Is Healthcare Affordability Driving a Need to Revolutionize Drug Pricing?
The Explosion of Innovative, New Therapies and Payers’ Crisis of Affordability
Newswise — New Orleans, LA, USA—May 22, 2019—ISPOR, the professional society for health economics and outcomes research (HEOR), held its final plenary of the ISPOR 2019 annual conference with, “Is Healthcare Affordability Driving a Need to Revolutionize Drug Pricing?”
The recent surge in the development of new, innovative drugs is an exciting time for many. This era of innovation has brought the promise of a cure for a number of diseases. These novel therapies, however, come at a high cost and includes 6-figure cancer therapies, expensive “orphan” drugs that treat rare diseases, and even some high-priced drugs for more common diseases. This has resulted in a crisis of affordability for payers who must now contend with budget impact issues for these high-cost therapies. The ISPOR 2019 Top 10 HEOR Trends report identified drug spending and pricing as the number 1 trend for this year. In the United States, President Trump launched his Blueprint to Lower Drug Prices in May 2018, and a recent paper from the University of Chicago reported that average total drug spending per hospital admission increased 18.5% between 2015 and 2017. Affordability of pharmaceuticals has become a global issue.
Panelists included Muna Bhanji, RPh, Merck, Philadelphia, PA, USA; Meindert Boysen, PharmD, MSc, National Institute for Health and Care Excellence, Manchester, England, UK; Colleen M. Flood; University of Ottawa Centre for Health Law, Policy and Ethics; Ottawa, ON, Canada; Louis P. Garrison, Jr, PhD, University of Washington, Seattle, WA, USA; and Mark Trusheim, MS, NEWDIGS and Massachusetts Institute of Technology, Cambridge, MA, USA.
The session was moderated by Ms Flood who generated a lively discussion from the panel. Dr Garrison stressed that medicines are global public goods and that we need to find a way for everyone to appropriately contribute to the pool of innovation that brings life saving drugs to market. He noted that the pricing of drugs often does not reflect their true value. Mr Trusheim advocated for “precision pricing” that employs appropriate variability in pricing of drugs. This approach would price drugs for every patient based on the value they receive—a customized price. Ms Bhanji pointed out that we now live in a transformative era where diseases that were once a death sentence are now chronic conditions. She focused on the importance of addressing inefficiencies in the healthcare system since it is estimated that 30%-40% of healthcare spending is inefficient. She stressed that even a small improvement in reducing this inefficiency could result in huge savings to the healthcare system. Dr Boysen spoke about how NICE focuses on the value side of medicines, eg, quality-adjusted life years (QALYs). In contrast, payers focus on affordability and assess the budget impact of new medications to determine their impact on budgets. He believes that discussions related to pricing, value, and affordability need to be had much earlier in the process than is currently happening.
ISPOR is recognized globally as the leading professional society for health economics and outcomes research and its role in improving healthcare decisions. ISPOR 2019 is the leading global HEOR conference and draws nearly 4000 healthcare thought leaders and stakeholders, including researchers and academicians, assessors and regulators, payers and policy makers, the life sciences industry, healthcare providers, and patient engagement organizations.
ISPOR, the professional society for health economics and outcomes research (HEOR), is an international, multistakeholder, nonprofit dedicated to advancing HEOR excellence to improve decision making for health globally. The Society is the leading source for scientific conferences, peer-reviewed and MEDLINE®-indexed publications, good practices guidance, education, collaboration, and tools/resources in the field.
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