Next frontiers for drug pricing – an international analysis

In this book chapter, published in Pricing and Reimbursement 2023 by Global Legal Insights, Margaux Hall, Katherine Wang and I explore key trends surfacing across multiple global jurisdictions: growing efforts at cost-containment and intensifying the legal scrutiny of government efforts to contain costs or restrict access to therapies. 

We sought to address the increasing scrutiny on health interventions in terms of their cost-effectiveness and the extent to which they should be covered by the respective national health systems. The following questions are commonly raised by policy makers:

• Can and should coverage be offered for a particular therapy?
• Is there a cost-effectiveness case for coverage and access to the therapy?
• What price is perceived as fair, justifiable and not excessive and on what basis is this determination made?

These questions have intensified over the past few years, as there is an increasing focus on containing health care costs through restrictive price controls or statutory rebates as a condition for effective market access.

These forces are colliding with an intensifying desire for equitable access to affordable innovative medical interventions. Despite the creation of expedited approval pathways in various jurisdictions to facilitate patient access to treatments for conditions with significant unmet medical need, the rate of adoption of transformative innovations in various national health systems remains slow.

The increase in therapeutic advances is not necessarily translating to enhancing patient access given restrictive market access criteria as has now become commonplace in many established markets. It is clear that many global markets are increasingly relying on health-economic tools to guide decision-making on whether medicines and health technologies should be financed or reimbursed by the respective health systems.

This highlights the general need for manufacturers to generate clinically relevant evidence to make the case to multiple stakeholders regarding the value that the treatment will provide to patients, to healthcare systems and to society and the price that the health system is willing to pay. This may require a deeper understanding of how value is understood by payers and policymakers so that concerted efforts are made to promote a more holistic approach to determine value for market access.

In that regard, there may be a need to adopt new methodological approaches to generate evidence that is generalisable to the intended patient population in a real-world setting. What remains certain is that governments will increasingly continue to look to pricing controls to contain healthcare costs even in countries such as the United States that historically have enjoyed a freer, more unconstrained market access environment.

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