Drug Prices Not Consistently Adjusted with Value in the US: Study

by Iswarya on  August 7, 2018 at 4:50 PM Health Insurance News
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Health care reimbursements in many countries for drugs are directly associated with their value or net health benefits in treating disease. But a new study finds that it is not the case in the US. The findings of the study are published in the journal Health Affairs.
Drug Prices Not Consistently Adjusted with Value in the US: Study
Drug Prices Not Consistently Adjusted with Value in the US: Study

"In the United Kingdom, for example, cost-effectiveness is a driver of decisions to pay for, or decline to pay for, health interventions," said the study's lead author Jon Campbell, Ph.D., associate professor of pharmacy. "They generally do not pay more than Ģ30,000 to Ģ40,000 per quality-adjusted-life-year (QALY) for new medical interventions, thus signaling to manufacturers and other innovators what their country is willing to pay for additional health improvements."

QALY is used to measure one year of perfect health.

In the U.S., there is no formally agreed-upon cost-effectiveness threshold, due mostly to its fragmented health care system.

Using a forecasting model, they calculated the cost-effectiveness for commonly reimbursed cardiovascular drugs by estimating the cost per health outcome achieved. They wanted to see if the U.S. had an observed payment threshold, if even implicitly.

Instead, they found a broad spectrum of cost-effectiveness, suggesting that drug prices are not consistently associated with what they produce regarding health gains. Prices were, in short, not consistently aligned with value.

"When we purchase a medical treatment, we expect to get something in return, such as living a longer life or having fewer symptoms," said study co-author Melanie Whittington, Ph.D., research faculty at the CU School of Pharmacy. "The results of our study show the amount insurance providers pay to get one more unit of health, such as one additional year of life in perfect health, varies considerably and can exceed what is considered good value in other parts of the world. This contributes to higher-priced medical treatments."

She noted that the study used data from 1985-2011 and that in recent years healthcare leaders have been talking more about value-driven health care.

Campbell said the U.S. pays up to twice as much for branded drugs and health care services compared to other wealthy nations.

The reason, he said, may be due to the difference in price paid with little difference in the number of drugs or health services used.

"The U.S. gets very little regarding additional health outcomes for this added price paid," said Campbell, director of the pharmaceutical outcomes research graduate track at the Center for Pharmaceutical Outcomes Research at CU Anschutz. "In the pharmaceutical space, the U.S. has done a poor job at signaling to manufacturers what we are willing to pay for improvements in health and what improvements in health we care about."

He and Whittington hope the study will stimulate more debate in this country about what constitutes an acceptable cost per unit of health gained for drugs and how to achieve value-driven health care delivery in the U.S.

"Solutions toward fair drug pricing include the U.S. sending more signals about what we value in health and U.S. decision makers being willing and able to walk away from unfair pricing," Campbell said.

Source: Eurekalert

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