Valuing prizes and making reimbursement decisions: how different?. Kalipso Chalkidou, MD, PhD Harkness Fellow in Health Policy Johns Hopkins School of Public Health on sabbatical from NICE (UK)
Kalipso Chalkidou, MD, PhD
Harkness Fellow in Health Policy
Johns Hopkins School of Public Health
on sabbatical from NICE (UK)
DISCLAIMER: The views expressed here are those of the speaker and not of the Commonwealth Fund nor NICE.
1: Martin S, The Health Foundation, 2007, 2: King’s Fund, Brunel and City Universities and NICE; also see Culyer A, J Health Serv Res2007
but we will not:
“We recommend that Government reform the PPRS replacing current profit and price controls with a value based approach to pricing to ensure the price of drugs reflect their clinical and therapeutic value to patients and the broader NHS.”
Office for Fair Trading, February 2007
“We agree with the OFT that it is time to develop a pricing system which is fit for purpose for the twenty first century. We must ensure that any future pricing scheme delivers value, rewards innovation and ensures a fair deal.”
Interim Government Response to OFT Report
Competitiveness Minister Stephen Timms, London, August 2007
DiMasi and Grabowski, 2004 and 2007
It’s not going different?
to be easy…
Webb and Walker, Lancet 2007
Lower ICER=Better value for money
Miners et al, BMJ 2005
Daniels and Sabin, Philosophy and Public Affairs 1997
OTA, 1993; Garber, NBER, 2006; Skinner, Health Affairs, 2006; Light, Public Health, Policy and Law, 2007
Claxton, Health Economics, 2007
under patent protection
QIn a market system, we get access to what we can afford…
The market demand curve provides a constraint on a monopoly’s ability to profit from its market power. A monopolist would prefer, if it were possible, to charge a high price (P) and sell a large quantity (Q) at that high price. The market demand curve makes that outcome impossible.
The monopolist can choose any point on the demand curve but it cannot choose a point off the demand curve.
US: patients’ WTP, (obscure) insurance company and government criteria
UK: NICE, local NHS-run Trusts
Mankiw NG. Principles of Microeconomics, 4th Edition 2007