THE proliferation of high-cost medicines and rising drug prices are increasing
pressures on public health spending and calling into question the pharmaceutical
industry’s pricing strategies. Governments need to work with the industry and
regulators to define a new approach to the development and use of new health
technologies that encourages innovation while also delivering more affordable
and value for money treatments, according to a new OECD report.
New Health Technologies: Managing Access, Value and Sustainability says that
pharmaceutical spending is increasingly skewed towards high-cost products. The
launch prices of drugs for cancer and rare diseases are rising, sometimes without
a commensurate increase in health benefits for patients. For instance, in the
United States, the launch price of oncology drugs per life-year gained has been
multiplied by four in less than 20 years - in constant terms - and now exceeds
USD 200 000.
Payers, such as insurers or public health providers, are also increasingly struggling
to pay for high-cost medicines targeting very small populations, which are expected
to proliferate with the development of precision medicine. On the other side
of spectrum, new treatments for hepatitis which are very effective and cost-effective
in the long-term but target a wide population, are unaffordable to many who would
benefit in almost all OECD countries because of their high budget impact.
The prices paid for technologies must reflect their real-world health benefits
compared to alternatives, and be adjusted based on evidence about their actual
impact. Payers must be equipped with the necessary powers to adjust prices and
withdraw payment for ineffective technologies.
A rebalancing of the negotiating powers of payers and manufacturers is needed,
says the report. This could be through increased transparency and co-operation
between payers and international joint procurement initiatives, as tested in
Europe and Latin America. Pricing agreements, which link the final price paid
to the actual performance of the drug, as used in Italy and England, may also
be effective if management and administration costs are controlled and the clinical
data and evidence collected made widely available to the scientific community.
The report, which will be discussed at an OECD meeting for Ministers of Health
on “The Next Generation of Health Reforms” in Paris on 17 January, highlights
other challenges facing the adoption of new technologies. Investment in R&D
to treat neglected diseases, such as HIV/AIDS or tuberculosis, fight antimicrobial
resistance and address dementia has also become less attractive as their profitability
is lower. The incentives for private investment in these areas should be strengthened.
Many biomedical technologies are today approved and adopted based on limited
evidence of their safety and effectiveness. Assessment of their performance in
real world conditions is rare. This compromises safety, is wasteful and no longer
sustainable.
More efforts are also needed to harness the potential of health data more effectively.
Use of personal health data creates major opportunities for health system improvement,
research and disease surveillance, but requires the right governance frameworks
to realise these benefits while managing the privacy risks.
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