Netflix and pill: Translating the subscription model to healthcare

Subscription pricing models, also known as the “Netflix model”, represent a paradigm shift in how healthcare systems pay for high cost, transformative therapies. Traditional systems based on price-per-unit have long dictated the healthcare landscape, linking revenue for pharmaceutical companies directly to the number of units sold. In contrast, subscription models decouple payment from volume, allowing payers to make a fixed, upfront payment for access to specific treatments over a defined period, regardless of the number of units used.

Understanding the Netflix Model

The Netflix model entails a fixed, recurring payment from a healthcare payer to pharmaceutical manufacturers, regardless of the volume of product used. This model mirrors digital subscription services, whereby consumers pay a set flat fee for unlimited access, regardless of utilisation.

The potential implications of subscription pricing for medicines are profound. By moving away from per-unit pricing, the model aims to:

• Improve patient access to high-value medicines
• Ensure predictable (and manageable) budget impact
• Incentivise manufacturers to focus on optimising broader public health outcomes rather than maximising sales volume

Real-world case studies: Examples from Australia, the US (Louisiana), and the UK

Several countries have implemented versions of the Netflix model, primarily targeting Hepatitis C and antimicrobial resistance:

1. The Australian Hepatitis C Subscription Model

In 2015, the Australian government entered into agreements with four pharmaceutical companies to provide unlimited access to direct-acting antiviral (DAA) treatments, including sofosbuvir and ledipasvir for the treatment of Hepatitis C over five years, within a fixed national budget.

Positive implications included:

• Treating more than 82,000 patients by 2021 (over 40% of the Hepatitis C-infected population)
• Predictable spending for the national government, facilitating better financial planning and resource allocation
• Treatment of all (diagnosed) infected patients regardless of disease stage or reinfection risk, removing previous clinical eligibility restrictions
• Reduced administrative burden and negotiation complexities
• Major progress towards the WHO target of Hepatitis C elimination by 2030

Key limitations were:

• Slower-than-expected uptake in later years as the pool of undiagnosed patients remained unchanged.
• Initial difficulty in estimating the total eligible population.
• Difficulties collecting real-time, comprehensive data on treatment outcomes and population-level impact to inform continuous review/improvement.
• Manufacturer bearing of the ‘volume risk’, potentially limiting incentives for widespread promotion beyond initial contracts.

2. US: The Louisiana Subscription Deal for Hepatitis C

In 2018, Louisiana became the first US state to launch a three-year subscription agreement with Asegua Therapeutics (a Gilead subsidiary) for unlimited access to Hepatitis C treatment.

Positive implications included:

• Expanded access to underserved patient groups
• Controlled drug expenditure despite increased treatment volumes
• Improved equity in treatment provision

Key limitations were:

• Extensive coordination across stakeholders with significant administrative burden
• Initial patient uptake was slower than projected, partly due to care delivery infrastructure constraints
• Complex negotiations around intellectual property and data sharing

3. United Kingdom: A subscription pilot for antibiotics

In 2019, the UK government piloted a subscription model for antibiotics to address challenges in the traditional reimbursement framework, where restricted use and low sales volumes limit return on investment. The first two antibiotics: ceftazidime-avibactam (Pfizer) and cefiderocol (Shionogi), were selected, based on factors including novelty and assurance of supply.

This subscription model helped to overcome the paradox of restricting antibiotic use while ensuring a viable market for developers. By de-linking revenue from volume, this approach aligns public health goals with market incentives.

Positive implications included:

• NICE (in collaboration with NHS England) developed a novel framework to assess the broader societal value of antibiotics, including their role in preserving existing treatments, reducing transmission risk, and preventing resistance
• Each manufacturer received fixed payment regardless of sales volume

Key limitations were:

• Complexity of the procurement process for selected antibiotics
• Extensive coordination across NHS stakeholders (including budget holders and providers)

As a result of this pilot programme, on 12th August 2024, the NHS tendered contracts with an estimated value of approximately £1.9 billion over 16 years for new antimicrobial medicines, with contracts beginning on 1 April 2026.

While the implementation approaches vary, these initiatives highlight not only the real-world feasibility but also the underlying benefits that make the Netflix model for medicines funding a compelling approach:

• Predictable budgeting: Health systems benefit from consistent, forecastable expenditures over time, mitigating the impact of large one-time payments.
• Incentives for investment: Fixed payments can attract R&D investments, particularly in areas with limited commercial appeal under traditional pricing models.
• Increased access: Patients benefit from broader access, as payers no longer have incentives to ration care based on cost per unit.
• Public health gains: Increased treatment uptake has spillover benefits such as reduced transmission rates for infectious diseases.

Despite the potential advantages, like any innovative approach, the Netflix model for medicines funding is not without challenges:

• Setting the subscription price: Determining a fair and sustainable fixed payment remains complex, especially in the absence of comprehensive data on the predicted volume of patients/rate of uptake
• Structuring the contract duration: Subscription agreements must be long enough to provide security for all parties, but not so long as to block new market entrants
• Incentivising innovation: There is a risk that guaranteed payments may reduce incentives for continual innovation unless linked to performance or outcomes
• Multi-payer systems: In fragmented healthcare systems, such as the U.S., coordinated implementation is difficult
• Legal and administrative barriers: Regulations that cap contract values or mandate per-unit payment models may need to be amended to accommodate subscription models
• Payer hesitancy: Managing payer concerns regarding large upfront financial commitments without ‘guaranteed outcomes’, uncertainty regarding long-term budget impact and the administrative burden between parties

Broader application

Overall, the experience to date with Hepatitis C and antibiotics suggests both clinical and societal value can be achieved through further expansion of the subscription model funding approach for medicines.  Beyond Hepatitis C and antibiotics, subscription pricing could be explored for:

1. Technologies such as vaccines, digital health applications, and preventive therapies that can offer high long-term societal value but may suffer from underutilisation due to short-term cost constraints.
2. High-cost, one-time treatments such as cell and gene therapies that present a budgetary challenge due to high upfront costs (with high long-term clinical/economic value). Spreading these costs through a subscription model is likely to ensure sustainability for healthcare budgets whilst ensuring access for patients and an R&D incentive for manufacturers.
3. Mental health conditions such as depression or severe psychiatric disorders, as they often require multifaceted, long-term treatment approaches. A subscription-based payment model in this context could incentivise outcomes-based care and continuous patient engagement.
4. Opioid use disorder as a subscription model could incentivise broad access to treatment.

Conclusion

As the global healthcare ecosystem faces rising costs and potential new health threats, transitioning beyond legacy pricing models to provide incentives for the development of new therapies, whilst ensuring sustainable/predictable funding requirements for healthcare systems will become increasingly important. Volume-delinked subscription payment models have the potential to reshape how healthcare systems fund essential/high value medicines, and offer a compelling solution to affordability, patient access, and market sustainability challenges.

Real-world examples from Australia, the US, and the UK demonstrate both the opportunities and the implementation complexities of this approach. For subscription models to move from pilot projects to standard practice, robust data, adaptable contract structures, effective stakeholder coordination, and supportive policy frameworks will be critical. These elements will determine whether the model remains a niche solution or becomes a mainstream approach in the healthcare financing toolkit. By embracing and refining volume-delinked models, partners across industry, policy, and payer domains can support clinical development programmes aligned with societal objectives, equitable patient access to innovative technologies, and sustainable funding for healthcare systems.

Sources

1.     Duddy C., (2024). Available at: https://commonslibrary.parliament.uk/netflix-for-antimicrobials-the-antimicrobial-products-subscription-model/ [Accessed September 2025]

2.     Scott et al., (2022). Available at: https://www.thelancet.com/journals/lanwpc/article/PIIS2666-6065(21)00225-X/fulltext [Accessed September 2025]

3.     Fletcher E., (2019). Available at: https://healthpolicy-watch.news/netflix-pricing-model-eases-australians-access-to-expensive-hepatitis-c-drugs/ [Accessed September 2025]

4.     Friedrich M., (2023). Available at: https://www.arnoldventures.org/stories/in-louisiana-a-subscription-based-model-is-changing-hepatitis-c-treatment [Accessed September 2025]

5.     Sagonowsky E., (2019). Available at: https://www.fiercepharma.com/pharma/louisiana-picks-gilead-subsidiary-to-partner-netflix-model-for-hep-c-drugs [Accessed September 2025]

6.     Ahmed S., (2024). Available at: https://www.lshtm.ac.uk/research/centres/amr/news/426171/netflix-model-antibiotic-subscriptions [Accessed September 2025]

7.     Trusheim & Bach., (2019). Available at: https://www.healthaffairs.org/content/forefront/next-steps-netflix-can-all-you-can-treat-contracts-work-beyond-hepatitis-c [Accessed September 2025]

‍