. Sewall, MD, MPH | Education
    • Why removing fluoride from water is a public health disaster

      Steven J. Katz, DDS | Conditions
    • When did we start treating our lives like trauma?

      Maureen Gibbons, MD | Physician
    • In a fractured world, Brian Wilson’s message still heals

      Arthur Lazarus, MD, MBA | Physician
    • When your dream job becomes a nightmare [PODCAST]

      The Podcast by KevinMD | Podcast
    • How doctors took back control from hospital executives

      Gene Uzawa Dorio, MD | Physician
  • Past 6 Months

    • Why tracking cognitive load could save doctors and patients

      Hiba Fatima Hamid | Education
    • What the world must learn from the life and death of Hind Rajab

      Saba Qaiser, RN | Conditions
    • The silent toll of ICE raids on U.S. patient care

      Carlin Lockwood | Policy
    • Why shared decision-making in medicine often fails

      M. Bennet Broner, PhD | Conditions
    • My journey from misdiagnosis to living fully with APBD

      Jeff Cooper | Conditions
    • Why we fear being forgotten more than death itself

      Patrick Hudson, MD | Physician
  • Recent Posts

    • When your dream job becomes a nightmare [PODCAST]

      The Podcast by KevinMD | Podcast
    • Finding healing in narrative medicine: When words replace silence

      Michele Luckenbaugh | Conditions
    • Why coaching is not a substitute for psychotherapy

      Maire Daugharty, MD | Conditions
    • When the white coats become gatekeepers: How a quiet cartel strangles America’s health

      Anonymous | Physician
    • Why doctors stay silent about preventable harm

      Jenny Shields, PhD | Conditions
    • Why interoperability is key to achieving the quintuple aim in health care

      Steven Lane, MD | Tech

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

Leave a Comment

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

  • Most Popular

  • Past Week

    • 2 hours to decide my future: How the SOAP residency match traps future doctors

      Nicolette V. S. Sewall, MD, MPH | Education
    • Why removing fluoride from water is a public health disaster

      Steven J. Katz, DDS | Conditions
    • When did we start treating our lives like trauma?

      Maureen Gibbons, MD | Physician
    • In a fractured world, Brian Wilson’s message still heals

      Arthur Lazarus, MD, MBA | Physician
    • When your dream job becomes a nightmare [PODCAST]

      The Podcast by KevinMD | Podcast
    • How doctors took back control from hospital executives

      Gene Uzawa Dorio, MD | Physician
  • Past 6 Months

    • Why tracking cognitive load could save doctors and patients

      Hiba Fatima Hamid | Education
    • What the world must learn from the life and death of Hind Rajab

      Saba Qaiser, RN | Conditions
    • The silent toll of ICE raids on U.S. patient care

      Carlin Lockwood | Policy
    • Why shared decision-making in medicine often fails

      M. Bennet Broner, PhD | Conditions
    • My journey from misdiagnosis to living fully with APBD

      Jeff Cooper | Conditions
    • Why we fear being forgotten more than death itself

      Patrick Hudson, MD | Physician
  • Recent Posts

    • When your dream job becomes a nightmare [PODCAST]

      The Podcast by KevinMD | Podcast
    • Finding healing in narrative medicine: When words replace silence

      Michele Luckenbaugh | Conditions
    • Why coaching is not a substitute for psychotherapy

      Maire Daugharty, MD | Conditions
    • When the white coats become gatekeepers: How a quiet cartel strangles America’s health

      Anonymous | Physician
    • Why doctors stay silent about preventable harm

      Jenny Shields, PhD | Conditions
    • Why interoperability is key to achieving the quintuple aim in health care

      Steven Lane, MD | Tech

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Leave a Comment

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...