The future of pharmacoeconomic policy - does value-based pricing really have a role?

Abstract

The ‘Great Recession’ has left all countries aware of the need for cost containment in health care, a need which is felt by both governments and private payers. However, costs are increasing, not only due to greater demand and changing demographics but also due to an increase in costly drugs and technology. These technologies and pharmaceutical agents are a necessary part of the health care we provide, as innovations have been responsible for a significant improvement in morbidity and mortality. Value‐based pricing (VBP) represents an attempt to maximise utility and determine an appropriate price for the payer, while simultaneously addressing the needs of the public, as well as protecting pharmaceutical companies from inappropriate lowering of prices. It aims to improve access to treatment with unmet needs, decrease the use of me‐too drugs and encourage innovation in research and development, while ensuring cost containment. This article discusses how to develop a VBP policy as part of a national drug policy, by examining how value is measured, and how it is linked to price. The difficulties of price setting for drugs with multiple indications are discussed, as is price setting for Orphan diseases. The possible reimbursement schemes which may be used are described – from coverage with evidence development, to conditional treatment continuation. Finally, the importance of including reimbursement for innovation is examined, as VBP must take into account the cost of innovative drugs and technology.

Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

“…Next to the set-up of registries, several publications report that payers and developers face difficulties to select appropriate outcomes as decision-rule for payment adjustment based on treatment performance ( Breckenridge and Walley, 2008 ; Goldenberg and Bachman, 2012 ; Kocsis et al, 2015 ; Abou-El-Enein et al, 2016 ; Hettle et al, 2017 ; Holleman et al, 2017 ; Hanna et al, 2018 ; Pham and Carlson, 2018 ; Sandhu and Heidenreich, 2018 ; Jönsson et al, 2019 ; Mahendraratnam et al, 2019 ). Accessible and easily measurable outcomes in the short-term to medium-term which are clinically relevant, useful and important to all stakeholders are recommended ( Dankó et al, 2009 ; Kiernan, 2016 ; Pouwels et al, 2016 ; Goble et al, 2017 ; Kazi et al, 2017 ; Yeung et al, 2017 ; Danzon, 2018 ; EXPH, 2018 ; Cole et al, 2019 ). A minimal core outcome set per disease could be built such as survival, disease progression, relapse or recurrence, long-term side effects and return to normal activities for oncological diseases as proposed by Cole et al ( Cole et al, 2019 ) or disease progression, unacceptable toxicity not allowing continuation of treatment and toxicity-related death as used by the national health service in Italy ( Garattini and Casadei, 2011 ).…”

“…A minimal core outcome set per disease could be built such as survival, disease progression, relapse or recurrence, long-term side effects and return to normal activities for oncological diseases as proposed by Cole et al ( Cole et al, 2019 ) or disease progression, unacceptable toxicity not allowing continuation of treatment and toxicity-related death as used by the national health service in Italy ( Garattini and Casadei, 2011 ). However, payers are faced with the fact that effects of possibly curative therapies might only appear in the long-term while actionable outcomes are restricted to those measured in the short-term which is similar to the experienced difficulties of the United Kingdom MS scheme to provide conclusive answers on long-term functional outcomes ( Lage et al, 2013 ; Carr and Bradshaw, 2016 ; Kiernan, 2016 ; Seeley and Kesselheim, 2017 ). This would require the use of surrogate endpoints which may give false reassurance of performance ( Hettle et al, 2017 ; Pauwels et al, 2017 ; Seeley and Kesselheim, 2017 ; Toumi et al, 2017 ).…”

“…However, collaboration between different stakeholders may be complicated by the underlying interests of every stakeholder group and their respective incentives ( de Pouvourville, 2006 ; Carlson et al, 2009 ; Puig-Peiró et al, 2011 ; Neumann et al, 2011 ; Brennan and Wilson, 2014 ; Barlas, 2016a ; Carr and Bradshaw, 2016 ; Kiernan, 2016 ; Proach et al, 2016 ; Van De Vijver et al, 2016 ; NEHI, 2017 ; Value in Health, 2017 ; Cole et al, 2019 ; FoCUS, 2019a ; Federici et al, 2019 ; Pace et al, 2019 ; Kannarkat et al, 2020 ). Therefore, several authors recommend performing an analysis of the interests of all stakeholders at all stages of the agreement allowing the declaration of possible conflicts of interests and affiliations before the start of the agreement ( Chapman et al, 2003 ; Raftery, 2010 ; Menon et al, 2011 ; Clopes et al, 2017 ; Gerkens et al, 2017 ; Makady et al, 2019 ).…”

“…Payers struggle with their administrative capacity to handle (multiple) agreements under current staffing levels ( Adamski et al, 2010 ; FoCUS, 2019b ; Jorgensen et al, 2019 ; van de Wetering et al, 2017 ). Healthcare professionals, specifically clinicians, nurses, pharmacists and more broadly the hospital administration and finance department, are increasingly burdened with administrative tasks to collect data ( Williamson and Thomson, 2010 ; Franken et al, 2014 ; Gibson and Lemmens, 2014 ; Garattini et al, 2015 ; Kiernan, 2016 ; Nazareth et al, 2017 ; Brown et al, 2018 ; Carr et al, 2018 ; Schaffer et al, 2018 ; Antonanzas et al, 2019 ). They require an increase in staff resources by hiring dedicated healthcare staff or increasing personnel time for management of agreements ( Coulton et al, 2012 ; Goodman et al, 2019 ; Macaulay and Turkstra, 2019 ).…”

Application of Managed Entry Agreements for Innovative Therapies in Different Settings and Combinations: A Feasibility Analysis

“…A major drawback of pay-for-outcome schemes is the added burden to both the patient and the healthcare system to monitor the performance of the therapy. These costs can become so high that they outweigh any savings made by such a scheme [ 3 , 5 , 28 , 49 , 54 , 59 , 64 ]. The enforcement of additional studies to resolve the uncertainties regarding long-term effects could sometimes also be achieved by implementing a form of coverage with evidence development where it is agreed that the price will drop iteratively by a certain percentage or amount after predefined periods when the manufacturer does not produce the necessary evidence [ 89 ].…”