'Netflix' model for pricing hep. C drugs expected to lower patient costs by 85% in Australia

Using the Netflix-style payment model for purchasing hepatitis C drugs is expected to lower patient costs in Australia by 85 percent, according to a new study published in the New England Journal of Medicine, cited by STAT.

The Australian government is working its way through a five-year agreement in which several drugmakers were paid a lump sum of $766 million for an unlimited volume of hepatitis C drugs. The deal was signed in 2015.

When the agreement is completed, the cost of treating each patient is expected to total $7,352. Under traditional pricing methods, the cost per patient was anticipated to reach $55,000.

The cost per patient is lower than expected, in part, because of the higher-than-expected demand. The Australian government initially forecast that about 61,500 of the 230,000 people living with the hepatitis C would be treated over the five-year period and the cost per patient was expected to be $12,460.

However, in the first two years of the agreement, 47,000 people were treated, and about 104,000 patients are ultimately expected to receive treatment. As a result, patient costs are expected to drop by 85 percent over the five-year period.

The payment arrangement has "allowed the Australian government to offer universal access to curative hepatitis C treatment to its population, which very few countries, even the wealthiest, have been able to afford to do," Suerie Moon, PhD, director of research at the Global Health Centre of the Graduate Institute in Geneva, and lead author of the analysis, told STAT.

Recently, this Netflix-style approach to drug pricing has made its way into the U.S. Several states, including Washington and Louisiana, have proposed paying for hepatitis C treatments the same way.

Read the full report here.


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