Developing and communicating a value sharing approach to pricing new pharmaceuticals in the UK NHS
Theme 1: Empirical and conceptual work relating to medicines pricing
As part of EEPRU-2, EEPRU developed a new approach to quantifying the value of new pharmaceuticals and linking this to appropriate pricing policies. This research addressed three concerns with current pricing mechanisms: they often fail to reflect the long-term benefits of generics and biosimilars becoming available, they don’t account for the impact of price on R&D and future innovation, and they don’t appropriately account for health opportunity costs. This research suggests that it may be appropriate for pricing policy to move away from assessing value using cost-effectiveness thresholds and towards evaluating how different pricing policies distribute value between manufacturers, patients and health systems.
Discussions with UK policy contacts have indicated that there is significant interest in considering how these methods could be integrated into the way the NHS determines prices for branded medicines in the future. However, there is the need for further evidence about, and clear explanation of, a pricing mechanism based on shares of value.
Aims
To communicate the relevance of considering appropriate value sharing as a core goal of pharmaceutical pricing policy
To assess what this change in pricing policy could mean for the payments for different types of products
To consider how the performance of existing pricing policies, and potential new approaches to pricing, is influenced by key parameters (e.g. the discount rate) and scenarios (e.g. when the incumbent treatment is an on-patent originator product).
Project Team
Beth Woods, Carlos Rojas Roque, Karl Claxton, Mark Sculpher
Contact
Beth Woods beth.woods@york.ac.uk
Plain English Summary
Background:
The health system plays an important role in assessing whether new pharmaceuticals represent good value for money. However, the current tools for assessing value and therefore appropriate pricing levels don’t take account of all important factors. For example, they don’t take into account the way prices for pharmaceuticals are likely to change over time, or how prices might influence drug companies’ decisions about whether to invest in more research to develop new products. We have previously conducted research to understand whether new approaches, such as assessing how value is shared between drug companies and health systems/patients, might provide a better basis for assessing value and negotiating prices.
Aims and objectives:
In this project, this research will be communicated to a wider set of stakeholders such as drug companies, policy makers, and other academics. We will also develop a tool that shows how the new approach to pricing would change the prices paid for different types of medicines under different scenarios.
Methods:
We will develop a presentation to communicate the approach, a mathematical model to simulate its likely effects, and a paper summarising our findings.
Policy Relevance & Dissemination:
This work will contribute to shaping NHS pricing strategies and will be summarised in one or more peer-reviewed papers.