Assessing the Value of Medicines
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LEADING ARTICLE
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Assessing the Value of Medicines Lloyd Sansom Chair, Pharmaceutical Benefits Advisory Committee, Commonwealth of Australia, Division of Health Sciences, University of South Australia, Adelaide, South Australia
Abstract
Internationally, there is a growing use of cost-effectiveness analysis as part of the decision-making process for the subsidy of pharmaceuticals. This will continue as the cost of pharmaceuticals and the demands for health services increase within constrained financial frameworks and as the need to consider opportunity costs becomes more essential. Third party payers consists of governments (e.g. in the UK and Australia) or private health insurance agencies. The data needs of these payers have generally not been acknowledged by the pharmaceutical industry, which has concentrated on registration of the medicine as the primary focus of the drug development process. As the costs increase, the capacity of the individual patient to pay for these medicines becomes limited and new medicines will generally not have a market unless they are subsidized. Sponsors must now consider the data requirements of payers as part of the drug development process and payers will need to be more active in their dialogue with sponsors regarding these requirements, with a view to the development of an international framework similar to that which exists for data requirements for registration purposes. The growing use of conditional or controlled access by patients with requirements for further data collection as a means of addressing uncertainty will require a greater interaction between regulators, payers and sponsors. There seems to be a divide between regulators and payers, an absence of overt willingness to participate in an international dialogue to discuss issues of common interest and a divergence of philosophy rather than a uniqueness of the issues. All stakeholders need to work together to improve the efficiency of drug evaluation processes to ensure that patients have timely access to safe and effective medicines at a price they and their nations can afford.
1. Registration versus Subsidy The rising demand and cost of healthcare are major issues for all countries of the world irrespective of whether they are financed by the public or private sector. While for many of the developing countries the major issue is one of access to essential drugs, in most of the developed world, the major issue is how to value new pharmaceuticals, particularly in circumstances of increasing demand due to the ageing population. This is particularly relevant where the patient-relevant outcomes are sometimes uncertain (e.g. where surrogate endpoints form the primary outcomes of trials). Until relatively recently, the registration of a new pharmaceutical product by the regulatory authorities (e.g. US FDA, European Medicines Agency and the Australian Therapeutic Goods Administration) was regarded as the final hurdle that the pharmaceutical industry had to meet in orde
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