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PharmacoEconomics

, Volume 33, Issue 9, pp 905–924 | Cite as

Disinvestment and Value-Based Purchasing Strategies for Pharmaceuticals: An International Review

  • Bonny Parkinson
  • Catherine Sermet
  • Fiona Clement
  • Steffan Crausaz
  • Brian Godman
  • Sarah Garner
  • Moni Choudhury
  • Sallie-Anne Pearson
  • Rosalie Viney
  • Ruth Lopert
  • Adam G. Elshaug
Review Article

Abstract

Pharmaceutical expenditure has increased rapidly across many Organisation for Economic Cooperation and Development (OECD) countries over the past three decades. This growth is an increasing concern for governments and other third-party payers seeking to provide equitable and comprehensive healthcare within sustainable budgets. In order to create headroom for increasing utilisation, and to fund new high-cost therapies, there is an active push to ‘disinvest’ from low-value drugs. The aim of this article is to review how reimbursement policy decision makers have sought to partially or completely disinvest from drugs in a range of OECD countries (UK, France, Canada, Australia and New Zealand) where they are publicly funded or subsidised. We employed a systematic literature search strategy and the incorporation of grey literature known to the authorship team. We canvass key policy instruments from each country to outline key approaches to the identification of candidate drugs for disinvestment assessment (passive approaches vs. more active approaches); methods of disinvestment and value-based purchasing (de-listing, restricting treatment, price or reimbursement rate reductions, encouraging generic prescribing); lessons learnt from the various approaches; the potential role of coverage with evidence development; and the need for careful stakeholder management. Dedicated sections are provided with detailed coverage of policy approaches (with drug examples) from each country. Historically, countries have relied on ‘passive disinvestment’; however, due to (1) the availability of new cost-effectiveness evidence, or (2) ‘leakage’ in drug utilisation, or (3) market failure in terms of price competition, there is an increasing focus towards ‘active disinvestment’. Isolating low-value drugs that would create headroom for innovative new products to enter the market is also motivating disinvestment efforts by multiple parties, including industry. Historically, disinvestment has mainly taken the form of price reductions, especially when market failures are perceived to exist, and restricting treatment to subpopulations, particularly when a drug is no longer considered value for money. There is considerable experimentation internationally in mechanisms for disinvestment and the opportunity for countries to learn from each other. Ongoing evaluation of disinvestment strategies is essential, and ought to be reported in the peer-reviewed literature.

Keywords

Reference Price Pharmaceutical Benefit Advisory Committee Restricting Treatment Benfluorex Coverage With Evidence Development 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Author contributions

Bonny Parkinson and Adam Elshaug contributed to the conception and developed the structure of the paper. The initial systematic review was conducted by Moni Choudhury. All co-authors contributed to the acquisition of information about the policy situation in their respective countries. Bonny Parkinson was responsible for compiling each country’s contribution to the paper. All co-authors contributed towards drafting and revising the intellectual content of the manuscript, and approved the final version for publication. Associate Professor Adam Elshaug is the guarantor for the overall content.

Acknowledgments

We are indebted to the anonymous reviewers whose comments greatly improved this paper. An astute summary observation made by reviewer two has been adapted and included in the conclusion section. We acknowledge this input and thank him/her for allowing its inclusion.

Compliance and ethical standards

Funding Statement: This research was funded in part by an Australian National Health and Medical Research Council (NHMRC) Capacity Building Grant (ID 571926) and an NHMRC Centre of Research Excellence in Medicines and Ageing Grant (ID 1060407). Associate Professor Elshaug is supported by the HCF Research Foundation as the HCF Research Foundation Principal Research Fellow, and holds an Australian NHMRC Sidney Sax Fellowship (ID 627061). Associate Professor Sallie-Anne Pearson is a Cancer Institute New South Wales Career Development Fellow (ID 12/CDF/2-25) and an Australian Health Policy Research Fellow. Dr Fiona Clement is supported by a Harkness/Canadian Foundation for Healthcare Improvement in Health Care Policy and Practice fellowship.

Conflicts of interest: Bonny Parkinson, Catherine Sermet, Fiona Clement, Brian Godman and Ruth Lopert have no conflicts of interest to declare. Steffan Crausaz is the Chief Executive of PHARMAC, the New Zealand Government agency responsible for the funding of medicines in New Zealand, as well as the budget for such funding. He has an interest in purchasing and disinvestment since these are related to the performance of PHARMAC. Sarah Garner is directly employed by the National Institute for Health and Care Excellence (NICE). Moni Choudhury is directly employed by NICE. Sallie-Anne Pearson is a member or the Drug Utilisation Sub-Committee of the Australian Pharmaceutical Benefits Advisory Committee (PBAC). Rosalie Viney is a member of PBAC and its Economics Sub-Committee. Adam G. Elshaug receives consulting/sitting fees from Cancer Australia, the Capital Markets Cooperative Research Centre—Health Quality Program, NPS MedicineWise, and the Australian Commission on Safety and Quality in Health Care. Catherine Sermet is a member of the Economic Evaluation and Public Health Committee of the HAS (French National Authority for Health). The views presented are those of the authors and do not reflect those of any of the entities with which they are affiliated.

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Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  • Bonny Parkinson
    • 1
  • Catherine Sermet
    • 2
  • Fiona Clement
    • 3
  • Steffan Crausaz
    • 4
  • Brian Godman
    • 5
    • 6
  • Sarah Garner
    • 7
  • Moni Choudhury
    • 7
  • Sallie-Anne Pearson
    • 8
  • Rosalie Viney
    • 1
  • Ruth Lopert
    • 9
    • 10
  • Adam G. Elshaug
    • 11
    • 12
  1. 1.Centre for Health Economics Research and Evaluation (CHERE)University of Technology SydneySydneyAustralia
  2. 2.Institut de Recherche et de Documentation en Économie de la Santé (IRDES)ParisFrance
  3. 3.Health Technology Assessment Unit, Department of Community Health Sciences, Institute of Public HealthUniversity of CalgaryCalgaryCanada
  4. 4.Pharmaceutical Management Agency (PHARMAC)WellingtonNew Zealand
  5. 5.Division of Clinical PharmacologyKarolinska InstitutetStockholmSweden
  6. 6.Strathclyde Institute of Pharmacy and Biomedical SciencesGlasgowUK
  7. 7.National Institute for Health and Care Excellence (NICE)LondonUK
  8. 8.Pharmacoepidemiology and Pharmaceutical Policy Research GroupThe University of SydneySydneyAustralia
  9. 9.Pharmaceutical Policy and Strategy, Center for Pharmaceutical ManagementManagement Sciences for HealthArlingtonUSA
  10. 10.Department of Health PolicyGeorge Washington UniversityWashingtonUSA
  11. 11.Value in Health Care Division, Menzies Centre for Health PolicyThe University of SydneySydneyAustralia
  12. 12.Lown InstituteBostonUSA

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