Can and Should Value Based Pricing Be Applied to Molecular Diagnostics?

Just out is an OHE Research Paper that examines the issues. The authors note that diagnostics not only facilitate health gain and cost savings, but also provide information to inform patients’ decisions on interventions and to clarify how their behaviour may affect their health in future.

Martina Garau

 

Just out is an OHE Research Paper that examines the issues.  The authors note that diagnostics not only facilitate health gain and cost savings, but also provide information to inform patients’ decisions on interventions and to clarify how their behaviour may affect their health in future.  Current pricing and reimbursement systems for diagnostics, however, are not efficient and provide poor incentives for new diagnostic approaches.  Prices often are driven by administrative practice and expected production cost, rather than assessments of value.

The paper discusses how a value based pricing (VBP) framework for efficient use and pricing of medicines also might be applied to diagnostics. The authors recommend a two-part approach. First, in the case of companion diagnostics introduced at the launch of a drug, the process would follow the new drug assessment processes.  It would consider a broad range of value elements and be based on a balanced analysis of diagnostic impact. Second, for diagnostics not paired specifically with a drug at launch, review would be by a diagnostics-dedicated committee using VBP principles.

Download Garau, M., Towse, A., Garrison, L., Housman L. and Ossa, D. Can and should value based pricing be applied to molecular diagnostics? Research Paper 12/03. London: Office of Health Economics.