Pricing and Reimbursement

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.

Adrian Towse presented at the Monash Malaysia Health Economics Forum 2019 on three related topics: health system financing in Malaysia; pharmaceutical price regulation and competition in Malaysia; and the potential for using real world evidence to improve the efficiency of the Malaysian health system.

OHE presented at the Global AMR R&D Hub Board of Members Meeting in Paris, on adapting HTA and payment mechanisms to incentivise new drugs to tackle AMR. This presentation was based on research by OHE, funded by the Wellcome Trust.

A new OHE Research Paper summarises the findings of a project funded by the Wellcome Trust on innovative HTA methods and contracting for antibiotics. The paper provides an overview of the current state of HTA and contracting for antibiotics in five European countries, reviews recent proposals in the literature for revising HTA approaches and explores the associated implementation opportunities and challenges.

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