32 research outputs found
Reference Prices: The Spanish Way
The aim of this paper is to analyse the effects of recent regulatory reforms that Spanish Health Authorities have implemented in the pharmaceutical market: the introduction of a reference price system together with the promotion of generic drugs. The main objectives of these two reforms are to increase price competition and, ultimately, reduce pharmaceutical costs. Before the introduction of reference prices, consumers had to pay a fixed copayment of the price of whatever drug purchased. With the introduction of such system, the situation differs in the following way: if (s)he buys the more expensive branded drug, then (s)he pays a sum of two elements: the copayment associated to the reference price plus the difference between the price of this good and the reference price. However, if the consumer decides to buy the generic alternative, with price lower than the reference price, then (s)he has to pay the same copayment as before. We show that the introduction of a reference price system together with the promotion of generic drugs increase price competition and lower pharmaceutical costs only if the reference price is set in a certain interval. Also profits for the duopolists might be reduced. These results are due to the opposing effects that reference prices have on branded and generic producers respectively.Pharmaceutical Industry, Reference Prices, Generics
Business Model Options for Antibiotics: Learning from Other Industries
As resistance to antibiotics continues to grow, there is a well-recognized misalignment between the clinical need for new antibiotics and the incentives for their development. The returns from investment in antibiotics research and development (R&D) are perceived as too small. Partly as a result, the number of large multinational companies researching antibiotics has fallen drastically in the past 20 years and few high-quality antibiotics have been developed.
In looking at the antimicrobial resistance (AMR) situation, we were aware that other industries have faced conceptually similar challenges and that they might offer helpful lessons and possible solutions that could be adapted to the problems of antimicrobial R&D. Our focus was particularly on learning about models in which the incentive for R&D is delinked from the volume of sales.
A Big Innovation Centre and Chatham House workshop brought together on 1 September 2014 six companies that are members of the Big Innovation Centre: BAE Systems (defence), Allianz (insurance), Barclays Bank (finance), EDF Energy (energy), Dun & Bradstreet (corporate information) and Knowledge Unlatched (academic publishing). These companies presented business and incentivization models they had implemented or devised that could be explored further for their applicability to antibiotics R&D. It was made clear to them that any models shared might be adapted so that they a) provide the pharmaceutical industry with an incentive to invest in antibiotics R&D, b) offer insight to health services about how to fund and to maintain the availability of appropriate antibiotics and c) ensure that both new and existing antibiotics are used appropriately and wisely.
Learning from other industries has been a very fruitful exercise. They have offered a different perspective on how to tackle the AMR issue and have provided relevant analogies to consider.
This research report offers a number of innovative models and ideas that address many of the critical questions facing policy-makers in the EU and the US as they seek solutions. It also contributes to key new initiatives globally and in Europe and the US specifically, including the World Health Organization’s Global Strategy on AMR, the Innovative Medicines Initiative DRIVE-AB project in the EU, the UK’s Review on Antimicrobial Resistance and, in the US, the President’s Advisory Council and the National Strategy for Combating Antibiotic-Resistant Bacteria.
This report highlights important lessons about how these other industries have adapted to diverse challenges in their environment. Based on this work and on our own review over the past few months, we see a clear need for a ‘bucket’ of various funding mechanisms that can exist in parallel. There should be separate funding mechanisms in place during the R&D phase of developing an antibiotic and a different mechanism to fund the maintenance, delivery and distribution of the antibiotic after regulatory approval.
The report articulates three essential messages:
(1) Global collaboration is required on a scale not seen before in relation to antimicrobial resistance. Many independent initiatives are under way nationally and regionally, but they need to be brought together in a concerted worldwide effort to engage on a global scale. The report is designed to help bridge these various efforts and move towards consensus on global action. We propose four initiatives:
a. Creating a global antibiotics public-private partnership (GAPPP). A GAPPP should involve private companies, academic institutions and public bodies. It must be a sustainable, independent and self-funding operation with a focus on the research and early development of antibiotics in response to identified global public health needs.
b. Creating a global antibiotics fund (GAF), which would be set up to be an over-arching umbrella fund (potentially consolidating all the pre-existing small funds that exist globally). It could exist alongside or in collaboration with major existing funding sources, such as BARDA and IMI, that have very pre- defined targets for funding. A GAF would provide monetary support to a GAPPP in order to enable its R&D effort. A GAF would work with existing funders for better awareness of the work each is supporting and for collaboration in funding priorities, options and courses of action. Ultimately, proposals for a GAPPP and a GAF are a possible way forward to pool skills, resources and funding so as to ensure a sustainable long-term solution.
c. Exploring the Gavi (the Vaccine Alliance)-type model and determining whether or not an independent global body should serve as the global procurement and distribution entity for antibiotics.
d. Becoming better stewards of antibiotics, as they are valuable drugs. Otherwise, boosting the production of new antibiotics will be futile. Antibiotics must be used appropriately everywhere around the globe. A worldwide effort to conserve them and to ensure appropriate access and use requires international coordination and the participation of every country. Some form of an international treaty or framework agreement is called for.
(2) There is a need to explore ‘service-availability’/’option-to-use’ types of agreements/contracts between developers/manufacturers and health care systems as a means to support the ‘delinkage’ concept. As in the defence sector, products are developed but kept on the shelf, maintained and ready when needed, including all the services to deliver them effectively and efficiently. Long-term contracts with customers ensure that the services they require are available when needed. Innovators of new antibiotics should not be rewarded with the traditional ‘price x volume’ model but should focus more on delivering the product, resources and services when needed. Governments would pay an annual ‘service-availability’ fee/premium delinked from the volume of sales. Lessons from the insurance industry indicate how these annual ‘premiums’ could be calculated.
(3) There is a need to engage customers (in the broadest sense) and ensure that the right incentives, both financial and non-financial, are aligned from the bench to the bedside. We should not focus on incentives just for the pharmaceutical companies; we must include prescribers, health systems, patients and all other stakeholders
Value-Based Differential Pricing: Efficient Prices for Drugs in a Global Context
This paper analyzes pharmaceutical pricing between and within countries to achieve second-best static and dynamic efficiency. We distinguish countries with and without universal insurance, because insurance undermines patients\u27 price sensitivity, potentially leading to prices above second-best efficient levels. In countries with universal insurance, if each payer unilaterally sets an incremental cost-effectiveness ratio (ICER) threshold based on its citizens\u27 willingness-to-pay for health; manufacturers price to that ICER threshold; and payers limit reimbursement to patients for whom a drug is cost-effective at that price and ICER, then the resulting price levels and use within each country and price differentials across countries are roughly consistent with second-best static and dynamic efficiency. These value-based prices are expected to differ cross-nationally with per capita income and be broadly consistent with Ramsey optimal prices. Countries without comprehensive insurance avoid its distorting effects on prices but also lack financial protection and affordability for the poor. Improving pricing efficiency in these self-pay countries includes improving regulation and consumer information about product quality and enabling firms to price discriminate within and between countries
New pricing models for generic medicines to ensure long-term sustainable competition in Europe
Funding Information: This study was funded by Medicines for Europe. Funding Information: CF and GG worked for Creativ-Ceutical (Which has been taken over by Putnam PHMR) which received funding from Medicines for Europe to undertake the study. SS has previously held the EGA Chair “European policy towards generic medicines”. Publisher Copyright: Copyright © 2023 Francois, Gawlik, Mestre-Ferrandiz, Pana, Perelman, Yfantopoulos and Simoens.Background: Price erosion of generic medicines over time as a result of existing pricing policies in combination with increasing operational costs of these products due to high inflation, undermine long-term sustainable competition in European off-patent medicines markets. Therefore, the aim of this study is to identify new potential pricing models for retail generic medicines in Europe, examine their pros and cons, and illustrate them with examples inside or outside the pharmaceutical sector. Methods: A targeted literature review, one-to-one interviews and a joint advisory board meeting with experts from five European countries were carried out to assess potential pricing models for generic medicines. Results: We identified ten pricing models that can be applied to generic medicines. The tiered pricing model is viewed as a sustainable solution ensuring competitiveness, but requires market monitoring using a supportive IT infrastructure. De-linking the price of generic medicines from that of the off-patent originator medicine prevents the originator from forcing generic medicines’ prices to unsustainable levels. Higher costs due to inflation can be compensated in the automatic indexation model. Other pricing models that have less implementation potential include the one-in-one/multiple-out model, tax credits, value-based pricing, volume for savings and guaranteed margin/fee models. The hypothecated tax and cost allocation models, which add a patient fee to generic medicines prices, are not likely to be socially acceptable. Conclusion: When considering a new pricing model for generic medicines, the impact on innovative medicines and the characteristics of the healthcare system in a given country need to be taken into account. Also, there is a need to continuously follow up the level of competition in off-patent medicines markets and to identify sustainability risks.publishersversionpublishe
Parent's perception of respiratory syncytial virus and subsequent wheezing burden:A multi-country cross-sectional survey
Background: Respiratory Syncytial Virus (RSV) is the leading cause of hospitalization in infants. RSV bronchiolitis is associated with an increased risk of subsequent wheezing. We aimed to document the parents' perception of the link between RSV infection and subsequent wheezing, wheezing-related healthcare and family resources use, and its impact on family daily life. Methods: This cross-sectional online survey enrolled 1200 parents with at least one child ≤6y living in the United States, United Kingdom, Spain, and Italy. Children diagnosed with RSV bronchiolitis before age of 2 years were included in the RSV group, and those never diagnosed with RSV bronchiolitis in the Reference group. Results: The odds of wheezing were 4.5-fold (95%CI 3.5–5.9) higher in the RSV than in the Reference group. The odds increased to 7.7-fold (95%CI 5.4–11.1) among children who were hospitalized, and 9-fold (95%CI 5.1–16.6) among those admitted to pediatric intensive care with RSV bronchiolitis. Similar trends were observed across all countries. In total, 57% of parents reported their child's wheezing to have moderate to severe impact on their emotional well-being, and 53% on their daily life activities and/or social life. 64% of parents reported moderate–severe impact of wheezing on child's quality of sleep and 49% and 46% reported a moderate–severe impact on their children's emotional well-being and physical activities. Conclusions: This survey suggests an association between RSV infection and subsequent wheezing in children across different countries. Wheezing, especially in association with RSV infection, was associated with increased healthcare utilization and costs, and significantly impacted parents' and children daily life.</p
Relative Effectiveness in Breast Cancer Treatment : A Health Production Approach
BACKGROUND: Pharmaceuticals' relative effectiveness has come to the fore in the policy arena, reflecting the need to understand how relative efficacy (what can work) translates into added benefit in routine clinical use (what does work). European payers and licensing authorities assess value for money and post-launch benefit-risk profiles, and efforts to standardize assessments of relative effectiveness across the European Union (EU) are under way. However, the ways that relative effectiveness differs across EU healthcare settings are poorly understood. METHODS: To understand which factors influence differences in relative effectiveness, we developed an analytical framework that treats the healthcare system as a health production function. Using evidence on breast cancer from England, Spain, and Sweden as a case study, we investigated the reasons why the relative effectiveness of a new drug might vary across healthcare systems. Evidence was identified from a literature review and national clinical guidance. RESULTS: The review included thirteen international studies and thirty country-specific studies. Cross-country differences in population age structure, deprivation, and educational attainment were consistently associated with variation in outcomes. Screening intensity appeared to drive differences in survival, although the impact on mortality was unclear. CONCLUSIONS: The way efficacy translates into relative effectiveness across health systems is likely to be influenced by a range of complex and interrelated factors. These factors could inform government and payer policy decisions on ways to optimize relative effectiveness, and help increase understanding of the potential transferability of data on relative effectiveness from one health system to another
Parent's perception of respiratory syncytial virus and subsequent wheezing burden:A multi-country cross-sectional survey
Background: Respiratory Syncytial Virus (RSV) is the leading cause of hospitalization in infants. RSV bronchiolitis is associated with an increased risk of subsequent wheezing. We aimed to document the parents' perception of the link between RSV infection and subsequent wheezing, wheezing-related healthcare and family resources use, and its impact on family daily life. Methods: This cross-sectional online survey enrolled 1200 parents with at least one child ≤6y living in the United States, United Kingdom, Spain, and Italy. Children diagnosed with RSV bronchiolitis before age of 2 years were included in the RSV group, and those never diagnosed with RSV bronchiolitis in the Reference group. Results: The odds of wheezing were 4.5-fold (95%CI 3.5–5.9) higher in the RSV than in the Reference group. The odds increased to 7.7-fold (95%CI 5.4–11.1) among children who were hospitalized, and 9-fold (95%CI 5.1–16.6) among those admitted to pediatric intensive care with RSV bronchiolitis. Similar trends were observed across all countries. In total, 57% of parents reported their child's wheezing to have moderate to severe impact on their emotional well-being, and 53% on their daily life activities and/or social life. 64% of parents reported moderate–severe impact of wheezing on child's quality of sleep and 49% and 46% reported a moderate–severe impact on their children's emotional well-being and physical activities. Conclusions: This survey suggests an association between RSV infection and subsequent wheezing in children across different countries. Wheezing, especially in association with RSV infection, was associated with increased healthcare utilization and costs, and significantly impacted parents' and children daily life.</p
Understanding Variations in Relative Effectiveness : A Health Production Approach
BACKGROUND: Relative effectiveness has become a key concern of health policy. In Europe, this is because of the need for early information to guide reimbursement and funding decisions about new medical technologies. However, ways that effectiveness (does it work?) and efficacy (can it work?) might differ across health systems are poorly understood. METHODS: This study proposes an analytical framework, drawing on production function theory, to systematically identify and quantify the determinants of relative effectiveness and sources of variation between populations and healthcare systems. We consider how methods such as stochastic frontier analysis and data envelopment analysis using a Malmquist productivity index could in principle be used to generate evidence on, and improve understanding about, the sources of variation in relative effectiveness between countries and over time. RESULTS: Better evidence on factors driving relative effectiveness could: inform decisions on how to best use a new technology to maximum effectiveness; establish the need if any for follow-up post-launch studies, and provide evidence of the impact of new health technologies on outcomes in different healthcare systems. CONCLUSIONS: The health production function approach for assessment of relative effectiveness is complementary to traditional experimental and observational studies, focusing on identifying, collecting, and analyzing data at the national level, enabling comparisons to take place. There is a strong case for exploring the use of this approach to better understand the impact of new medicines and devices for improvements in health outcomes
Not one, but many: developing a multi-indication pricing model for medicines in Belgium
Back ground: Current pricing and reimbursement models that focus on one indication at a time are not suited to address the market access of multi-indication medicines. Therefore, the aim of this study is to co-create with Belgian stakeholders a multi-indication pricing model and procedural pathway, to identify conditions for implementation, and to illustrate the multi-indication pricing model with a case study.Methods: Different multi-indication pricing models were identified from the literature, case studies and pilots in other countries. Semi-structured interviews were conducted with 21 representatives from the National Institute for Health and Disability Insurance, insurance funds, clinicians, patients, the policy cell of the Minister of Health, pharmaceutical industry and academia. These provided insight in the opinions of stakeholders about possible multi-indication pricing models and their feasibility in the Belgian context. Agreement on the preferred multi-indication pricing model and procedural pathway was reached in a multi-stakeholder round table.Results: The international review generated four main multi-indication pricing models that vary in terms of whether a uniform price or differential prices are applied, whether prices are adjusted for the volume and/or value of the medicine in each indication, and whether a proactive or retroactive dynamic pricing approach is used. However, Belgian stakeholders preferred a fifth model, which sets a single price as the volume- and value-weighted average price across all indications at launch. Over time, the price is adapted based on volume and value of the medicine in real-life practice for each indication. To implement this model, a legal framework, horizon scanning and early dialogue, data infrastructure, an evidence plan for the medicine, technical expertise and governance model need to be developed.Conclusion: Although the multi-indication pricing model preferred by Belgian stakeholders raises the administrative burden, it allows for the price of a medicine to vary during the lifecycle based on its initial and real-life performance in multiple indications
Recommended from our members
Appraising research policy instrument mixes: a multicriteria mapping study in six European countries of diagnostic innovation to manage antimicrobial resistance
This article provides prospective appraisal of key policy instruments intended to stimulate innovation to combat antimicrobial resistance (AMR). AMR refers to the ability of microbes to evolve resistance to those treatments designed to kill them, and is associated with the overuse or misuse of medicines such as antibiotics. AMR is an emerging global challenge with major implications for healthcare and society as a whole. Diagnostic tests for infectious diseases can guide decision making when prescribing medicines, so reducing inappropriate drug use. In the context of growing international interest in policies to stimulate innovation in AMR diagnostics, this study uses multicriteria mapping (MCM) to appraise a range of policy instruments in order to understand their potential performance while also highlighting the uncertainties that stakeholders hold about such interventions in complex contexts. A contribution of the article is the demonstration of a novel method to analyse and visualise MCM data in order to reveal stakeholder inclinations towards particular options while exploring interviewees’ uncertainties about the effectiveness of each instrument's design or implementation. The article reports results from six European countries (Germany, Greece, Italy, the Netherlands, Spain and the UK). The findings reveal which policy instruments are deemed most likely to perform well, and why, across stakeholder groups and national settings, with areas of common ground and difference being identified. Importantly, the conclusions presented here differ from prominent policy discourse, with international implications for the design of mixes of policy instruments to combat AMR. Strategic and practical methodological implications also emerge for general appraisal of innovation policy instrument mixes