New: Operationalising Value Based Pricing

To date, the UK Government has not been specific about how VBP will be implemented, but has indicated that calculations of value will extend beyond the QALY approach currently used by NICE. The Department of Health has stated that it will include “the range of factors through which medicines deliver benefits for patients and society”.

To date, the UK Government has not been specific about how VBP will be implemented, but has indicated that calculations of value will extend beyond the QALY approach currently used by NICE.  The Department of Health has stated that it will include “the range of factors through which medicines deliver benefits for patients and society”.

In this OHE Research Paper, the authors identify and describe the full set of possible means by which value based pricing might be operationalised, categorise these by developing a taxonomy of approaches, and provide an initial assessment of the challenges, pros and cons of each.  They review the elements of value that could be considered and how these might be measured and valued,  combined into an overall assessment of a medicine’s value, and then linked to the maximum price the health service is willing to reimburse.  Finally, the means by which VBP is currently operationalised in a selection of countries is examined; both these and proposals for the UK are placed in the context of the taxonomy.

Download Sussex, J., Towse, A. and Devlin, N. (2011)  Operationalising Value Based Pricing of Medicines: A Taxonomy of Approaches. OHE Research Paper. London: Office of Health Economics.