Value-based tiered pricing for universal health coverage: an idea worth revisiting

A conceptual framework to build effective medicine pricing policies for low and middle-income countries (LMICs)

Building effective medicine pricing policies is a challenging task in all high-, middle- and low-income countries. In high-income countries have stable health systems in place, trained workforce, as well as specialised agencies to evaluate innovative drugs for reimbursement. However, in low- and middle-income countries (LMICs) the challenges are manifold. A large majority of low- and middle-income countries lack technical expertise either to evaluate new medicines or to set efficient medicine prices. The countries also lack comparator reference pricing data to set prices. Also, there are significant out-of-pocket expenditures as people pay for medicines by themselves. An effective medicine pricing policy is vital in the context that it can be used as a tool to improve access and affordability among the masses. This discussion paper presents a conceptual framework to build effective medicine pricing policies for low and middle-income countries (LMICs). The enablers to build effective medicine pricing policies are also discussed. This includes (a) data and statistics on the pharmaceutical situation of the country (b) Having a national medicine policy in the country (c) The availability of the medicine pricing data and (d) Human resources and technical capacity. WHO has recommended several strategies including External Price Referencing (EPR), Internal Reference pricing, Value-based pricing, Cost-plus pricing, and Generic medicine policies to build a pricing policy. However, this information is generic and it's a complex task for countries to tailor to their needs, hence a critical analysis is provided on these policies. The concepts related to fair medicine pricing, providing information to consumers and price transparency are also discussed.

A mixed integer programming model for vaccine pricing within a group purchasing organization

BACKGROUND

Setting prices for life-saving medical or pharmaceutical products needs to consider multiple factors, e.g., affordability and health outcomes across different populations. When a group of buyers (e.g., countries) combine their purchasing power (e.g., via a group purchasing organization), the average procurement price decreases in the total volume. Decisions about what price to then charge to each member in a group are particularly challenging, considering the disparities in their respective ability and willingness to pay. Tiered pricing can be an effective way to set prices for a group of buyers, but its performance needs to be quantified and evaluated.

METHODS

We modeled the decision of setting prices of a medical product (for example, a vaccine) for a group of buyers using a mixed integer programming model, considering the buyers' ability and willingness to pay. The objective is to minimize the unit price disparity adjusted by the buyers' willingness to pay, subject to the constraint that the prices decrease in the buyers' ability to pay. We also developed an analogous subsidy allocation model that applies if the group receives philanthropic donations to support procurement. The models were illustrated with two case studies based on the Bacillus Calmette-Guerin (BCG) vaccine procurement by Gavi, the Vaccine Alliance and Pan American Health Organization, and the performances of uniform, tiered, and differentiated pricing schemes were examined.

RESULTS

The adjusted unit price disparity is non-increasing in the number of price tiers allowed. The biggest decrease in the adjusted price disparity occurs when switching to two-tier pricing from uniform pricing. Tiered pricing performs better in the Gavi group compared to the PAHO group, in part because the ability to pay and willingness to pay have a higher degree of rank correlation within the former group of countries.

CONCLUSIONS

This work provides a model for price-setting (subsidy allocation) decisions for a group of buyers and provides a quantitative comparison of different pricing schemes. The results of the case studies suggest that the performance of tiered pricing depends on various factors, including the disparities in the ability and willingness to pay across the buyers.

FUNDING

This research has been supported in part by the Center for Health and Humanitarian Systems, the William W. George endowment, and the following benefactors at Georgia Tech: Andrea Laliberte, Richard Rick E. and Charlene Zalesky, and Claudia and Paul Raines.

Associations Between Social Vulnerability Indicators and Pediatric Tonsillectomy Outcomes

OBJECTIVE

To investigate the impact of neighborhood-level social vulnerability on pediatric tonsillectomy outcomes.

METHODS

This single-center retrospective cohort study included tonsillectomies performed on children aged 1 to 18 between August 2019 and August 2020. Geographic information systems were used to geocode addresses, and spatial overlays were used to assign census-tract level social vulnerability index (SVI) scores to each patient. For categorical variables, two-sided Pearson chi-square tests were used, whereas for continuous variables, paired t-tests, means, and standard deviations were calculated. SVI and its four subthemes were investigated using binomial logistic regressions to determine their impact on post-T&A complications and readmissions.

RESULTS

The study included 397 patients, with 52 having complications (13.1%) and 33 (8.3%) requiring readmissions due to their complications. Controlling for age, gender, race, insurance status, surgical indication, comorbidities, obesity, and obstructive sleep apnea, postoperative complications were associated with high overall SVI (odds ratio [OR] 5.086, 95% confidence interval [CI] 1.128-22.938), high socioeconomic vulnerability (SVI theme 1, OR 6.003, 95% CI 1.270-28.385), and high house composition vulnerability (SVI theme 2, OR 6.340, 95% CI 1.275-31.525). Readmissions were also associated with high overall SVI (10.149, 95% CI 1.293-79.647) and high housing/transportation vulnerability (SVI theme 4, OR 5.657, 95% CI 1.089-29.396).

CONCLUSION

Social vulnerability at the neighborhood level is linked to poorer surgical outcomes in otherwise healthy children, suggesting a target for community-based interventions. Because of the increased risk, it may have implications for preoperative decision-making, treatment plans, and clinic follow-ups.

LEVEL OF EVIDENCE: 3

Laryngoscope, 134:954-962, 2024.

Antihypertensive medicine use differs between Ghana and Nigeria

BACKGROUND

Non-communicable diseases are a growing burden in many African countries; cardiovascular disease is the main disease. Antihypertensive medicines (AHM) are a common treatment option but we know little about community use in most low- and medium-income countries (LMIC). We aimed to describe the use of antihypertensive medicines (AHM) in Ghana and Nigeria using a novel data source.

METHODS

We used data from mPharma-a health and pharmaceutical company which distributes pharmaceuticals to hospital and retail pharmacies. We extracted data using the anatomical therapeutic chemical (ATC) classification codes and calculated use in defined daily doses and explored patterns by class, medicines, dose, and originator or generic product.

RESULTS

AHM use differed between Ghana and Nigeria. The most used classes in Ghana were angiotensin receptor blockers (ARB) followed by calcium channel blockers (CCB) and angiotensin-converting-enzyme inhibitors (ACEi). The five most used products were 16 mg candesartan, 30 mg nifedipine, 10 mg lisinopril, 5 mg amlodipine and 50 mg losartan. In Nigeria ARB, CCB and diuretics were widely used; the top five products were 50 mg losartan, 10 mg lisinopril, 30 mg nifedipine, 40 mg furosemide, and 5 mg amlodipine. More originator products were used in Ghana than Nigeria.

CONCLUSION

The differences between Ghana and Nigeria may result from a combination of medical, contextual and policy evidence and reflect factors related to clinical guidance (e.g. standard treatment guidelines), accessibility to prescribers and the role of community pharmacies, and structure of the health system and universal health coverage including funding for medicines. We show the feasibility of using novel data sources to gain insights on medicines use in the community.

Public support in the United States for global equity in vaccine pricing

Global vaccine prices that are tiered across countries, equitable for poorer countries, and profitable for manufacturers (TEP) can promote global vaccine equity but its implementation may require political will and public support in rich countries. A survey experiment with a demographically representative sample of US adults was conducted between April and May 2021 to investigate public support for TEP and the likelihood of collective agreement on TEP relative to alternative global vaccine pricing strategies. The experiment varied vaccine cost and provision of information about the importance of equity and profitability considerations in global vaccine pricing across eight treatment conditions. TEP of low-cost vaccines received less support than TEP of high-cost vaccines, but TEP received more public support than any alternative pricing strategy. Information about equity and profitability considerations increased support for TEP of low-cost vaccines. TEP was also the most likely pricing strategy to achieve collective agreement among participants across all treatments.