It's not quite insurance. Firstly, this is a relationship between the government/insurance companies and the drug companies. The people (however flawed) already

It's not quite insurance. Firstly, this is a relationship between the government/insurance companies and the drug companies. The people (however flawed) already have insurance. For those organizations, drugs aren't risk, and they are paying in bigger lumps, so this is closer to the opposite of insurance. It's constant price gouging mitigation. There's a slight difference since nexflix entirely covers the marginal cost per item consumed. If we had drug bounties, the drug companies could become entirely R&D outfits, with boring old chemical companies doing the pill manufacturering. Over time, if the existing companies lose their manufacturing ability, they will need more dependent on this arrangement. Finally, it removes the perverse incentive against cures/innoculations and for rest-of-your-life migrations.