The Use of Pay-for-Performance for Drugs: Can It Improve Incentives for Innovation?

Towse, Adrian; Garrison, Louis P.; Puig-Peiro, R.

doi:10.2139/ssrn.2639641

Cited by 7 publications

(15 citation statements)

References 18 publications

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“…However, spreading payments may conflict with standard financial flows since a link is needed between the medical system and the financial system to allow the initiation of payments when outcomes are achieved and payments have to be tracked over multiple years which may create additional administrative costs (Garrison Jr et al, 2013;Kleinke and McGee, 2015;Slocomb et al, 2017;Richardson and Ling, 2018). These difficulties are similar to the financial challenges experienced by OBAs with upfront payments, such as the OBA for sunitinib in the United Kingdom, where the healthcare provider may need to adjust stock control systems, verify if the cost of the drug is correctly reflected in the financial systems and ensure payments are correctly triggered (Carlson et al, 2009;Lucas et al, 2009;Williamson and Thomson, 2010;Espin et al, 2011;Coulton et al, 2012;Towse et al, 2012;Ferrario and Kanavos, 2013;Navarria et al, 2015;Faulkner et al, 2016;Gerkens et al, 2017;Pauwels et al, 2017;Toumi et al, 2017;Bouvy et al, 2018;Cole et al, 2019;Mahendraratnam et al, 2019;Wenzl and Chapman, 2019). To avoid the burden of current financial flows, payers could directly purchase the therapeutic product from the manufacturer and distribute it to the healthcare provider, as proposed by Spark Therapeutics for the reimbursement of Luxturna (Senior, 2018).…”

Section: Barriers and Potential Opportunities For Implementing Spreadmentioning

confidence: 99%

“…However, proven validated surrogate endpoints may not exist for all disease areas which complicates agreement between payer and developer on the chosen outcome. Furthermore, multistakeholder agreement on the definition of success, by determining the baseline and target performance, has shown to be difficult but is crucial to define the link between the achieved outcomes and payment (McCabe et al, 2010;Neumann et al, 2011;Towse et al, 2012;Marsden et al, 2017;Jönsson et al, 2019).…”

Section: The Organization Of Data Collectionmentioning

confidence: 99%

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Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

et al. 2020

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Background: The challenging market access of high-cost one-time curative therapies has inspired the development of alternative reimbursement structures, such as outcome-based spread payments, to mitigate their unaffordability and answer remaining uncertainties. This study aimed to provide a broad overview of barriers and possible opportunities for the practical implementation of outcome-based spread payments for the reimbursement of one-shot therapies in European healthcare systems.Methods: A systematic literature review was performed investigating published literature and publicly available documents to identify barriers and implementation opportunities for both spreading payments and for implementing outcome-based agreements. Data was analyzed via qualitative content analysis by extracting data with a reporting template.Results: A total of 1,503 publications were screened and 174 were included. Main identified barriers for the implementation of spread payments are reaching an agreement on financial terms while considering 12-months budget cycles and the possible violation of corresponding international accounting rules. Furthermore, outcome correction of payments is currently hindered by the need for additional data collection, the lack of clear governance structures and the resulting administrative burden and cost. The use of spread payments adjusted by population- or individual-level data collected within automated registries and overseen by a governance committee and external advisory board may alleviate several barriers and may support the reimbursement of highly innovative therapies.Conclusion: High-cost advanced therapy medicinal products pose a substantial affordability challenge on healthcare systems worldwide. Outcome-based spread payments may mitigate the initial budget impact and alleviate existing uncertainties; however, their effective implementation still faces several barriers and will be facilitated by realizing the required organizational changes.

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Section: Barriers and Potential Opportunities For Implementing Spreadmentioning

confidence: 99%

Section: The Organization Of Data Collectionmentioning

confidence: 99%

Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

et al. 2020

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“…One critical unresolved issue that needs to be addressed is the di culty to measure the social impact and predict the cost savings that could be delivered by using repurposed medicines in clinical practice. Experience in measuring these outcomes may be gained from pay-forperformance or outcome-based managed entry agreements that are increasingly being used for market access of high-cost innovative medicines in Europe (96,97). could potentially function as coordinating centres and facilitate patient-centred approaches for increasing the quality and e ciency of international clinical trials.…”

Section: Discussionmentioning

confidence: 99%

New Mechanisms to Fund Independent Clinical Trials for Repurposing Off-Patent or Generic Medicines

Verbaanderd

Rooman

Huys

2020

Preprint

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Finding new therapeutic uses for approved, off-patent or generic medicines could lead to safe, affordable and timely new treatment options for patients with high medical needs. However, due to a lack of economic incentives, pharmaceutical developers are rarely interested to invest in this type of research. Consequently, potential new uses for off-patent or generic medicines are mainly studied in independent proof-of-concept clinical trials initiated and led by researchers from academia, research institutes or collaborative groups. Yet, these researchers need additional financial support to conduct expensive phase III clinical trials to confirm the results from exploratory research. In this study, scientific and grey literature was searched to identify and evaluate new mechanisms for funding clinical trials with repurposed medicines. Semi-structured interviews were conducted with 16 European stakeholders with expertise in clinical research, funding mechanisms and/or drug repurposing between November 2018 and February 2019 to consider the future perspectives of applying new funding mechanisms. Traditional grant funding awarded by government and philanthropic organisations or companies is well known and widely implemented in all research fields. In contrast, the application potential of newer mechanisms to fund independent clinical research, such as social impact bonds or crowdfunding, is not yet known. Interviewees stated that there is a substantial need for additional financial support in health research, especially in disease domains where there is limited commercial interest. However, the implementation of new funding mechanisms is facing several practical and financial challenges, such as a lack of expertise and guidelines, high transaction costs and difficulties to measure health outcomes. Furthermore, increased collaboration and centralisation at a European and international level is recommended to make clinical research more efficient and reduce the need for additional funding. New funding mechanisms to support clinical research may become more important in the future, but the unresolved issues warrant further exploration in pilot projects.

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“…Within a VBP policy, these schemes can be either conditional coverage or performance linked, with the optimal choice potentially being a combination of these, depending on the medication/disease process involved. Conditional coverage includes coverage with evidence development (CED), and is appropriate for products that have strong innovative potential, but do not have a strong evidence base . CED has been reported to be an appropriate middle ground for treatment for unmet needs.…”

Section: Schemes Of Reimbursementmentioning

confidence: 99%

The future of pharmacoeconomic policy - does value-based pricing really have a role?

Kiernan

2016

J Pharm Health Serv Res

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The ‘Great Recession’ has left all countries aware of the need for cost containment in health care, a need which is felt by both governments and private payers. However, costs are increasing, not only due to greater demand and changing demographics but also due to an increase in costly drugs and technology. These technologies and pharmaceutical agents are a necessary part of the health care we provide, as innovations have been responsible for a significant improvement in morbidity and mortality. Value‐based pricing (VBP) represents an attempt to maximise utility and determine an appropriate price for the payer, while simultaneously addressing the needs of the public, as well as protecting pharmaceutical companies from inappropriate lowering of prices. It aims to improve access to treatment with unmet needs, decrease the use of me‐too drugs and encourage innovation in research and development, while ensuring cost containment. This article discusses how to develop a VBP policy as part of a national drug policy, by examining how value is measured, and how it is linked to price. The difficulties of price setting for drugs with multiple indications are discussed, as is price setting for Orphan diseases. The possible reimbursement schemes which may be used are described – from coverage with evidence development, to conditional treatment continuation. Finally, the importance of including reimbursement for innovation is examined, as VBP must take into account the cost of innovative drugs and technology.

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The Use of Pay-for-Performance for Drugs: Can It Improve Incentives for Innovation?

Cited by 7 publications

References 18 publications

Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

New Mechanisms to Fund Independent Clinical Trials for Repurposing Off-Patent or Generic Medicines

The future of pharmacoeconomic policy - does value-based pricing really have a role?

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