Value-based prices for drugs needed, says OFT
Prices paid for branded drugs should reflect the therapeutic value that they bring to patients, according to a recent report from the Office of Fair Trading.
The OFT report recommends that value-based approaches to medicines
pricing should replace the current Pharmaceutical Price Regulation
Scheme. This would give pharmaceutical companies stronger incentives
to invest in drugs for those medical conditions where there is
greatest need, the report says. Also, reduced spending on poor
value drugs could potentially mean more resources are available
for other high cost, valuable medicines.
Under the proposed scheme, manufacturers would submit a suggested
price, along with evidence of cost-effectiveness, which would differ
across indications. An analysis of prices reflecting value would
then be carried out in a co-ordinated way by the National Institute
for Health and Clinical Excellence, the Scottish Medicines Consortium
and the All Wales Medicines Strategy Group. If these organisations
considered that, at the given price, the drug would fall within
the cost-effectiveness threshold in all indications, the drug would
be recommended for use in the NHS. Recommendations would take the
form of guidance similar to that issued through NICE’s single
technology appraisal process or by the SMC.
In the long term, the OFT suggests that a commission on the value
of medicines be created.
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Hospital
Pharmacist