Innovative Payment Models for High-Cost Innovative Medicines – A Report by the Expert Panel on Effective Ways of Investing in Health
Panel
Panel 6: Drug Cost and Access III
Moderator
Keith Hatschek, Professor and Program Director for Music Management and Music Industry Studies, University of the Pacific, Conservatory of Music
Description
Health systems face a common challenge in achieving multiple objectives: a) innovation “that matters” is produced, b) patients have access to innovation that is produced; and c) financial sustainability of health systems.
Standard models of rewarding innovation seem to be insufficient. Moreover, it is unlikely that a single payment model will be fit for all situations. Instead of defining a unique payment model to be applied to all innovations, the Opinion of the EC Expert Panel of Effective Ways of Investing in Health proposes broad principles that should be observed. The relative importance of each principle is determined by the context of the product and the problem it addresses.
A major element is the balance between incentives to develop innovations that have higher therapeutic value and the division of value generated. Another major distinction is between decentralized innovation (with rewards based on patents) and centralized innovation, or procurement for innovation. A third major point is the recognition of countries’ interdependencies (innovation benefits all). Fourth point is that institutional arrangements matter and may have unintended effects. In particular, assessing the value of an innovation and setting its prices should follow different mechanisms (that is, value-based health care does not immediately and automatically implies value-based pricing, especially in health systems with centralized processes of price reimbursement of innovative medicines).
Location
Pacific McGeorge School of Law, Lecture Hall, 3200 Fifth Ave., Sacramento, CA
Innovative Payment Models for High-Cost Innovative Medicines – A Report by the Expert Panel on Effective Ways of Investing in Health
Pacific McGeorge School of Law, Lecture Hall, 3200 Fifth Ave., Sacramento, CA
Health systems face a common challenge in achieving multiple objectives: a) innovation “that matters” is produced, b) patients have access to innovation that is produced; and c) financial sustainability of health systems.
Standard models of rewarding innovation seem to be insufficient. Moreover, it is unlikely that a single payment model will be fit for all situations. Instead of defining a unique payment model to be applied to all innovations, the Opinion of the EC Expert Panel of Effective Ways of Investing in Health proposes broad principles that should be observed. The relative importance of each principle is determined by the context of the product and the problem it addresses.
A major element is the balance between incentives to develop innovations that have higher therapeutic value and the division of value generated. Another major distinction is between decentralized innovation (with rewards based on patents) and centralized innovation, or procurement for innovation. A third major point is the recognition of countries’ interdependencies (innovation benefits all). Fourth point is that institutional arrangements matter and may have unintended effects. In particular, assessing the value of an innovation and setting its prices should follow different mechanisms (that is, value-based health care does not immediately and automatically implies value-based pricing, especially in health systems with centralized processes of price reimbursement of innovative medicines).
Speaker Bio
Pedro Pita Barros is Professor of Economics at Universidade Nova de Lisboa. He is a member of the European Commission’s “Expert panel on effective ways of investing in health”, a member of the Portuguese National Council of Ethics for the Life Sciences, a member of Portuguese National Health Council and Past-President of the European Association of Health Economics. His research focuses on health economics and on regulation and competition policy and appeared in many academic journals. Pedro Pita Barros has also several books on health economics (in Portuguese and English).
He served as Member of the Board of the Portuguese Energy Regulator (2005/2006) and on the Governmental Commission for the Financial Sustainability of the National Health Service (2006/2007). Pedro Pita Barros was President of the Portuguese Association for Health Economics. He serves on the editorial boards of academic journals in the field of Health Economics. He acted as consultant for both private and public entities, in Portugal and at the European level, in the areas of health economics, competition policy and economic regulation.