A new OHE Research Paper reviews a recent report on cancer pricing published by the World Health Organization. The authors argue that the report fails to promote mechanisms that are key to efficient pricing and use of cancer medicines. The Research Paper outlines some for addressing these shortcomings.

A new OHE Research Paper by Simon Brassel, Olga Rozanova, and Adrian Towse reviews a recent report on cancer pricing published by the World Health Organization (WHO). The authors argue that the report fails to promote mechanisms (value assessment and related pricing arrangements) that are key to efficient pricing and use of cancer medicines. This is a missed opportunity. WHO should also support differential pricing of on-patent drugs and vaccines, which is crucial to increasing access. It should oppose the Report’s advocacy of transparency of on-patent pricing, which will reduce access to medicines.

At the end of 2018 a WHO Technical Report was published in order to address requests made in a resolution adopted by the 2018 Seventieth World Health Assembly (WHA) on Cancer prevention and control in the context of an integrated approach.

The report dismisses value assessment and the fundamental role of value assessment in delivering value for money. This is inconsistent with both existing WHA policy on Health Technology Assessment (HTA) and the reality that more and more payers in WHO Member States are using value assessment analyses to support their purchasing decisions. The report also lacks proposals to enable differential pricing and managed entry agreements to happen. Both can increase access while setting the right incentives for future innovation if implemented correctly. The report calls for price transparency and price caps which are likely to have a negative impact on differential pricing and managed entry agreements, reducing access to treatment for patients and producing less innovation in the future.

Much of the emphasis of the report is that the R&D ‘supply side’ is not working as the authors would like, but we are not convinced that this is the major challenge. Supply responds to demand and the real challenge is to get demand side reforms that use new treatments efficiently and send the right signals to industry about the new cancer treatments (and associated health gains) that payers want to fund.

The Report fails to promote mechanisms and processes (value assessment and related pricing and purchasing arrangements) that are key to efficient pricing and use of cancer medicines. This is a missed opportunity. In our view, the priorities for WHO should be to:

1. Provide support for Member States introducing effective HTA and related priority setting mechanisms in order to support both the introduction of universal health care and more efficient pricing and reimbursement mechanisms based on value-based pricing.
2. Ensure HTA reflects the context both in terms of the elements of value deemed relevant and in the impact on the healthcare system. There may be important differences between high-income and low- and middle-income countries as to the character of HTA.
3. Advocate differential pricing of drugs and vaccines. This is crucial to increasing access to on-patent products.
4. Oppose transparency of on-patent pricing. This will reduce both access to medicines and R&D.
5. Recognise that most products that underpin health care provision (by value and volume in low- and middle-income countries and by volume in high-income countries) are off-patent multi-source generics (and, in the future biosimilars). Advice on the effective procurement of these products is key.
6. Acknowledge that R&D is best incentivised by use of value-based assessment of health and health-related outcomes and by value-based pricing. Additional incentives may be needed for ultra-orphan drugs in oncology and other diseases. Effective management of the demand side of the health system is a far more effective way to get R&D that meets patient and health system needs than seeking to restructure R&D.

This study was commissioned and funded by the International Federation of Pharmaceutical Manufacturers (IFPMA).

Citation

Brassel, S., Rozanova, O., and Towse, A., 2019. The WHO Technical Report on the Pricing of Cancer Medicines: Missing a Central Role for HTA and Value Assessment. OHE Research Paper, London: Office of Health Economics.

Related research

Berdud, M., Chalkidou, K., Dean, E., Ferraro, J., Garrison, L., Nemzoff, C. and Towse, A., 2019. The Future of Global Health Procurement: Issues around Pricing Transparency. Office of Health Economics. RePEc.