Slides from a presentation Adrian gave on the subject of indication-based pricing at the 2018 ISPOR Europe conference in Barcelona, Spain on November 12th.
This project explored whether an aligned, forward-looking health technology assessment (HTA) process exists, or can be established. The areas of interest for modern HTA systems were identified and explored in terms of ‘future directions’, namely the HTA good practice principles that are debated or that pose implementation challenges. Based on conversations with HTA experts from high- and middle-income countries, we concluded that an aligned, modern, forward-looking HTA is not feasible but further research initiatives would be valuable to stimulate debate and provide clarity in these topic areas.
Author(s) and affiliation(s): Margherita Neri, the Office of Health Economics, Grace Hampson, the Office of Health Economics and Adrian Towse, the Office of Health Economics
Conference/meeting: ISPOR Europe 2018
Event location: Barcelona, Spain
Date: 13 November 2018
HTA Value Based Pricing Versus WHO Fair Pricing: Which Delivers Universal Hea...Office of Health Economics
Slides from a presentation Adrian gave as part of an issue panel on the topic of HTA value-based pricing versus WHO fair pricing at the 2018 ISPOR Europe conference in Barcelona.
Slides from the presentation Adrian gave on payment mechanisms and handling uncertainty as part of a forum held at the 2018 ISPOR Europe conference on the topic of triangulating developers, regulators, and payors to reap rewards and address challenges with curative therapies.
Should Drug Prices Differ by Indication? Outlining the debate on indication-b...Office of Health Economics
The notion that the price of a medicine should be linked in some way to the value it generates for patients and the health system is generally accepted. Yet, how can this be achieved when, increasingly, medicines are being developed that derive patient across many different indications? We summarise the current state-of-play for indication-based pricing (IBP), both in theory as described in the key literature, and in practice by investigating its use in the US and five major European countries.
Author(s) and affiliations(s): Amanda Cole, OHE Bernarda Zamora, OHE Adrian Towse, OHE
Conference/meeting: ISPOR Europe
Event location: ISPOR Europe
Date: 13/11/2018
Are Wider Societal Effects Considered in Healthcare Decision-making? An over...Office of Health Economics
Presentation at ISPOR Italy - 12.04.16 - Are Wider Societal Effects Considered in Healthcare Decision-making? An overview from other countries by Martina Garau, OHE
Opportunity costs and local health servicespending decisions: A qualitative ...Kerry Sheppard
This document summarizes a qualitative study of how local health boards in Wales fund new healthcare technologies approved by regulatory agencies. Semi-structured interviews found that boards generally plan for such costs in advance using contingency funds. Efficiency savings from reducing unnecessary spending, not service displacements, were the most common way of funding new treatments. The opportunity cost is not wholly felt through displaced NHS services but also falls on increased efficiency efforts and other public spending areas. The study challenges the assumption that healthcare budgets are fixed and that approving new treatments necessarily displaces existing services.
This project explored whether an aligned, forward-looking health technology assessment (HTA) process exists, or can be established. The areas of interest for modern HTA systems were identified and explored in terms of ‘future directions’, namely the HTA good practice principles that are debated or that pose implementation challenges. Based on conversations with HTA experts from high- and middle-income countries, we concluded that an aligned, modern, forward-looking HTA is not feasible but further research initiatives would be valuable to stimulate debate and provide clarity in these topic areas.
Author(s) and affiliation(s): Margherita Neri, the Office of Health Economics, Grace Hampson, the Office of Health Economics and Adrian Towse, the Office of Health Economics
Conference/meeting: ISPOR Europe 2018
Event location: Barcelona, Spain
Date: 13 November 2018
HTA Value Based Pricing Versus WHO Fair Pricing: Which Delivers Universal Hea...Office of Health Economics
Slides from a presentation Adrian gave as part of an issue panel on the topic of HTA value-based pricing versus WHO fair pricing at the 2018 ISPOR Europe conference in Barcelona.
Slides from the presentation Adrian gave on payment mechanisms and handling uncertainty as part of a forum held at the 2018 ISPOR Europe conference on the topic of triangulating developers, regulators, and payors to reap rewards and address challenges with curative therapies.
Should Drug Prices Differ by Indication? Outlining the debate on indication-b...Office of Health Economics
The notion that the price of a medicine should be linked in some way to the value it generates for patients and the health system is generally accepted. Yet, how can this be achieved when, increasingly, medicines are being developed that derive patient across many different indications? We summarise the current state-of-play for indication-based pricing (IBP), both in theory as described in the key literature, and in practice by investigating its use in the US and five major European countries.
Author(s) and affiliations(s): Amanda Cole, OHE Bernarda Zamora, OHE Adrian Towse, OHE
Conference/meeting: ISPOR Europe
Event location: ISPOR Europe
Date: 13/11/2018
Are Wider Societal Effects Considered in Healthcare Decision-making? An over...Office of Health Economics
Presentation at ISPOR Italy - 12.04.16 - Are Wider Societal Effects Considered in Healthcare Decision-making? An overview from other countries by Martina Garau, OHE
Opportunity costs and local health servicespending decisions: A qualitative ...Kerry Sheppard
This document summarizes a qualitative study of how local health boards in Wales fund new healthcare technologies approved by regulatory agencies. Semi-structured interviews found that boards generally plan for such costs in advance using contingency funds. Efficiency savings from reducing unnecessary spending, not service displacements, were the most common way of funding new treatments. The opportunity cost is not wholly felt through displaced NHS services but also falls on increased efficiency efforts and other public spending areas. The study challenges the assumption that healthcare budgets are fixed and that approving new treatments necessarily displaces existing services.
HATi Toyko 2016 - Building Efficient Healthcare Systems Through Integrated He...Office of Health Economics
The document discusses three levels of decision making for healthcare resources - macro, intermediate, and micro. It finds that decision making is currently fragmented between these levels, with different decision makers not following common objectives or methods. There is also significant variation between countries. The document identifies some potential policy options to better align decision making across levels, including using a consistent value principle, strengthening intermediate-level decisions, and monitoring data on health and economic impacts. However, more research is needed to develop an integrated decision making framework to reduce inefficiencies in health systems from the misalignment between different decision-making levels.
This document provides a timeline and overview of the value-based pricing policy proposed in the UK from 2007-2015. It summarizes that the policy faced political challenges due to changes in government and an ambitious but inexperienced health minister. It also faced challenges due to an ambiguous definition and claims that contradicted evidence. The policy risked clashes between market values and NHS values. Overall, the attempt to implement value-based pricing faced many difficulties and was ultimately shelved due to a lack of agreement.
This document summarizes a presentation given by Professor Adrian Towse on reflections on value based pricing and assessment. The presentation covered several topics: definitions of value based pricing versus value based assessment; preferences elicitation research on weighting QALY gains; approaches to aggregating multiple criteria in decision making; issues around setting cost effectiveness thresholds; and reforms to the Cancer Drugs Fund in the UK. The conclusion was that further work is still needed to better define and measure broader concepts of value, but that value based assessment rather than pricing is a better approach going forward.
The document summarizes the history and economics of the U.S. healthcare system. It discusses key events from ancient Greece establishing medical practices to modern policies like the Affordable Care Act. Several economic concepts are also explained, including supply and demand curves, competition versus monopoly, and how the nursing labor market functions. The U.S. is described as having the most expensive healthcare system in the world, with costs projected to continue rising significantly without reform.
This document summarizes a presentation given by Adrian Towse on the topic of QALYs (Quality-Adjusted Life Years) and equity. It discusses different definitions of equity in healthcare, lessons from using QALYs to determine value-based pricing in England, ways to expand what is captured in healthcare decision-making beyond just QALYs, and applications of extended cost-effectiveness analysis in middle- and low-income countries. The presentation examines moving from listing factors that matter to patients and society to measuring and weighting them, and argues for a fair and deliberative decision-making process to determine healthcare priorities and resource allocation.
This document provides an introduction to health economics. It discusses how health care expenditures have increased dramatically, prompting concerns about scarce resources. Health economic evaluation is presented as a tool to demonstrate the value of health care interventions in terms of both clinical and economic outcomes. The key concepts of health economics evaluation are defined, including comparing costs and outcomes of at least two alternatives from various perspectives. Types of economic analyses - cost analysis, cost-effectiveness analysis, cost-utility analysis - are introduced. The document provides examples of health economic evaluations influencing coverage decisions for treatments in Thailand.
This document discusses issues of affordability within cost-effectiveness analysis and value-based healthcare systems. It makes three key points:
1) For a healthcare system to be sustainably affordable, the cost-effectiveness threshold and budget must be related - a higher budget allows for a higher threshold, reimbursing more drugs at higher prices.
2) Expanding what is included in measuring healthcare value, such as secondary benefits, could raise or lower cost-effectiveness thresholds but may not support a higher overall healthcare budget given fixed resources.
3) Drugs with either very high prices but high patient volumes (e.g. breakthrough therapies) or very high prices but low patient volumes (orphan drugs)
This presentation looks at ways in which governments can set prices, including “cost plus”, value, and the external referencing of prices elsewhere. It looks at the role that competition can play in keeping down prices. In that context it briefly discusses pricing proposals being considered in Malaysia. It makes the case for using HTA to inform pricing decisions.
Adrian Towse
Introduction
What is definition and law of supply
Factors determine supply for health care services
Factors determine price & quantity of health care
What is the production function for health
Market equilibrium
Investing in the healthcare sector
Cost production in healthcare
Different healthcare system
Models of non-profit agencies
References
Data Governance for Real-World Evidence: Cross-country differences and recomm...Office of Health Economics
This document analyzes data governance frameworks for using real-world data (RWD) to generate real-world evidence (RWE) in eight countries. It identifies 29 elements of an ideal governance framework and assesses each country's framework against these criteria. Recommendations include having clear data protection laws that allow secondary uses of health data to benefit patients, using opt-out consent for large cohort data collection, and transparent data linkage mechanisms with national interoperability standards. Current country frameworks show varying adherence to these recommendations.
Adrian Towse's slides from a session will exploring how the benefits of antibiotics can best be captured in HTA, and how we should pay for them when their value may depend on restricting their use.
Author(s) and affiliation(s): Adrian Towse, Office of Health Economics
Conference/meeting: Health Technology Assessment International (HTAi) 2018
Location: Vancouver, Canada
Date: 03/06/2018
% GDP spending in UK, G5 countries and OECD upper middle income countries. W...Office of Health Economics
The document discusses healthcare spending in Malaysia relative to other countries. It notes that while Malaysia spends around 4% of GDP on healthcare, this is split almost evenly between public and private spending. There are pressures to increase healthcare spending due to an aging population and shift to chronic diseases. While additional investment may pay off through economic and health gains, funding needs to be increased through measures like taxes on tobacco or reducing fossil fuel subsidies. The large public-private divide and high out-of-pocket spending also need to be addressed through more strategic purchasing of healthcare services.
The supply of health care services involves multiple inputs that need to be combined to produce better health outcomes. These inputs include highly skilled manpower like physicians and nurses, health facilities, pharmaceuticals, medical technology, and other infrastructure. Physicians play a crucial role in recommending treatment and making decisions that influence 80% of health spending. Specialized manpower like physicians regulate their own production and distribution through certification and licensing. Health facilities also vary in their technology, specialization, capacity, and geographic distribution across the country. Pharmaceuticals make up most health spending and involve large research costs that are recouped through patents, after which generics emerge.
Supply of health and medical care
Definition and Law of Supply.
The health care production function.
Cost production in health care.
Factors determine price and quantity of health care.
Factors affecting Supply.
Investment on healthcare.
Health insurance and supply in healthcare.
Market Equilibrium.
References
Questions
Global HTA and pricing mechanisms
What can we learn about national medicines pricing and procurement?
Led by Janssen UK
Day One, Pop-up University 3, 16.00
Generating Quality Data through Collaborative Research with an ACOTodd Berner MD
This document summarizes a presentation about generating quality data through collaborative research with an ACO. The number of public and private ACOs is growing rapidly, with over 250 CMS MSSP ACOs covering 4 million Medicare beneficiaries. The goal of the collaborative research is to disseminate valued information on effectiveness and costs of care to payers and policymakers. Real-world evidence studies can provide insights beyond randomized controlled trials by observing patient outcomes across delivery system models. Measuring quality requires considering multiple stakeholder perspectives to identify metrics that drive improvement and have utility.
Data Governance for Real-World Evidence: Cross-country differences and recommendations for a governance framework
Cole, A., Garrison, L., Mestre-Ferrandiz, J. & Towse A.
The Economics of Innovative Payment Models Compared with Single Pricing of Ph...Office of Health Economics
The presentation summarises an OHE report, exploring the economic implications of permitting multiple prices where a medicine’s value differs by indication. It considers the impact on payer budgets, patient access, incentives for innovation, and the role of competition.
Author(s) and affiliation(s): Amanda Cole, OHE. Adrian Towse, OHE. Paula Lorgelly, OHE. Richard Sullivan, King's College London.
Event: Webinar presented to IQVIA based on our OHE Research Paper
Location: n/a
Date: 12/09/2018
HATi Toyko 2016 - Building Efficient Healthcare Systems Through Integrated He...Office of Health Economics
The document discusses three levels of decision making for healthcare resources - macro, intermediate, and micro. It finds that decision making is currently fragmented between these levels, with different decision makers not following common objectives or methods. There is also significant variation between countries. The document identifies some potential policy options to better align decision making across levels, including using a consistent value principle, strengthening intermediate-level decisions, and monitoring data on health and economic impacts. However, more research is needed to develop an integrated decision making framework to reduce inefficiencies in health systems from the misalignment between different decision-making levels.
This document provides a timeline and overview of the value-based pricing policy proposed in the UK from 2007-2015. It summarizes that the policy faced political challenges due to changes in government and an ambitious but inexperienced health minister. It also faced challenges due to an ambiguous definition and claims that contradicted evidence. The policy risked clashes between market values and NHS values. Overall, the attempt to implement value-based pricing faced many difficulties and was ultimately shelved due to a lack of agreement.
This document summarizes a presentation given by Professor Adrian Towse on reflections on value based pricing and assessment. The presentation covered several topics: definitions of value based pricing versus value based assessment; preferences elicitation research on weighting QALY gains; approaches to aggregating multiple criteria in decision making; issues around setting cost effectiveness thresholds; and reforms to the Cancer Drugs Fund in the UK. The conclusion was that further work is still needed to better define and measure broader concepts of value, but that value based assessment rather than pricing is a better approach going forward.
The document summarizes the history and economics of the U.S. healthcare system. It discusses key events from ancient Greece establishing medical practices to modern policies like the Affordable Care Act. Several economic concepts are also explained, including supply and demand curves, competition versus monopoly, and how the nursing labor market functions. The U.S. is described as having the most expensive healthcare system in the world, with costs projected to continue rising significantly without reform.
This document summarizes a presentation given by Adrian Towse on the topic of QALYs (Quality-Adjusted Life Years) and equity. It discusses different definitions of equity in healthcare, lessons from using QALYs to determine value-based pricing in England, ways to expand what is captured in healthcare decision-making beyond just QALYs, and applications of extended cost-effectiveness analysis in middle- and low-income countries. The presentation examines moving from listing factors that matter to patients and society to measuring and weighting them, and argues for a fair and deliberative decision-making process to determine healthcare priorities and resource allocation.
This document provides an introduction to health economics. It discusses how health care expenditures have increased dramatically, prompting concerns about scarce resources. Health economic evaluation is presented as a tool to demonstrate the value of health care interventions in terms of both clinical and economic outcomes. The key concepts of health economics evaluation are defined, including comparing costs and outcomes of at least two alternatives from various perspectives. Types of economic analyses - cost analysis, cost-effectiveness analysis, cost-utility analysis - are introduced. The document provides examples of health economic evaluations influencing coverage decisions for treatments in Thailand.
This document discusses issues of affordability within cost-effectiveness analysis and value-based healthcare systems. It makes three key points:
1) For a healthcare system to be sustainably affordable, the cost-effectiveness threshold and budget must be related - a higher budget allows for a higher threshold, reimbursing more drugs at higher prices.
2) Expanding what is included in measuring healthcare value, such as secondary benefits, could raise or lower cost-effectiveness thresholds but may not support a higher overall healthcare budget given fixed resources.
3) Drugs with either very high prices but high patient volumes (e.g. breakthrough therapies) or very high prices but low patient volumes (orphan drugs)
This presentation looks at ways in which governments can set prices, including “cost plus”, value, and the external referencing of prices elsewhere. It looks at the role that competition can play in keeping down prices. In that context it briefly discusses pricing proposals being considered in Malaysia. It makes the case for using HTA to inform pricing decisions.
Adrian Towse
Introduction
What is definition and law of supply
Factors determine supply for health care services
Factors determine price & quantity of health care
What is the production function for health
Market equilibrium
Investing in the healthcare sector
Cost production in healthcare
Different healthcare system
Models of non-profit agencies
References
Data Governance for Real-World Evidence: Cross-country differences and recomm...Office of Health Economics
This document analyzes data governance frameworks for using real-world data (RWD) to generate real-world evidence (RWE) in eight countries. It identifies 29 elements of an ideal governance framework and assesses each country's framework against these criteria. Recommendations include having clear data protection laws that allow secondary uses of health data to benefit patients, using opt-out consent for large cohort data collection, and transparent data linkage mechanisms with national interoperability standards. Current country frameworks show varying adherence to these recommendations.
Adrian Towse's slides from a session will exploring how the benefits of antibiotics can best be captured in HTA, and how we should pay for them when their value may depend on restricting their use.
Author(s) and affiliation(s): Adrian Towse, Office of Health Economics
Conference/meeting: Health Technology Assessment International (HTAi) 2018
Location: Vancouver, Canada
Date: 03/06/2018
% GDP spending in UK, G5 countries and OECD upper middle income countries. W...Office of Health Economics
The document discusses healthcare spending in Malaysia relative to other countries. It notes that while Malaysia spends around 4% of GDP on healthcare, this is split almost evenly between public and private spending. There are pressures to increase healthcare spending due to an aging population and shift to chronic diseases. While additional investment may pay off through economic and health gains, funding needs to be increased through measures like taxes on tobacco or reducing fossil fuel subsidies. The large public-private divide and high out-of-pocket spending also need to be addressed through more strategic purchasing of healthcare services.
The supply of health care services involves multiple inputs that need to be combined to produce better health outcomes. These inputs include highly skilled manpower like physicians and nurses, health facilities, pharmaceuticals, medical technology, and other infrastructure. Physicians play a crucial role in recommending treatment and making decisions that influence 80% of health spending. Specialized manpower like physicians regulate their own production and distribution through certification and licensing. Health facilities also vary in their technology, specialization, capacity, and geographic distribution across the country. Pharmaceuticals make up most health spending and involve large research costs that are recouped through patents, after which generics emerge.
Supply of health and medical care
Definition and Law of Supply.
The health care production function.
Cost production in health care.
Factors determine price and quantity of health care.
Factors affecting Supply.
Investment on healthcare.
Health insurance and supply in healthcare.
Market Equilibrium.
References
Questions
Global HTA and pricing mechanisms
What can we learn about national medicines pricing and procurement?
Led by Janssen UK
Day One, Pop-up University 3, 16.00
Generating Quality Data through Collaborative Research with an ACOTodd Berner MD
This document summarizes a presentation about generating quality data through collaborative research with an ACO. The number of public and private ACOs is growing rapidly, with over 250 CMS MSSP ACOs covering 4 million Medicare beneficiaries. The goal of the collaborative research is to disseminate valued information on effectiveness and costs of care to payers and policymakers. Real-world evidence studies can provide insights beyond randomized controlled trials by observing patient outcomes across delivery system models. Measuring quality requires considering multiple stakeholder perspectives to identify metrics that drive improvement and have utility.
Data Governance for Real-World Evidence: Cross-country differences and recommendations for a governance framework
Cole, A., Garrison, L., Mestre-Ferrandiz, J. & Towse A.
The Economics of Innovative Payment Models Compared with Single Pricing of Ph...Office of Health Economics
The presentation summarises an OHE report, exploring the economic implications of permitting multiple prices where a medicine’s value differs by indication. It considers the impact on payer budgets, patient access, incentives for innovation, and the role of competition.
Author(s) and affiliation(s): Amanda Cole, OHE. Adrian Towse, OHE. Paula Lorgelly, OHE. Richard Sullivan, King's College London.
Event: Webinar presented to IQVIA based on our OHE Research Paper
Location: n/a
Date: 12/09/2018
This presentation was an invited talk at the recent IFQCC. It presents the case for indication based pricing as an innovative approach to incentivising R&D and promotion competition. The presentation covers the work recently published in the OHE Research Report https://www.ohe.org/publications/economics-innovative-payment-models-compared-single-pricing-pharmaceuticals-0#
Author(s) and affiliation(s): Paula Lorgelly, Amanda Cole, Adrian Towse, Richard Sullivan (KCL)
Conference/meeting: International Forum for Quality Cancer Care
Event location: Keble College, Oxford
Date: 08/09/2018
This document summarizes Adrian Towse's presentation on multi-indication pricing at HTAi Rome in June 2017. It discusses the benefits of multi-indication pricing in allowing prices to better reflect the relative value of different indications. However, implementation faces challenges from stakeholders with differing perspectives. UK and US workshops provided feedback supporting the concept but noting administrative hurdles. Options for achieving multi-indication pricing include blended pricing, differential rebates, or a combination approach, but require ability to track drug use by indication using data systems.
Dr Paul Cornes has received salary from the UK National Health Service and honoraria from several pharmaceutical companies including Roche, Janssen, Sandoz, Lilly, European Generics Association, Teva, and Hospira. The document discusses the increasing cost of cancer drugs and argues that greater use of generics and biosimilars can help contain costs while maintaining treatment effectiveness. It provides examples showing that in the US, increased generic drug use has saved over $1 trillion in healthcare costs in the past decade through lower prices.
Learn about reference pricing as a purchaser in response to the high and rising pharmaceutical sales and innovative strategies for managing specialty drugs.
This document summarizes a presentation given at an ISPOR conference on multi-indication pricing. It discusses the challenges of setting one price for a drug across multiple indications when the value may differ based on the indication. It provides examples showing large price differences between indications for the same drugs in different countries. Stakeholders generally support prices reflecting relative value but have concerns about implementation. UK workshop participants felt more collaboration would be needed between stakeholders if the UK pursued multi-indication pricing schemes.
This document summarizes a presentation given by Adrian Towse on dimensions of value assessment and decision making. It discusses identifying elements of value, which usually include health effects and cost offsets but less frequently include other factors like patient preferences. Methods of assessing value discussed include using QALYs and categories/scales. The presentation also covers translating assessments of value to price and affordability, noting two main approaches of cost-effectiveness requirements and therapeutic added value requirements. It provides examples of using categories/scales to support different pricing approaches from various countries and organizations.
This document discusses the challenges of value-based pricing for pharmaceuticals and proposes multi-indication pricing as a solution. It notes that a single price across all indications can restrict access for some patients and discourage development of new indications. Multi-indication pricing, where the price varies based on the value for each indication or patient subgroup, could increase access for more patients while still reflecting value. However, it adds complexity. The document explores options for implementing multi-indication pricing such as blended pricing or differential rebates and argues that this approach is needed as most drugs now have multiple indications.
This document summarizes a presentation given by David Lin from Novartis Oncology on drug purchasing and pricing from the pharmaceutical industry perspective. The presentation covers:
- The growing demand for healthcare and new treatments putting pressure on pricing and access
- Malaysia's national medicine policy and efforts to improve access to medicines through affordability
- Factors considered in pharmaceutical pricing like production costs, reference pricing to other countries, and balancing access and sustainability
- Efforts by industry like access programs to help patients gain early access to innovative treatments
- The changing treatment landscape with new cellular and personalized therapies requiring new frameworks for evaluation and pricing assessment.
Rethinking Value Based Healthcare
Around the world healthcare providers are busy exploring how value-based healthcare can both improve the efficiency and effectiveness of healthcare delivery and seed new opportunities for innovation. Continuing our collaboration with Denmark, we are very pleased to release a new perspective on how VBHC can have greater impact in practice. Based on insights from a recent event hosted by DTU Executive Business Education and undertaken in partnership with Rethink Value, this point of view looks at the key issues for patients, physicals, providers and payers.
It explores some of the associated implications for healthcare systems worldwide, highlights several leading early examples of VBHC in practice and looks at how it can have impact at scale. Recommendations focus on the structure of care, key metrics, moving beyond pilots, changes in reimbursement models and the need for greater insight sharing and deeper collaboration.
For related Future Agenda research see www.futureofpatientdata.org
The document discusses the growing importance of demonstrating value through evidence for biotech companies when engaging with payers. It outlines how health technology assessments and real-world evidence are being used by payers globally to determine coverage, reimbursement, and contracting. Additionally, it explores emerging innovative contracting models between payers and manufacturers that are shifting focus to outcomes over utilization and sharing risk.
The document discusses the growing importance of demonstrating value through evidence for biotech companies when engaging with payers. It outlines how health technology assessments and real-world evidence are being used by payers globally to determine coverage, reimbursement, and contracting. Additionally, it explores emerging innovative contracting models between payers and manufacturers that are shifting focus to outcomes over utilization and sharing risk.
This document provides information about Dr. Paul Cornes and his conflicts of interest. It discloses that Dr. Cornes receives salary from the UK National Health Service and has received honoraria from several pharmaceutical companies. The document then discusses challenges in setting reimbursement thresholds for new cancer treatments, including that many new drugs approved in 2012 cost over $100,000 annually but provided only small survival benefits. It also considers options for containing future health spending and the need to balance health spending with economic growth.
1. Value-based differential pricing, where prices reflect local willingness-to-pay for health and other value elements, is a theoretically robust approach, though many countries currently use therapeutic added value plus price bargaining.
2. Measurement of relative health gain will remain important, but broader definitions of value need further development, moving from listing to measuring to weighting different factors.
3. The UK experience shows measuring broader value factors is possible, but weighting them explicitly makes preferences and social welfare functions clear and may cause backlash without understanding public and patient preferences. A deliberative process combining societal weighting and structured decision-making is needed for fair value assessment.
Government cost containment methods in Asia-Pacific markets are as diverse as the cultures represented in the region, so what lessons are the markets leveraging from cost containment experiences? And what, in the end, are pharmaceutical companies supposed to do about it?
Does Price Discrimination Have a Place in Pharmaceutical Pricing in Developin...Office of Health Economics
At iHEA 2013, OHE's Adrian Towse participated in a session on implementing differential pricing schemes. He discussed the role of price discrimination strategies, including the use of discounts, access programmes and risk sharing agreements in increasing the number of patients who can benefit from new medications in LMICs. Real life examples illustrated differential pricing schemes between and within countries and provided background for exploring feasibility—particularly about how options relying on confidentiality and negotiation compare with those based on collaborative international agreement about how price differentiation is developed and implemented.
The document discusses payer agreements between pharmaceutical companies and health insurers/governments that aim to address issues of pricing, reimbursement, and market access for drugs. It provides an overview of different types of agreements being used across several countries. These agreements either deal with financial issues like price-volume agreements or address uncertainty through increased data collection. The report examines trends in various countries through case studies and aims to identify features that lead to successful agreements. It also discusses perspectives from industry experts on opportunities and challenges of risk-sharing agreements.
Similar to The debate on indication-based pricing (20)
Professor Nancy Devlin argues that the use of utility theory to value health-related quality of life (HRQoL) in cost-effectiveness analysis (CEA) warrants reexamination. While utility theory has been convention for over 30 years, its application in health economics departs from the normative foundations of CEA. Extra-welfarism permits weighting outcomes based on principles other than preferences and allows multiple stakeholders to provide values. The orthodox utility-based approach is inconsistent with extra-welfarism and utility theory choices influence results. Further, stated preference methods construct rather than reveal preferences, limiting their validity. Devlin concludes the field should refocus on simple, fit-for-purpose HRQoL measures
The document discusses the topic of price transparency in healthcare. It examines price transparency from several perspectives, including whether transparency is good as an end in itself or as a means to improve outcomes. It also discusses transparency of the price-setting process versus prices obtained, and how transparency could impact competition, collusion, and prices of off-patent versus on-patent drugs. While transparency may reduce corruption and improve competition, it also potentially facilitates collusion and could result in higher prices if it reduces firms' incentives to offer low prices.
This document discusses the role of health technology assessment (HTA) and contracting mechanisms for new antibiotic drugs to address antimicrobial resistance (AMR). It notes that HTA typically focuses on clinical trial evidence but this presents challenges for antibiotics. The document recommends that HTA for antibiotics consider additional elements of public health value and that contracting move away from volume-based payments towards delinked models. International coordination on developing new approaches to AMR drug assessment and reimbursement is encouraged.
The role of real world data and evidence in building a sustainable & efficien...Office of Health Economics
This presentation defines RWD and RWE in the context of digital health, and looks at potential uses for RWD and RWE. It briefly sets out the current landscape in Malaysia and looks at the challenges in using RWE. In particular, the issues of access, governance and ensuring good quality are considered.
This document summarizes a symposium on capturing value across the healthcare system sponsored by PhRMA. The objective is to demonstrate why value assessment is critical for identifying gaps in value information, reducing low-value care, and measuring the value of health services. Speakers discuss expanding the focus of value assessment beyond drugs to hospital and medical services, where the majority of healthcare spending occurs. Presentations analyze factors driving rising US healthcare costs, measures of high- and low-value care, and approaches to align incentives to improve the system. The importance of robust measurement and considering stakeholder perspectives in value assessment is emphasized.
Role Substitution, Skill Mix, and Provider Efficiency and Effectiveness : Les...Office of Health Economics
Graham participated in an organised session on Monday July 15th 2019. In the session he presented his paper with his co-author Ioannis Laliotis from the London School of Economics. The paper revisits the relationship between workforce and maternity outcomes in the English NHS in an attempt to contribute knowledge to an important policy question for which there has been a paucity of research.
This research explores the feasibility of introducing an Outcome-Based Payment approach for new cancer drugs in England. A literature review explored the current funding landscape in England, the available evidence on existing OBP schemes internationally, and
which outcomes cancer patients value most. Two focus groups and an online survey with patients and carers, as well as interviews with NHS and government stakeholders, healthcare
professionals, and pharmaceutical industry representatives, provided additional evidence on the feasibility and suitability of OBP schemes
Understanding what aspects of health and quality of life are important to peopleOffice of Health Economics
Poster presentation from the EuroQol Plenary Meeting 2019, Brussels, Belgium. By Koonal Shah, Brendan Mulhern, Patricia Cubi-Molla, Bas Janssen, and David Mott.
Koonal presented as part of an organised session on ‘moving beyond conventional economic approaches in palliative and end of life care’. He summarised the empirical evidence on the extent of pubic support for an end of life premium, before discussing some novel approaches that have been used in recent studies. His presentation was discussed by Helen Mason of Glasgow Caledonian University.
Author(s) and affiliation(s): Koonal Shah, Office of Health Economics
Event: iHEA Congress
Date: 17/07/2019
Location: Basel, Switzerland
Assessing the Life-Cycle Value Added of Second Generation Antipsychotics in S...Office of Health Economics
This research presented in a poster at HTAi 2019, Cologne (Germany) by a team of OHE and IHE researchers, estimates the value added by second generation antipsychotics over their life-cycle in the UK and Sweden. It concludes that considering the entire life-cycle, the value added by SGAs to the system is higher than the expected value estimated at launch. P&R decisions should consider how to measure, capture and take into account the value added by medicines over the long-run.
Author(s) and affiliation(s): Mikel Berdud (Office of Health Economics, London), Niklas Wallin-Bernhardsson (Institute for Health Economics, Stockholm), Bernarda Zamora (Office of Health Economics, London), Peter Lindgren (Institute for Health Economics, Stockholm), Adrian Towse (Office of Health Economics, London)
Event: HTAi 2019 Annual Meeting
Date: 18/06/2019
Location: Cologne, Germany
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Location: Albacete, Spain
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Author(s) and affiliation(s): Meng Li, Postdoctoral Research Fellow, Leonard D Schaeffer Center, University of Southern California, Los Angeles, CA, USA. Adrian Towse, Emeritus Director, Office of Health Economics, London, UK Jens Grueger, formerly Head of Global Access, Senior Vice President at F. Hoffmann-La Roche
Event: ISPOR 2019
Location: New Orleans, USA
Date: 21/05/2019
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Event: ISPOR 2019
Location: New Orleans, USA
Date: 21/05/2019
The issue of open-source models in the cost-effectiveness and disease-level (collaborative) models has been brewing for many years. There has been a marked growth in open science, and funding bodies and publishers increasingly require that research data be made available. As mentioned in our previous Issue Panel, “cost-effectiveness models synthesise a wide range of evidence to facilitate extrapolation over time and from intermediate to final decision endpoints. These models are often statistically sophisticated and require assumptions that are not directly testable. This can lead to decision-makers “discounting” the results of cost-effectiveness analyses, particularly if the developer is seen as partial.” Open-source models, then, would encourage greater transparency in pharmacoeconomic modeling and the reuse and updating of the best/most useful models; they are essential if cost-effectiveness analyses are to be widely accepted to reduce bias, increase transparency, improve model access, and allow for faster access to critical knowledge. The ISPOR-SMDM guidelines and the EUnetHTA joint action projects, are supportive of these views on collaboration, transparency, confidentiality, processes and consistency offered by the availability of open-source models to improve decision-making around health care and reimbursement. With openness and sharing, however, come issues of copyright and access and a need to define how model sharing can be achieved in a fair and equitable manner. There is, therefore, a need to develop an ongoing dialog on openness, especially where the research may be considered precompetitive and not worthy of IP investment. The pros and cons of open source models and the proposed mission of the Open Source Model SIG to curate an ongoing dialog regarding issues around creating, disseminating, sharing, evaluating, and updating open source cost-effectiveness and comparative effectiveness models will be debated amongst SIG members.
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Event: ISPOR 2019 Annual Meeting
Date: 20/05/2019
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Event: ISPOR 2019
Location: New Orleans, LA, United States
Date: 20/05/2019
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This slide is very helpful for physiotherapy students and also for other medical and healthcare students.
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Furthermore, the time constraints and workload in healthcare settings can make it challenging for caregivers to prioritise safe patient handling Australia practices, leading to shortcuts and increased risks.
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The debate on indication-based pricing
1. The Debate on Indication-Based Pricing
Adrian Towse
Director of the Office of Health Economics
Visting Professor, London School of Economics
12th November 2018
2. Acknowledgements
Cole, A., Towse, A., Lorgelly, P. and
Sullivan, R. (2018). Economics of Innovative
Payment Models Compared with Single
Pricing of Pharmaceuticals. OHE Research
Paper 18/04, London: Office of Health
Economics. Available at:
https://www.ohe.org/publications/economic
s-innovative-payment-models-
comparedsingle-pricing-
pharmaceuticals#overlay-
context=publications
Towse, A., Cole, A., and Zamora, B.
(2018). The Debate on Indication-
Based Pricing in the U.S. and Five
Major European Countries. OHE
Consulting Report, London: Office of
Health Economics. Available at:
https://www.ohe.org/publications/de
bate-indicationbased-pricing-us-and-
five-major-european-countries
Thank you to AstraZeneca and to IQVIA respectively for their funding of these two
projects. Thank you also to my colleague Amanda Cole for her work on both of these
projects.
3. I. Potential benefits of IBP – aligning price
with value could expand patient access
Matching payments with value
• Permits rational prices which reflect true differences in value across
indications (Bach 2014; Pearson et al. 2017; Flume et al. 2016)
• Reimbursement systems that do not account for changing value
across indications or over time may produce suboptimal long-term
societal outcomes (Garrison & Veenstra 2009)
• Allows physicians to make value-based prescribing decisions
(Bradley, 2017)
• Outcomes contracts can reduce uncertainty; net price can thereby
reflect actual value in the real-world setting (Yeung and Carlson
2017)
• Could encourage research into better targeting (Sachs et al 2017)
• Can be used as a tool to make treatment indications with poor cost-
effectiveness more affordable (Bach 2016)
4. I. Potential benefits of IBP – aligning price
with value could expand patient access
Expand patient access
• Would facilitate reimbursement in indications for which, based on
current prices, the treatment is not cost-effective (Hui et al. 2017)
• IBP expands patient access and maximises quality-adjusted life
years (QALYs) gained from a given budget, as well as encouraging
the development of new indications. This provides the right signals
for R&D (Mestre-Ferrandiz et al. 2015)
Balancing the needs of all stakeholders
• Could balance affordability for payers, sustainability for
manufacturers and access for patients (Pearson et al. 2017)
5. II. Potential drawbacks of IBP –
unaffordable for payers?
Some argue that IBP would benefit industry at the
expense of rising costs for payers
• “Relative to uniform pricing, IBP results in higher prices for patients
who benefit the most, higher utilization by patients who benefit the
least, higher overall spending, and higher manufacturer profits”
(Chandra & Garthwaite 2017)
• Payers clear that IBP by itself does not meet challenges to
affordability (Pearson et al. 2017; Bach 2016)
We would qualify this: In the short-run expenditure is likely
to rise, but in the long-run IBP would provide the right
incentives for R&D and could increase price
competition at the indication-level, driving down prices
and delivering better value to the health system
6. Value($)
PU
NU
LV
MV
HV
Value($)
PU
NU
LV
MV
HV
No access
Value($)
PU
NU
LV
MV
HV
No access
No access
Value($)
Number of patients
PM
NIBP
LV
MV
HV
PL
PH
Uniform pricing scenarios: IBP scenario (static)
N: Number of patients (Nu under uniform pricing, NIBP under IBP)
P: Price (PU under uniform pricing scenarios, PH [high value] PM
[medium value] PL [low value] under IBP)
Value: HV- High value; MV: Medium value; LV: Low value
Consumer (payer) surplus
Producer surplus
No patient access
↑/↓ Prices, ↑ Spend,
↑ Patient access,
Transfer of /extra
surplus to producers,
↑ Welfare
OVERALL …
↑ Spend
↑ Patient access
↑ Welfare (but
transfer to
producers)
II. Potential drawbacks of IBP –
unaffordable for payers?
7. Value($)
Number of patients
PM
NIBP
LV
MV
HV
PL
PH
IBP scenario (static)
N: Number of patients (Nu under uniform pricing, NIBP under IBP)
P: Price (PU under uniform pricing scenarios, PH [high value] PM
[medium value] PL [low value] under IBP)
Value: HV- High value; MV: Medium value; LV: Low value
Consumer (payer) surplus
Producer surplus
Value($)
Number of patients
PMd
NIBP
LV
MV
HV
PLd
PH
PM
PL
IBP scenario (dynamic)
Dynamic price for
the medium / low
value indications
(PMd/PLd)
Value (PM/PL in
static scenario)<
This leads to transfer of surplus
from producer to consumer (payer)
II. Potential drawbacks of IBP –
unaffordable for payers?
8. III. IBP – The details matter
What format should IBP take?
• IBP aligns payments with value, but efficacy differs from
effectiveness; this means that evidence-based IBP prices (set ex-
ante) might be quite different to outcomes-based reimbursement
(based on realised value) (Yeung & Carlson 2017)
Barrier (opportunity?): data collection
• Poor data availability for tracking use by indication per patient
(Pearson et al. 2017; Bach 2014)
• Feasibility of data collection must be balanced with the clinical
relevance of the outcome (Yeung & Carlson 2017)
• Data lacking on effectiveness in sub-populations (Sachs et al. 2017)
• IBP could facilitate the collection of richer real-world data, and
provide greater transparency in the utilisation of cancer drugs (Bach
2014)
9. III. IBP – The details matter
Legal and contractual barriers (surmountable?)
• Market-specific contractual barriers, e.g. Medicaid's best-price rule
(Pearson et al. 2017)
This could be overcome, e.g. through contracts using weighted
average price for multiple indications, or through product
differentiation (Sachs et al. 2017)
• Bulk purchases by pharmacies, and volume-based payments by
doctors and hospitals (Bach 2014)
• Off-label use, anti-kickback statute (Pearson et al. 2017)
• Privacy concerns inhibit data sharing with manufacturers (Sachs et
al. 2017)
Political challenges may be greater than technical
challenges (Bach 2014)
10. In summary…
• The case for IBP continues to be debated.
• Some argue that IBP would lead to higher prices and
increasing expenditure on medicines.
• This depends on how uniform prices are set and the extent
IBP promotes price competition
• In principle it could be both efficient – increasing the
numbers of patients using a medicine and increasing the
numbers of new indications that offer value for money – and
potentially promote competition.
• If IBP were to be implemented, a number of barriers need to be
overcome to enable its potential benefits to be realised.
• US health plans and PBMs are currently piloting IBP approaches
with the objective to better manage expenditure
11. Reference list
• Bach, P.B., 2016. Walking the Tightrope Between Treatment Efficacy and Price. Journal of Clinical
Oncology; 34(9): 889-891.
• Bach P.B., 2014. Indication-specific pricing for cancer drugs. JAMA. 2014 Oct 22-29;312(16):1629-30.
• Bradley, J., 2017. Cancer, Financial Burden, and Medicare Beneficiaries Journal of Clinical Oncology
35, no. 22 (August 2017) 2461-2462.
• Chandra A, Garthwaite C., 2017. The Economics of Indication-Based Drug Pricing. N Engl J Med. Jul
13; 377(2):103-106.
• Flume M, Bardou M, Capri S, Sola-Morales O, Cunningham D, Levin L-A, et al., 2016. Feasibility and
attractiveness of indication value-based pricing in key EU countries. Journal of Market Access & Health
Policy; 4(1):30970.
• Garrison LP Jr, Veenstra DL., 2009. The economic value of innovative treatments over the product life
cycle: the case of targeted trastuzumab therapy for breast cancer. Value Health; 12(8):1118-23.
• Hui L, von Keudell G, Wang R, Zeidan AM, Gore SD, Ma X, Davidoff AJ, Huntington SF, 2017.
Costeffectiveness analysis of consolidation with brentuximab vedotin for high-risk Hodgkin lymphoma
after autologous stem cell transplantation. Cancer. 2017 Oct 1;123(19):3763-3771.
• Mestre-Ferrandiz,J., Towse, A., Dellamano, R., and Pistollato, M. 2015. Multi-indication Pricing: Pros,
Cons and Applicability to the UK. Seminar Briefing 56. Office of Health Economics. 2015.
• Pearson SD, Dreitlein WB, Henshall C, Towse A., 2017. Indication-specific pricing of pharmaceuticals
in the US healthcare system. J Comp Eff Res. Jul; 6(5):397-404.
• Sachs R, Bagley N, Lakdawalla DN., 2017. Innovative Contracting for Pharmaceuticals and Medicaid's
Best-Price Rule. J Health Polit Policy Law. Sep 28.
• Yeung K, Li M, Carlson JJ. Using Performance-Based Risk-Sharing Arrangements to Address
Uncertainty in Indication-Based Pricing. J Manag Care Spec Pharm. 2017; 3(10):1010-1015
12. Contacts
To enquire about additional information and analyses, please contact
Adrian Towse at atowse@ohe.org
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