Achieving dynamic efficiency in pharmaceutical innovation: Identifying the optimal share of value and payments required.
analysis of health care markets
dynamic efficiency
government policy
pharmaceutical pricing
public health
regulation
static efficiency
Journal
Health economics
ISSN: 1099-1050
Titre abrégé: Health Econ
Pays: England
ID NLM: 9306780
Informations de publication
Date de publication:
16 Jan 2024
16 Jan 2024
Historique:
revised:
23
11
2023
received:
24
03
2023
accepted:
11
12
2023
medline:
16
1
2024
pubmed:
16
1
2024
entrez:
16
1
2024
Statut:
aheadofprint
Résumé
It has been argued that cost-effectiveness analysis of branded pharmaceuticals only considers static efficiency, neglects dynamic effects and undermines incentives for socially valuable innovation. We present a framework for designing pharmaceutical pricing policy to achieve dynamic efficiency. We develop a coherent framework that identifies the long-term static and dynamic benefits and costs of offering manufacturers different levels of reward. The share of value that would maximise long-term population health depends on how the quantity and quality of innovation responds to payment. Using evidence of the response of innovation to payment, the optimal share of value of new pharmaceuticals to offer to manufacturers is roughly 20% (range: 6%-51%). Reanalysis of a sample of NICE technology appraisals suggests that, in most cases, the share of value offered to manufacturers and the price premium paid by the English NHS were too high. In the UK, application of optimal shares would offer considerable benefits under both a public health objective and a broader view of social welfare. We illustrate how an optimal share of value can be delivered through a range of payment mechanisms including indirect price regulation via the use of different approval norms by an HTA body.
Types de publication
Journal Article
Langues
eng
Sous-ensembles de citation
IM
Subventions
Organisme : National Institute for Health and Care Research
Organisme : Policy Research Unit in Economic Methods of Evaluation in Health and Social Care Interventions
ID : PR-PRU-1217-20401
Informations de copyright
© 2024 The Authors. Health Economics published by John Wiley & Sons Ltd.
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