SciCombinator

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Concept: Price

174

Since its enactment in 2000, the European Orphan Medicinal Products Regulation has allowed the review and approval of approaching 70 treatments for some 55 different conditions in Europe. Success does not come without a price, however. Many of these so-called “orphan drugs” have higher price points than treatments for more common diseases. This has been raising debate as to whether the treatments are worth it, which, in turn risks blocking patient access to treatment. To date, orphan drugs have only accounted for a small percentage of the overall drug budget. It would appear that, with increasing numbers of orphan drugs, governments are concerned about the future budget impact and their cost-effectiveness in comparison with other healthcare interventions. Orphan drugs are under the spotlight, something that is likely to continue as the economic crisis in Europe takes hold and governments respond with austerity measures that include cuts to healthcare expenditures. Formally and informally, governments are looking at how they are going to handle orphan drugs in the future. Collaborative proposals between EU governments to better understand the value of orphan drugs are under consideration. In recent years there has been increasing criticism of behaviours in the orphan drug field, mainly centring on two key perceptions of the system: the high prices of orphan drugs and their inability to meet standard cost-effectiveness thresholds; and the construct of the system itself, which allows companies to gain the benefits that accrue from being badged as an orphan drug. The authors hypothesise that, by examining these criticisms individually, one might be able to turn these different “behaviours” into criteria for the creation of a system to evaluate new orphan drugs coming onto the market. It has been acknowledged that standard methodologies for Health Technology Assessments (HTA) will need to be tailored to take into account the specificities of orphan drugs given that the higher price-points claimed by orphan drugs are unlikely to meet current cost-effectiveness thresholds. The authors propose the development of a new assessment system based on several evaluation criteria, which would serve as a tool for Member State governments to evaluate each new orphan drug at the time of pricing and reimbursement. These should include rarity, disease severity, the availability of other alternatives (level of unmet medical need), the level of impact on the condition that the new treatment offers, whether the product can be used in one or more indications, the level of research undertaken by the developer, together with other factors, such as manufacturing complexity and follow-up measures required by regulatory or other authorities. This will allow governments to value an orphan drug that fulfilled all the criteria very differently from one that only met some of them. An individual country could determine the (monetary) value that it places on each of the different criteria, according to societal preferences, the national healthcare system and the resources at its disposal – each individual government deciding on the weighting attributed to each of the criteria in question, based on what each individual society values most. Such a systematic and transparent system will help frame a more structured dialogue between manufacturers and payers, with the involvement of the treating physicians and the patients; and foster a more certain environment to stimulate continued investment in the field. A new approach could also offer pricing and reimbursement decision-makers a tool to handle the different characteristics amongst new orphan drugs, and to redistribute the national budgets in accordance with the outcome of a differentiated assessment. The authors believe that this could, therefore, facilitate the approach for all stakeholders.

Concepts: Health economics, Universal health care, Clinical trial, Price, Rare disease, Orphan drug, European Organization for Rare Diseases, National Organization for Rare Disorders

155

Direct primary care (DPC) is an emerging practice alternative that (1) eliminates traditional third-party fee-for-service billing and (2) charges patients a periodic fee for primary care services. We describe the DPC model by identifying DPC practices across the United States; distinguish it from other practice arrangements, such as the “concierge” practice; and describe the model’s pricing using data compiled from existing DPC practices across the United States. Lower price points and a broad distribution of DPC practices were confirmed, but data about quality are lacking.

Concepts: United States, U.S. state, Alaska, Marketing, Price, Oregon, Pricing, Primary election

151

This article aims to define a value-based approach to pricing and reimbursement for off-patent originators using a multiple criteria decision analysis (MCDA) approach centered on a systematic analysis of current pricing and reimbursement policies in China. A drug price policy review was combined with a quantitative analysis of China’s drug purchasing database. Policy preferences were identified through a MCDA performed by interviewing well-known academic experts and industry stakeholders. The study findings indicate that the current Chinese price policy includes cost-based pricing and the establishment of maximum retail prices and premiums for off-patent originators, whereas reference pricing may be adopted in the future. The literature review revealed significant differences in the dissolution profiles between originators and generics; therefore, dissolution profiles need to be improved. Market data analysis showed that the overall price ratio of generics and off-patent originators was around 0.54-0.59 in 2002-2011, with a 40 % price difference, on average. Ten differentiating value attributes were identified and MCDA was applied to test the impact of three pricing policy scenarios. With the condition of implementing quality consistency regulations and controls, a reduction in the price gap between high-quality off-patent products (including originator and generics) seemed to be the preferred policy. Patents of many drugs will expire within the next 10 years; thus, pricing will be an issue of importance for off-patent originators and generic alternatives.

Concepts: Scientific method, Drug, Decision theory, Decision making software, Qualitative research, Price, Pricing, Suggested retail price

88

Coastal hypoxia (dissolved oxygen ≤ 2 mg/L) is a growing problem worldwide that threatens marine ecosystem services, but little is known about economic effects on fisheries. Here, we provide evidence that hypoxia causes economic impacts on a major fishery. Ecological studies of hypoxia and marine fauna suggest multiple mechanisms through which hypoxia can skew a population’s size distribution toward smaller individuals. These mechanisms produce sharp predictions about changes in seafood markets. Hypoxia is hypothesized to decrease the quantity of large shrimp relative to small shrimp and increase the price of large shrimp relative to small shrimp. We test these hypotheses using time series of size-based prices. Naive quantity-based models using treatment/control comparisons in hypoxic and nonhypoxic areas produce null results, but we find strong evidence of the hypothesized effects in the relative prices: Hypoxia increases the relative price of large shrimp compared with small shrimp. The effects of fuel prices provide supporting evidence. Empirical models of fishing effort and bioeconomic simulations explain why quantifying effects of hypoxia on fisheries using quantity data has been inconclusive. Specifically, spatial-dynamic feedbacks across the natural system (the fish stock) and human system (the mobile fishing fleet) confound “treated” and “control” areas. Consequently, analyses of price data, which rely on a market counterfactual, are able to reveal effects of the ecological disturbance that are obscured in quantity data. Our results are an important step toward quantifying the economic value of reduced upstream nutrient loading in the Mississippi Basin and are broadly applicable to other coupled human-natural systems.

Concepts: Scientific method, Value, Price, Null hypothesis, Overfishing, Shrimp, Microeconomics, Relative price

64

Price and affordability of foods are important determinants of health. Targeted food pricing policies may help improve population diets. However, methods producing comparable data to inform relevant policy decisions are lacking in Australia and globally. The objective was to develop and pilot standardised methods to assess the price, relative price and affordability of healthy (recommended) and current (unhealthy) diets and test impacts of a potential policy change.

Concepts: Health care, Public health, Health, Epidemiology, Nutrition, Policy, Population health, Price

59

New hepatitis C virus (HCV) medicines have markedly improved treatment efficacy and regimen tolerability. However, their high prices have limited access, prompting wide debate about fair and affordable prices. This study systematically compared the price and affordability of sofosbuvir and ledipasvir/sofosbuvir across 30 countries to assess affordability to health systems and patients.

Concepts: Medicine, Hepatitis, Hepatitis C, Efficacy, Cost, Hepatitis A, Price, Hepatitis C virus

45

Health spending growth in the United States for 2015-25 is projected to average 5.8 percent-1.3 percentage points faster than growth in the gross domestic product-and to represent 20.1 percent of the total economy by 2025. As the initial impacts associated with the Affordable Care Act’s coverage expansions fade, growth in health spending is expected to be influenced by changes in economic growth, faster growth in medical prices, and population aging. Projected national health spending growth, though faster than observed in the recent history, is slower than in the two decades before the recent Great Recession, in part because of trends such as increasing cost sharing in private health insurance plans and various Medicare payment update provisions. In addition, the share of total health expenditures paid for by federal, state, and local governments is projected to increase to 47 percent by 2025.

Concepts: Health care, Medicare, Health insurance, United States, Economics, Cost, Price, Canada Health Act

45

Large commercial publishers sell bundled online subscriptions to their entire list of academic journals at prices significantly lower than the sum of their á la carte prices. Bundle prices differ drastically between institutions, but they are not publicly posted. The data that we have collected enable us to compare the bundle prices charged by commercial publishers with those of nonprofit societies and to examine the types of price discrimination practiced by commercial and nonprofit journal publishers. This information is of interest to economists who study monopolist pricing, librarians interested in making efficient use of library budgets, and scholars who are interested in the availability of the work that they publish.

Concepts: Academic publishing, Marketing, Price, Society, Pricing, Public library, Marketing mix, Price discrimination

34

While evidence that alcohol pricing policies reduce alcohol-related health harm is robust, and alcohol taxation increases are a WHO “best buy” intervention, there is a lack of research comparing the scale and distribution across society of health impacts arising from alternative tax and price policy options. The aim of this study is to test whether four common alcohol taxation and pricing strategies differ in their impact on health inequalities.

Concepts: Statistics, Mathematics, Policy, Price, Tax, Pricing, Public finance, Best Buy

32

High pharmaceutical expenditure is one of the main concerns for policymakers worldwide. In Colombia, a middle-income country, outpatient prescription represents over 10% of total health expenditure in the mandatory benefits package (POS), and close to 90% in the complementary government fund (No POS). In order to control expenditure, since 2011, the Ministry of Health introduced price caps on inpatient drugs reimbursements by active ingredient. By 2013, more than 400 different products, covering 80% of public pharmaceutical expenditure were controlled. This paper investigates the effects of the Colombian policy efforts to control expenditure by controlling prices.

Concepts: Pharmacology, Cost, Pharmaceutical drug, Control, Price, Ministry of Truth, Price point