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
69 Shares
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.

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.

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

  • Unveiling the global pandemic threat: insights into risk factors and urgent measures for prevention

    Ton La, Jr., MD, JD
  • Why the WHO’s pandemic accord is critical for global health care

    Elizabeth Métraux
  • The revolutionary Kaiser-Geisinger deal: How health care giants are reshaping the industry and empowering patients

    Robert Pearl, MD
  • Unveiling the intricate link between housing costs and health care

    Harvey Castro, MD, MBA
  • Uncovering the truth about racial health inequities in America: a book review

    John Paul Mikhaiel, MD
  • Why affirmative action is crucial for health equity and social justice in medicine

    Katrina Gipson, MD, MPH
  • Most Popular

  • Past Week

    • Is chaos in health care leading us towards socialized medicine? How physician burnout is a catalyst.

      Howard Smith, MD | Physician
    • Boxing legends Tyson and Foreman: powerful lessons for a resilient and evolving health care future

      Harvey Castro, MD, MBA | Physician
    • A physician’s typical day, as envisioned by a non-clinician health care MBA: a satire

      Jennifer Lycette, MD | Physician
    • Revealing America’s expansion: the dark truth of Native American suffering and unjustified abuses

      Anonymous | Physician
    • The tragic story of Mr. G: a painful journey towards understanding suicide

      William Lynes, MD | Physician
    • Decoding name displays in health care: Privacy, identification, and compliance unveiled

      Deepak Gupta, MD | Physician
  • Past 6 Months

    • “Is your surgeon really skilled? The hidden threat to public safety in medicine.

      Gene Uzawa Dorio, MD | Physician
    • Revolutionize your practice: the value-based care model that reduces physician burnout

      Chandravadan Patel, MD | Physician
    • Breaking the cycle of racism in health care: a call for anti-racist action

      Tomi Mitchell, MD | Policy
    • Unveiling the hidden damage: the secretive world of medical boards

      Alan Lindemann, MD | Physician
    • An inspiring tribute to an exceptional radiologist who made a lasting impact

      Kim Downey, PT | Conditions
    • Proactive risk management: a game-changer in preventing physician burnout

      Howard Smith, MD | Physician
  • Recent Posts

    • Unmasking the truth: the shocking reality of the opioid epidemic and who’s really to blame

      Jay K. Joshi, MD | Physician
    • Discover your true north: Navigating life’s confusions and embracing your path to success

      Tyler Jorgensen, MD | Physician
    • A revolution in patient empowerment: Working together to save our medical system [PODCAST]

      The Podcast by KevinMD | Podcast
    • Revealing America’s expansion: the dark truth of Native American suffering and unjustified abuses

      Anonymous | Physician
    • Unlock financial freedom: The physician’s guide to lucrative multifamily syndications and wealth accumulation

      Pranay Parikh, MD | Finance
    • From Moscow Mule to the opioid crisis: Unveiling the tragic legacy and urgent solutions

      Osmund Agbo, MD | Meds

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

CME Spotlights

From MedPage Today

Latest News

  • Checkpoint Blockade Stumbles in Advanced EGFR-Mutant NSCLC
  • Secret Past of Slain Doctor; Pope Needs Intestinal Surgery; More MIs on Mondays
  • New Antiviral Option for CMV Prophylaxis After Kidney Transplant
  • Antibody for Infant RSV Prevention to Face FDA Panel
  • Is Getting Test Results Online Right Away a Good Idea? Yes, Patients Say

Meeting Coverage

  • Checkpoint Blockade Stumbles in Advanced EGFR-Mutant NSCLC
  • Phase II Study: Bispecific Oral Drug Tops Leading JAK Inhibitor for RA
  • Closing the Diversity Gaps in Urologic Oncology Leadership
  • Certain NSCLC Patients May Be Able to Stop Immunotherapy at 2 Years
  • No Survival Benefit With Immune Checkpoint Inhibitor Rechallenge in Metastatic RCC
  • Most Popular

  • Past Week

    • Is chaos in health care leading us towards socialized medicine? How physician burnout is a catalyst.

      Howard Smith, MD | Physician
    • Boxing legends Tyson and Foreman: powerful lessons for a resilient and evolving health care future

      Harvey Castro, MD, MBA | Physician
    • A physician’s typical day, as envisioned by a non-clinician health care MBA: a satire

      Jennifer Lycette, MD | Physician
    • Revealing America’s expansion: the dark truth of Native American suffering and unjustified abuses

      Anonymous | Physician
    • The tragic story of Mr. G: a painful journey towards understanding suicide

      William Lynes, MD | Physician
    • Decoding name displays in health care: Privacy, identification, and compliance unveiled

      Deepak Gupta, MD | Physician
  • Past 6 Months

    • “Is your surgeon really skilled? The hidden threat to public safety in medicine.

      Gene Uzawa Dorio, MD | Physician
    • Revolutionize your practice: the value-based care model that reduces physician burnout

      Chandravadan Patel, MD | Physician
    • Breaking the cycle of racism in health care: a call for anti-racist action

      Tomi Mitchell, MD | Policy
    • Unveiling the hidden damage: the secretive world of medical boards

      Alan Lindemann, MD | Physician
    • An inspiring tribute to an exceptional radiologist who made a lasting impact

      Kim Downey, PT | Conditions
    • Proactive risk management: a game-changer in preventing physician burnout

      Howard Smith, MD | Physician
  • Recent Posts

    • Unmasking the truth: the shocking reality of the opioid epidemic and who’s really to blame

      Jay K. Joshi, MD | Physician
    • Discover your true north: Navigating life’s confusions and embracing your path to success

      Tyler Jorgensen, MD | Physician
    • A revolution in patient empowerment: Working together to save our medical system [PODCAST]

      The Podcast by KevinMD | Podcast
    • Revealing America’s expansion: the dark truth of Native American suffering and unjustified abuses

      Anonymous | Physician
    • Unlock financial freedom: The physician’s guide to lucrative multifamily syndications and wealth accumulation

      Pranay Parikh, MD | Finance
    • From Moscow Mule to the opioid crisis: Unveiling the tragic legacy and urgent solutions

      Osmund Agbo, MD | Meds

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...