Pricing and Reimbursement

Using medicines in combination can deliver better outcomes for patients across different tumour types and disease stages. Yet many HTA agencies do not find that the expected additional benefits from adding a new medicine to a currently reimbursed medicine represents value for money to the health system. In markets that utilise cost-per-QALY approaches for assessing value, a clinically effective medicine might even be found to be “not cost-effective at zero price” when used as part of a regimen that increases treatment duration.

Histology independent therapies are changing the picture of cancer treatment and in so doing don’t ‘fit the frame’ of value assessment. What are the key challenges on the pathway from regulatory to Health Technology Assessment and how can we bridge those? This blog summarises expert and audience insights from an OHE-led ISPOR Educational Session, held Nov 9th 2020.

This blog post summarises some of the more notable changes put forward in NICE’s methods consultation (November – December 2020), and comments on their potential consequences.

In the focus on US drug prices, ICER has contributed thinking on determining when price aligns with patient benefits. Less debated is whether insurance coverage provides patients with fair access to a drug with a fair, value-based price. But how do we define fair access? This paper from ICER and OHE authors develops a fair access framework, proposing Ethical Goals for Access and Fair Design Criteria for cost sharing and prior authorization protocols.

Berdud, Drummond and Towse (2020) propose a method for establishing a reasonable price for an orphan drug. Assuming prices for drugs are set according to incremental value, they propose adjustments to a payer’s ‘normal’ cost-effectiveness threshold (CET) for non-orphan drugs to ensure orphan drug developers achieve no more than the industry-wide rate of return. Adjustments are calculated for differences in R&D costs and population sizes.

The American Society of Health Economists (ASHEcon) announced Patricia Danzon as recipient of the 2020 Victor R. Fuchs Award. This is given to an economist making significant lifetime contributions to the health economics field. Professor Danzon is an internationally recognized expert in the fields of economics of health care, the biopharmaceutical industry, and insurance, including the medical malpractice area where she began her research.

A move towards paying multiple prices for medicines (depending on what they are used for) could address a commonly cited problem in drug development and increase patient access. Our latest consulting report investigates whether key stakeholders are onboard.

Adrian Towse presented evidence that transparency of process reduced corruption and improved competition. Evidence was, however, against price transparency for on-patent medicines. It will reduce access in low income countries. In generic markets, price transparency could improve efficiency, although it risks collusion by suppliers. There is therefore a case for buyers sharing, but not publishing, price data for off-patent medicines.

People living in Middle and Low Income Countries (MLICs) do not get access to innovative treatments and new treatments meeting MLIC requirements do not come to market. These issues should be addressed through a demand-side approach— better payer policy in MLICs, supported by international actors, to speed development and dissemination. An Innovation Uptake Institute (IUI) can serve as an honest broker between country payers and suppliers.

OHE Lunchtime Seminar with Alistair McGuire, 3rd February 2020. The seminar will present some preliminary thoughts on the promises offered by personalised medicine that it will allow efficient identification of different target groups and consequently more effective treatment.


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