Value-Based Pricing

The OHE has been very active in conceptualising approaches incorporating a broader assessment of the elements of value (often called "value based pricing" or "VBP"), as its publications to date illustrate. During the last quarter of 2012, OHE has been active in discussions of VBP in a variety of forums.

Just out is an OHE Research Paper that examines the issues. The authors note that diagnostics not only facilitate health gain and cost savings, but also provide information to inform patients’ decisions on interventions and to clarify how their behaviour may affect their health in future.

The UK Department of Health’s value based pricing (VBP) Consultation Document proposes a process whereby higher prices would be granted to medicines that tackle diseases that produce the greatest burdens of illness – i.e. those diseases that are most severe or are associated with the greatest unmet need.

During the last quarter of 2011, OHE team members were involved in discussions and presentations in a range of forums, covering each of OHE's three areas of focus. This post reviews their activities.

This post reviews OHE's activities in September 2011 that contributed to advancing thought and stimulating innovative ideas in its three key research areas: financing and delivery of health care, HTA methods and processes, and the economics of the pharmaceutical and life sciences industries.

At the PPRI conference in Vienna on 29-30 September, 2011, Jorge Mestre-Ferrandiz presented a poster summarising the results of a literature review on risk sharing, flexible pricing, patient access schemes and performance-based reimbursement.

To date, the UK Government has not been specific about how VBP will be implemented, but has indicated that calculations of value will extend beyond the QALY approach currently used by NICE. The Department of Health has stated that it will include “the range of factors through which medicines deliver benefits for patients and society”.

Register now for our workshop on 'value-based pricing', how it relates to risk-sharing and patient access schemes and what approaches might make the most sense.

In December 2010, the UK Department of Health released a consultation document to elicit comments on ‘proposals for a new value-based system of pricing medicines which aims to recognise and reward innovation. The document sets out the principles that would underpin the move to value-based pricing, outlines how the new system could work across the UK and seeks views on a number of key issues’.

Value-based pricing for new medicines, proposed as part of UK health care reform, would create a QALY-plus approach for drugs approved starting 1 January 2014. For new drugs, this would replace the current PPRS system. The implications for pricing and reimbursement, and innovation, are outlined by Prof Towse in this blog post.

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