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Levaggi L, Levaggi R. Timely, Cheap, or Risk-Free? The Effect of Regulation on the Price and Availability of New Drugs. Pharmacy (Basel) 2024; 12:50. [PMID: 38525730 PMCID: PMC10961771 DOI: 10.3390/pharmacy12020050] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 12/20/2023] [Revised: 02/21/2024] [Accepted: 02/28/2024] [Indexed: 03/26/2024] Open
Abstract
The high level of regulation of innovative drugs on the market, which is necessary to protect consumers, produces important effects on drug availability and innovation. In public healthcare systems, the need to curb prices comes from expenditure considerations. The aim of price regulation is to obtain a more equitable allocation of the value of an innovative drug between industries and patients (by reducing prices to make drugs more affordable), but it may also reduce access. (In the listing process, the industry may find it more convenient to limit commercialisation to profitable subgroups of patients.) Furthermore, with the advent of personalised medicine, there is another important dimension that has to be considered, namely, incentives to invest in drug personalisation. In this paper, we review and discuss the impact of different pricing rules on the expenditure and availability of new drugs.
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Affiliation(s)
- Laura Levaggi
- Faculty of Engineering, Free University of Bolzano-Bozen, Piazza Università, 1, 39100 Bolzano, Italy;
| | - Rosella Levaggi
- Department of Economics and Management, University of Brescia, Via San Faustino 74b, 25100 Brescia, Italy
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Fortuny M, Sanduzzi-Zamparelli M, Reig M. Systemic therapies in hepatocellular carcinoma: A revolution? United European Gastroenterol J 2024; 12:252-260. [PMID: 38267015 PMCID: PMC10954433 DOI: 10.1002/ueg2.12510] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Journal Information] [Submit a Manuscript] [Subscribe] [Scholar Register] [Received: 09/03/2023] [Accepted: 11/06/2023] [Indexed: 01/26/2024] Open
Abstract
The evolution in systemic therapies in hepatocellular carcinoma (HCC) signifies a strategy of high-cost, high-gain innovation that originated with sorafenib, despite its limited impact on tumor response. This strategic approach paved the way for the emergence of a second wave of the short-lived competitive advantage, exemplified by the incorporation of atezolizumab plus bevacizumab and tremelimumab plus durvalumab. In the context of safety concerns within the liver cancer domain, the IMBRAVE150 and HIMALAYA trials boldly incorporated bevacizumab and tremelimumab, respectively, demonstrating the continuation of the high-risk, high-reward innovation paradigm. This review delves into the strengths, weaknesses, opportunities, and threats analysis of systemic therapies in the field of HCC.
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Affiliation(s)
- Marta Fortuny
- Barcelona Clinic Liver Cancer (BCLC) Group, Institut d'Investigacions Biomèdiques August Pi i Sunyer (IDIBAPS), Barcelona, Spain
- Liver Oncology Unit, Liver Unit, Hospital Clinic de Barcelona, Barcelona, Spain
- Centro de Investigación Biomédica en Red en Enfermedades Hepáticas y Digestivas (CIBEREHD), Madrid, Spain
- Universitat Autònoma de Barcelona, Barcelona, Spain
| | - Marco Sanduzzi-Zamparelli
- Barcelona Clinic Liver Cancer (BCLC) Group, Institut d'Investigacions Biomèdiques August Pi i Sunyer (IDIBAPS), Barcelona, Spain
- Liver Oncology Unit, Liver Unit, Hospital Clinic de Barcelona, Barcelona, Spain
- Centro de Investigación Biomédica en Red en Enfermedades Hepáticas y Digestivas (CIBEREHD), Madrid, Spain
| | - Maria Reig
- Barcelona Clinic Liver Cancer (BCLC) Group, Institut d'Investigacions Biomèdiques August Pi i Sunyer (IDIBAPS), Barcelona, Spain
- Liver Oncology Unit, Liver Unit, Hospital Clinic de Barcelona, Barcelona, Spain
- Centro de Investigación Biomédica en Red en Enfermedades Hepáticas y Digestivas (CIBEREHD), Madrid, Spain
- Barcelona University, Barcelona, Spain
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Takami A, Kato M, Deguchi H, Igarashi A. Value elements and methods of value-based pricing for drugs in Japan: a systematic review. Expert Rev Pharmacoecon Outcomes Res 2023; 23:749-759. [PMID: 37339436 DOI: 10.1080/14737167.2023.2223984] [Citation(s) in RCA: 4] [Impact Index Per Article: 4.0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 11/28/2022] [Accepted: 06/07/2023] [Indexed: 06/21/2023]
Abstract
INTRODUCTION Value-based pricing (VBP) can be a promising tool for optimizing drug prices. However, there is no consensus on the specific value elements and pricing method that should be used for VBP. AREAS COVERED We performed a systematic review and narrative synthesis to investigate the value elements and pricing method for VBP. The main inclusion criterion was that value elements, VBP method, and estimated prices for actual drugs were reported. We performed a search in MEDLINE and ICHUSHI Web. Eight articles met the selection criteria. Four studies adopted the cost-effectiveness analysis (CEA) approach and the others used different approaches. The CEA approach included the value elements of productivity, value of hope, real option value, disease severity, insurance value in addition to costs and quality-adjusted life years. The other approaches used efficacy, toxicity, novelty, rarity, research and development costs, prognosis, population health burden, unmet needs, and effectiveness. Each study used individual methods to quantify these broader value elements. EXPERT OPINION Both conventional and broader value elements are used for VBP. To allow VBP to be widely applied to various diseases, a simple, versatile method is preferable. Further research is needed to establish VBP method which enables to incorporate broader values.
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Affiliation(s)
- Akina Takami
- Market Access, Public Affairs & Patient Experience, Japan Pharma Business Unit, Takeda Pharmaceutical Company Limited, Tokyo, Japan
- Department of Health Economics and Outcomes Research, Graduate School of Pharmaceutical Sciences, The University of Tokyo, Tokyo, Japan
| | - Masafumi Kato
- Market Access, Public Affairs & Patient Experience, Japan Pharma Business Unit, Takeda Pharmaceutical Company Limited, Tokyo, Japan
| | - Hisato Deguchi
- Market Access, Public Affairs & Patient Experience, Japan Pharma Business Unit, Takeda Pharmaceutical Company Limited, Tokyo, Japan
| | - Ataru Igarashi
- Department of Health Economics and Outcomes Research, Graduate School of Pharmaceutical Sciences, The University of Tokyo, Tokyo, Japan
- Department of Public Health, School of Medicine, Yokohama City University, Yokohama, Japan
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Capri S, Antoñanzas F, Levaggi R. The impact of conventional cost-effectiveness analysis on pricing dynamics in the market of new medicines: a proposed countervailing approach. Expert Rev Pharmacoecon Outcomes Res 2023; 23:431-438. [PMID: 36823030 DOI: 10.1080/14737167.2023.2184801] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 02/25/2023]
Abstract
BACKGROUND Countries using cost effectiveness ratio as a decision tool for price and reimbursement decisions still witness accelerating price increases. The objective of this paper is to propose a change in the application of the incremental cost effectiveness ratio as a criterion for price policy. RESEARCH DESIGN We develop a model that sets a price for marginal effectiveness equal to the marginal willingness to pay, but it reimburses average effectiveness according to the size of increased QALY gain. RESULTS This new formula also allows to split the economic value of drug between patients and the industry and creates a reward to invest into QALY gains. We show some empirical data of the new prices derived from the application of the new formula, as well as the implications in terms of the consumer and manufacturer´s surplus based on two potential scenarios of the incentives generated by this new formulation. DISCUSSION We propose that small increases in life expectancy be priced differently from substantial as a way of containing the price dynamics. CONCLUSIONS A change in the application of the ICER threshold will help to reduce the price pressure on public budgets.
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Affiliation(s)
- Stefano Capri
- School of Economics and Management, Cattaneo-LIUC University, Castellanza (Varese), Italy
| | | | - Rosella Levaggi
- Dipartimento di Economia e Management, Università degli Studi di Brescia, Brescia, Italy
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Levaggi R, Pertile P. A reply to "Who would benefit from average value-based pricing?". Health Econ 2021; 30:2284-2286. [PMID: 34245084 DOI: 10.1002/hec.4392] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Indexed: 06/13/2023]
Affiliation(s)
- Rosella Levaggi
- Department of Economics and Management, University of Brescia, Brescia, Italy
| | - Paolo Pertile
- Department of Economics, University of Verona, Verona, Italy
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Levaggi L, Levaggi R. Value-based drug price schemes: a welfare analysis. Journal of Pharmaceutical Health Services Research 2021. [DOI: 10.1093/jphsr/rmab043] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/14/2022]
Abstract
Abstract
Objectives
The market for innovative drugs is characterized by high levels of regulation, whose impact on the market is not neutral. On the one hand, strict regulation may in fact adversely affect incentives to develop new and better products; on the other hand, high prices may drive an unsustainable increase in healthcare costs. This trade-off is particularly important in Europe, where about 75% of drugs costs are financed by the public sector.
Methods
We develop a simple model that allows to compare the impact of different listing and pricing strategies on the social value of innovative drugs, the consumer surplus and the expected profit of the industry.
Key findings
Uncertainty in the expected price, as well as other forms of access regulation, may lead to a fairer division of the social value between patients and the industry, at the cost of leaving some of the potential value of the drug unexploited.
Conclusions
The regulator may improve value for money if it is prepared either to restrict access to the drug or to reduce the expected price. In both cases, the number of groups of patients treated may be different from the social optimum.
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Affiliation(s)
- Laura Levaggi
- Faculty of Science and Technology, Free University of Bolzano-Bozen, Bolzano Bozen, Italy
| | - Rosella Levaggi
- Department of Economics and Management, University of Brescia, Brescia, Italy
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Gamba S, Pertile P, Vogler S. The impact of managed entry agreements on pharmaceutical prices. Health Econ 2020; 29 Suppl 1:47-62. [PMID: 32628324 DOI: 10.1002/hec.4112] [Citation(s) in RCA: 18] [Impact Index Per Article: 4.5] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 11/04/2019] [Revised: 04/30/2020] [Accepted: 05/04/2020] [Indexed: 06/11/2023]
Abstract
Managed entry agreements (MEAs) have been used for several years, with the aim of curbing the growth of pharmaceutical expenditure and enhancing patient access to innovation. Yet, much remains to be understood about their economic implications. This paper studies the impact of MEAs on list prices, that is, prices before the deduction of any discount. Using a theoretical model, we show that, under most price setting regimes, the introduction of an MEA leads to a higher list price. This is confirmed by our empirical analysis of a sample of 156 medicines in six countries, providing a conservative estimate of the increase in price due to the MEA of 5.9%. A relevant policy implication is that payers may overestimate the financial gains that can be achieved through this tool.
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Affiliation(s)
- Simona Gamba
- Department of Economics and Finance, Università Cattolica del Sacro Cuore, Milan, Italy
| | - Paolo Pertile
- Department of Economics, University of Verona, Verona, Italy
| | - Sabine Vogler
- Pharmacoeconomics Department, Gesundheit Österreich GmbH, Austrian National Public Health Institute, Vienna, Austria
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Costa-Font J, Levaggi R. Innovation, aging, and health care: Unraveling "silver" from "red" herrings? Health Econ 2020; 29 Suppl 1:3-7. [PMID: 33146937 DOI: 10.1002/hec.4187] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.3] [Reference Citation Analysis] [What about the content of this article? (0)] [Affiliation(s)] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 05/12/2020] [Revised: 05/12/2020] [Accepted: 10/21/2020] [Indexed: 06/11/2023]
Abstract
This perspective paper argues that a sustainable health system design encompasses identifying opportunities and incentives for innovation, alongside an analysis of its effect on expenditure. Although aging alone is not a powerful cost driver, the combined effect of costly innovation, personalized care, and the rise of chronic conditions is. We identify an increasing role of prevention, the reduction of the prevalence of chronic conditions, re-organisation of incentives in health care markerts, including a closer scrutiny of the appropriateness of new treatments.
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Affiliation(s)
- Joan Costa-Font
- Department of Health Policy, London School of Economics, London, UK
| | - Rosella Levaggi
- Department of Economics and Management, University of Brescia, Brescia, Italy
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