The Payer License Agreement, or “Netflix model,” for hepatitis C virus therapies enables universal treatment access, lowers costs and incentivizes innovation and competition

BACKGROUND AND AIMS: High unit prices of treatments limit access. For epidemics like that of hepatitis C virus (HCV), reduced treatment access increases prevalence and incidence, making the infectious disease increasingly difficult to manage. The objective of the current study was to construct and test an alternative pricing model, the Payer License Agreement (PLA), and determine whether it could improve outcomes, cut costs and incentivize innovation versus the current unit‐based pricing model. METHODS: We built and used computational models of hepatitis C disease progression, treatment, and pricing in historical and future scenarios and quantitatively analyzed their economic and epidemiological impact in three high‐income countries. RESULTS: This study had three key results regarding HCV treatment. First, if the PLA model had been implemented when interferon‐free direct‐acting antiviral (DAA) combinations launched, the number of patients treated and cured would have more than doubled in the first three years, while the liver‐related deaths (LRDs) would have decreased by around 40%. Second, if the PLA model had been implemented beginning in 2018, the year that several Netflix‐like payment models were under implementation, the number of treated and cured patients would nearly double, and the LRDs would decline by more than 55%. Third, implementing the PLA model would result in a decline in total payer costs of more than 25%, with an increase to pharmaceutical manufacturer revenues of 10%. These results were true across the three healthcare landscapes studied, the USA, the UK and Italy, and were robust against variations to critical model parameters through sensitivity analysis. CONCLUSIONS AND RELEVANCE: These results suggest that implementation of the PLA model in high‐income countries across a variety of health system contexts would improve patient outcomes at lower payer cost with more stable revenue for pharmaceutical manufacturers. Health policy‐makers in high‐income countries should consider the PLA model for application to more cost‐effective management of HCV, and explore its application for other infectious diseases with curative therapies available now or soon.