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Zaprutko T, Cynar J, Sygit M, Stolecka A, Skorupska P, Jaszcz P, Kopciuch D, Paczkowska A, Ratajczak P, Kus K. Medicines prices in International (Geary-Khamis) Dollar. The comparison between regulated and deregulated markets. PLoS One 2024; 19:e0304400. [PMID: 38848422 PMCID: PMC11161061 DOI: 10.1371/journal.pone.0304400] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 10/04/2023] [Accepted: 05/11/2024] [Indexed: 06/09/2024] Open
Abstract
BACKGROUND Affordability of medicines is key for effective healthcare. Thus, we compared medicine prices using International Dollar (I$), which allows confronting the values of different currencies. Besides, we intended to verify if pharmaceutical market deregulation leads to lower medicines prices. MATERIALS AND METHODS We conducted the study between December 2019 and September 2022 collecting data from 21 countries. From the preliminary sampling of 30 medicines, we selected 10 brand names (5 Rx and 5 OTC brands) for the analysis. In each country, we collected price information from 3 pharmacies and then converted them to the I$ using the rates published by the International Monetary Fund. RESULTS There were differences between regulated and deregulated markets in prices presented in I$. For instance, Aspirin C® (10 soluble pills) was on average I$ 5.41 in Finland (regulated market) and I$ 13.25 in Brazil. The most expensive Xarelto® 20 x 28 pills (I$ 538.40) was in Romania, which in the case of other medicines, was in the group of cheaper countries. There was no statistical significance in price comparison between regulated and deregulated markets. In some cases, however, regulated markets offered lower prices of the same medicine than deregulated markets. CONCLUSION The analysis revealed differences in I$ prices between countries. Pharmaceutical market regulation does not mean higher prices of medicines. There is a need for affordable medicines. Hence, decision-makers should work on the medicines prices and adjust them to the local economies. I$ could be important in creating pharmaceuticals prices, and the conducted study should encourage other researchers to present their results using this currency.
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Affiliation(s)
- Tomasz Zaprutko
- Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Julia Cynar
- Student Scientific Society, Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Maria Sygit
- Student Scientific Society, Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Aleksandra Stolecka
- Student Scientific Society, Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Patrycja Skorupska
- Student Scientific Society, Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Paulina Jaszcz
- Student Scientific Society, Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Dorota Kopciuch
- Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Anna Paczkowska
- Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Piotr Ratajczak
- Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
| | - Krzysztof Kus
- Department of Pharmacoeconomics and Social Pharmacy, Poznan University of Medical Sciences, Poznań, Poland
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Levaggi L, Levaggi R. Timely, Cheap, or Risk-Free? The Effect of Regulation on the Price and Availability of New Drugs. PHARMACY 2024; 12:50. [PMID: 38525730 PMCID: PMC10961771 DOI: 10.3390/pharmacy12020050] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 12/20/2023] [Revised: 02/21/2024] [Accepted: 02/28/2024] [Indexed: 03/26/2024] Open
Abstract
The high level of regulation of innovative drugs on the market, which is necessary to protect consumers, produces important effects on drug availability and innovation. In public healthcare systems, the need to curb prices comes from expenditure considerations. The aim of price regulation is to obtain a more equitable allocation of the value of an innovative drug between industries and patients (by reducing prices to make drugs more affordable), but it may also reduce access. (In the listing process, the industry may find it more convenient to limit commercialisation to profitable subgroups of patients.) Furthermore, with the advent of personalised medicine, there is another important dimension that has to be considered, namely, incentives to invest in drug personalisation. In this paper, we review and discuss the impact of different pricing rules on the expenditure and availability of new drugs.
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Affiliation(s)
- Laura Levaggi
- Faculty of Engineering, Free University of Bolzano-Bozen, Piazza Università, 1, 39100 Bolzano, Italy;
| | - Rosella Levaggi
- Department of Economics and Management, University of Brescia, Via San Faustino 74b, 25100 Brescia, Italy
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An Analysis of Stated Insurance Coverage and Estimated Patient-Incurred Costs of Treatments for Lower Urinary Tract Symptoms. UROGYNECOLOGY (HAGERSTOWN, MD.) 2023; 29:287-294. [PMID: 36735446 DOI: 10.1097/spv.0000000000001307] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Track Full Text] [Subscribe] [Scholar Register] [Indexed: 02/03/2023]
Abstract
IMPORTANCE Lower urinary tract symptoms (LUTSs) affect more than half of all adults, yet clinical care remains poor. Anecdotally, patients and health care providers express frustration over obstacles from insurance providers to obtaining LUTS treatment; however, little information concerning actual patient-incurred costs for these medications is available. OBJECTIVES This study aimed to analyze coverage by 5 major insurance companies and patient costs for LUTS pharmacotherapy. STUDY DESIGN For each of 5 major nationwide insurance providers (Aetna, Blue Cross/Blue Shield, Cigna, Humana, United HealthCare), formulary coverage of medications for overactive bladder, interstitial cystitis/bladder pain syndrome, and genitourinary syndrome of menopause were reviewed for low- and high-cost plans. When not covered, the best preinsurance cash price of medications was determined from GoodRx. RESULTS This qualitative analysis demonstrates that no guideline-directed therapy was universally covered by all insurance providers at low cost, regardless of the availability of generic alternatives. Medication prices ranged from $3 to $900 per month across plans. Inconsistencies in coverage and medication prices were common across insurance providers, between similar medications used for treatment of a given condition, and between a provider's low- and high-cost plans. CONCLUSIONS Even medications that are U.S. Food and Drug Administration-approved and indicated by guidelines can have patient costs that are prohibitive. Because lack of care for LUTSs profoundly affects quality of life, the ability to live independently, and overall morbidity, improved price transparency is required to understand the health implications of limited coverage on LUTS care.
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Yuan F, Bangdiwala SI, Tong W, Lamy A. The impact of statistical properties of incremental monetary net benefit and incremental cost-effectiveness ratio on health economic modeling choices. Expert Rev Pharmacoecon Outcomes Res 2023; 23:69-78. [PMID: 36334614 DOI: 10.1080/14737167.2023.2144838] [Citation(s) in RCA: 2] [Impact Index Per Article: 2.0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/08/2022]
Abstract
INTRODUCTION There is controversy on whether to use incremental monetary net benefit (INMB) or incremental cost-effectiveness ratio (ICER) in health economic evaluations alongside randomized controlled trials. We studied the impact of restricted mean survival time (RMST) on the long-term projection of INMB and ICER. METHODS We analyzed the unbiasedness and efficiency of ICER and INMB by (1) deriving the metrics' expected values and variances based on theoretical probability distributions, (2) simulating their 15-year post-trial projections based on between-arm-RMST-gained through a 2 × 4 × 2 factorial experiment of Markov 2-state microsimulations. Simulations and comparison were run on the data from the Cardiovascular Outcomes for People Using Anticoagulation Strategies Study (COMPASS). RESULTS Our simulation findings using RMST showed that ICER was more efficient than INMB, regardless of disease populations, time horizon, modeling choices, and underlying probability distributions of incremental mean cost and effect. ICER had a small variance and thus showed its robustness to the choices of models. CONCLUSION INMB's variance varies with a willingness-to-pay (WTP) threshold quadratically while ICER's variance with a WTP threshold value quadratically while ICER's variance with incremental-mean-cost quadratically. A simple and naïve model can sufficiently estimate ICER. Future metrics are expected to be health-economic-meaningful, unambiguous, unbiased, efficient, and statistical-inference-friendly.
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Affiliation(s)
- Fei Yuan
- Department of Statistics, Population Health Research Institute, Hamilton, ON, Canada.,Department of Health Research Methods, Evidence and Impact, McMaster University, Hamilton, ON, Canada
| | - Shrikant I Bangdiwala
- Department of Statistics, Population Health Research Institute, Hamilton, ON, Canada.,Department of Health Research Methods, Evidence and Impact, McMaster University, Hamilton, ON, Canada
| | - Wesley Tong
- Department of Perioperative and Surgery, Population Health Research Institute, Hamilton, ON, Canada
| | - Andre Lamy
- Department of Health Research Methods, Evidence and Impact, McMaster University, Hamilton, ON, Canada.,Department of Perioperative and Surgery, Population Health Research Institute, Hamilton, ON, Canada.,Hamilton Health Sciences, Hamilton, ON, Canada
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Tranvåg EJ, Haaland ØA, Robberstad B, Norheim OF. Appraising Drugs Based on Cost-effectiveness and Severity of Disease in Norwegian Drug Coverage Decisions. JAMA Netw Open 2022; 5:e2219503. [PMID: 35767256 PMCID: PMC9244608 DOI: 10.1001/jamanetworkopen.2022.19503] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Track Full Text] [Figures] [Journal Information] [Submit a Manuscript] [Subscribe] [Scholar Register] [Indexed: 11/14/2022] Open
Abstract
IMPORTANCE Rising health care costs are a major health policy challenge globally. Norway has implemented a priority-setting system intended to balance cost-effectiveness and concerns for fair distribution, but little is known about this strategy and whether it works in practice. OBJECTIVE To present and evaluate a systematic drug appraisal method that uses the severity of disease to account for a fair distribution of health in cost-effectiveness analysis, forming the basis for price negotiations and coverage decisions. DESIGN, SETTING, AND PARTICIPANTS This cross-sectional study uses confidential drug price information and publicly available data from health technology assessments and logistic and linear regression analyses to evaluate drug coverage decisions for the Norwegian specialized health care sector from 2014 to 2019. MAIN OUTCOMES AND MEASURES Drug coverage decisions by Norwegian authorities and incremental cost-effectiveness and severity of disease measured as absolute shortfall of quality adjusted life years. RESULTS Between 2014 and 2019, a total of 188 drugs were appraised, of which 113 were cancer drugs. The overall coverage rate was 73% (138 of 188). The number of annual appraisals increased during the observation period. Based on 83 chosen decisions, regression analysis showed that incremental cost-effectiveness ratios (ICER) based on negotiated drug prices, adjusted for severity-differentiated cost-effectiveness thresholds, was the variable that best projected drug approvals (OR, 0.60; 95% CI, 0.42-0.86). An increase in the ICER by $10 000 was associated with a reduction in the odds for approval of 40% for drugs assessed from 2018 to 2019. CONCLUSIONS AND RELEVANCE This cross-sectional study demonstrated how concerns for efficiency and fair distribution of health can be implemented systematically into drug appraisals and reimbursement decisions. New, expensive drugs are expected to escalate health care costs in the years to come, and it may be feasible to control costs by negotiating the prices of new drugs while appraising both their cost-effectiveness and how their health benefits are distributed.
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Affiliation(s)
- Eirik Joakim Tranvåg
- Bergen Centre for Ethics and Priority Setting, Department of Global Public Health and Primary Care, University of Bergen, Bergen, Norway
- Centre for Cancer Biomarkers, Department of Global Public Health and Primary Care, University of Bergen, Bergen, Norway
| | - Øystein Ariansen Haaland
- Bergen Centre for Ethics and Priority Setting, Department of Global Public Health and Primary Care, University of Bergen, Bergen, Norway
| | - Bjarne Robberstad
- Research Group in Health Economics, Leadership, and Translational Ethics Research, Department of Global Public Health and Primary Care, University of Bergen, Bergen, Norway
| | - Ole Frithjof Norheim
- Bergen Centre for Ethics and Priority Setting, Department of Global Public Health and Primary Care, University of Bergen, Bergen, Norway
- Centre for Cancer Biomarkers, Department of Global Public Health and Primary Care, University of Bergen, Bergen, Norway
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Almajed S, Alotaibi N, Zulfiqar S, Dhuhaibawi Z, O'Rourke N, Gaule R, Byrne C, Barry AM, Keeley D, O'Mahony JF. Cost-effectiveness evidence on approved cancer drugs in Ireland: the limits of data availability and implications for public accountability. THE EUROPEAN JOURNAL OF HEALTH ECONOMICS : HEPAC : HEALTH ECONOMICS IN PREVENTION AND CARE 2022; 23:375-431. [PMID: 34460007 PMCID: PMC8964600 DOI: 10.1007/s10198-021-01365-2] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.5] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 09/11/2020] [Accepted: 07/29/2021] [Indexed: 06/13/2023]
Abstract
BACKGROUND We surveyed evidence published by Ireland's National Centre for Pharmacoeconomics (NCPE) on the cost-effectiveness of cancer drugs approved for funding within the Irish public healthcare system. The purpose is threefold: to assess the completeness and clarity of publicly available cost-effectiveness data of such therapies; to provide summary estimates of that data; to consider the implications of constraints on data availability for accountability regarding healthcare resource allocation. METHODS The National Cancer Control Programme lists 91 drug-indication pairs approved between June 2012 and July 2020. Records were retrieved from the NCPE website for each drug-indication pair, including, where available, health technology assessment (HTA) summary reports. We assessed what cost-effectiveness data regarding approved interventions is available, aggregated it and considered the consequences of reporting constraints. RESULTS Among the 91 drug-indication pairs 61 were reimbursed following full HTA, 22 after a rapid review process and 8 have no corresponding NCPE record. Of the 61 where an HTA report was available, 41 presented costs and quality-adjusted life-year (QALY) estimates of the interventions compared. Cost estimates and corresponding incremental cost-effectiveness ratios (ICERs) are based on prices on application for reimbursement. Reimbursed prices are not published. Aggregating over the drug-indication pairs for which data is available, we find a mean incremental health gain of 0.85 QALY and an aggregate ICER of €100,295/QALY, which exceeds Ireland's cost-effectiveness threshold of €45,000/QALY. CONCLUSION Reimbursement applications by pharmaceutical manufacturers for cancer drugs typically exceed Ireland's cost-effectiveness threshold, often by a considerable margin. On aggregate, the additional total net cost of new drugs relative to current treatments needs to be more than halved for the prices sought on application to be justified for reimbursement. Commercial confidentiality regarding prices and cost-effectiveness upon reimbursement compromises accountability regarding the fair and efficient allocation of scarce healthcare resources.
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Affiliation(s)
- Suaad Almajed
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Nora Alotaibi
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Sana Zulfiqar
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Zahraa Dhuhaibawi
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Niall O'Rourke
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Richard Gaule
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Caoimhe Byrne
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Aaron M Barry
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - Dylan Keeley
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland
| | - James F O'Mahony
- School of Medicine Trinity College, 2-4 Foster Place, Dublin 2, Ireland.
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Franzen N, Ziegler A, Romagnoli G, Retèl VP, Offerman TJ, van Harten WH. Affordable Prices Without Threatening the Oncological R&D Pipeline-An Economic Experiment on Transparency in Price Negotiations. CANCER RESEARCH COMMUNICATIONS 2022; 2:49-57. [PMID: 36860697 PMCID: PMC9973423 DOI: 10.1158/2767-9764.crc-21-0031] [Citation(s) in RCA: 2] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [Track Full Text] [Figures] [Subscribe] [Scholar Register] [Received: 08/17/2021] [Revised: 11/11/2021] [Accepted: 12/28/2021] [Indexed: 11/16/2022]
Abstract
The high prices of innovative medicines endanger access to care worldwide. Sustainable prices need to be affordable while sufficiently incentivizing research and development (R&D) investments. A proposed solution is increased transparency. Proponents argue that price and R&D cost confidentiality are drivers of high prices. On the contrary, supporters of confidentiality claim that confidentiality enables targeted discounts which make treatments affordable; moreover, pharmaceutical companies argue that R&D investments would suffer with more transparency. Despite the political relevance, limited empirical evidence exists on the effects of transparency regulations. We contribute to fill this gap with an experiment where we replicate the EU pharmaceutical market in a laboratory setting. In a randomized controlled study, we analyzed how participants, 400 students located in four European countries, negotiated in the current system of Price Secrecy in comparison with innovative bargaining settings where either prices only (Price Transparency) or prices and R&D costs (Full Transparency) were made transparent to buyers. We found that Price transparency had no statistically significant effect on average prices or number of patients treated and made R&D investments significantly smaller (-16.86%; P: 0.0024). On the other hand, Full Transparency reduced prices (-26%; P: 0.0004) and held the number of patients constant at the level of Price Secrecy. It produced price convergence between countries with low and high health budgets, and, despite lower prices, had no effect on R&D investments. Our findings provide novel evidence that combining price and R&D cost transparency could be an effective policy to contribute to sustainable medicine prices. See related article by Franzen et al. (Cancer Discov 2022;12:299-302).
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Affiliation(s)
- Nora Franzen
- The Netherlands Cancer Institute, Department of Psychosocial Research and Epidemiology, Amsterdam, The Netherlands.,University of Twente, Department of Health Technology and Services Research, Enschede, The Netherlands
| | - Andreas Ziegler
- Center for Research in Experimental Economics and Political Decision Making, University of Amsterdam, Amsterdam, the Netherlands
| | - Giorgia Romagnoli
- Center for Research in Experimental Economics and Political Decision Making, University of Amsterdam, Amsterdam, the Netherlands
| | - Valesca P. Retèl
- The Netherlands Cancer Institute, Department of Psychosocial Research and Epidemiology, Amsterdam, The Netherlands.,University of Twente, Department of Health Technology and Services Research, Enschede, The Netherlands
| | - Theo J.S. Offerman
- Center for Research in Experimental Economics and Political Decision Making, University of Amsterdam, Amsterdam, the Netherlands
| | - Wim H. van Harten
- The Netherlands Cancer Institute, Department of Psychosocial Research and Epidemiology, Amsterdam, The Netherlands.,University of Twente, Department of Health Technology and Services Research, Enschede, The Netherlands.,Rijnstate Hospital, Arnhem, the Netherlands.,Corresponding Author: Wim H. van Harten, Psychosocial Research and Epidemiology, Netherlands Cancer Institute, Ansterdam 1066, the Netherlands. Phone: 318-8005-7544; E-mail:
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Wettstein DJ, Boes S. How value-based policy interventions influence price negotiations for new medicines: An experimental approach and initial evidence. Health Policy 2021; 126:112-121. [PMID: 35000803 DOI: 10.1016/j.healthpol.2021.12.007] [Citation(s) in RCA: 3] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 09/03/2021] [Revised: 12/26/2021] [Accepted: 12/27/2021] [Indexed: 11/19/2022]
Abstract
BACKGROUND Various forms of value-based pricing policies for new medicines have recently been introduced in OECD countries. While these initiatives are expected to have a positive impact on societal outcomes such as availability, affordability and value for money, scientific evidence on this impact is scarce due to confidential agreements. OBJECTIVE We aimed to assess the impact of value-based policy interventions in price negotiations on patient benefit in an experimental setting. METHODS An online experiment was conducted (n = 269). Participants were randomly assigned into the active role of either a buyer or seller in two intervention groups (cost-benefit, risk-sharing) and one control group. Decisions had real monetary consequences on other participants and through donations to a patient association. RESULTS Patient access, benefit and value for money were higher in the cost-benefit group than in the risk-sharing group. An available alternative to the agreement led to higher price offers. This effect was weaker in the cost-benefit group. CONCLUSIONS Outcomes of price negotiations on patient benefit depend on the alternatives available for failed or delayed negotiations. A shared but voluntary valuation framework might increase patient access, benefit, and value for money. The cost containment effect of risk-sharing agreements may be offset by the negative impact on overall patient benefit. Further development of the approach could provide support for policy design of pharmaceutical pricing regulations.
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Affiliation(s)
- Dominik J Wettstein
- Department of Health Sciences and Medicine, University of Lucerne, Frohburgstrasse 3, P.O. Box 4466, CH-6002 Lucerne, Switzerland.
| | - Stefan Boes
- Department of Health Sciences and Medicine, University of Lucerne, Frohburgstrasse 3, P.O. Box 4466, CH-6002 Lucerne, Switzerland.
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Russo P, Carletto A, Németh G, Habl C. Medicine price transparency and confidential managed-entry agreements in Europe: findings from the EURIPID survey. Health Policy 2021; 125:1140-1145. [PMID: 34253396 DOI: 10.1016/j.healthpol.2021.06.008] [Citation(s) in RCA: 9] [Impact Index Per Article: 3.0] [Reference Citation Analysis] [Abstract] [Journal Information] [Subscribe] [Scholar Register] [Received: 03/22/2021] [Revised: 06/08/2021] [Accepted: 06/17/2021] [Indexed: 10/21/2022]
Abstract
Pricing of pharmaceuticals is an all-time challenge for healthcare systems. Often public payers agree with companies on confidential managed-entry agreements (MEAs) that, e.g. foresee discounts under specific circumstances. The EURIPID Executive Committee surveyed 22 European countries, who all reported the use of confidential agreements between pharmaceutical companies and public payers, confirming that the actual prices paid are typically lower than the published list price. In 68% of the countries, the confidentiality of MEAs is required by non-disclosure clauses between companies and public payers. In some countries (27%) this is even backed up by a specific law. Our study identified legal constraints for the sharing of information on actual prices and confidential agreements among European countries and consequently restrictions in transparency. In conclusion, the EURIPID survey findings suggest that the current possibility to improve the medicines' price transparency across countries is limited and the issue probably requires international institutional engagement, at least to coordinate initiatives toward a greater collaboration among member states.
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Affiliation(s)
| | | | - Gergely Németh
- National Institute of Health Insurance Fund Management (NEAK), Váciút 73/A, H-1139 Budapest, Hungary.
| | - Claudia Habl
- Austrian National Public Health Institute (GÖG), Stubenring 6, 1010 Vienna, Austria.
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10
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Wettstein DJ, Boes S. Assessing social preferences in reimbursement negotiations for new Pharmaceuticals in Oncology: an experimental design to analyse willingness to pay and willingness to accept. BMC Health Serv Res 2021; 21:234. [PMID: 33726735 PMCID: PMC7968195 DOI: 10.1186/s12913-021-06231-8] [Citation(s) in RCA: 4] [Impact Index Per Article: 1.3] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Download PDF] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 03/08/2020] [Accepted: 03/02/2021] [Indexed: 11/10/2022] Open
Abstract
Background Price negotiations for specialty pharmaceuticals take place in a complex market setting. The determination of the added value of new treatments and the related societal willingness to pay are of increasing importance in policy reform debates. From a behavioural economics perspective, potential cognitive biases and other-regarding concerns affecting outcomes of reimbursement negotiations are of interest. An experimental setting to investigate social preferences in reimbursement negotiations for novel, oncology pharmaceuticals was used. Of interest were differences in social preferences caused by incremental changes of the patient outcome. Methods An online experiment was conducted in two separate runs (n = 202, n = 404) on the Amazon Mechanical Turk (MTurk) platform. Populations were split into two (run one) and four (run two) equally sized treatment groups for hypothetical reimbursement decisions. Participants were randomly assigned to the role of a public price regulator for pharmaceuticals (buyer) or a representative of a pharmaceutical company (seller). In run two, role groups were further split into two different price magnitude framings (“real world” vs unconverted “real payoff” prices). Decisions had real monetary effects on other participants (in the role of premium payers or investors) and via charitable donations to a patient organisation (patient benefit). Results 56 (run one) and 59 (run two) percent of participants stated strictly monotone preferences for incremental patient benefit. The mean incremental cost-effectiveness ratio (ICER) against standard of care (SoC) was higher than the initial ICER of the SoC against no care. Regulators stated lower reservation prices in the “real world” prices group compared to their colleagues in the unconverted payoff group. No price group showed any reluctance to trade. Overall, regulators rated the relevance of the patient for their decision higher and the relevance of their own role lower compared to sellers. Conclusions The price magnitude of current oncology treatments affects stated preferences for incremental survival, and assigned responsibilities lead to different opinions on the relevance of affected stakeholders. The design is useful to further assess effects of reimbursement negotiations on societal outcomes like affordability (cost) or availability (access) of new pharmaceuticals and test behavioural policy interventions. Supplementary Information The online version contains supplementary material available at 10.1186/s12913-021-06231-8.
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Affiliation(s)
- Dominik J Wettstein
- Department of Health Sciences and Medicine, University of Lucerne, Frohburgstrasse 3, P.O. Box 4466, CH-6002, Lucerne, Switzerland.
| | - Stefan Boes
- Department of Health Sciences and Medicine, University of Lucerne, Frohburgstrasse 3, P.O. Box 4466, CH-6002, Lucerne, Switzerland
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Vogler S, Schneider P, Lepuschütz L. Impact of changes in the methodology of external price referencing on medicine prices: discrete-event simulation. COST EFFECTIVENESS AND RESOURCE ALLOCATION 2020; 18:51. [PMID: 33292293 PMCID: PMC7670789 DOI: 10.1186/s12962-020-00247-3] [Citation(s) in RCA: 3] [Impact Index Per Article: 0.8] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Download PDF] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 02/25/2020] [Accepted: 11/02/2020] [Indexed: 11/10/2022] Open
Abstract
BACKGROUND Several governments apply the policy of external price referencing (EPR), which considers the prices of a medicine in one or more other countries for the purpose of setting the price in the own country. Different methodological choices can be taken to design EPR. The study aimed to analyse whether, or not, and how changes in the methodology of EPR can impact medicine prices. METHODS The real-life EPR methodology as of Q1/2015 was surveyed in all European Union Member States (where applicable), Iceland, Norway and Switzerland through a questionnaire responded by national pricing authorities. Different scenarios were developed related to the parameters of the EPR methodology. Discrete-event simulations of fictitious prices in the 28 countries of the study that had EPR were run over 10 years. The continuation of the real-life EPR methodology in the countries as surveyed in 2015, without any change, served as base case. RESULTS In most scenarios, after 10 years, medicine prices in all or most surveyed countries were-sometimes considerably-lower than in the base case scenario. But in a few scenarios medicine prices increased in some countries. Consideration of discounts (an assumed 20% discount in five large economies and the mandatory discount in Germany, Greece and Ireland) and determining the reference price based on the lowest price in the country basket would result in higher price reductions (on average - 47.2% and - 34.2% compared to the base case). An adjustment of medicine price data of the reference countries by purchasing power parities would lead to higher prices in some more affluent countries (e.g. Switzerland, Norway) and lower prices in lower-income economies (Bulgaria, Romania, Hungary, Poland). Regular price revisions and changes in the basket of reference countries would also impact medicine prices, however to a lesser extent. CONCLUSIONS EPR has some potential for cost-containment. Medicine prices could be decreased if certain parameters of the EPR methodology were changed. If public payers aim to apply EPR to keep medicine prices at more affordable levels, they are encouraged to explore the cost-containment potential of this policy by taking appropriate methodological choices in the EPR design.
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Affiliation(s)
- Sabine Vogler
- WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Pharmacoeconomics Department, Gesundheit Österreich GmbH (GÖG, Austrian National Public Health Institute), Stubenring 6, A 1010, Vienna, Austria.
| | - Peter Schneider
- WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Pharmacoeconomics Department, Gesundheit Österreich GmbH (GÖG, Austrian National Public Health Institute), Stubenring 6, A 1010, Vienna, Austria
| | - Lena Lepuschütz
- WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Pharmacoeconomics Department, Gesundheit Österreich GmbH (GÖG, Austrian National Public Health Institute), Stubenring 6, A 1010, Vienna, Austria
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12
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Wettstein DJ, Boes S. The impact of reimbursement negotiations on cost and availability of new pharmaceuticals: evidence from an online experiment. HEALTH ECONOMICS REVIEW 2020; 10:13. [PMID: 32440753 PMCID: PMC7243324 DOI: 10.1186/s13561-020-00267-y] [Citation(s) in RCA: 5] [Impact Index Per Article: 1.3] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Subscribe] [Scholar Register] [Received: 12/14/2019] [Accepted: 03/27/2020] [Indexed: 05/10/2023]
Abstract
BACKGROUND The necessity to measure and reward "value for money" of new pharmaceuticals has become central in health policy debates, as much as the requirement to assess the "willingness to pay" for an additional, quality-adjusted life year (QALY). There is a clear need to understand the capacity of "value-based" pricing policies to impact societal goals, like timely access to new treatments, sustainable health budgets, or incentivizing research to improve patient outcomes. Not only the pricing mechanics, but also the process of value assessment and price negotiation are subject to reform demands. This study assesses the impact of a negotiation situation for life-extending pharmaceuticals on societal outcomes. Of interest were general effects of the bargaining behaviour, as well as differences caused by the assigned role and the magnitude of prices. METHODS We ran an online experiment (n = 404) on Amazon Mechanical Turk (MTurk). Participants were randomly assigned into four treatment groups for a reimbursement negotiation between two roles (health minister, pharma representative) in two price framings. Payoff to players consisted of a fixed salary and a potential bonus, depending on their preferences, their price offer and the counter offer of a randomly paired negotiation partner. Success had real social consequences on other MTurk users (premium payers, investors) and via donations to a patient association. RESULTS Margins between reservation prices and price offers increased throughout the game. Yet, 47% of players reduced at least once and 15% always their bonus probability to zero in favour of an agreement. 61% of simulated negotiation pairs could have reached an agreement, based on their preferences. 63% of these were successful, leaving 61% of patients with no access to the new treatment. The group with "real world" prices had lower prices and less agreements than the unconverted payoff group. The successful markets redistributed 20% of total assets from premium payers to investors over five innovation cycles. CONCLUSIONS The negotiation situation for pharmaceutical reimbursement has notable impact on societal outcomes. Further research should evaluate policies that align preferences and increase negotiation success.
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Affiliation(s)
- Dominik J Wettstein
- Department of Health Sciences and Medicine, University of Lucerne, Frohburgstrasse 3, P.O. Box 4466, CH-6002, Lucerne, Switzerland.
| | - Stefan Boes
- Department of Health Sciences and Medicine, University of Lucerne, Frohburgstrasse 3, P.O. Box 4466, CH-6002, Lucerne, Switzerland
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