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INNOVATIVE PAYMENT MODELS FOR HIGH-COST INNOVATIVE MEDICINES

The emergence of high-price innovative medicines, implying high costs for health care payers, is exerting strong financial pressure on health systems. Over the years, health care payers and pharmaceutical companies have explored different ways of defining payment for new products that ensures three main objectives: quick access of patients to more effective new medicines, that provides adequate incentives to R&D efforts (both in rewarding R&D and guiding efforts to areas of higher social value) and that keeps health systems financially sustainable. In some ways, the issue of fairness (in the division of social surplus generated by the new products) can be seen as a separate one, additional to these three main objectives in the context of new pharmaceutical products.

The response to this trend has been the search for new payment models between health care payers and pharmaceutical companies. The new payment models have been generally termed Managed Entry Agreements and have a wide variety of formulations. A crucial question is whether, or not, any of these, or a subset of them, will deliver a solution to the three objectives outlined. 

Source : Report of the Expert Panel on e ective ways of investing in Health (EXPH) - © European Union, 2018 - reuse is authorised provided the source is acknowledged.

 

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