Pricing and Reimbursement

The Trump Administration proposed an International Pricing Index for reimbursing physician-administered Medicare drugs. A conservative thought leader proposed a different basket of 'market-oriented' countries. These differ markedly from the U.S. Their governments have a central role in medicines purchase, in contrast to U.S. reliance on private markets.

This research by a team of OHE and IHE researchers estimates the value added by second generation antipsychotics over their life-cycle in the UK and Sweden. It concludes that considering the entire life-cycle, the value added by SGAs to the system is higher than the expected value estimated at launch. P&R decisions should consider the value added by medicines over the long-run.

At the recent ISPOR Annual Conference, OHE’s Chief Executive, Professor Graham Cookson announced a new programme of work on Value 2.0: Assessing the Value of US Healthcare to be funded by PhRMA. Graham was joined by the Innovation and Value Institute’s Executive Director Jenn Bright, and Harvard Medical School Professor Bapu Jena.

OHE Lunchtime Seminar with Pedro Pita Barros on ‘Incentives for R&D, Competition and Intertemporal Effects of Payment Rules for Cures’. To be held on 6 June 2019 from 12 p.m. to 2 p.m.

Current payment and pricing rules for pharmaceutical products do not account for...

A new OHE Research Paper reviews a recent report on cancer pricing published by the World Health Organization. The authors argue that the report fails to promote mechanisms that are key to efficient pricing and use of cancer medicines. The Research Paper outlines some for addressing these shortcomings.

Transparency as a principle of good governance is not the same as transparency for improving access by lowering prices. In fact, the former often carries an opportunity cost on the latter. Developing country markets are, however, dominated by generic products and encouraging competition through sharing prices makes sense if capacities are there to use the data to inform procurement decisions and protect against collusion.

Report does not recommend price transparency for on-patent medicines, but buyers should share multi-source product price data among themselves. Transparency of the procurement process encourages bidders. In many cases, referencing processes and institutions may be a safer bet than trying to copy each other’s prices.

Value-based pricing (VBP) is an efficient method for pricing new drugs. Rate of return pricing could, however, be useful in two cases: treatments for ultra-rare diseases, and ‘cures’ for conditions currently being treated at great expense. Rate of return pricing gives rise to challenges. Two are (i) finding proxy estimates of development costs including failures, and (ii) driving future research towards discovering high-value treatments.

The Japanese government has recently announced new plans to implement HTA from April 2019. The ISPOR HTA Task Force published ‘Good Practices in HTA’ in January 2019. The Japanese proposals do not meet them.

The combination of rising drug costs in the US and increasing financial stress for individual patients has triggered intense national concern. One target has come under particular scrutiny: rebates. A new report published by ICER and the OHE describes how alternatives to the current rebate system offer potential disadvantages as well as potential benefits. It outlines evidence presented to date and key questions that still need to be answered.

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