International Experience in Therapeutic Value and Value-Based Pricing: A Rapid Review of the Literature.
Prieto-Pinto Laura,Garzón-Orjuela Nathaly,Lasalvia Pieralessandro,Castañeda-Cardona Camilo,Rosselli Diego
Value in health regional issues
OBJECTIVES:To characterize at a global level the concept of therapeutic value (TV) and describe the experience of value-based pricing (VBP) policies in 6 reference countries. METHODS:We conducted a rapid review of the literature that addressed 2 exploratory research questions. A systematic and exhaustive search was carried out up to July 2018 in MEDLINE (Ovid), Embase, Scopus, and Web of Science. RESULTS:The concepts of TV and VBP are related; value frameworks for medicines should include social preferences, comparative effectiveness, safety, adoption viability, social impact, high quality of evidence, severity of illness, and innovation. The added therapeutic value (ATV) is the manner of measuring the therapeutic advantages of new medicines compared with existing ones in terms of comparative effectiveness and safety. There are variations in the mechanisms of reimbursement and drug pricing regulation between the countries of study. CONCLUSION:In a VBP system it is essential to establish the TV and ATV of a new medicine. Although there are no methodological guidelines for the implementation of VBP policies, the process implies from the beginning the definition of TV categories that will be included in the drug pricing and reimbursement systems. Agreements between the pharmaceutical industry and governments have become a useful tool as a negotiating mechanism in most countries.
Lessons From The Impact Of Price Regulation On The Pricing Of Anticancer Drugs In Germany.
Lauenroth Victoria D,Kesselheim Aaron S,Sarpatwari Ameet,Stern Ariel D
Health affairs (Project Hope)
Worldwide spending on prescription drugs has increased dramatically in recent years. Although this increase has been particularly pronounced in the US, it remains largely unaddressed there. In Europe, however, different approaches to regulating drug prices have been implemented. Under the 2011 German Pharmaceutical Market Restructuring Act (Arzneimittelmarktneuordnungsgesetz, or AMNOG), for example, manufacturers freely set the prices of newly authorized drugs during their first year on the market. Benefit assessments are carried out during this year and then used in price negotiations between manufacturers and representatives of the country's statutory health insurers. Using data on fifty-seven anticancer drugs launched in Germany from 2002 to 2017, we found that implementation of AMNOG was associated with drug prices being more closely aligned with clinical benefit. Introducing price negotiations led to a 24.5 percent decrease in negotiated prices relative to launch prices. We did not find evidence that manufacturers responded by setting higher launch prices. AMNOG is an example of how government price negotiation can be designed to better align prices with clinical benefit without delaying patient access.
Linking the Price of Cancer Drug Treatments to Their Clinical Value.
Gozzo Lucia,Navarria Andrea,Drago Valentina,Longo Laura,Mansueto Silvana,Pignataro Giacomo,Cicchetti Americo,Salomone Salvatore,Drago Filippo
Clinical drug investigation
BACKGROUND AND OBJECTIVE:Appropriate pricing of medications is one of the ultimate goals for decision makers, but reliable data on the risk/benefit ratio are often lacking when a Marketing Authorization Application is submitted. Here we propose a method to consistently evaluate price adequacy, which we applied to six anticancer medications approved in Italy in recent years. METHODS:We obtained ratios of cost per survival per day (cost/survival/day) by dividing the total costs of evaluated medications for the median survival gain in days. Each cost/survival/day corresponds to a crude score, with 0 assigned to a cost/survival/day ≥€586. The maximum price considered as adequate was €91 cost/survival/day (score 75) while a score of 100 corresponded to a cost/survival/day ≤€11, based on the thresholds set by the British National Health System (NHS) and the "willingness-to-pay" of the Italian NHS. Crude scores were then adjusted using correction factors for efficacy, safety, quality of life, and prevalence of disease. RESULTS:None of the analyzed medications (abiraterone, afatinib, aflibercept, bevacizumab, dabrafenib, and ipilimumab) achieved a final score of 75, corresponding to adequate pricing. The final score for afatinib was the highest with 55 points. Prices of all the other drugs resulted in being inadequate, with negative final scores for bevacizumab, dabrafenib, and ipilimumab. CONCLUSIONS:This method may be considered a tool for the evaluation of appropriateness of price proposed at negotiation and could represent a reliable resource for decision-making. Furthermore, this analysis suggests that most recently approved cancer drugs in Italy do not fulfill price adequacy.
Evolution of drug reimbursement in Canada: the Pan-Canadian Pharmaceutical Alliance for new drugs.
Husereau Don,Dempster William,Blanchard Adrienne,Chambers Johanne
Value in health : the journal of the International Society for Pharmacoeconomics and Outcomes Research
Canada has a unique system of public drug coverage and reimbursement characterized by a centralized review agency that makes funding recommendations along with decentralized authority for delivering health care across 10 provinces and three territories. There has been a significant increase in price negotiation for new pharmaceuticals in the past 10 years, first by individual provinces and now through a collective price negotiation process called the "Pan-Canadian Pharmaceutical Alliance." As of February 2014, the Pan-Canadian Pharmaceutical Alliance has already completed 32 negotiations despite still being in a formative stage; it is anticipated that a formal process will be developed in the coming year. In this article, we describe the evolution of price negotiation in Canada and identify several opportunities for improvement of the current process, including the incorporation of economic considerations into price negotiation.
Anticancer drug prices and clinical outcomes: a cross-sectional study in Italy.
Trotta Francesco,Mayer Flavia,Barone-Adesi Francesco,Esposito Immacolata,Punreddy Ranadhir,Da Cas Roberto,Traversa Giuseppe,Perrone Francesco,Martini Nello,Gyawali Bishal,Addis Antonio
OBJECTIVE:To investigate whether the prices of new anticancer drugs correlated with their relative benefit despite negotiation. DESIGN:Retrospective cross-sectional study correlating new anticancer drugs prices with clinical outcomes. SETTING:We did a retrospective cross-sectional study including all new anticancer drugs approved by the European Medicines Agency (EMA) (2010-2016) and reimbursed in Italy. MAIN OUTCOMES AND MEASURES:Information on clinical outcomes-in terms of median overall survival (OS), median progression-free survival (PFS) and objective response rate (ORR)-was extracted from pivotal trials as reported in the European Public Assessment Reports available on the EMA website. Cost of a full course treatment was estimated on negotiated official and discounted prices. Regression coefficients β, their levels of significance p and the coefficients of determination R were estimated adjusting by tumour type. RESULTS:Overall, 30 new anticancer drugs (with 35 indications) were available for analysis. Where data on OS were available, we observed no correlation between the improvement in median OS (in weeks) and negotiated price (R=0.067, n=16 drugs for 17 indications). When the clinical outcomes were expressed as improvements in the median PFS or ORR, 25 drugs (29 indications) were available for the analysis, and again, there was no correlation with prices (R=0.004 and 0.006, respectively). CONCLUSIONS AND RELEVANCE:Our results suggest that the prices of anticancer drugs in Italy do not reflect their therapeutic benefit. Drug price negotiations, which is mandatory by law in Italy, do not seem to ensure that prices correlate with clinical benefits provided by the cancer drugs. These results call for further efforts to establish the standard determinants of drug prices available at the time of negotiation. These findings need to be confirmed in other countries where price negotiations are in place. Moreover, further investigations may verify whether outcome data obtained after drug marketing would improve the correlation between prices and therapeutic benefit.
A new entity for the negotiation of public procurement prices for patented medicines in Mexico.
Gómez-Dantés Octavio,Wirtz Veronika J,Reich Michael R,Terrazas Paulina,Ortiz Maki
Bulletin of the World Health Organization
PROBLEM:As countries expand health insurance coverage, their expenditures on medicines increase. To address this problem, WHO has recommended that every country draw up a list of essential medicines. Although most medicines on the list are generics, in many countries patented medicines represent a substantial portion of pharmaceutical expenditure. APPROACH:To help control expenditure on patented medicines, in 2008 the Mexican Government created the Coordinating Commission for Negotiating the Price of Medicines and other Health Inputs (CCPNM), whose role, as the name suggests, is to enter into price negotiations with drug manufacturers for patented drugs on Mexico's list of essential medicines. LOCAL SETTING:Mexico's public expenditure on pharmaceuticals has increased substantially in the past decade owing to government efforts to achieve universal health-care coverage through Seguro Popular, an insurance programme introduced in 2004 that guarantees access to a comprehensive package of health services and medicines. RELEVANT CHANGES:Since 2008, the CCPNM has improved procurement practices in Mexico's public health institutions and has achieved significant price reductions resulting in substantial savings in public pharmaceutical expenditure. LESSONS LEARNT:The CCPNM has successfully changed the landscape of price negotiation for patented medicines in Mexico. However, it is also facing challenges, including a lack of explicit indicators to assess CCPNM performance; a shortage of permanent staff with sufficient technical expertise; poor coordination among institutions in preparing background materials for the annual negotiation process in a timely manner; insufficient communication among committees and institutions; and a lack of political support to ensure the sustainability of the CCPNM.
Progress on drug pricing negotiations in China.
Tang Mi,Song Peipei,He Jiangjiang
On November 28, 2019, the National Healthcare Security Administration (NHSA) and the Ministry of Human Resources and Social Security (MOHRSS) of China announced the results of drug pricing negotiations. Seventy first-negotiated drugs with 60.7% average price decrease and twenty-seven re-negotiated medicines with 26.4% average price fall, involving 11 disease categories, were successfully incorporated into National Reimbursement Drug List (NRDL). Medicines that successfully get accessed to NRDL are mostly new listings with high clinical value, and more than half of them are manufactured by Chinese enterprises. Compared to the negotiated drug list of 2017, the biggest increase in western medicines is the digestive system medications (10 drugs added), and the traditional Chinese medicine is internal medicine (17 drugs added). The negotiation follows the process including preparation, examination, negotiation, and announcement. There are several innovations in the procedure, such as the parallel calculation of the floor price, the introduction to competitive negotiations, allowing companies to apply for price confidentiality, and increasing government-enterprise communication before negotiations. Incorporating patent drugs into NRDL by negotiation not only helps patients reduce the economic burden, but also encourages pharmaceutical companies to innovate.
International best practices for negotiating 'reimbursement contracts' with price rebates from pharmaceutical companies.
Morgan Steven,Daw Jamie,Thomson Paige
Health affairs (Project Hope)
Reimbursement contracts, in which health insurers receive rebates from drug manufacturers instead of paying the transparent list price, are becoming increasingly common worldwide. Through interviews with policy makers in nine high-income countries, we describe the use of these contracts around the globe and identify related policy challenges and best practices. Of the nine countries surveyed, the majority routinely use confidential reimbursement contracts. This alternative to drug coverage at list prices offers benefits but is not without challenges. Payers face increased administrative costs, difficulties enforcing contracts, and reduced information about prices paid by others. Among the best practices identified, policy makers recommend establishing clear and consistent processes for negotiating contracts with relatively simple rebate structures and transparency to the public about the existence, purpose, and type of reimbursement contracts in place. Policy makers should also work to address undesirable price disparities within their countries and internationally, which may occur as a result of this new pricing paradigm.
External referencing and pharmaceutical price negotiation.
Garcia Mariñoso Begoña,Jelovac Izabela,Olivella Pau
External referencing (ER) imposes a price cap for pharmaceuticals, based on prices of identical or comparable products in foreign countries. Suppose a foreign country (F) negotiates prices with a pharmaceutical firm, whereas a home country (H) can either negotiate prices independently or implement ER, based on the foreign price. We show that country H prefers ER if copayments in H are relatively high. This preference is reinforced when H's population is small. Irrespective of relative country sizes, ER by country H harms country F. Our model is inspired by the wide European experience with this cost-containment policy. Namely, in Europe, drug authorization and price negotiations are carried out by separate agencies. We confirm our main results in two extensions. The first one allows for therapeutic competition between drugs. In the second one, drug authorization and price negotiation take place in a single agency.
The Impact Of Price Regulation On The Availability Of New Drugs In Germany.
Stern Ariel D,Pietrulla Felicitas,Herr Annika,Kesselheim Aaron S,Sarpatwari Ameet
Health affairs (Project Hope)
The 2011 German Pharmaceutical Market Restructuring Act subjected brand-name drugs for nonrare diseases to price regulation based on an assessment of their clinical benefit. Indication-specific assessment outcomes range from major added benefit to less benefit than the appropriate comparator(s) and affect price negotiations beyond the first year on the market. Using data on drugs that entered the market in the period 2012-16, we evaluated benefit assessment findings, subsequent drug exits, and their correlates. We considered 171 drug-indication pairs, corresponding to 138 different drugs. Of these, 66 drug-indication pairs (55 different drugs) were found to have added benefit. Almost all drugs with a positive benefit assessment (98 percent) remained on the market, while drugs without a positive benefit assessment were over ten times more likely to exit (25 percent versus 2 percent). US policy makers considering how to address rapidly increasing drug costs may draw valuable lessons from the German experience.
Can locally developed me-too drugs aid price negotiation? An example of cancer therapies from China.
Luo Zhenhuan,Gyawali Bishal,Han Sheng,Shi Luwen,Guan Xiaodong,Wagner Anita Katharina
Seminars in oncology
Rapid growth in pharmaceutical expenditures and high prices have greatly hampered access to medicines, especially targeted anticancer medicines. Confronted with such difficulties, the Chinese government has put more effort into supporting local research and development of cancer medicines, resulting in locally developed me-too drugs. Since 2016, the government has implemented a central reimbursement-linked drug price negotiation policy aimed at reducing the prices of expensive medicines. Locally developed me-too drugs marketed at lower prices may inject price competition and help negotiate reduced prices of similar internationally-developed products. As an example, we selected 3 tyrosine kinase inhibitors (TKIs) developed for the therapy of advanced non-small cell lung cancer harboring mutations in the epidermal growth factor receptor (EGFR). Descriptive analysis was applied to data from the Chinese Medical Economic Information database to describe the impact on the price and utilization of three TKIs after the introduction of icotinib, a locally developed me-too TKI and two national negotiations regarding the price of EGFR-TKIs in China. After two national negotiations, the daily costs of all three EGFR-TKIs were reduced to around $30. From the first quarter of 2013 to the second quarter of 2016, the market share of the purchasing volume of icotinib, China's locally developed TKI, increased from 13% to 40%, while the market shares of two internationally developed TKIs decreased from 35% to 15% and from 52% to 45%, for erlotinib and gefitinib, respectively. The prices of EGFR-TKIs decreased and China's locally developed TKI accounted for a considerable proportion of market share. Locally developed me-too drugs aid price negotiation by injecting price competition and helping negotiate reduced prices of similar internationally-developed products. Through efforts to develop me-too drugs, combined with national drug price negotiation and reimbursement policies, developing countries might improve access to more affordable targeted cancer therapies.
Determinants of price negotiations for new drugs. The experience of the Italian Medicines Agency.
Villa Federico,Tutone Michaela,Altamura Gianluca,Antignani Sara,Cangini Agnese,Fortino Ida,Melazzini Mario,Trotta Francesco,Tafuri Giovanni,Jommi Claudio
Health policy (Amsterdam, Netherlands)
OBJECTIVES:The aim of this paper is to investigate the determinants of the difference between the price proposal submitted by the industry and the final negotiated price. We used Italy as a case-study. METHODS:Data were gathered through the information system used by Italian Medicines Agency. The time-frame for this analysis is 2013-2017. Factors influencing the delta price were analyzed through a regression analysis. RESULTS:44 orphan drugs and 89 new other molecular entities obtained reimbursement in the last five years. Following the negotiation process, prices were lowered by 25.1% and 28.6% on average for orphan drugs and other molecules respectively. The price reduction was higher for innovative drugs (-32.2%). Statistically significant determinants associated to higher price reduction were: i) the implementation of a product specific monitoring registry, ii) the negotiation of a financial-based Managed Entry Agreement, iii) a target population larger than 20,000 patients, iv) an expected National Health Service expenditure larger than €200 million. DISCUSSION:The impact of some variables on the delta price was predictable (e.g. for drugs with an expected higher budget impact and a larger population target), others were more surprising (e.g. a significant price reduction for "innovative" drugs). The implementation of financial-based agreements, which often rely on confidential arrangements, was one of the determinants with higher impact on price reduction.