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The impact of reimbursement negotiations on cost and availability of new pharmaceuticals: evidence from an online experiment.

ABSTRACT: BACKGROUND:The necessity to measure and reward "value for money" of new pharmaceuticals has become central in health policy debates, as much as the requirement to assess the "willingness to pay" for an additional, quality-adjusted life year (QALY). There is a clear need to understand the capacity of "value-based" pricing policies to impact societal goals, like timely access to new treatments, sustainable health budgets, or incentivizing research to improve patient outcomes. Not only the pricing mechanics, but also the process of value assessment and price negotiation are subject to reform demands. This study assesses the impact of a negotiation situation for life-extending pharmaceuticals on societal outcomes. Of interest were general effects of the bargaining behaviour, as well as differences caused by the assigned role and the magnitude of prices. METHODS:We ran an online experiment (n?=?404) on Amazon Mechanical Turk (MTurk). Participants were randomly assigned into four treatment groups for a reimbursement negotiation between two roles (health minister, pharma representative) in two price framings. Payoff to players consisted of a fixed salary and a potential bonus, depending on their preferences, their price offer and the counter offer of a randomly paired negotiation partner. Success had real social consequences on other MTurk users (premium payers, investors) and via donations to a patient association. RESULTS:Margins between reservation prices and price offers increased throughout the game. Yet, 47% of players reduced at least once and 15% always their bonus probability to zero in favour of an agreement. 61% of simulated negotiation pairs could have reached an agreement, based on their preferences. 63% of these were successful, leaving 61% of patients with no access to the new treatment. The group with "real world" prices had lower prices and less agreements than the unconverted payoff group. The successful markets redistributed 20% of total assets from premium payers to investors over five innovation cycles. CONCLUSIONS:The negotiation situation for pharmaceutical reimbursement has notable impact on societal outcomes. Further research should evaluate policies that align preferences and increase negotiation success.

SUBMITTER: Wettstein DJ

PROVIDER: S-EPMC7243324 | biostudies-literature | 2020 May

REPOSITORIES: biostudies-literature

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The impact of reimbursement negotiations on cost and availability of new pharmaceuticals: evidence from an online experiment.

Wettstein Dominik J DJ Boes Stefan S

Health economics review 20200521 1

<h4>Background</h4>The necessity to measure and reward "value for money" of new pharmaceuticals has become central in health policy debates, as much as the requirement to assess the "willingness to pay" for an additional, quality-adjusted life year (QALY). There is a clear need to understand the capacity of "value-based" pricing policies to impact societal goals, like timely access to new treatments, sustainable health budgets, or incentivizing research to improve patient outcomes. Not only the ...[more]

PMID: 32440753

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Project description:BackgroundPrice negotiations for specialty pharmaceuticals take place in a complex market setting. The determination of the added value of new treatments and the related societal willingness to pay are of increasing importance in policy reform debates. From a behavioural economics perspective, potential cognitive biases and other-regarding concerns affecting outcomes of reimbursement negotiations are of interest. An experimental setting to investigate social preferences in reimbursement negotiations for novel, oncology pharmaceuticals was used. Of interest were differences in social preferences caused by incremental changes of the patient outcome.MethodsAn online experiment was conducted in two separate runs (n = 202, n = 404) on the Amazon Mechanical Turk (MTurk) platform. Populations were split into two (run one) and four (run two) equally sized treatment groups for hypothetical reimbursement decisions. Participants were randomly assigned to the role of a public price regulator for pharmaceuticals (buyer) or a representative of a pharmaceutical company (seller). In run two, role groups were further split into two different price magnitude framings ("real world" vs unconverted "real payoff" prices). Decisions had real monetary effects on other participants (in the role of premium payers or investors) and via charitable donations to a patient organisation (patient benefit).Results56 (run one) and 59 (run two) percent of participants stated strictly monotone preferences for incremental patient benefit. The mean incremental cost-effectiveness ratio (ICER) against standard of care (SoC) was higher than the initial ICER of the SoC against no care. Regulators stated lower reservation prices in the "real world" prices group compared to their colleagues in the unconverted payoff group. No price group showed any reluctance to trade. Overall, regulators rated the relevance of the patient for their decision higher and the relevance of their own role lower compared to sellers.ConclusionsThe price magnitude of current oncology treatments affects stated preferences for incremental survival, and assigned responsibilities lead to different opinions on the relevance of affected stakeholders. The design is useful to further assess effects of reimbursement negotiations on societal outcomes like affordability (cost) or availability (access) of new pharmaceuticals and test behavioural policy interventions.

Project description:BACKGROUND:Increasing the availability of healthier food increases its selection and consumption. However, there is an absence of evidence related to alcohol. This study aimed to estimate the impact of increasing the absolute and relative availability of non-alcoholic compared to alcoholic drinks on selection. We also assessed whether effects were modified by cognitive resource. METHODS:UK adult weekly alcohol consumers (n?=?808) were recruited to an online experiment with a hypothetical drink selection task. Participants were randomly assigned to one of eight conditions, in a 4 (availability) ×?2 (cognitive resource) factorial design. The four availability conditions were: i. Reference 1 (two non-alcoholic, two alcoholic drinks); ii. Reference 2 (four non-alcoholic, four alcoholic drinks); iii. Increased non-alcoholic drinks (six non-alcoholic, two alcoholic drinks); iv. Increased alcoholic drinks (two non-alcoholic, six alcoholic drinks). The two cognitive resource conditions were: a. Low (high time pressure); b. High (low time pressure). Logistic regression was used to assess selection of a non-alcoholic drink. RESULTS:49% of participants selected a non-alcoholic drink in the Increased non-alcoholic drinks condition, compared to 36% in Reference 1, 39% in Reference 2, and 26% in the Increased alcoholic drinks condition. Non-alcoholic drink selection was similar between Reference 1 and 2 when the total number of drinks increased (absolute availability) but the proportion of non-alcoholic compared to alcoholic drinks (relative availability) was unchanged (OR?=?1.15, 95% CI 0.77, 1.73). In contrast, the odds of selecting a non-alcoholic drink were 71% higher when both absolute and relative availability of non-alcoholic compared to alcoholic drinks was increased from Reference 1 to the Increased non-alcoholic drinks condition (OR: 1.71, 95% CI 1.15, 2.54), and 48% higher when increased from Reference 2 to the Increased non-alcoholic drinks condition (OR: 1.48, 95% CI 0.99, 2.19). There was no evidence of an effect of cognitive resource. CONCLUSIONS:Greater availability of non-alcoholic drinks, compared to alcoholic drinks, increased their online selection, an effect that may be larger when changing their relative availability, i.e., increasing the proportion of non-alcoholic drinks. Naturalistic studies are needed to determine the impact of availability interventions on reducing alcohol purchasing and consumption.

Project description:BACKGROUND:We analysed the impact of clinical study design for oncological pharmaceuticals on the subsequent price negotiations after early benefit assessment between pharmaceutical companies and the German National Association of Statutory Health Insurance Funds. The analysis was conducted for all oncology pharmaceuticals that underwent the early benefit assessment in Germany since its introduction in 2011 up to September 2016. METHODS:It was differentiated between additive (new therapy in addition to baseline therapy) and substitutive study designs (baseline therapy to be replaced). The study design was derived from the dossiers of the pharmaceutical companies submitted to the Federal Joint Committee. Subgroup specific costs in case of granted added benefit were calculated as annual therapy costs and compared with the costs of the appropriate comparators to quantify price premiums. Further price influencing factors were analysed in univariate and multivariate regression analysis considering the budget impact for the statutory health insurance as well. RESULTS:The mean and the median of the additive premiums for substitutive designs (€50,477.68 and €49,841.24) were higher than for additive designs, if the comparator was different to best supportive care (€48,750.00 and €42,820.44). The mean multiplicative premium for the substitutive designs was 15.07 versus 2.29 for the additive designs. EU-Prices and target population size had a significant effect on the reimbursement. The adjusted R-square in the log Premium OLS-regressions reached 0.708 when including all explanatory variables and considering interaction between target population and annual costs of the comparator. CONCLUSIONS:Study design as an additional important influencing factor of the negotiations next to those stated in the framework agreement was identified and verified. Therefore, study design should be considered by pharmaceutical companies and by decision makers and payers within strategic price planning as a potential predictor. For some specific categories the number of cases was small. Further analyses should be performed when more oncology pharmaceuticals have passed the early benefit assessment.

Project description:ObjectivesThis study aims to analyze the reimbursement and cost of biological therapy for severe asthma in Bulgaria during 2014-2019 from the perspective of the National Health Insurance Fund.MethodsIt is a retrospective, Marco-costing, top-down study of the expenditures for biological products for severe asthma. The changes in the cost paid by the National Health Insurance Fund per year, per product, and per patient during 2015-2020 were systematized and calculated. The utilization of biologicals was analyzed by calculating the defined daily dose/1000inh/day. Three databases were searched-the European Medicines Agency for the date of marketing authorization of biological products, National Council of Prices and Reimbursement for the date of their respective inclusion in the positive drug list, and National Health Insurance Fund about the number of patients with asthma, reimbursed sum for all asthma patients, and number of packages sold of biological products.ResultsAt the end of 2019, five international non-proprietary names of biologicals with indication for severe asthma had received European marketing authorization, and three of them were included in the Bulgarian positive drug list-omalizumab, mepolizumab, and benralizumab with a 75% reimbursement. Upon their introduction into the positive drug list, the reimbursed expenditures for asthma therapy started to increase from 27 million in 2014 to 33 million BGN in 2019 (€13.5-€16.5 million). The cost of therapy with biologicals rose from 16% to 24% of all anti-asthmatic medicines budget. The National Health Insurance Fund database reported that between 47,000 and 52,000 of patients with asthma, 466 are on biological therapy. The yearly cost of one asthma patient ranges between 512 and 615 BGN (€258-€307), and the yearly per-patient cost of severe asthma is 16,666 BGN (appr. €8333). Total utilization in defined daily dose/1000inh/day increases from 0.0199 to 0.0383 from 2015 to 2019.ConclusionThe access to biological therapy through the reimbursement system has improved during the last 3 years. The cost of therapy is posing a high burden on the National Health Insurance Fund and on the patients and is expected to increase due to the small number of patients on biological therapy currently in comparison to all reimbursed asthmatics.

Dataset Information

The impact of reimbursement negotiations on cost and availability of new pharmaceuticals: evidence from an online experiment.

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The impact of reimbursement negotiations on cost and availability of new pharmaceuticals: evidence from an online experiment.

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