Sustainable Financing of Innovative Therapies: A Review of Approaches

Abstract

The process of innovation is inherently complex, and it occurs within an even more complex institutional environment characterized by incomplete information, market power, and externalities. There are therefore different competing approaches to supporting and financing innovation in medical technologies, which bring their own advantages and disadvantages. This article reviews value-and cost-based pricing, as well direct government funding, and cross-cutting institutional structures. It argues that performance-based risk-sharing agreements are likely to have little effect on the sustainability of financing; that there is a role for cost-based pricing models in some situations; and that the push towards longer exclusivity periods is likely contrary to the interests of industry.

The Implementation of Managed Entry Agreements in Central and Eastern Europe: Findings and Implications

“…Health outcome-based agreements include different types of performance agreements whereby reimbursement is linked to the performance of the medicine in real-life or evidence development [ 4 – 6 ]. These MEAs have also been called performance-based risk-sharing arrangements (PBRSAs) [ 7 , 8 ].…”

Role of Health Technology Assessment in Pharmaceutical Market Access in Developed Countries

“…Consequently, these new medicines should command lower or similar prices to existing standards; or at best only limited increases versus existing standards based on HTA as well as key pricing and reimbursement considerations [4,5,21,41,72]. However, currently concerns with the definition of innovation and value, as well as issues of priority, unmet need and emotion, cloud such discussions and deliberations [63,[73][74][75][76]. This is a challenge for the future especially in Europe to maintain the ideals of equitable and comprehensive healthcare.…”

“…These have to be balanced though against no reimbursement if no agreements are reached. These concerns include potential savings in reality, whether health systems have the ability to monitor patient outcomes in routine clinical practice, and the administrative burden and costs associated with such schemes [3,25,75,[91][92][93]. However not surprisingly given rising prices for new medicines, the number of such arrangements has grown in recent years especially for new anti-cancer medicines, although this is not universal [4,25,[94][95][96].…”

Bill C-30: who wins and who loses in Canada’s pharmaceutical patent battles?

“…However, public insurers face spending caps because of limited provincial healthcare budgets. If exclusivity periods are longer but healthcare budgets remain constant, then either prices have to be reduced or some products and services will not be covered [8]. It seems probable that the budget for the provincial drug plans will not simply expand because of CSPs.…”