Do Profit Margins of Pharmaceuticals Influence Reimbursement Decisions? A Discrete Choice Experiment Among Dutch Healthcare Decision Makers

Abstract

This study aimed to investigate whether the profit margins of pharmaceuticals would influence the outcome of reimbursement decisions within the Dutch policy context. Methods:We conducted a discrete choice experiment among 58 Dutch decision makers. In 20 choice sets, we asked respondents to indicate which of 2 pharmaceutical treatment options they would select for reimbursement. Options were described using 5 attributes (disease severity, incremental costs per quality-adjusted life-year, health gain, budget impact, and profit margin) with 3 levels each. Additionally, cognitive debriefing questions were presented, and for validation debriefing, interviews were conducted. Choice data were analyzed using mixed logit models, also to calculate marginal effects and choice probabilities.Results: Results indicated that the specified levels of profit margins significantly influenced choices made. Decision makers were less likely to reimburse a product with a higher profit margin. The relative importance of profit margins was lower than that of the included traditional health technology assessment criteria, but not negligible. When asked directly, 61% of respondents indicated that profit margin should play a role in reimbursement decision making, although concerns about feasibility and the connection to price negotiations were voiced. Conclusions:Our results suggest that if available to decision makers the profit margin of pharmaceutical products would influence reimbursement decisions within the Dutch policy context. Higher profit margins would reduce the likelihood of reimbursement. Whether adding profit margin as an additional, explicit criterion to the health technology assessment decision framework would be feasible and desirable is open to further exploration.

The Value of Health in a Cost-Effectiveness Analysis: Theory Versus Practice

“…In practice, a threshold can serve as a signal of an acceptable price and producers can use this strategically to price their products up to this threshold. Guidelines for CEAs provide little help to decision makers in dealing with strategic price setting, as a crucial assumption in the models behind CEAs is that costs are set exogenously [ 43 ], and thus no distinction is made between price demanded or set by the producer and the cost price of the product [ 44 ]. More attention for ‘pricing below the threshold’, and therefore a fair division of surplus between the producer and society, is urgently required.…”

Do Health Technology Assessment organisations consider manufacturers’ costs in relation to drug price? A study of reimbursement reports

“…8 ICES, Toronto, ON, Canada. 9 • support for research data, including large and complex data types • gold Open Access which fosters wider collaboration and increased citations maximum visibility for your research: over 100M website views per year…”

“…Hence, given the increased attention for price setting as well as the increased reliance on price negotiations, manufacturers’ costs in relation to prices, or profit margins, could be an explicit part of the deliberations during the appraisal phase, also to justify certain decisions or recommendations. A recent discrete choice experiment among Dutch healthcare decision makers suggested that information on profit margin would influence their reimbursement recommendations when available [ 9 ].…”