Evidence-Based Decision-Making on Medical Technologies in China, Japan, and Singapore

Objective:  To review the use of evidence in the market approval process, reimbursement, and price control mechanisms for medicines and medical devices in China, Japan, and Singapore.
Methodology:  Documentary reviews relevant to public health policy and management by government authorities.
Results:  Drug regulatory authorities play a vital role in the market authorization process of medical technologies. The approval criteria in the three countries are similar to those of the US Food and Drug Administration and many other countries, whose core measures are efficacy, safety, and quality, along with risk-based analyses in China and Singapore. All established the national drug list (Japan) or lists (China and Singapore) for reimbursement. Although Japan reimburses any drugs listed, China and Singapore selectively reimburse regarding the types of the list. The cost-effectiveness is utilized for prioritization of new drugs listed in Singapore. Japan controls the price by government, whereas Singapore keeps market liberalism, and China maintains a mixture of both.
Conclusion:  All three countries have established their own mechanisms, but cost-effectiveness requirements have not been fully introduced yet, partially applied to the reimbursement processes in Singapore.     

International comparison of orthotic brace prices

This study compared market prices (i.e. third-party reimbursement and patient co-payment) of prefabricated neck, wrist and knee braces in Belgium, France, the Netherlands, Ontario (Canada) and the UK. Data were collected through contacts with health authorities, health insurance funds, manufacturers and distributors. Market prices varied substantially between countries, indicating that manufacturers adapt their price setting strategy to the policy environment and the structure of the brace market of a country. Belgian prices tended to exceed prices in other countries for the selected neck, wrist and knee braces. There seems to be scope for reducing Belgian prices of selected braces.      

A new entity for the negotiation of public procurement prices for patented medicines in Mexico

Problem

As countries expand health insurance coverage, their expenditures on medicines increase. To address this problem, WHO has recommended that every country draw up a list of essential medicines. Although most medicines on the list are generics, in many countries patented medicines represent a substantial portion of pharmaceutical expenditure.

Approach

To help control expenditure on patented medicines, in 2008 the Mexican Government created the Coordinating Commission for Negotiating the Price of Medicines and other Health Inputs (CCPNM), whose role, as the name suggests, is to enter into price negotiations with drug manufacturers for patented drugs on Mexico’s list of essential medicines.

Local setting

Mexico’s public expenditure on pharmaceuticals has increased substantially in the past decade owing to government efforts to achieve universal health-care coverage through Seguro Popular, an insurance programme introduced in 2004 that guarantees access to a comprehensive package of health services and medicines.

Relevant changes

Since 2008, the CCPNM has improved procurement practices in Mexico’s public health institutions and has achieved significant price reductions resulting in substantial savings in public pharmaceutical expenditure.

Lessons learnt

The CCPNM has successfully changed the landscape of price negotiation for patented medicines in Mexico. However, it is also facing challenges, including a lack of explicit indicators to assess CCPNM performance; a shortage of permanent staff with sufficient technical expertise; poor coordination among institutions in preparing background materials for the annual negotiation process in a timely manner; insufficient communication among committees and institutions; and a lack of political support to ensure the sustainability of the CCPNM.     

Cost-Effectiveness Analysis of Branded Drugs With Market Demand and Insurance

ObjectivesCost-effectiveness analysis of branded pharmaceuticals presumes that both cost (or price) and marginal effectiveness levels are exogenous. This assumption underlies most judgments of the cost-effectiveness of specific drugs. In this study, we show the theoretical implications of letting both factors be endogenous by modeling pharmaceutical price setting with and without health insurance, along with patient response to the prices that depend on marginal effectiveness. We then explore the implications of these models for cost-effectiveness ratios.MethodsWe used simple textbook models of patient demand and pricing behavior of drug firms to predict market equilibria in the drug and insurance markets and to generate calculations of the cost-effectiveness ratios in those settings.ResultsWe found that ratios in market settings can be much different from those calculated in cost-effectiveness studies based on exogenous prices and treatment of all patients at risk rather than those who would demand treatment in a market setting. We also found that there may be considerable similarity in these market cost-effectiveness ratios across different products because drug firms with market power set profit-maximizing prices.ConclusionsWe found that market cost-effectiveness ratios will always indicate an excess of benefits over cost. Insurance will lead to less favorable ratios than without insurance, but when insurers bargain with drug firms, rather than taking their prices as given, cost-effectiveness ratios will be more favorable.     

Correction to: A systematic review of economic evaluations of enzyme replacement therapy in Lysosomal storage diseases

In December 2019, the Digital Health Care Act (“Digitale-Versorgung-Gesetz”) introduced a general entitlement to the provision and reimbursement of digital health applications (DiGA) for insured persons in the German statutory health insurance. As establishing a new digital service area within the solidarity-based insurance system implies several administrative and regulatory challenges, this paper aims to describe the legal framework for DiGA market access and pricing as well as the status quo of the DiGA market. Furthermore, we provide a basic approach to deriving value-based DiGA prices. To become eligible for reimbursement, the Federal Institute for Drugs and Medical Devices evaluates the compliance of a DiGA with general requirements (e.g., safety and data protection) and its positive healthcare effects (i.e., medical benefit or improvements of care structure and processes) in a fast-track process. Manufacturers may provide evidence for the benefits of their DiGA either directly with the application for the fast-track process or generate it during a trial phase that includes temporary reimbursement. After one year of \]reimbursement, the freely-set manufacturer price is replaced by a price negotiated between the National Association of Statutory Health Insurance Funds and the manufacturer. By February 2022, 30 DiGA had successfully completed the fast-track process. 73% make use of the trial phase and have not yet proven their benefit. Given this dynamic growth of the DiGA market and the low minimum evidence standards, fair pricing remains the central point of contention. The regulatory framework makes the patient-relevant benefits of a DiGA a pricing criterion to be considered in particular. Yet, it does not indicate how the benefits of a DiGA should be translated into a reasonable price. Our evidence-based approach to value-based DiGA pricing approximates the SHI’s willingness to pay by the average cost-effectiveness of one or more established therapy in a field of indication and furthermore considers the positive healthcare effects of a DiGA. The proposed approach can be fitted into DiGA pricing processes under the given regulatory framework and can provide objective guidance for price negotiations. However, it is only one piece of the pricing puzzle, and numerous methodological and procedural issues related to DiGA pricing are still open. Thus, it remains to be seen to what extent DiGA prices will follow the premise of value-based pricing.     

药品分类补偿的经验借鉴

本文介绍了西欧6国、东欧7国、泰国、澳大利亚药品分类补偿的情况。国外对OTC药品一般不列入医疗保险的药品报销目录范围，患者要承担一定比例的药费，控制药品费用要从价格-补偿-用量控制三管齐下才能奏效。分类给付药品政策的研究为减少社保基金的负担，满足不同用药的需求水平提出了一种新的思路。     

Pharmaceutical pricing and reimbursement in Finland

The cornerstones of social security within the Finnish health care system are public health care and an insurance system covering drug costs in outpatient care and the services of the private health care sector. The reimbursement system is two-tiered, so that when a wholesales price is approved for a drug, it automatically enters the basic reimbursement category. The acceptance of a medicine into the higher reimbursement categories for serious and long-term illnesses involves a separate legislative process. Compared with OECD countries, the degree of reimbursement is low. The price decision is mainly based on international price comparisons, the price of corresponding products on the market, and the funds the reimbursement system has at its disposal. Since 1998, a pharmacoeconomic justification has been mandatory for all new chemical entities. The wholesales prices fall below the EU average. A committee deliberating a reform of the reimbursement system is expected to deliver its report during the summer of 2001.     

Pharmaceutical pricing and reimbursement in Finland

The cornerstones of social security within the Finnish health care system are public health care and an insurance system covering drug costs in outpatient care and the services of the private health care sector. The reimbursement system is two-tiered, so that when a wholesales price is approved for a drug, it automatically enters the basic reimbursement category. The acceptance of a medicine into the higher reimbursement categories for serious and long-term illnesses involves a separate legislative process. Compared with OECD countries, the degree of reimbursement is low. The price decision is mainly based on international price comparisons, the price of corresponding products on the market, and the funds the reimbursement system has at its disposal. Since 1998, a pharmacoeconomic justification has been mandatory for all new chemical entities. The wholesales prices fall below the EU average. A committee deliberating a reform of the reimbursement system is expected to deliver its report during the summer of 2001.     

韩国和德国专利药价格谈判模式比较研究及启示

为完善我国专利药价格谈判制度,本文从目标、程序及效果三方面,比较分析韩国和德国专利药价格谈判模式的共性与特点,从而为中国提供借鉴。结果发现,韩国和德国专利药价格谈判均以提高国家医保基金使用效率为关键目标,并通过科学的职责分工确保谈判的公平与效率,但技术评估标准的选择因国情差异而存在较大不同。建议我国加强专利药价格谈判与医保报销政策的衔接,建立以专利药创新程度为核心的评估标准体系,同时应制定科学合理的谈判程序与职责分工。     

Payers’ experiences with confidential pharmaceutical price discounts: A survey of public and statutory health systems in North America,Europe, and Australasia

Institutional payers for pharmaceuticals worldwide appear to be increasingly negotiating confidential discounts off of the official list price of pharmaceuticals purchased in the community setting. We conducted an anonymous survey about experiences with and attitudes toward confidential discounts on patented pharmaceuticals in a sample of high-income countries. Confidential price discounts are now common among the ten health systems that participated in our study, though some had only recently begun to use these pricing arrangements on a routine basis. Several health systems had used a wide variety of discounting schemes in the past two years. The most frequent discount received by participating health systems was between 20% and 29% of official list prices; however, six participants reported their health system received one or more discount over the past two years that was valued at 60% or more of the list prices. On average, participants reported that confidential discounts were more common, complex, and significant for specialty pharmaceuticals than for primary care pharmaceuticals. Participants had a more favorable view of the impact of confidential discount schemes on their health systems than on the global marketplace. Overall, the frequency, complexity, and scale of confidential discounts being routinely negotiated suggest that the list prices for medicines bear limited resemblance to what many institutional payers actually pay.     

Pharmaceutical pricing and reimbursement reforms in Greece

Pharmaceutical price regulation in Greece is centralized. The National Drug Organization (EOF) is the main regulatory authority functioning under the auspices of the Ministry of Health and Social Solidarity. In 2004, total pharmaceutical expenditure in Greece reached the level of 2.9 billion €, of which 77.9% were public expenditure and the remaining 22.1% private. According to Organization for Economic Cooperation and Development (OECD) data the total per-capita expenditure on pharmaceutical care in Greece is among the lowest in Europe, representing 58% of the EU-12 average. In 1998, Greece introduced a reimbursement list, and the lowest reference pricing system among the 15 European Union member states with the purpose of controlling the growth of pharmaceutical expenditure. The measures proved to be ineffective since pharmaceutical expenditure, after a short-term reduction, continued to increase at similar rates to those before the introduction of price control mechanisms. The average annual increase of pharmaceutical expenditure in Greece over the period 1998–2003 was 7.9%, which is among the highest in the OECD countries (average 6.1%). New pharmaceutical legislation, no. 3457, was enacted on May 8th 2006, aiming at greater access to medicines, improvements to citizens’ quality of life, effective and efficient utilization of health resources, transparency in public management, protecting public health, and maintaining long-term financial viability of the insurance system. The innovative aspect of the new legislation is the abolition of the positive list and the establishment of a rebate system granting the National Insurance Funds a rebate rate paid by the pharmaceutical companies. The purpose of this paper is twofold. First to assess the effectiveness of the positive list introduced in 1988 in Greece, using simple econometric models. Second to present the recent pharmaceutical reforms aimed at the introduction of a rebate system and establishing reimbursement pricing based on the average of the three lowest European prices.      

Setting cost-effectiveness thresholds as a means to achieve appropriate drug prices in rich and poor countries

Finding better mechanisms to enable differential pricing that reflects different degrees of willingness to pay across countries with different income levels is an important challenge for drug manufacturers and policy makers. Drug prices must be high enough to meet manufacturers' needs--covering costs and ensuring adequate investment in research and development, as well as producing a profit--but low enough to allow consumers access to medicines that they need. Examining drug pricing, we found that in rich countries, insurance coverage can make consumers insensitive to price, which means that manufacturers' prices are largely unrestrained unless payers intervene. In middle- and low-income countries, where most consumers pay for drugs out of pocket, we found that the poorest countries face the highest prices, relative to their mean per capita income. We recommend that countries and payers set their own cost-effectiveness thresholds to reflect how much they are willing to pay for "health gain"--in other words, for a measured improvement in the health of a person or a population. Adopting this approach broadly should lead to appropriate price differences across and within countries, benefiting consumers and manufacturers alike.     

The role of discounts and loss leaders in medicine procurement in Austrian hospitals - a primary survey of official and actual medicine prices

Background

Knowledge about the prices of medicines used in hospitals, particularly the actually achieved ones, is scant. There are indications of large discounts and the provision of medicines cost-free to Austrian hospitals. The study aims to survey the official and actual prices of medicines procured by Austrian hospitals and to compare them to the out-patient prices.

Methods

Primary price collection of the official hospital list prices and the actually achieved prices for 12 active ingredients as of the end of September 2009 in five general hospitals in Austria and analysis of the 15 most commonly used presentations.

Results

The official hospital list prices per unit differed considerably (from 1,500 Euro for an oncology medicine to 0.20 Euro for a generic cardiovascular medicine). For eight on-patent medicines (indications: oncology, anti-inflammatory, neurology-multiple sclerosis and blood) actual hospital medicine prices equaled the list prices (seven medicines) or were lower (one medicine) in four hospitals, whereas one hospital always reported higher actual prices due to the application of a wholesale mark-up. The actual hospital prices of seven medicines (cardiology and immunomodulation) were below the official hospital prices in all hospitals; of these all cardiovascular medicines were provided free-of-charge. Hospital prices were always lower than out-patient prices (pharmacy retail price net and reimbursement price).

Conclusion

The results suggest little headroom for hospitals to negotiate price reductions for “monopoly products”, i.e. medicines with no therapeutic alternative. Discounts and cost-free provision (loss leaders) appear to be granted for products of strategic importance for suppliers, e.g. cardiovascular medicines, whose treatment tends to be continued in primary care after discharge of the patient.

     

Reforming the Belgian market for orthotic braces: What can we learn from the international experience?

OBJECTIVES: This article aims to review regulation governing outpatient orthotic braces (neck, wrist and knee braces) in France, the Netherlands and Sweden with a view to reforming the Belgian market. METHODS: Information about the regulatory framework was derived from an analysis of legal texts and a survey completed by national experts. RESULTS: Strategies to keep down prices include public procurement in Sweden, maximum prices in France, and exclusion of expensive braces from reimbursement in the Netherlands. Reimbursement is linked to a medical indication or a chronic condition in France, the Netherlands and Sweden. To gain reimbursement, the cost-effectiveness of orthotic braces needs to be demonstrated in France and the Netherlands. Orthotic braces tend to be initially prescribed by a specialist physician and distributed by orthotists, medical equipment shops and/or community pharmacies. CONCLUSIONS: Extensive government intervention exists in the outpatient orthotic brace market in the countries studied. Our recommendations to reform the Belgian market for prefabricated orthotic braces are to separate reimbursement for service provision from reimbursement for braces; to set prices by means of a tendering process or an international price comparison; and to make reimbursement conditional on effectiveness and cost-effectiveness of braces.     

Understanding Medication Compliance and Persistence from an Economics Perspective

Objectives:  An increased understanding of the reasons for noncompliance and lack of persistence with prescribed medication is an important step to improve treatment effectiveness, and thus patient health. Explanations have been attempted from epidemiological, sociological, and psychological perspectives. Economic models (utility maximization, time preferences, health capital, bilateral bargaining, stated preference, and prospect theory) may contribute to the understanding of medication-taking behavior.
Methods:  Economic models are applied to medication noncompliance. Traditional consumer choice models under a budget constraint do apply to medication-taking behavior in that increased prices cause decreased utilization. Nevertheless, empiric evidence suggests that budget constraints are not the only factor affecting consumer choice around medicines. Examination of time preference models suggests that the intuitive association between time preference and medication compliance has not been investigated extensively, and has not been proven empirically. The health capital model has theoretical relevance, but has not been applied to compliance. Bilateral bargaining may present an alternative model to concordance of the patient–prescriber relationship, taking account of game-playing by either party. Nevertheless, there is limited empiric evidence to test its usefulness. Stated preference methods have been applied most extensively to medicines use.
Results:  Evidence suggests that patients' preferences are consistently affected by side effects, and that preferences change over time, with age and experience. Prospect theory attempts to explain how new information changes risk perceptions and associated behavior but has not been applied empirically to medication use.
Conclusions:  Economic models of behavior may contribute to the understanding of medication use, but more empiric work is needed to assess their applicability.     

台湾地区医保药品的采购模式和支付价格

目的:分析台湾地区医保药品在采购和支付方面的做法和经验,为大陆地区推进药品采购模式和支付价格改革提供参考。方法:系统梳理台湾地区在医保药品采购和支付方面的政策文件和相关文献,并与大陆地区药品采购和支付政策进行对比分析。结果:台湾地区医疗机构根据自身用药需求,自主采购药品,采购价格由供需双方直接谈判形成。政府仅对医保药品的价格进行管理,对新药采用国际参考定价办法;原厂药、BA/BE学名药、一般学名药的支付价以国际参考价格为上限,依次降低。药品质量也在医保支付标准考虑之列。此外,药品的支付价格依据采购价格实行动态调整,当二者差值大于30%时,健保署便会调整支付价格以减小二者的差价。结论:台湾地区通过制度设计和调整,较好地统筹了药品采购和补偿两个环节,形成了合理的药品采购价格和支付价格,这些经验可为中国大陆地区完善药品采购和支付政策提供参考。     

The Current Capacity and Future Development of Economic Evaluation for Policy Decision-Making: A Survey among Researchers and Decision-Makers in Thailand

Objective:  This study aims to explore the knowledge, experience, and attitudes toward economic evaluation (EE) among decision-makers and researchers in Thailand.
Methods:  Researchers were purposively selected from Thai academics and both public and private research organizations related to EE. Decision-makers at the provincial level were purposively selected from the members of the Management Committees of Provincial Health Offices, and those at hospital level were randomly selected from members of the public and private hospital formulary drug committees throughout Thailand. The self-administered postal questionnaires were distributed. Univariate and bivariate analyses were applied.
Results:  Of the total 2575 questionnaires distributed, 758 (29.4% response rate) were completed and sent back. The majority of researchers and decision-makers were not familiar with technical terms commonly used in health EE, e.g., incremental cost-effectiveness ratio, discounting, and sensitivity analysis. More decision-makers (70.6%) had never had EE training compared to researchers (50.0%). Both roles indicated that value for money was one of the important issues to consider for health technology adoption.
Conclusions:  An extensive unmet demand for EE training among Thai researchers and decision-makers still exists. Findings from this study contribute to the short- and long-term plans for research capacity building.     

The effect of patented drug price on the share of new medicines across OECD countries

The Government of Canada plans to implement new controls on the prices of patented drugs sold in Canada. The literature indicates that such controls delay drug launches. The Government of Canada, in its cost benefit analysis of the proposed regulatory changes, claims that they do not. To examine this claim, we use recent OECD country level data to estimate regression models of drug launches. These estimates suggest that higher drug list prices increase the number of launches of new medicines; the estimates are larger in the short term than in the longer term. If our estimates have a causal interpretation, then, consistent with the extant literature, drug list price reductions delay availability of new medicines in the OECD countries. We explore the implications of these findings.