Toward greater efficiency and equity in healthcare resource allocation: Dr Panos Kanavos to lead consortium in ADVANCE_HTA European Commission FP7 grant

Healthcare policymaking is increasingly driven by the need to reconcile mounting healthcare system demands with constrained resources. This is particularly true for medical technologies such as pharmaceuticals, medical devices and diagnostics, which comprise a sizeable proportion of healthcare budgets. In the health policy sphere, efforts to match resources with demands are often centred on devising and implementing policies that deliver greater value for money. The undertaking of value assessments for medical technologies by way of Health Technology Assessment (HTA) is one such policy lever that can be deployed in achieving this end. Through the rigorous evaluation of clinical and pharmaco-economic evidence, together with relevant stakeholder perspectives, HTA endeavours to inform healthcare resource allocation and decision-making at the micro-, meso-, and macro-levels of the healthcare system

The pharmaceutical distribution chain in the European Union: structure and impact on pharmaceutical prices

In an environment characterised by fragmentation in the market structure of wholesale and retail entities, significant diversity in terms of remuneration schemes as well as regulations pertaining to operational features of wholesale and retail entities, but also significant developments in policy and practice concerning distribution, the objective of this report, is twofold: First, to map the distribution chain in EU Member States, including the main actors in wholesaling and retailing, discuss the requirements to provide certain services and outline their sources of remuneration, both direct and indirect. Second, to collect and analyse data on distribution margins, fees and service requirements in the originator and generic markets in EU Member States with a view to understanding the impact the distribution chain is having on the prices of reimbursable prescription only medicines (POMs). The report does not address issues relating to over-the-counter (OTC) medications

Medicines in parallel trade in the European Union: a gravity specification

While recent research has explored the phenomenon of drug parallel trade in regulated environments such as the European Union (EU), or the European Economic Area, little is known about the mechanisms that explain its origin or the role of the distribution chain in exporting and importing countries in determining its extent. By building on theoretical literature explaining the role of the distribution chain, this paper draws on an empirical specification of a gravity model to examine the determinants of inter-country flows of parallel-traded drugs. In this context, the paper deals with the effect of differences in the regulation of and competition in the distribution chain in the countries of origin and destination. The paper draws on proprietary data from the Intercontinental Medical Statistics database (for the Netherlands and other EU countries that export to the Netherlands) which identify the country of origin of parallel-imported medicines from 1997-2002 for a therapeutic group (statins) for which there is no generic competition. The study reveals that although parallel trade is a specific form of arbitrage, it is primarily a regulation-induced phenomenon. As a result, although the driving force for parallel trade is price differences across countries, the propagation mechanism lies in (a) the way drug prices are regulated across countries and (b) fragmentation and the underlying incentive structure in the wholesale distribution chain in countries where drug prices are regulated. The implications that flow from our study are that a more flexible and competitive and less fragmented (along national borders) distribution chain, particularly at wholesale level, might reduce the extent of and potential for parallel trade

Acquiring pharmaceutical industry assets in the UK: 1 + 1 = 1?

The recent AstraZeneca takeover bid from Pfizer puts pharmaceutical R&D once again on the public agenda. Three pertinent questions are (a) what can be expected from this acquisition, (b) what are the implications for the UK economy and science base, and (c) whether such a deal should go ahead. Although the key driver behind this acquisition would be an improvement in company performance and shareholder value, past evidence suggests that mergers and acquisitions (M&A) of large pharmaceutical companies imply a neutral net effect on productivity, if not a decline, with employment decreasing and R&D spend following a similar trend. Similarities between the two companies include dropping sales; however, relative to its size, AstraZeneca has a more promising R&D pipeline, especially in therapeutic areas where Pfizer’s strength is currently limited (e.g. oncology). Ensuring a portfolio diversification would make Pfizer’s takeover proposal a knight’s one, but history points towards a knave-like behavior

Value-based assessment of new medical technologies: towards a robust methodological framework for the application of multiple criteria decision analysis in the context of health technology assessment

In recent years, multiple criteria decision analysis (MCDA) has emerged as a likely alternative to address shortcomings in health technology assessment (HTA) by offering a more holistic perspective to value assessment and acting as an alternative priority setting tool. In this paper, we argue that MCDA needs to subscribe to robust methodological processes related to the selection of objectives, criteria and attributes in order to be meaningful in the context of healthcare decision making and fulfil its role in value-based assessment (VBA). We propose a methodological process, based on multi-attribute value theory (MAVT) methods comprising five distinct phases, outline the stages involved in each phase and discuss their relevance in the HTA process. Importantly, criteria and attributes need to satisfy a set of desired properties, otherwise the outcome of the analysis can produce spurious results and misleading recommendations. Assuming the methodological process we propose is adhered to, the application of MCDA presents three very distinct advantages to decision makers in the context of HTA and VBA: first, it acts as an instrument for eliciting preferences on the performance of alternative options across a wider set of explicit criteria, leading to a more complete assessment of value; second, it allows the elicitation of preferences across the criteria themselves to reflect differences in their relative importance; and, third, the entire process of preference elicitation can be informed by direct stakeholder engagement, and can therefore reflect their own preferences. All features are fully transparent and facilitate decision making

Cost, outcomes, treatment pathways and challenges for diabetes care in Italy

Background: In Italy both incidence and prevalence of diabetes are increasing and age at diagnosis is decreasing in type 2 diabetes. Diabetes is one of the major causes of morbidity in Italy, causing several disabilities and affecting the economically active population. The objective of this paper is to identify and discuss costs, outcomes and some of the challenges of diabetes care in Italy in the context of recent policy changes. Methods: The study collected data and evidence from both primary and secondary sources. A total of 10 experts, including clinicians (diabetologists/endocrinologists) and decision makers, both at national and regional levels, were interviewed through face-to-face semi-structured interviews. The secondary sources include peer review literature from Medline, grey literature, reports from national and international sources, including professional bodies and organizations. Results: The total direct cost of diabetes for the Italian NHS in 2012 is estimated to be above €9 billion, of which more than half for hospital admissions (57%), and the remaining half for drugs (30%) and outpatient care (13%). However, there is scant evidence on indirect and intangible costs of diabetes in Italy. The quality of care addressed via the AMD Annals found overall good performance with both process and intermediate outcome indicators showing positive and improving results from 2004 to 2011, except for few parameters, including renal function and foot monitoring, which are still inadequate. Major challenges are the rising diabetes prevalence, the difficulty in meeting the rising demand for care and the scant development of multidisciplinary delivery of care, especially in the predominantly ambulatory setting of the Southern diabetes centres. Conclusions: Prevention of diabetes, especially adopting a multi-sectorial approach, should be further empowered by policy makers through promoting healthy lifestyles and specifically targeting child obesity. Other key strategies include more information and education, better diabetes management through the adoption of a chronic model of care, more focus on appropriateness and efficiency of care and better communication between diabetes centres within every Region

Transitioning to a national health system in Cyprus: a stakeholder analysis of pharmaceutical policy reform

Objective To review the pharmaceutical sector in Cyprus in terms of the availability and affordability of medicines and to explore pharmaceutical policy options for the national health system finance reform expected to be introduced in 2016. Methods We conducted semi-structured interviews in April 2014 with senior representatives from seven key national organizations involved in pharmaceutical care. The captured data were coded and analysed using the predetermined themes of pricing, reimbursement, prescribing, dispensing and cost sharing. We also examined secondary data provided by the Cypriot Ministry of Health; these data included the prices and volumes of prescription medicines in 2013 Findings We identified several key issues, including high medicine prices, underuse of generic medicines and high out-of-pocket drug spending. Most stakeholders recommended the national government review existing pricing policies to ensure medicines within the forthcoming national health system are affordable and available, introduce a national reimbursement system and incentivize the prescribing and dispensing of generic medicines. There were disagreements over how to (i) allocate responsibilities to governmental agencies in the national health system, (ii) reconcile differences in opinion between stakeholders and (iii) raise awareness among patients, physicians and pharmacists about the benefits of greater generic drug use. Conclusion In Cyprus, if the national health system is going to provide universal health coverage in a sustainable fashion, then the national government must address the current issues in the pharmaceutical sector. Importantly, the country will need to increase the market share of generic medicines to contain drug spending

Pharmaceutical policies in Cyprus: a review of the current system and future options

The pharmaceutical market in Cyprus is characterised by several country- and system specific peculiarities and challenges, including: • Small market size; • The system of external price referencing (ERP) does not enable the country to capitalise on transaction prices in reference countries; • The absence of a health insurance scheme and the resulting absence of a suitable reimbursement system does not allow the country to exercise any form of market power; this may lead to inequities in access and expose citizens to undue financial and health risks; • There are no mechanisms in place to monitor and control the prescribing behaviour of physicians; coupled with brand awareness, this likely encourages the over-prescribing of expensive, on-patent products; • There do not appear to be any limits on promotional activities by manufacturers and distributors or any self-regulating practices (such as a code of practice), potentially incentivising providers to induce demand; • The pharmacy remuneration structure and the absence of generic substitution favour the dispensing of expensive products; • For patients, there is little cost-sharing in the public sector, whereas drug costs are borne out-of-pocket in the private sector. A World Health Organization (WHO) mission to study the current system of pharmaceutical pricing and coverage decisions resulted in a series of recommendations. Chronologically, these have been divided into three categories: first, interventions for the short-term to refine the way the current system works, aiming to increase its efficiency and economise on resources; second, interventions aiming to address gaps in the organisation and delivery of health and pharmaceutical services in anticipation of the introduction of a general health insurance scheme (GeSY); and, third, interventions aiming to ensure the sustainability of health and pharmaceutical care provision following GeSY implementation