As pharmaceutical innovation continues, the question of value-based pricing for treatments continues to raise its head on, as a more nuanced pricing model to reflect things like unique treatment characteristics, or small patient populations.
Examples of successful implementation exist, but wholesale payer policy change towards a holistic value-based pricing model has been glacial – with the complex legal, regulatory and payer reimbursement landscape failing to keep pace with scientific innovation.
We spoke to four former policymakers – a former health minister from the UK, a former drugs policy minister from Poland, a former chair of the German AMNOG Arbitration Board and a former Canadian Health Minister to help understand what pharmaceutical companies can do to make value-based pricing (VBP) a reality.
1. Engage with the right people at the right time
According to our experts, pharmaceutical companies tend to have conversations about pricing at the time of launch, but these launches rarely take government budget cycles into account. If conversations occur towards the end of a budget cycle, or outside of the budget cycle window, they’re much less likely to penetrate the government “machine”. Depending on the country, there are multiple departments and stakeholders you could bring on board early to strengthen your case – early engagement timed right could go a long way.
2. Sell “value” in their terms
Ultimately, political leaders are looking to get re-elected, and implementing a complicated new reimbursement system is unlikely to deliver “wins” quickly enough to make a dent on their approval ratings. The way pharmaceutical companies currently try to sell value-based pricing doesn’t chime with policymakers – and too often comes from an argument of ‘rewarding innovation’. Any VBP offer needs to have a solid business case with a clearly differentiated proposition, an understanding of the health system partner’s economic context, and ideally examples of the proposal working in practice.
3. Start small and scale
Implementing IBP nationally will likely require wholesale restructuring of the price negotiation process, which is unlikely to happen. Building local or regional projects and using them as the proof points to scale more widely is your best chance of success in the short term. In the longer term, as the number of multi-indication medicines grows, healthcare systems will be less able to approach negotiations on a case-by-case basis. Collating existing examples of VBP and formalising them into a proposal that demonstrates the merit of VBP and addresses some of the perceived barriers will help to build momentum for change.
4. Put the patient at the centre
Because pricing is personal, pharmaceutical companies tend to go it alone in these conversations. External pressure on policymakers, especially from a public/patient voice, can help make it untenable for the healthcare system not to find a solution to the problem
 |
GermanyTwitter-famous health economist, now health minister, looks to cut medicine prices |
Prof Karl Lauterbach, Professor of Health Economics and Social Democratic Party Member of the German Bundestag since 2005, shot to prominence during the COVID-19 pandemic as an expert commentator on the virus (or a “COVID Cassandra” depending on who you ask). As a rough indicator of his journey to household name, in his prior life as just a Bundestag Member and a respected voice in health policy in the EU’s largest country, Lauterbach had 90,000 Twitter followers in January 2020. Just over two years on, he has nearly 1 million, four times as many as Sajid Javid, and about twice as many as Patty Murray, Chair of the U.S. Senate Committee on Health, Education, Labor, and Pensions.
Lauterbach has a long record of published articles and comments on health policy. He’s co-authored articles and given interviews about the success of Germany’s Disease Management Programmes and how Germany’s disease management programmes (currently covering diabetes, asthma, COPD, heart disease and breast cancer) are a way of combining ‘competition’ and ‘solidarity’, driving up quality of care.
In response to the financial crisis Germany’s health insurance funds are in, Lauterbach has put forward, and then withdrawn a draft bill which would which aim to contain the cost of medicines. The floated reforms have caused a ferocious and sustained response from the Federal Association of the Pharmaceutical Industry, who are warning it will cause supply shortages and saying the draft Bill breaks the coalition agreement. The Bill had apparently not been discussed with the SDP’s coalition partners before launch, Lauterbach has appeared to step back and says it was merely the “beginning of a dialogue”. However, if the alternative to such a measure is higher insurance contributions, then resisting measures to reduce medicines prices may be politically impossible.
 |
FranceWhat the outcome of the presidential and legislative elections means for the Health agenda |
Following the presidential elections on 20 May, Brigitte Bourguignon was appointed as the new Minister for Solidarity and Health. She swiftly lost in the legislative elections to Marie Le Pen’s National Rally candidate Christine Engrand by 56 votes. Alas, she was not the only appointed member of Macron’s Government that did not make it to the chamber of the Deputy– with two more appointed ministers having to resign (appointed Minister for ecological transition Amelie de Montchalin; and Justine Benin, Secretary of State for the Sea, both lost to left-wing alliance candidates).
Macron’s party only got 245 seats at the chamber of the Deputies, short of 44 seats to get the majority. This means that Macron’s party might have to make strategic alliances with other parties like the Republicans (mainstream right) who got 61 seats or the NUPES (the new left-wing alliance) who got 131 seats to get some of its key bills through.
In early July, François Braun, a 60-year-old doctor, was appointed as Health Minister – having supported Macron with his election health proposals. In his presidential manifesto, Macron’s health proposals focused on addressing the lack of access to GPs and other healthcare professionals for people in more rural areas. Other priorities outlined in Macron’s Manifesto included enhancing telemedicine, regulating more strongly where GPs can settle across France through targeted incentives, and simplifying the liaison between public hospitals and private practitioners.
Since May, Braun has been working on a “flash mission” to establish the first measures to try to support the healthcare sector – with an eyewatering 41 conclusions. A key measure is a national campaign on appropriate use of emergency services, which has already garnered criticism in a the context of months of media reporting of hospitals experiencing serious staffing issues, both in rural and big urban areas, forcing a number of A&E and maternity units to close down temporarily. The president of the trade union for the emergency services described Braun’s appointment and policies as a “provocation”, saying it would lead to a “revolt in the world of health”.
 |
BrusselsEU proposes to knock down barriers to health data-sharing across the bloc |
The EU Commission has lined up EUR 810 million in funding to create the new European Health Data Space (EHDS), which it expects to come into effect in 2025. Yet to be discussed by the Council or Parliament, it aims to make sharing of health data across member states easier, and forms part of the EU’s more general ‘GDPR+’ data infrastructure overhaul.
Data has the potential to revolutionise approaches to research and improve equal access to treatment across the EU, decision-making for system leaders, and innovation in life sciences. However, across the EU, data infrastructure is often seen as fragmented, with differing standards making it hard to share data to these ends. The EU says that the EHDS, and the accompanying standardisation of data rules, will help patients, healthcare professionals, researchers, policymakers and industry by making health data “as open as possible, and as closed as necessary”.
The Commission hopes that patients will have better access to their own data, health services will be more efficient and better able to care for patients from other EU countries, and research and innovation in the digital healthcare and life sciences will be boosted by streamlining regulation.
Whilst this ostensibly constitutes progress for the EU’s health data sector, patient groups have also cautioned that access should also come only with control, choice and transparency for the patient, and that new processes should not add to administrative burdens. Patient groups have also urged the EU to recognise existing differences and inequalities between member states, and use the EHDS as a tool to address inequalities. These topics will likely get more discussion when Parliament gets its say in the coming months.
 |
ItalyHealthcare transformation as needed to ‘level up’ chronic disease care exposed |
The EU Commission has lined up EUR 810 million in funding to create the new European Health Data Space (EHDS), which it expects to come into effect in 2025. Yet to be discussed by the Council or Parliament, it aims to make sharing of health data across member states easier, and forms part of the EU’s more general ‘GDPR+’ data infrastructure overhaul.
Data has the potential to revolutionise approaches to research and improve equal access to treatment across the EU, decision-making for system leaders, and innovation in life sciences. However, across the EU, data infrastructure is often seen as fragmented, with differing standards making it hard to share data to these ends. The EU says that the EHDS, and the accompanying standardisation of data rules, will help patients, healthcare professionals, researchers, policymakers and industry by making health data “as open as possible, and as closed as necessary”.
The Commission hopes that patients will have better access to their own data, health services will be more efficient and better able to care for patients from other EU countries, and research and innovation in the digital healthcare and life sciences will be boosted by streamlining regulation.
Whilst this ostensibly constitutes progress for the EU’s health data sector, patient groups have also cautioned that access should also come only with control, choice and transparency for the patient, and that new processes should not add to administrative burdens. Patient groups have also urged the EU to recognise existing differences and inequalities between member states, and use the EHDS as a tool to address inequalities. These topics will likely get more discussion when Parliament gets its say in the coming months.
Maddy Farnworth
Director
Maddy leads our global policy work, and has a special interest in post-pandemic health system sustainability and resilience. She’s sat in more meetings with policymakers making international comparisons than she’d care to admit.
Noah Froud
Senior Account Manager
Noah is the brains behind our newsletter, and previously worked for a Member of the European Parliament. He’s an unashamed health policy nerd and has his finger on the pulse of UK and European developments.
Beth Harwood
Account Executive
Beth recently joined the MHP team following her master’s degree in Global Public Health.
Julie Henri
Account Manager
Julie is one of our global health experts, and conveniently is also French, so naturally knows the inner workings of Macron’s mind.
Chris Sargent
Account Manager
Chris spent two years living in China working for the British Chamber of Commerce and speaks both Chinese and French.
Sophie Vandenbroucke
Account Executive
Sophie joined our team as an Account Executive in January 2022. She has at least three degrees which puts most of the rest of the team to shame.
The short film has won the Short Film Grand Jury award in the animation category at the 38th Edmonton International Film Festival in Canada... Read more
MHP selected as financial and corporate communications partner for next-generation exchange group... Read more