An augmented capital asset pricing model using new macroeconomic determinants

Using the interview results of 26 experienced scholars, managers, and professional stock traders in conjunction with findings of recent studies in economics, we proposed an augmented asset pricing model using the macroeconomic determinants representing the macroeconomic state variables to explain the nexus between these risks and the U.S. stock returns. This non-traded factor model (MAPM) is inspired by and based on the macroeconomic theory and models and consists of the market return, U.S. prime rate, U.S. government long-term bond rate, and exchange rate of USD/EUR as in Eq. (1). Using the Bayesian approach (via two Bayes and t.Bayes estimators) and monthly returns of the S&P 500 stocks from 2007- 2019, our results showed the MAPM consistently yielded a statistically significant greater forecasting, explanatory power, and model adequacy compared to the most used capital asset pricing model (CAPM) in practice. Interestingly, our study found and confirmed (t-statistic > 3) that the last two macroeconomic determinants have a statistically significant positive effect on the stock returns, which also supports the MAPM. These findings suggest the MAPM is a more efficient and advantageous model compared to the CAPM. So, practitioners would be better off employing the MAPM over CAPM in practice and research.

Herding behaviour in digital currency markets: An integrated survey and empirical estimation

This paper reviews the empirical literature on the highly popular phenomenon of herding behaviour in the markets of digital currencies. Furthermore, a comparison takes place with outcomes from earlier studies about traditional financial assets. Moreover, we empirically investigate herding behaviour of 240 cryptocurrencies during bull and bear markets. The present survey suggests that empirical findings about whether herding phenomena have made a significant appearance or not in cryptocurrency markets are split. The Cross-sectional absolute deviations (CSAD) and Cross-sectional standard deviations (CSSD) approaches for measuring herding tendencies are found to be the most popular. Different behaviour is detected in bull periods compared to bear markets. Nevertheless, evidence from primary studies indicates that herding is stronger during extreme situations rather than in normal conditions. However, our empirical estimations reveal that herding behaviour is evident only in bull markets. These findings cast light on and provide a roadmap for investment decisions with modern forms of liquidity.

Predictors of negotiated prices for new drugs in Germany

INTRODUCTION

In Germany, all new, innovative medicines are subject to an early benefit assessment by the German Federal Joint Committee with subsequent price negotiation and optional arbitration. The purpose of this study was to identify drivers of negotiated (including arbitrated) prices of new, non-orphan innovative medicines in Germany.

METHODS

The analysis considered all non-orphan drugs that underwent a benefit appraisal between January 2011 and June 2016, and displayed a reimbursement price in the German Drug Directory (Lauer-Taxe^®) in November 2017. Negotiated annual treatment costs were analyzed with respect to 11 explanatory variables in regression models.

RESULTS

The total sample included 106 non-orphan drugs. The analysis showed a significant and positive association of log-transformed negotiated annual treatment cost of new medicines with log-transformed annual treatment cost of its comparator(s), extent of added benefit, and log-transformed size of the target population. Analyzing the effects of specific endpoints instead of the overall added benefit revealed that the single endpoint with the largest impact on price is adverse events (AEs). Surprisingly, an increase in AEs significantly increased the price. Various subgroup and sensitivity analyses demonstrated the robustness of the results. The adjusted R squared for all models was above 80%.

CONCLUSIONS

The analysis was able to confirm that variables whose consideration is mandated by law are, in fact, the key drivers of negotiated prices. Somewhat puzzling, the analysis also found an increase in AEs to move prices significantly upward.

Threat of infectious disease during an outbreak: Influence on tourists' emotional responses to disadvantaged price inequality

The ongoing COVID-19 pandemic has negatively influenced the global tourism industry. Despite the documented negative impacts of diseases on tourism demand and people's perceived health risk, researchers have seldom examined the psychological responses of tourists travelling during an infectious disease outbreak. We therefore conducted three studies to examine this key aspect, and our findings indicate that tourists have a strong negative emotional reaction towards disadvantaged tourism-related prices in response to a high (vs low) infectious disease threat. Furthermore, risk aversion acts as an underlying mechanism driving this effect: tourists are more risk aversive under the threat of an infectious disease, which consequently magnifies their negative emotional reaction. At last, theoretical and practical implications of these findings for tourism are discussed.

Impact of the therapeutic positioning report in the P&R process in Spain: analysis of orphan drugs approved by the European Commission and reimbursed in Spain from 2003 to 2019

BACKGROUND

Pricing and reimbursement decisions for orphan drugs are faced with differences access between European countries depending on each reimbursement policies, evaluation processes and timings. In 2013, the therapeutic positioning report was introduced in the pricing and reimbursement process in Spain. The present study aims to identify orphan drugs authorised in Spain and approved by the European Commission between January 2003 and December 2019, analyse the impact of the therapeutic positioning report in the pricing and reimbursement process of orphan drugs in Spain and to assess additional potential criteria that could influence pricing and reimbursement decisions for orphan drugs.

RESULTS

Ninety-four orphan drugs have been approved by the European Commission between January 2003 and December 2019 and have marketing authorisation in Spain. Out of the 94 orphan drugs, 46 (48.9%) had received pricing and reimbursement approval. Before the inclusion of the therapeutic positioning report in year 2013, the mean time from European Commission approval to pricing and reimbursement approval for orphan drugs in Spain was 25.1 ± 16.5. After 2013, timelines have been reduced by an average of 9 months. The mean regulatory time from European Commission approval to Spanish marketing authorisation has decreased nearly 4 months (from 7.5 ± 10.2 months in years 2003-2013 to 3.8 ± 7.6 months in years 2014-2019). The instauration of the therapeutic positioning report could be associated with a reduction of the mean time from the Spanish marketing authorisation to pricing and reimbursement approval by an average of 5 months (from 17.3 ± 13.1 months in years 2003-2013 to 12.3 ± 5 months in years 2014-2019). In addition, orphan drugs with a positive conclusion in the therapeutic positioning report would be more likely to be reimbursed in Spain (p < 0,0001).

CONCLUSIONS

This study shows that the therapeutic positioning report plays a key role in the pricing and reimbursement process in Spain. A positive conclusion of the therapeutic positioning report seems to favourably affect pricing and reimbursement decisions in Spain and, since its introduction, has also contributed to reduce pricing and reimbursement approval timelines in Spain.

Optimal selling price, replenishment cycle and payment time among advance, cash, and credit payments from the seller's perspective

Although research on pricing and lot-sizing decisions concerning payment types has been extensive, almost all of it has been done from the buyer's perspective. In this study, we incorporate the following relevant and essential facts. If a seller allows a buyer to pay on credit, it increases sales volume. But if a seller asks a buyer for an advance payment, it decreases sales volume. Sometimes, a seller offers a buyer a price discount for an advance payment to increase sales and profitability. Asking a buyer for an advance payment bears interest earned and has no default risk. If a seller offers a buyer the opportunity to pay on credit, then a longer credit period may mean a higher the sales volume, but the default risk is higher, too. The seller wants to set an optimal selling price, replenishment time, and payment method simultaneously so that the profit per unit time is maximized. To achieve this, we develop and compare the seller's profit per unit time under each of three payment methods-advance, cash and credit. Through numerical analyses, the following managerial insights are highlighted: (1) Under certain conditions, a specific payment type obtains the seller's highest profit among all three payment types. (2) If advance payment is required, then it is critically important for a seller to offer a price discount. (3) An advance payment generates more profit than a credit payment provided that sales volume from a credit payment to an advance payment declines insignificantly and vice versa.

Is estimating the Capital Asset Pricing Model using monthly and short-horizon data a good choice?

This research argued for estimating the Capital Asset Pricing Model (CAPM) using daily and medium-horizon data over monthly and short horizon-data. Using a Gibbs sample, the Bayesian framework via both parametric and non-parametric Bayes estimators, confidence interval approach, and six data sets (two daily, two weekly, and two monthly data) from a sample of 150 randomly selected S&P 500 stocks from 2007 – 2019, the empirical results showed that the CAPM using daily data yielded a statistically significant higher model fit and smaller Beta standard deviation, model error, and Alpha compared with monthly data. The CAPM using medium-horizon data yielded a statistically significant higher model fit, smaller Beta standard deviation and Alpha, and much less zeroed Betas compared with short-horizon data. These findings show 1) daily data is more reliable and efficient, has higher forecasting power, and fits better with the assumption of market efficiency compared with monthly data. 2) Medium-horizon data is more reliable and efficient, has more explanatory power, and fits better with the assumption of market efficiency compared with monthly data. Therefore, these findings challenge the common practices of using monthly (quarterly/annually) and short-horizon data among the practitioners and researchers in asset pricing work.

Determining value of logistics costs in projects: empirical findings based-on executing several cement projects in Indonesia

This research tries to shed light on precise values of logistics costs that so far undisclosed. The values are important for every project planners to evaluate, control and monitoring, and especially imperative for procurement activities. Tender, bidding, and defining the scope of contracts and value can be well organized without time-consuming. This research uses methodology previously developed by Subiyanto (2020a) and discussed only a few particular and directly related to the logistics. The model had been decomposed by utilizing path analysis and the data had been regressed to define variables as the most inflator for logistics. The findings are total logistics costs in Indonesia generally at around 14.6% to total costs of investment. It consists following of insurance cost 0.11%, costs for customs clearance 6.52%, foreign logistics costs 6.62%, domestic manufacture 0.47%, and domestic logistics costs 0.89%. This research is not discussing logistics costs relating to human resources, human travelling, and internal logistics conducted by vendors or contractors as the scope included counted within their procurement contract. These results are important as guidance for project planners, controllers, and other parties to prepare costs more precisely. Negotiating to the banks will be easier as the more precise amount of budgets had been estimated. Due to the important values that have been identified, there will help transparency and governance conducting the projects. Procurement processes involving societies are more objective and better. This is a novelty finding as previous researchers have not decided yet.

Examination of information release on return volatility: A market and sectoral analysis

This paper examines the role of information release in explaining the return volatility of the Australian equity market. The study applies proxies of greater accuracy to examine the effect of public and private information on return volatility. Analyst price targets (PTR) and Morningstar stock star ratings (MSR) were used as private information proxies while Australian Securities Exchange (ASX) announcements were used as the public information proxy. Daily data was collected for ASX 200 listed firms for the period 2013 to 2017. Analysis was conducted at both the aggregate market level and the sectoral level. Findings suggest that PTR have the largest effect on return volatility at both levels, with varied effects within each sector. This indicates that investors rely heavily on this information when undertaking investment decisions. In contrast, MSR had a negligible effect, likely due to the lower degree of informational content. Public information had a minor effect on return volatility at both the aggregate market and sectoral levels. These mixed results show that information flow varies depending on the information type (i.e. public or private) with each sector interpreting the same type of information differently. The research findings provide a valuable guide to investors regarding the appropriate information to generate excess returns as well as to hedge against future losses.

A proportional rule for setting reimbursement prices of new drugs and its mathematical consistency

BACKGROUND

Value-based pricing (VBP) of new drugs has been suggested both as a way to control health expenditures and to maximize health benefits based on the available resources. The purpose of this work is to present a simple mathematical proof showing that prices of new drugs are set in a mathematically consistent way when the sum of intervention and downstream costs is proportional to the size of health benefits. Such proportional relationship underlies the efficiency-frontier method used by the German Institute for Quality and Efficiency in Health Care (IQWiG).

METHODS

A proof by contradiction is presented that is based upon the following three premises: 1) total costs (intervention plus downstream costs) of existing non-dominated drugs and interventions are acceptable to decision-making bodies; 2) new drugs with health benefits in-between those of the most and second most effective existing interventions are not automatically excluded from reimbursement and are acceptable if prices are sufficiently low; and 3) value is measured on a cardinal scale.

RESULT

The proof shows that a proportional rule sets reimbursement prices of new drugs in a mathematically consistent way.

CONCLUSION

Based on the proof and the underlying assumptions a proportional relationship between costs and health benefits ensures mathematical consistency in VBP of drugs.

Pricing behavior of monopoly market with the implementation of green technology decision under emission reduction subsidy policy

Carbon emissions are one of the major constraints considered under a Cap-and-Trade (C-and-T) system, regarding the implementation of green technologies in the operations of emissions-generating companies. Green technology implementation, based on optimal pricing decisions, has become an inevitability due to rising carbon emissions. We studied the profit-maximizing behavior of a firm considering whether to implement of green technology due to subsidies offered on emission-reduction rates. In order to achieve the desired results, we used a simulation-based model and developed a conceptual model for the verification of functions. When the product price was high, the firm achieved a high profit, which was the main focus of the firm. The firm thus had sufficient resources to implement green technology. However, when the product price was low, the firm could achieve its goal of profit maximization, but did so without implementing green technology. To solve this problem, we studied government involvement in the market to incentivize emissions reduction and to benefit the firm. We decided to model emissions-reduction policy to encourage the implementation of green technology and support firm profits. We found that subsidies enabled a firm to maximize its profits while ensuring green technology implementation, while the firm would not have adopted green technology without subsidies or mandates. This study should help decision makers understand pricing strategies in the maximization of the profit. Additionally, this study helps demonstrate that the government plays an important role in monopolized markets by reducing negative externalities.

The systematic risk estimation models: A different perspective

In practice, the capital asset pricing model (CAPM) using the parametric estimator is almost certainly being used to estimate a firm's systematic risk (beta) and cost of equity as in Eq. (1). However, the parametric estimators, even when data is normal, may not yield better performance compared with the non-parametric estimators when outliers existed. This research argued for the non-parametric Bayes estimator to be employed in the CAPM by applying both advance and basic evaluation criteria such as hypotheses/confidence intervals of the AIC/DIC, model variance, fit, and error, alpha, and beta and its standard deviation. Using all the S&P 500 stocks having monthly data from 07/2007-05/2019 (450 stocks) and the Bayesian inference, we showed the non-parametric Bayes estimator yielded less number of zeroed betas and smaller alpha compared with the parametric Bayes estimator. More importantly, this non-parametric Bayes yielded the statistically significantly smaller AIC/DIC, model variance, and beta standard deviation and higher model fit compared with the parametric Bayes estimator. These findings indicate the CAPM using the non-parametric Bayes estimator is superior compared with the parametric Bayes estimator, a contrast of common practice. Hence, the non-parametric estimator is recommended to be employed in asset pricing work.

What is health economics?

OBJECTIVES

This paper describes the principles of economics and their application to the promotion, protection and restoration of oral health in populations and the planning, management and delivery of oral health care. After illustrating the economic determinants of oral health, the demand for oral health care is discussed with particular reference to asymmetric information between patient and provider. The reasons for the market failure in (oral) health care and their implications for efficiency and equity are explained. We go on to describe how economic evaluation contributes to policies aimed at maximising oral health gains where resources are constrained. The behavioural aspects of patients´ demand for and dental professionals´ provision of oral health services are discussed. Finally, we outline methods for planning the dental workforce in ways that reflect system goals.

Challenges in the value assessment, pricing and funding of targeted combination therapies in oncology

BACKGROUND

The use of targeted combination therapy (TCT) is becoming the standard of care in oncology as cancers are attacked through multiple inhibition mechanisms. TCTs pose a budget challenge to health systems and an economic return challenge for companies developing them.

METHODS

We conducted a systematic literature review to identify challenges specific to TCTs and reviewed publicly available reports by health technology assessment and pricing and reimbursement bodies. We synthesized our findings into a problem map.

RESULTS AND DISCUSSION

Challenges and policy solutions linked to TCTs remain almost fully unexplored; we identified few resources that explicitly addressed TCTs. Contributors to the budget challenge are found at different layers; they and include static willingness-to-pay (WTP) for TCTs and inefficiencies in managing prices of backbone therapies. Economic return challenges are related to payer-imposed restrictions, peculiarities of TCT development, and conflicting incentives of pharmaceutical companies that own constituent therapies. Consequences are delayed or restricted patient access to TCTs, disincentives for research and development, and fewer life years gained.

CONCLUSIONS

Multiple issues will lead to the unsustainability of funding systems and possible conflict between stakeholders around access to TCTs. To manage these, new value assessment and attribution methodologies, modified trial designs and differentiated WTP thresholds can be considered in ways that are customized to the characteristics of different health systems.

The high costs of cheap tanning: pricing and promotional practices of indoor tanning facilities in six cities in the United States

Few studies have investigated pricing and promotional practices used by the indoor tanning industry, despite their potential to promote indoor UV tanning-a well-established risk factor for melanoma skin cancer. Posing as potential customers, we telephoned 94 indoor tanning businesses in six United States (U.S.) cities and requested pricing information. The price of a single tanning session ranged from $0 to $23, and was lower at facilities that offered indoor tanning as a secondary service (mean $4.82 and free in 35%) than at tanning salons (mean $16.45). Session prices in salons could be as low as $1.50 with daily use of an unlimited monthly plan. Free indoor tanning, monthly packages, and memberships encourage increased use. Policies that limit free indoor tanning or that restrict pricing and advertising for indoor tanning exist in several places in the U.S. and Europe. Future research should evaluate whether those policies are effective in reducing indoor tanning.

Affordable and equitable access to subsidised outpatient medicines? Analysis of co-payments under the Additional Drug Package in Kyrgyzstan

BACKGROUND

Out-of-pocket (OOP) payments can constitute a major barrier for affordable and equitable access to essential medicines. Household surveys in Kyrgyzstan pointed to a perceived growth in OOP payments for outpatient medicines, including those covered by the benefits package scheme (the Additional Drug Package, ADP). The study aimed to explore the extent of co-payments for ADP-listed medicines and to explain the reasons for developments.

METHODS

A descriptive statistical analysis was performed on prices and volumes of prescribed ADP-listed medicines dispensed in pharmacies during 2013-2015 (1,041,777 prescriptions claimed, data provided by the Mandatory Health Insurance Fund). Additionally, data on the value and volume of imported medicines in 2013-2015 (obtained from the National Medicines Regulatory Agency) were analysed.

RESULTS

In 2013-2015, co-payments for medicines dispensed under the ADP grew, on average, by 22.8%. Co-payments for ADP-listed medicines amounted to around 50% of a reimbursed baseline price, but as pharmacy retail prices were not regulated, co-payments tended to be higher in practice. The increase in co-payments coincided with a reduction in the number of prescriptions dispensed (by 14%) and an increase in average amounts reimbursed per prescription in nearly all therapeutic groups (by 22%) in the study period. While the decrease in prescriptions suggests possible underuse, as patients might forego filling prescriptions due to financial restraints, the growth in average amounts reimbursed could be an indication of inefficiencies in public funding. Variation between the regions suggests regional inequity. Devaluation of the national currency was observed, and the value of imported medicines increased by nearly 20%, whereas volumes of imports remained at around the same level in 2013-2015. Thus, patients and public procurers had to pay more for the same amount of medicines.

CONCLUSIONS

The findings suggest an increase in pharmacy retail prices as the major driver for higher co-payments. The national currency devaluation contributed to the price increases, and the absence of medicine price regulation aggravated the effects of the depreciation. It is recommended that Kyrgyzstan should introduce medicine price regulation and exemptions for low-income people from co-payments to ensure a more affordable and equitable access to medicines.

Drug Pricing and Value in Oncology

This paper first reviews the evidence on price levels, price growth, and value for cancer drugs. The available evidence suggests that prices for originator (brand-name) drugs are rising significantly more rapidly than general inflation, but the available data are inadequate for robust comparisons between cancer and other categories of specialty drugs. We then examine the factors contributing to high and rising prices for cancer drugs. This analysis focuses mainly on the USA, which accounts for 46% of global expenditures on cancer drugs. It is the country of first launch for most cancer and other specialty drugs and frequently has the highest prices for drugs.

May your drug price be evergreen

Presenting the first comprehensive study of evergreening, this article examines the extent to which evergreening behavior-which can be defined as artificially extending the protection cliff-may contribute to the problem. The author analyses all drugs on the market between 2005 and 2015, combing through 60,000 data points to examine every instance in which a company added a new patent or exclusivity. The results show a startling departure from the classic conceptualization of intellectual property protection for pharmaceuticals. Rather than creating new medicines, pharmaceutical companies are largely recycling and repurposing old ones. Specifically, 78% of the drugs associated with new patents were not new drugs, but existing ones, and extending protection is particularly pronounced among blockbuster drugs. Once companies start down the road of extending protection, they show a tendency to return to the well, with the majority adding more than one extension and 50% becoming serial offenders. The problem is growing across time.

Why stents are expensive: Drivers of high prices in emerging markets

Pricing of stents is being questioned by healthcare stakeholders due to large differences in price of its product types and its variation across different markets. The stent pricing literature published during 1997-2017 were reviewed besides inputs from industry experts to identify initial key pricing drivers. Interpretive structural modeling was used to build priority for checking the price rise in emerging markets like India. Lack of regulation besides other drivers like R&D cost and price of substitute was found to be important drivers of high prices. The findings would help policy makers to take steps to make stent pricing affordable.

Improving cardiometabolic health through nudging dietary behaviours and physical activity in low SES adults: design of the Supreme Nudge project

Background

Initiating and maintaining a healthy lifestyle -including healthy eating and sufficient physical activity- is key for cardiometabolic health. A health-promoting environment can facilitate a healthy lifestyle, and may be especially helpful to reach individuals with a lower socio-economic status (SES). In the Supreme Nudge project, we will study the effects of pricing and nudging strategies in the supermarket – one of the most important point-of-choice settings for food choices – and of a context-specific mobile physical activity promotion app. This paper describes the stepwise and theory-based design of Supreme Nudge, which aims to develop, implement and evaluate environmental changes for a sustained impact on lifestyle behaviours and cardiometabolic health in low SES adults.

Methods

Supreme Nudge uses a multi-disciplinary and mixed methods approach, integrating participatory action research, qualitative interviews, experimental pilot studies, and a randomized controlled trial in a real-life (supermarket) setting. First, we will identify the needs, characteristics and preferences of the target group as well as of the participating supermarket chain. Second, we will conduct a series of pilot studies to test novel, promising and feasible intervention components. Third, a final selection of intervention components will be implemented in a full-scale randomised controlled supermarket trial. Approximately 1000 low SES adults will be recruited across 8–12 supermarkets and randomised at supermarket level to receive 1) no intervention (control); 2) environmental nudges such as food product placement or promotion; 3) nudges and a tailored physical activity app that provides time- and context specific feedback; 4) pricing interventions, nudges, and the physical activity app. The effects on dietary behaviours and physical activity will be evaluated at 3, 6 and 12 months, and on cardiometabolic health at 6 and 12 months. Finally, we will evaluate the Reach, Effectiveness, Adoption, Implementation and Maintenance (RE-AIM) of the intervention, and we will use insights from System Innovation and Transition Management theories to define the best strategies for implementation and upscaling beyond the study period.

Discussion

The Supreme Nudge project is likely to generate thorough evidence relevant for policy and practice on the effects of a mixed method and multi-disciplinary intervention targeting dietary behaviours and physical activity.

Trial registration

The real-life trial has been registered on 30 May 2018, NTR7302.

Access to orphan drugs - comparison across Balkan countries

The aim of this study was to compare orphan drug access in a sample of Balkan countries: five EU Member States (Bulgaria, Croatia, Greece, Romania, Slovenia) and two EU Candidates (Serbia, Montenegro). The comparative analysis was based on a cross-sectional study and included medicinal products with an active orphan designation and market authorisation on January 1, 2017. Access to orphan drugs is an ongoing challenge in these countries. Three clusters of countries were identified in terms of orphan drug access: Greece and Slovenia, making the top tier, Romania, Bulgaria, and Croatia, being in the middle, and EU Candidates, Serbia and Montenegro, forming the bottom tier, where a substantial number of EU market approved orphan drugs was not even registered. Available public health resources and market size are probably among the contributing factors for such inequalities. Sizeable part of EMA market authorised orphan medicinal products is not even priced in the Balkan countries. This is a serious issue, which is putting rare disease patients from this region in a particularly vulnerable situation. There is a need for further improvement in accessibility of orphan drugs in the Balkan countries. Cross-border collaboration in the field of pricing, health technology assessment, and reimbursement negotiation of orphan drugs may help to address these challenges.

Policies and availability of orphan medicines in outpatient care in 24 European countries

PURPOSE

To assess pricing and reimbursement policies specific to orphan medicines and the availability and distribution settings of ten recently authorised medicinal products suitable for outpatient care with orphan status and centralised marketing authorisation in Europe, and whether patients receive these products free of charge or have to pay some or all of the costs themselves.

METHODS

Web survey to authorities and representatives of third party payers in the Pharmaceutical Pricing and Reimbursement Information (PPRI) network in April 2016.

RESULTS

In most of the 24 countries, special policies were not implemented in the assessment of reimbursement status (22 countries) or in the pricing (20 countries) of orphan medicines. An average of five of the ten recently authorised products per country were available for outpatient care. Products were dispensed from community pharmacies in eight countries and from health care units in five countries. In four countries, both distribution settings were used. When products were dispensed from community pharmacies, patients typically paid some of the price themselves. Products dispensed from health care units were often free of charge for patients.

CONCLUSIONS

Most European countries had not implemented pricing and reimbursement policies specific to orphan medicines. The availability of orphan products varied between countries. It is important to discuss whether orphan medicines should be considered as a separate group in the reimbursement regulations in order to secure patient access to these medicines.

Pricing appraisal of anti-cancer drugs in the South East Asian, Western Pacific and East Mediterranean Region

BACKGROUND

Globally, cancer is one of the leading causes of mortality. High treatment cost, partly owing to higher prices of anti-cancer drugs, presents a significant burden on patients and healthcare systems. The aim of the present study was to survey and compare retail prices of anti-cancer drugs between high, middle and low income countries in the South-East Asia, Western Pacific and Eastern Mediterranean regions.

METHODS

Cross-sectional survey design was used for the present study. Pricing data from ten counties including one from South-East Asia, two from Western Pacific and seven from Eastern Mediterranean regions were used in this study. Purchasing power parity (PPP)-adjusted mean unit prices for 26 anti-cancer drug presentations (similar pharmaceutical form, strength, and pack size) were used to compare prices of anti-cancer drugs across three regions. A structured form was used to extract relevant data. Data were entered and analysed using Microsoft Excel®.

RESULTS

Overall, Taiwan had the lowest mean unit prices while Oman had the highest prices. Six (23.1%) and nine (34.6%) drug presentations had a mean unit price below US$100 and between US$100 and US$500 respectively. Eight drug presentations (30.7%) had a mean unit price of more than US$1000 including cabazitaxel with a mean unit price of $17,304.9/vial. There was a direct relationship between income category of the countries and their mean unit price; low-income countries had lower mean unit prices. The average PPP-adjusted unit prices for countries based on their income level were as follows: low middle-income countries (LMICs): US$814.07; high middle income countries (HMICs): US$1150.63; and high income countries (HICs): US$1148.19.

CONCLUSIONS

There is a great variation in pricing of anticancer drugs in selected countires and within their respective regions. These findings will allow policy makers to compare prices of anti-cancer agents with neighbouring countries and develop policies to ensure accessibility and affordability of anti-cancer drugs.

A review of international coverage and pricing strategies for personalized medicine and orphan drugs

BACKGROUND

Personalized medicine and orphan drugs share many characteristics-both target small patient populations, have uncertainties regarding efficacy and safety at payer submission, and frequently have high prices. Given personalized medicine's rising importance, this review summarizes international coverage and pricing strategies for personalized medicine and orphan drugs as well as their impact on therapy development incentives, payer budgets, and therapy access and utilization.

METHODS

PubMed, Health Policy Reference Center, EconLit, Google Scholar, and references were searched through February 2017 for articles presenting primary data.

RESULTS

Sixty-nine articles summarizing 42 countries' strategies were included. Therapy evaluation criteria varied between countries, as did patient cost-share. Payers primarily valued clinical effectiveness; cost was only considered by some. These differences result in inequities in orphan drug access, particularly in smaller and lower-income countries. The uncertain reimbursement process hinders diagnostic testing. Payer surveys identified lack of comparative effectiveness evidence as a chief complaint, while manufacturers sought more clarity on payer evidence requirements. Despite lack of strong evidence, orphan drugs largely receive positive coverage decisions, while personalized medicine diagnostics do not.

CONCLUSIONS

As more personalized medicine and orphan drugs enter the market, registries can provide better quality evidence on their efficacy and safety. Payers need systematic assessment strategies that are communicated with more transparency. Further studies are necessary to compare the implications of different payer approaches.