Economics of innovation

A COVID-19 vaccine is needed now, but timelines (12-18 months) create large market risk. By the time a vaccine is ready, the crisis may have passed. A CGD Note explores three options: business as usual – which may lead to promotion of an inferior vaccine or fierce country competition for supply – and two models (cost- or value-based), with countries pre-committing to purchases meeting specified efficacy. The authors prefer a value-based model.

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.

OHE has published a white paper discussing the relative merits and shortfalls of current approaches to defining, estimating, and applying cost-effectiveness thresholds in HTA.

This will be accompanied by a (forthcoming) research paper exploring bargaining in threshold setting

TB kills 1.6m people annually - the world’s deadliest infectious disease. The Market-Driven, Value-Based Advance Commitment (MVAC), creates and guarantees a market for better TB treatment. The final “blueprint” has four pillars: HTA to inform countries’ value-based purchase commitments; commitment guarantees underwritten by a development bank; industrial policy alignment; and a governance structure credible to MIC payers and industry.

In light of concerns that not all medicines for ultra-rare (also known as ultra-orphan) conditions are appraised under the same NICE process, a new OHE Consulting Report discusses the distinct ethical and economic challenges faced by medicines for ultra-rare conditions, with particular reference to the challenges of HTA in the UK. A failure to consistently consider all ultra-rare disease medicines under the HST process could lead to inequalities in access and health outcomes for patients with ultra-rare conditions.

Henderson N., Errea M., Skedgel C. and Jofre-Bonet, M.

Consulting Report
January 2020

In light of concerns that not all medicines for ultra-rare (also known as ultra-orphan) conditions are appraised under the same NICE process, a new OHE Consulting Report discusses the distinct ethical and economic challenges faced by medicines for ultra-rare conditions, with particular reference to the challenges of HTA in the UK. A failure to consistently consider all ultra-rare disease medicines under the HST process could lead to inequalities in access and health outcomes for patients with ultra-rare conditions.

New research by the Office of Health Economics (OHE) concludes the proposed International Price Index effectively outsources pharmaceutical policy decisions to countries that “give the government a central role” vs. the U.S.’ greater reliance on the private market.

In an...

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.

A new OHE Consulting Report describes the current status of real-world data in Japan, including core legislation and governance arrangements. The authors sought to understand how real-world data is accessed or generated and used to produce or generate real-world evidence, and to see whether use is aligned with international standards.

Yasunaga, H., Yamana, H., Rodes Sanchez, M. and Towse, A.

Consulting Report
September 2019

In 2015, OHE Consulting published a report on data governance arrangements for real-world evidence (RWE) covering the specifics under which RWE was used in eight different countries: Australia, France, Germany, Italy, Sweden, the Netherlands, the UK and the US1. Two years later, Lilly commissioned a second report based on the South Korean setting, following the same method and structure as the original2.

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