Economics of innovation

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.

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.

Berdud, M., Wallin-Bernhardsson, N., Zamora, B., Lindgren, P., and Towse, A.

Research Paper
July 2019

The present work aims to assess the life-cycle value of innovative medicines based on the example of Second-Generation Antipsychotics (SGA). Assessing the entire life-cycle of SGA, the study explores how much additional value has been delivered through additional approved indications for SGAs, generic competition or new and clinically superior formulations launched. Using risperidone as representative of the SGA class and comparing it to haloperidol – its counterpart from the First-Generation Antipsychotics (FGA) – this research estimates the life-cycle cost-effectiveness of the SGA class against FGA class in incremental terms. It also estimates the absolute social value added, measured by the sum of the consumer and producer surpluses. Study results aim to quantify the nature of value added by pharmaceutical innovation over the long-run to support consideration as to how access decisions can be informed by these life cycle effects.

Cole, A., Towse, A. and Zamora, B.

Briefing
June 2019

Cada vez más, los avances científicos desarrollan nuevas medicinas que permiten mejoras en la supervivencia y calidad de vida para diversas indicaciones terapéuticas. La fijación de precios en función de la indicación se ha propuesto como un modo de relacionar el precio con el valor. En este breve documento de debate, explicamos los aspectos más importantes como los posibles beneficios IBP, posibles inconvenientes, y consideraciones para la implementación. Nos gustaría conocer su opinión. Fecha de cierre de la consulta: lunes, 30 de septiembre de 2019.

Market-Driven, Value-Based Advanced Commitment (MVAC) is a new mechanism to help re-direct private-sector R&D investments where they’re needed most. We propose to use MVAC to encourage investments in tuberculosis (TB), which affects 10 million people worldwide. In this blog post, we reflect on the first round of feedback on our consultation draft on MVAC.

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...

Increasingly, scientific advances are delivering new medicines that deliver improved survival and quality of life across multiple treatment indications. Indication-Based Pricing (IBP) has been proposed as a way to better link price with value. In this short Discussion Paper, we outline the major issues including the potential benefits of IBP, potential drawbacks, and considerations for implementation. We then ask for your views. To submit your thoughts, please access the survey which accompanies the Discussion Paper. Consultation closing date: Monday, 30 September 2019.

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