Value in Pharmaceutical Pricing

................................................................................................................................................... 8 RESUME ........................................................................................................................................................ 8 EXECUTIVE SUMMARY ............................................................................................................................ 9 INTRODUCTION ........................................................................................................................................ 11 OBJECTIVES AND METHOD ................................................................................................................... 12 The concept of value-based pricing ........................................................................................................... 12 Objectives of the study .............................................................................................................................. 13 Methods ..................................................................................................................................................... 14 SECTION 1 AN OVERVIEW OF PHARMACEUTICAL COVERAGE AND PRICE REGULATION .. 17 Health systems characteristics and coverage for pharmaceutical care ...................................................... 17 Reimbursement and pricing policies in brief ............................................................................................. 19 SECTION 2 VALUE-BASED PRICING IN PRACTICE ........................................................................... 24 Introduction ............................................................................................................................................... 24 Economic evaluation for reimbursement and pricing decisions ................................................................ 24 Principles and methods used for economic evaluation .......................................................................... 25 Approaches for economic evaluation adopted by case-study countries ................................................ 26 The measure of therapeutic benefits and utility for patients ..................................................................... 28 Clinical outcomes: final endpoints, surrogate markers and intermediate outcomes .............................. 28 The measurement of utility .................................................................................................................... 29 Type and level of evidence required ...................................................................................................... 31 The choice of comparator to assess added therapeutic value .................................................................... 32 The consideration of costs and budget impact .......................................................................................... 33 Costs considered in assessment for reimbursement or pricing .............................................................. 34 The consideration of budget impact....................................................................................................... 37 The value of innovativeness ...................................................................................................................... 38 What do new technologies get for added therapeutic value? ................................................................. 38 The assessment of added therapeutic value is not always consistent across countries .......................... 40 Innovation “beyond added therapeutic value” is generally not considered ........................................... 42 Positive changes in the process of care may be an exception ................................................................ 42 How are wider social benefits valued? ...................................................................................................... 44 Is there a cost-effectiveness threshold? ..................................................................................................... 45 Are treatments for severe or rare diseases more valued than others? ........................................................ 48 Treatments for severe diseases are more valued .................................................................................... 48 Treatments for rare diseases are also often more valued ....................................................................... 50 Paying for value through product-specific agreements ............................................................................. 51 What happens when products have different indications with very different benefits? ............................ 54 DELSA/HEA/WD/HWP(2013)4 5 How does international benchmarking interfere with value-based pricing? ............................................. 55 CONCLUSIONS .......................................................................................................................................... 58 REFERENCES ............................................................................................................................................. 61 ANNEX 1: BACKGROUND INFORMATION ON CASE-STUDY COUNTRIES .................................. 65 Trends in pharmaceutical spending ........................................................................................................... 65 User participation to the costs of pharmaceutical care .............................................................................. 69