International Experience in Therapeutic Value and Value-Based Pricing: A Rapid Review of the Literature

Pharmaceutical innovativeness index: methodological approach for assessing the value of medicines - a case study of oncology drugs

BACKGROUND

We propose a framework to assess the value of pharmaceutical innovations, with explicit clinical and methodological parameters, based on the therapeutic value and health needs.

RESEARCH DESIGN AND METHODS

The study was based on the adaptation of health technology assessment methods documented in the literature, which was applied to a sample of oncological drugs. Difficulties and issues during the application of those tools were identified and addressed to develop a new framework with new and revised domains and clear classification criterion for each domain. Scores were assigned to each level and domain according to their relevance to generate the final score of innovativeness.

RESULTS

The Pharmaceutical Innovation Index (PII) includes four domains, two related to clinical and social dimensions - Therapeutic Need and Added Therapeutic Value - and other two about methodological features - Study Design and Quality (risk of bias). The scores combined after assigned to each domain results Index of the Innovativeness of the medicines represents the degree of pharmaceutical innovation.

CONCLUSION

This work proposes a transparent methodology with well-defined criteria and script; the algorithm developed with authors' weightings and criteria may be switched to best adjust to other applications, perspective or clinical indications, while keeping the transparency and objectiveness.

List prices and clinical value of anticancer drugs in China, Japan, and South Korea: a retrospective comparative study

Background

High prices of anticancer drugs have raised concerns due to their financial impact on patients and healthcare systems. This study aimed to assess the initial and latest list prices and clinical value of reimbursed anticancer drugs in China, Japan, and South Korea.

Methods

We identified anticancer drugs newly approved by the National Medical Products Administration of China from January 2012 to June 2022, and by the Pharmaceuticals and Medical Devices Agency of Japan and the Ministry of Food and Drug Safety of South Korea up until June 2022. We compared initial and latest treatment prices between countries and assessed clinical value using patients' survival, quality of life (QoL), and European Society for Medical Oncology Magnitude of Clinical Benefit Scale (ESMO-MCBS). We calculated Spearman rank correlation coefficients of treatment prices with clinical value for individual countries and employed regression analyses to investigate whether the relationship between prices and clinical value was modified by the country setting.

Findings

Our cohort included 91 anticancer drug indications, with 60 listed for reimbursement in China, 91 in Japan, and 87 in South Korea. Median treatment prices were highest in Japan, followed by South Korea, and lowest in China, both for initial prices (US$64082 vs. US$45529 vs. US$19144, p < 0.0001) and latest prices (US$50859 vs. US$31611 vs. US$18666, p < 0.0001). Over time, China (β = -0.047, p < 0.0001) and South Korea (β = -0.049, p < 0.0001) witnessed more significant price reductions compared to Japan (β = -0.013, p = 0.011). The correlations between both initial and latest treatment prices and clinical value (QoL and ESMO-MCBS) were more significant and stronger in China and South Korea than in Japan, although Japan exhibited slightly stronger correlations in terms of survival compared to China and South Korea. The relationship between clinical value and treatment prices may not be modified by the country setting.

Interpretation

In comparison, South Korea's list prices and their correlations with clinical value appear reasonable. Policymakers in Japan could enhance efficiency by controlling prices and aligning them with clinical value, while China would need to take substantial steps to expand anticancer drug coverage.

Funding

National Natural Science Foundation of China (72374149 and 72074163), and China Center for South Asian Studies, Sichuan University.

Medical service pricing and pharmaceutical supply chain coordination contracts under the zero-markup drug policy

To implement state policies of zero-markup drug policy and medical service fee adjustment for public hospitals, this study constructed game models of the pharmaceutical supply chain, consisting of a drug supplier and a public hospital. The study obtained the optimal medical service level and pricing under the new state drug policies. In addition, it analyzed the impacts of the degree of public benefit of hospitals on the medical service level, the medical service price, and the drug price. Finally, from the perspective of cooperation between drug suppliers and public hospitals, the specialized coordination contract was designed to maximize overall social welfare. This study found an anomalous but meaningful conclusion: in the background of the zero-markup drug policy, a higher public benefit of hospitals could increase the drug prices, but it could reduce the medical service prices further to cut down on the overall treatment fees for the patients. The novel coordination contract can optimize the pharmaceutical supply chain and achieve a win-win situation for the drug suppliers, public hospitals, and patients. When the public benefit of hospitals is higher, the profit of a decentralized decision-making supply chain is greater than a centralized one, while the pharmaceutical supply chain will not coordinate itself.

Estimation of Value-Based Price for 48 High-Technology Medical Devices

Value-based price is estimated quite frequently for medicines, but its application to medical devices is scarce. While some reports have been published in which this parameter has occasionally been determined for devices, no large-scale application has yet been reported. Our objective was to pursue a systematic analysis of the literature published on value-based prices of medical devices. Pertinent papers were selected upon the criterion that the value-based price was reported for the device examined. The real prices of the devices were compared with their values of value-based price and the ratios between real price versus value-based price were calculated. A total of 239 economic articles focused on high-technology medical devices were selected from a standard PubMed search. Among these, the proportion of analyses unsuitable for value-based price estimation was high (191/239; 80%), whereas adequate clinical and economic information for estimating this parameter was available in 48 cases (20%). Standard equations of cost-effectiveness were applied. The value-based price was determined according to a willingness-to-pay threshold of 60,000 € per quality-adjusted life year. Real prices of devices were compared with the corresponding estimates of value-based prices. From each analysis, we extracted also the value of incremental cost-effectiveness ratio (ICER). Our final dataset included 47 analyses because one was published twice. There were five analyses in which the ICER could be estimated for the treatment, but not for the device. In the dataset of 42 analyses with complete information, 36 out of 42 devices (86%) were found to have an ICER lower than the pre-specified threshold (favorable ICER). Three ICERs were borderline. A separate analysis was conducted on the other three devices that showed an ICER substantially greater than the threshold (unfavorable ICER). Regarding value-based prices, the values of real price were appreciably lower than the corresponding value-based price in 36 cases (86%). For three devices, the real price was substantially higher than the value-based price. In the remaining three cases, real prices and value-based prices were very similar. To our knowledge, this is the first experience in which a systematic analysis of the literature has been focused on the application of value-based pricing in the field of high-technology devices. Our results are encouraging and suggest a wider application of cost-effectiveness in this field.

Managing Tenders in the Procurement of Advanced Medical Devices: An Original Model Based on the Net Monetary Benefit Combined With Three Clinical Endpoints

In medical devices, recent studies have proposed original approaches for standardizing competitive tenders with the aim of promoting reproducibility, avoiding discretional decisions, and applying value-based principles. In the framework of tenders' standardization, the net monetary benefit (NMB) method has attracted much interest, but its mathematical complexity has prevented a wide application. In the present work, we developed a procurement model that simplifies clinical information management for high-technology devices purchased for our public hospitals. Our objective was to promote the application of NMB in competitive tenders, particularly at the final stage of the procurement process, where the tender scores are determined. Software to facilitate this task in everyday practice has been developed. This software is made available through the present technical report. We surveyed the most relevant literature about NMB to select the main models commonly used in the studies published thus far. Standard equations of cost-effectiveness were identified. A simplified computation model based on three clinical endpoints was developed to estimate the NMB with less mathematical complexity. This model is proposed as an alternative to the standard approach based on a full economic analysis. The model developed herein has been implemented in a web-based software freely available on the Internet. This software is accompanied by a detailed description of the equations by which the NMB is estimated. A detailed application example is reported; a real tender carried out in 2021 has been re-examined for this purpose. In this re-analysis, the new software has been used to calculate the NMB of three devices. To our knowledge, this is the first experience in which an institution of the Italian healthcare system has evaluated the NMB as a tool for determining tender scores. The model is designed to offer performance similar to a full economic analysis. Our preliminary results are encouraging and suggest a wider application of this method. This approach has important implications regarding cost-effectiveness and cost containment because a value-based procurement is known to maximize effectiveness without determining an increase in costs.

High cost drugs in Latin America: access and barriers

INTRODUCTION

Latin America comprises a large set of culturally diverse middle-income countries sharing an inequality gap and a rapidly ageing population. A better informed growing middle class adds to the pressure on fragmented health systems that strive to attain universal coverage. Cost containment becomes crucial for sustainability.

AREAS COVERED

Using "high cost" as free term, together with individual country names, a search was performed in Pubmed and Scopus databases for relevant documents centered on pharmaceutical products. References of selected articles were also reviewed.

EXPERT OPINION

In the region as elsewhere improving health information systems has been the starting point. Official health technology assessment agencies have been established in several countries, supporting decisions on best available evidence. A few centralized procurement and price regulation schemes using international reference pricing have been successful. Fast-track approval of generics and biosimilars, or establishing a separate funding source for high cost technologies are other options that, with varying degrees of success, have been. Since Latin America is characterized by its social, geographical and political diversity, each health system needs to recognize its individual priorities, learn from successful experiences elsewhere, and adapt possible alternative interventions to the different local contexts.

Current Medical Technology Reimbursement System in Japan

OBJECTIVES

The process for reimbursement of medical technologies in Japan is complex, and to date, it has not been well described overall. This article aims to provide an overview of the reimbursement system for medical technologies in Japan, including the reimbursement application process and the payment decision making.

METHODS

Conduct review for relevant health policy and regulation and gather opinion from the key stakeholders.

RESULTS

The Japanese functional category listing system for the reimbursement of medical technologies is a unique fee-for-service payment system, and the timing for the listing is dependent on the application category. A key positive aspect of the current system is the level of transparency and the predictable pathway for reimbursement of new medical technologies. Conversely, the current reimbursement process may not capture the true extent of the innovation of new technologies, especially when creating a new functional category and/or a new medical procedure coding.

CONCLUSIONS

There are potential areas where changes could improve access, efficiencies, and value, such as the price revision system based on the market survey, the foreign average price assessment, and the health technology assessment system. These additions and modifications in policy and regulation of reimbursement will help facilitate the effective and efficient access to new innovative medical technologies within the context of a sustainable and affordable National Health Insurance system in Japan.

Estimation of Value-Based Price for Five High-Technology Medical Devices Approved by a Regional Health Technology Assessment Committee in Italy

Background and objectives

Value-based pricing (VBP) is used quite frequently for medicines, but its application to medical devices is very limited. The objective of the present study was to conduct a pilot experience of systematic estimation of the value-based price of medical devices from the perspective of our national health system. Our experience was focused on high-technology devices (class IIb/III and active implantable). The objective was to evaluate the applicability of VBP in a real-world setting and to estimate the value-based price of devices in all cases where this estimation was feasible.

Methods

The dataset analysed in this work consists of 24 new devices approved consecutively in the Tuscany region over the period from January 2020 to December 2021. Since the calculation of value-based price requires the availability of a cost-effectiveness analysis, we searched for this information for each of these devices. The Cost-Effectiveness Analysis (CEA) Registry of Tufts Medical Center (US) and the health technology assessment (HTA) reports of our region were considered adequate sources of these data. Standard equations of cost-effectiveness were applied to determine the value-based price for these devices, and these prices were compared with the corresponding real prices charged in our region.

Results

We found adequate information for five devices (21%) out of the total of 24. In three of these cases, the published analysis taken as a reference was based on Markov modelling. The comparison between value-based prices and real prices generally showed an acceptable concordance, though with a couple of outliers. An important finding is that, in a large proportion of cases (79%), the information needed for this calculation was lacking.

Conclusion

To our knowledge, this is the first experience in which an institution of the healthcare system has tried a systematic application of VBP in the field of high-technology devices. Our results are encouraging and suggest a wider application of cost-effectiveness in this field.

Comparative value-based pricing of an Ebola vaccine in resource-constrained countries based on cost-effectiveness analysis

OBJECTIVES

Pricing, affordability, and access are important deliberations around infectious disease interventions. Determining a fair price that not only incentivizes development but ensures value and access for patients is critical given the increasing global health crisis. Using Ebola virus disease (EVD) as an exemplar, we aim to elucidate the estimation of a jurisdiction-specific value-based price (VBP) for a vaccine package and to consider how prices compare across selected countries that have experienced EVD outbreaks.

METHODS

Using a dynamic transmission model, we assessed the cost-effectiveness of a vaccine package - composed of the vaccine, storage, maintenance, and administration - for vaccination toward herd immunity in 4 countries affected with EVD (Democratic Republic of Congo, Liberia, Sierra Leone, Uganda). Based on the cost-effectiveness metrics and using willingness-to-pay thresholds equal to varying percentages of the Gross Domestic Product (GDP), we demonstrated how a VBP is calculated using a cost-effectiveness-based approach.

RESULTS

The VBP for the vaccine is directly proportional to effectiveness (DALYs prevented), cost-effectiveness (ICER) and GDP per capita. Higher effectiveness, greater cost-effectiveness, and higher GDP per capita resulted in higher price ceilings compared to lower cost-effectiveness and lower GDP.

CONCLUSION

Despite the concerns with the cost-effectiveness-based approach, we illustrated that it is an easily comprehensible method for determining the VBP of a vaccine using cost-effectiveness analysis. Choice of data, population characteristics, and disease dynamics are among the factors that need to be considered when comparisons are made across countries.