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Many high income countries use value based pricing for new drugs, tying price to therapeutic value. This encourages companies to focus research and development on transformational instead of incremental innovations. However, the benchmarks that determine how much should be paid for a drug with a certain level of therapeutic benefit often don’t take affordability for health systems into account.3 4 Benchmarks typically result from a political process, often involving negotiation with the drug industry. The UK’s benchmark, for example, means that health benefits achieved from every pound of pharmaceutical spending are about half those achieved from every pound of other healthcare spending.5 Value benchmarks and prices for advanced medicinal products should reflect differences in countries’ health systems and resource constraints, informed by the empirical evidence available.3 4 6 This aligns with the argument that lower income countries, while paying a “fair share,” should face substantially lower prices than higher income countries.

or advanced medicinal products should reflect differences in countries’ health systems and resource constraints, informed by the empirical evidence available.3 4 6 This aligns with the argument that lower income countries, while paying a “fair share,” should face substantially lower prices than higher income countries. Alternative procurement approaches, such as compulsory or voluntary licensing with price regulation, may be necessary if companies are unwilling to supply advanced therapies at a price that aligns with local value, covers manufacturing costs, and provides a fair contribution to stimulate future research and development.7 8 Pooled procurement across similar contexts can facilitate access in smaller markets that may be less attractive to manufacturers. Examples such as the BeNeLuxA initiative, a collaboration including Belgium, The Netherlands, Luxembourg, Austria, and Ireland, show how.9 Health systems should not pursue access to specialised drugs at all costs. For many low and middle income countries, advanced therapies may not represent the best use of scarce healthcare resources. For example, Novartis was unwilling to supply onasemnogene abeparvovec (Zolgensma), a gene therapy for infants with severe spinal muscular atrophy, at the price considered affordable by the Brazilian health system. This led to lawsuits that mandated the government to provide this drug at a higher price, resulting in overall costs of $79m to treat 46 patients.10

ly onasemnogene abeparvovec (Zolgensma), a gene therapy for infants with severe spinal muscular atrophy, at the price considered affordable by the Brazilian health system. This led to lawsuits that mandated the government to provide this drug at a higher price, resulting in overall costs of $79m to treat 46 patients.10 Given the high prices of new drugs, sustainable pharmaceutical expenditure has long depended on the availability of cheap generics after patents expire. However, for biological drugs, cheaper biosimilar versions are often never produced or become available years after patents have expired, imposing substantial costs on health systems.11 12 The delay reflects the complexity of biosimilar manufacturing, regulatory requirements, actions by originator manufacturers, and prescribing reluctance—problems that will be amplified when attempting to introduce biosimilar versions of advanced therapeutic products. New EU drug rules currently being negotiated seem unlikely to address regulatory uncertainties.13 Governments may need to fund directly the development of biosimilars for advanced therapeutic products if health gains justify the investment.14

Uncertainty in the clinical evidence has also made it hard for payers to establish value based prices for these new treatments. Studies often are not randomised, have small sample sizes, and short follow-up.15 Payers have responded by using managed entry agreements, where future prices and funding are dependent on further data collection.16 17 However, such agreements often impose substantial burdens on health systems (eg, developing contracts and monitoring patient outcomes),16 and produce poor quality evidence.18 They can also reduce the feasibility of generating better evidence because once drugs are routinely available randomisation may be impractical or considered unethical.19 Regulators and health systems should consider the benefits and risks of early access. This will require more explicit consideration of the financial and health risks if a therapy does not deliver on its promise, alongside the risks of withholding potentially life changing treatments.20

ctical or considered unethical.19 Regulators and health systems should consider the benefits and risks of early access. This will require more explicit consideration of the financial and health risks if a therapy does not deliver on its promise, alongside the risks of withholding potentially life changing treatments.20 Advanced therapies will contribute to overall population health only if they can be procured at a cost that delivers local value. For many health systems this will require more stringent price regulation, including affordability linked value benchmarks and clear guidance on when and how alternative procurement approaches such as delayed access, voluntary or compulsory licensing, and pooled procurement will be pursued. For this to succeed manufacturers, private investors, and developers must fully engage in evidence based fair procurement processes, including licensing and technology transfer. In the longer term, public sector funded development of generic equivalents is likely to be required.