Abstract
Several cases of expensive drugs designed for large patient populations (e.g. sofosbuvir) have raised a complex question in terms of drug pricing. Even assuming value-based pricing, the treatment with these drugs of all eligible patients would have an immense budgetary impact, which is unsustainable also for the richest countries. This raises the need to reduce the prices of these agents in comparison with those suggested by the value-based approach and to devise new pricing methods that can achieve this goal. The present study discusses in detail the following two methods: (i) The approach based on setting nation-wide budget thresholds for individual innovative agents in which a fixed proportion of the historical pharmaceutical expenditure represents the maximum budget attributable to an innovative treatment; (ii) The approach based on nation-wide price–volume agreements in which drug prices are progressively reduced as more patients receive the treatment. The first approach has been developed in the USA by the Institute for Clinical and Economic Review and has been applied to PCSK9 inhibitors (alirocumab and evolocumab). The second approach has been designed for the Italian market and has found a systematic application to manage the price of ranibizumab, sofosbuvir, and PCSK9 inhibitors. While, in the past, price–volume agreements have been applied only on an empirical basis (i.e. in the absence of any quantitative theoretical rule), more recently some explicit mathematical models have been described. The performance of these models is now being evaluated on the basis of the real-world experiences conducted in some European countries, especially Italy.
Similar content being viewed by others
References
Bach PB, Pearson SD. Payer and policy maker steps to support value-based pricing for drugs. JAMA. 2015;314(23):2503–4.
Young RC. Value-based cancer care. N Engl J Med. 2015;373(27):2593–5.
Parkinson B, Sermet C, Clement F, Crausaz S, Godman B, Garner S, et al. Disinvestment and value-based purchasing strategies for pharmaceuticals: an international review. Pharmacoeconomics. 2015;33(9):905–24.
Palozzo AC, Messori A. Disinvestment and Value-Based Purchasing Strategies for Pharmaceuticals: An International Review. Pharmacoeconomics. 2016;34(4):419–20.
Messori A. Newest treatments for hepatitis C: how can we manage sustainability?. Clin Infect Dis. 2015;61(12):1891–2.
Tice JA, Kazi DS, Pearson SD. Proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitors for treatment of high cholesterol levels: effectiveness and value. JAMA Intern Med. 2015;14:1–2.
McCarthy M. New cholesterol drugs are overpriced, independent analysis finds. BMJ. 2015;10(351):h4864.
Institute for Clinical and Economic Review. Value assessment project: a framework to guide payer assessment of the value of medical services. http://www.icer-review.org/wp-content/uploads/2014/01/Slides-on-value-framework-for-national-webinar1.pdf (2014). Accessed 10 Aug 2015.
Institute for Clinical and Economic Review. PCSK9 inhibitors for treatment of high cholesterol: effectiveness, value, and value based price benchmarks (full report). http://cepac.icer-review.org/wp-content/uploads/2015/04/Final-Report-for. Accessed 23 Jan 2016.
Messori A. Application of the budget-threshold pricing model to PCSK9 inhibitors: detailed description of the pharmacoeconomic calculations (Comment), PubMed Commons, published 25 Jan 2016. http://www.ncbi.nlm.nih.gov/pubmed/26662572#cm26662572_13891. Accessed 12 May 2016.
Bach PB. New math on drug cost-effectiveness. N Engl J Med. 2015;373(19):1797–9.
Messori A, Fadda V, Trippoli S. Lowering the High Cost of Cancer Drugs-II. Mayo Clin Proc. 2016;91(3):397–9.
Messori A. Criteria for drug pricing: preliminary experiences with modeling the price-volume relationship. Sci Pharm. 2015;84(1):73–9.
Messori A. Evolocumab and alirocumab: exploring original procurement models to manage the reimbursement of these innovative treatments. Int J Clin Pharmacol Ther. 2016 [Epub ahead of print]
Lee H, King D, Darzi A, Dolan P. Value-based pricing: time for a NICEr way of measuring health? Lancet. 2011;378(9804):1698.
Claxton K, Briggs A, Buxton MJ, Culyer AJ, McCabe C, Walker S, Sculpher MJ. Value based pricing for NHS drugs: an opportunity not to be missed? BMJ. 2008;336(7638):251–4.
Webb DJ, Walker A. Value-based pricing of drugs in the UK. Lancet. 2007;369(9571):1415–6.
Collier R. Value-based drug system proposed in UK. CMAJ. 2010;182(17):E773–4.
le Polain M, Franken M, Koopmanschap M, Cleemput I. Drug reimbursement systems: international comparison and policy recommendations. KCE Report 147C. https://kce.fgov.be/. Accessed 12 May 2016.
Cleemput I, Neyt M, Thiry N, De Laet Cs, Leys M. Threshold values for cost-effectiveness in health care. KCE Report 100C. https://kce.fgov.be/. Accessed 12 May 2016.
Raftery J. Value based pricing: can it work? BMJ. 2013;11(347):f5941.
Young RC. Value-based cancer care. N Engl J Med. 2015;373(27):2593–5.
Minhas R, Moon JC. The office of fair trading report: a prescription for value-based drug pricing. J R Soc Med. 2007;100(5):216–8.
Karlsberg Schaffer S, Sussex J, Hughes D, Devlin N. Opportunity costs and local health service spending decisions: a qualitative study from Wales. BMC Health Serv Res. 2016;16(1):103.
Eckermann S, Pekarsky B. Can the real opportunity cost stand up: displaced services, the straw man outside the room. Pharmacoeconomics. 2014;32(4):319–25.
Rawlins MD, Chalkidou K. The opportunity cost of cancer care: a statement from NICE. Lancet Oncol. 2011;12(10):931–2.
Cohen JP, Stolk E, Niezen M. Role of budget impact in drug reimbursement decisions. J Health Polit Policy Law. 2008;33(2):225–47.
O’Mahony JF, Coughlan D. The Irish cost-effectiveness threshold: does it support rational rationing or might it lead to unintended harm to Ireland’s health system?. Pharmacoeconomics. 2016;34(1):5–11.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Funding
No sources of funding were used in the preparation if this manuscript.
Conflict of interest
A. Messori has no conflicts of interest to declare.
Rights and permissions
About this article
Cite this article
Messori, A. Application of the Price–Volume Approach in Cases of Innovative Drugs Where Value-Based Pricing is Inadequate: Description of Real Experiences in Italy. Clin Drug Investig 36, 599–603 (2016). https://doi.org/10.1007/s40261-016-0408-9
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40261-016-0408-9