Value-Based Pricing: OHE Comments

In December 2010, the UK Department of Health released a consultation document to elicit comments on ‘proposals for a new value-based system of pricing medicines which aims to recognise and reward innovation. The document sets out the principles that would underpin the move to value-based pricing, outlines how the new system could work across the UK and seeks views on a number of key issues’.

In December 2010, the UK Department of Health released a consultation document to elicit comments on ‘proposals for a new value-based system of pricing medicines which aims to recognise and reward innovation. The document sets out the principles that would underpin the move to value-based pricing, outlines how the new system could work across the UK and seeks views on a number of key issues’. Responses were requested by 17 March 2011. (The Department of Health consultation document is available here.)

The OHE has submitted its comments and made the full text of its remarks available here.

Briefly stated, key issues addressed in our response include the following.

1. Value-based pricing (VBP) can, and should, exist side-by-side with other approaches such as the Patient Assess Schemes.

2. No approach to assessing value as a basis for pricing can be wholly mechanistic; as demonstrated in every other country that assesses the ‘value’ of medicines, an element of negotiation about price always is present.

3. ‘Innovation’ is not a ‘yes or no’ variable, but occurs along a continuum of various degrees of innovation. This perspective must underlie any VBP.

4. Discussions must include whether the UK has an obligation to price in a way that encourages innovation, not ‘free ride’ on other countries that do.

5. Full assessment of value must take full account of patients’ preferences and experiences as well as the wider benefits to society, not be limited to costs to the NHS.

6. A value assessment based on weighting quality-adjusted life years (QALYs), as suggested by the UK Department of Health, is not appropriate. Multiple criteria must be considered and include social value judgements, some of which will not be proportional to the incremental QALYs a medicine is judged to yield.

Because the issues and considerations raised by value-based pricing (VBP) are complex, we urge readers to download and read our response in full.