How value-based policy interventions influence price negotiations for new medicines: An experimental approach and initial evidence. Issue 2 (February 2022)

• Record Type: Journal Article
• Authors: Wettstein, Dominik J.; Boes, Stefan
• Is Part Of: Health policy. Volume 126:Issue 2(2022)
• Page Start: 112
• Page End: 121
• Publication Date: 2022-02
• Subjects: Pharmaceutical policies -- Pharmaceutical pricing -- Pharmaceutical pricing policies -- Drug pricing -- Access to medicines -- Laboratory experiment; Medical education -- Periodicals; Medical policy -- Periodicals; Delivery of Health Care -- Periodicals; Education, Medical -- Periodicals; Health Education -- Periodicals; Health Planning -- Periodicals; Public Policy -- Periodicals; Enseignement médical -- Périodiques; Politique sanitaire -- Périodiques; Medical education; Medical policy; Periodicals; Electronic journals; Electronic journals; 362.1
• DOI: 10.1016/j.healthpol.2021.12.007
• Languages: English
• ISSNs: 0168-8510

Abstract

Highlights: Confidential agreements make it difficult to assess pricing policies for new medicines. An approach to study policy interventions in pharmaceutical price negotiations is presented. Existing therapy alternatives influence the outcomes of price negotiations for new therapies. A value framework mitigates this effect in favour of increased societal outcomes. Further development of the approach could support reforms of pharmaceutical pricing policies. Abstract: Background: Various forms of value-based pricing policies for new medicines have recently been introduced in OECD countries. While these initiatives are expected to have a positive impact on societal outcomes such as availability, affordability and value for money, scientific evidence on this impact is scarce due to confidential agreements. Objective: We aimed to assess the impact of value-based policy interventions in price negotiations on patient benefit in an experimental setting. Methods: An online experiment was conducted ( n = 269). Participants were randomly assigned into the active role of either a buyer or seller in two intervention groups (cost-benefit, risk-sharing) and one control group. Decisions had real monetary consequences on other participants and through donations to a patient association. Results: Patient access, benefit and value for money were higher in the cost-benefit group than in the risk-sharing group. An available alternative to the agreement led to higher price offers. This effect was weaker in the cost-benefit group. Conclusions: Outcomes of price negotiations on patient benefit depend on the alternatives available for failed or delayed negotiations. A shared but voluntary valuation framework might increase patient access, benefit, and value for money. The cost containment effect of risk-sharing agreements may be offset by the negative impact on overall patient benefit. Further development of the approach could provide support for policy design of pharmaceutical pricing regulations.