Opinion on Innovative payment models for high-cost innovative
medicines

RICCIARDI, W., P. PITA BARROS, Aleš BOUREK, W. BROUWER, L. LEHTONEN, M. MCKEE and C. WILD. Opinion on Innovative payment models for high-cost innovative medicines. Luxembourg: Publications Office of the European Union, 2018, 78 pp. Expert Panel on effective ways of investing in Health. ISBN 978-92-79-77052-4. Available from: https://dx.doi.org/10.2875/049700.

Other formats: BibTeX LaTeX RIS

TY  - BOOK
ID  - 1498118
AU  - Ricciardi, W. - Pita Barros, P. - Bourek, Aleš - Brouwer, W. - Lehtonen, L. - McKee, M. - Wild, C.
PY  - 2018
TI  - Opinion on Innovative payment models for high-cost innovative medicines
VL  - Expert Panel on effective ways of investing in Health
PB  - Publications Office of the European Union
CY  - Luxembourg
SN  - 9789279770524
KW  - EXPH
KW  - Expert Panel on effective ways of investing in Health
KW  - scientific opinion
KW  - innovative payment models
KW  - high-cost medicines
UR  - https://ec.europa.eu/health/expert_panel/sites/expertpanel/files/docsdir/opinion_innovative_medicines_en.pdf
L2  - https://ec.europa.eu/health/expert_panel/sites/expertpanel/files/docsdir/opinion_innovative_medicines_en.pdf
N2  - The growth of pharmaceutical expenditures due to new high-cost innovative medicines, under the current institutional framework, creates financial challenges to health systems. The recognition that the current path of growth cannot be continued indefinitely leads to the search of new ways to ensure that innovation “that matters” is produced, that patients have access to innovation and that health systems are financially sustainable.This context leads to the discussion of innovative payment models for new medicines that improves the way the three above-mentioned objectives are met.It is unlikely that a single payment model will be optimal for all situations. Some broad principles should be observed when defining specific payment models for innovative medicines and deciding on rewarding R&D in pharmaceutical products: Greater price and cost transparency, including the acknowledgement that high prices (high costs to payers) may or may not have underlying high costs of R&D. Revisit the promotion of innovation through patent law and market exclusivity, as other mechanisms to promote and reward high-value innovations can and should be devised. This is particularly true when clear areas of neglected attention can be identified in a consensual way. The patent system is the current bestoption for decentralized innovation efforts when consumers are price sensitive, but not necessarily otherwise. This opens space to explore new models of promoting innovation that will encompass novel payment models which may or may not be associated with different rules in R&D funding (say, making use of prize-awarding mechanisms). Develop methodologies to measure the social value of pharmaceutical products and systematically use such methods, for instance in the context of Health Technology Assessment. Have an assessment of exercise of market power in each price negotiation, as insurance protection set by health systems reduces the role of consumer’s price sensitivity in limiting price increases of new products under patent protection. Set better rewards for higher therapeutic value added, so that innovation efforts are directed to the more relevant areas. Payment systems should evolve in the direction of paying for acquisition of a service (treatment) and not of a product (pill). Explore non-linear payment systems, including bundling, price-volume agreements, differentiation across geographies, and across indications, ensuring the conditions required for all parties to benefit.Create dialogue platforms involving all relevant stakeholders.
ER  -

Basic information
Original name	Opinion on Innovative payment models for high-cost innovative medicines
Authors	RICCIARDI, W. (380 Italy), P. PITA BARROS (620 Portugal), Aleš BOUREK (203 Czech Republic, guarantor, belonging to the institution), W. BROUWER (528 Netherlands), L. LEHTONEN (246 Finland), M. MCKEE (372 Ireland) and C. WILD (40 Austria).
Edition	Luxembourg, 78 pp. Expert Panel on effective ways of investing in Health, 2018.
Publisher	Publications Office of the European Union

Other information
Original language	English
Type of outcome	Book on a specialized topic
Field of Study	30304 Public and environmental health
Country of publisher	Belgium
Confidentiality degree	is not subject to a state or trade secret
Publication form	printed version "print"
WWW	URL
RIV identification code	RIV/00216224:14110/18:00106243
Organization unit	Faculty of Medicine
ISBN	978-92-79-77052-4
Doi	http://dx.doi.org/10.2875/049700
Keywords in English	EXPH; Expert Panel on effective ways of investing in Health; scientific opinion; innovative payment models; high-cost medicines
Tags	rivok
Tags	International impact, Reviewed
Changed by	Changed by: Soňa Böhmová, učo 232884. Changed: 22/2/2019 13:12.

Abstract

The growth of pharmaceutical expenditures due to new high-cost innovative medicines, under the current institutional framework, creates financial challenges to health systems. The recognition that the current path of growth cannot be continued indefinitely leads to the search of new ways to ensure that innovation “that matters” is produced, that patients have access to innovation and that health systems are financially sustainable.This context leads to the discussion of innovative payment models for new medicines that improves the way the three above-mentioned objectives are met.It is unlikely that a single payment model will be optimal for all situations. Some broad principles should be observed when defining specific payment models for innovative medicines and deciding on rewarding R&D in pharmaceutical products: Greater price and cost transparency, including the acknowledgement that high prices (high costs to payers) may or may not have underlying high costs of R&D. Revisit the promotion of innovation through patent law and market exclusivity, as other mechanisms to promote and reward high-value innovations can and should be devised. This is particularly true when clear areas of neglected attention can be identified in a consensual way. The patent system is the current bestoption for decentralized innovation efforts when consumers are price sensitive, but not necessarily otherwise. This opens space to explore new models of promoting innovation that will encompass novel payment models which may or may not be associated with different rules in R&D funding (say, making use of prize-awarding mechanisms). Develop methodologies to measure the social value of pharmaceutical products and systematically use such methods, for instance in the context of Health Technology Assessment. Have an assessment of exercise of market power in each price negotiation, as insurance protection set by health systems reduces the role of consumer’s price sensitivity in limiting price increases of new products under patent protection. Set better rewards for higher therapeutic value added, so that innovation efforts are directed to the more relevant areas. Payment systems should evolve in the direction of paying for acquisition of a service (treatment) and not of a product (pill). Explore non-linear payment systems, including bundling, price-volume agreements, differentiation across geographies, and across indications, ensuring the conditions required for all parties to benefit.Create dialogue platforms involving all relevant stakeholders.

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Opinion on Innovative payment models for high-cost innovative medicines

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