- Created on Monday, 28 September 2009 00:00
Improving UK Patient Outcomes: How can Value-based Pricing improve access and adoption of new treatments?
Reviewing the ‘value’ of new treatments
The new Pharmaceutical Price Regulation Scheme (PPRS) 2009 has adopted some of the recommendations from the Office of Fair Trading (OFT) to better reflect the value of new medicines, to the NHS and to patients. This includes pricing flexibilities in certain circumstances, patient access schemes and subject to consultation, generic substitution following the loss of exclusivity after patient protection has elapsed. It introduces post launch reviews of the ‘value’ of new medicines, conducted by the National Institute for Health and Clinical Excellence (NICE), which could affect the price. It is thought likely that medical technologies will also be assessed in the same way in the future. PPRS also includes patient access schemes for new products. The OFT report on PPRS 2007 suggested that savings of £500 million could be made by introducing ‘value-based pricing’ and substituting old drugs and generics. We argue these savings are not real. Value-based pricing, as described by the OFT, has not worked anywhere in the world. Additionally, they did not consider fully the greater effectiveness and reduced side effects of newer drugs to patients and the potential effect of these on compliance and health outcomes. Prices may, in fact, increase.
How do we value medical treatments?
Since the new PPRS reviews will appraise ‘value’, including ‘value to patients’, how do we value medical treatments? There is little previous research on this, so 2020Health.org carried out a public consultation with all stakeholder groups to assess what value means to them. There is a large disparity between what the NHS ‘values’ and what taxpayers (who fund the NHS), patients and other stakeholder groups ‘value’. Effectiveness/efficacy and safety rank top, but patients and other stakeholders also consider their dignity, care needed by friends and family, convenience, side effects, time away from work, time to feeling completely well and the invasiveness of treatment as being very important, as well as costs to their employers and the economy. Also, consideration of value for treatments for acute (short-term), chronic (long-term) and end of life disease differ and this should be taken into account.
These attributes need to be considered when valuing medical treatments both by NICE and the NHS.
Download the Executive Summary in pdf format
Read the full report Valuing Medical Treatments and Value-based Pricing