From what I understand about value-based pricing (and that’s not a lot so please correct me if I’m wrong) then this will mean that what the customer considers to be the best drugs will be the most expensive. The idea, I guess, is to incentivise the pharmaceutical industry to create drugs that the customer (medical professionals) regards as highly useful as they will then be paid a high price for them. Sounds like a good idea, though one obvious consequence is that (without being too cynical) that the pharmaceutical industry will worry less about actual innovation than convincing the customers (through their previously mentioned huge marketing budgets) that their drugs are the best and should have the highest price. That could potentially lead to even less money for R&D as pharmaceutical companies see that profits are determined more by the regard in which their drugs are held rather than (the admittedly related) usefulness of those drugs. I guess it could go either way depending on how objective the customers can be in ignoring the marketing and focusing on the evidence.
From: Evidence based health (EBH) [mailto:[log in to unmask]] On Behalf Of Underhill Jonathan
Sent: 24 May 2010 11:50
Ash wrote:
>>>>
While I fully agree with most of what you have written, there is, in my opinion, a need to debunk a few myths, especially within the context of this important email trail.
<<<<<
Great thread!
I think most us would all agree that we need a profitable pharmaceutical industry to invest in good, robust R&D to drive the innovation of medicines and patient care.
The key is how to achieve this balance – driving innovation whilst curbing the worst excesses of the commercial side of this (usually around marketing and sales) that often provide the stories Ash illustrates (and there are many, many others – see nofreelunch)
Having read the OFT report when it came out and also reflecting now on what it said wrt value-based pricing, the notion of the NHS (or other heathcare system) incentivising and rewarding those medicines that provide most utility, seems to me to be a great leap forward in achieving this balance.
It wont be perfect, will likely require many iterations and there will be LOTS of resistance to it from within pharma (and their shareholders) who may be relatively happy with the status quo. But I can see many advantages at least in the underlying principles of rewarding those medicines that are most useful to patients. Importantly, this also needs to be accompanied by a strong willingness to disinvest in those medicines where we don’t have robust evidence (yet) that they provide worthwhile utility and value for money.
I’m sure the devil will be in the detail – interesting times ahead!
Cheers
Jonathan Underhill
Head of EBT, NPC