The impact of drug quality ratings from health technology assessments on the adoption of new drugs by physicians in Germany

Abstract

Payers are increasingly calling for the value of new drugs to be measured explicitly. We analyze how the availability of drug quality ratings by health technology assessment (HTA) agencies affects the adoption of new drugs by physicians in Germany. We combine data from drug quality ratings, promotional spending, and a physician panel. In a latent utility model, time to adoption is specified as a function of quality rating, promotional spending by manufacturers, and physician‐specific variables. As expected, drugs with a positive rating were adopted faster (p < 0.001) than those without. However, our results suggest that it was the publication of the quality rating itself that affected adoption. Indeed, before a quality rating was published, drugs that went on to receive a positive quality rating were not adopted significantly faster than drugs that went on to receive a negative quality rating. In contrast, after the publication of the HTA quality rating, drugs with a positive rating were adopted significantly faster than those without (p < 0.05). The per physician value of a positive quality rating was EUR 393.50. Our results suggest that there are returns from HTAs beyond their use in price negotiations.

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“…On the other hand, lower prices mean that a health care system will save money in the long run, potentially allowing for spending in other areas that could lead to a gain in life years or other beneficial outcomes for society. Also, prior research has shown that a positive HTA evaluation may be seen by physicians as a positive rating of a pharmaceutical’s quality from a trusted third-party source, thereby increasing the speed with which the pharmaceutical is diffused [ 42 ]. This faster diffusion could at least partly compensate for the effects of a delayed launch.…”

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“…Their findings allow for the calculation of the commercial value of clinical studies, which has clear implications for practice. Lastly, Blankart and Stargardt (2020) and Olson and Yin (2021) focus on the effects of valence. The former find that public evidence reporting positive results accelerates initial drug adoption, whereas the latter conclude that public evidence reporting negative or mixed effects for children lowers the drug prescriptions to them.…”

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