Skip to main content
Key Specialties
Cardiology Diabetology Endocrinology Gastroenterology Geriatrics and Gerontology Gynecology and Obstetrics Hematology Infectious Disease Internal Medicine Nephrology Neurology Oncology Pediatrics Respiratory Medicine Rheumatology Surgery
Congress Coverage
2024 ACC Congress 2023 ESMO Congress 2023 EASD Congress 2023 ERS Congress 2023 ESC Congress
Clinical Collections
Advances in Alzheimer’s

Keynote webinar | Spotlight on medication adherence

LIVE: Thursday 27th June 2024, 18:00-19:30 (CEST)
Join our expert panel to discover why you need to understand the drivers of non-adherence in your patients, and how you can optimize medication adherence in your clinics to drastically improve patient outcomes.
ADVANCED SEARCH
Log in
Top
Cost Effectiveness and Resource Allocation
Published in: Cost Effectiveness and Resource Allocation 1/2014

Open Access 01-12-2014 | Research

A pilot study to assess feasibility of value based pricing in Cyprus through pharmacoeconomic modelling and assessment of its operational framework: sorafenib for second line renal cell cancer

Authors: Panagiotis Petrou, Michael A Talias

Published in: Cost Effectiveness and Resource Allocation | Issue 1/2014

Login to get access

Abstract

Background

The continuing increase of pharmaceutical expenditure calls for new approaches to pricing and reimbursement of pharmaceuticals. Value based pricing of pharmaceuticals is emerging as a useful tool and possess theoretical attributes to help health system cope with rising pharmaceutical expenditure.

Aim

To assess the feasibility of introducing a value-based pricing scheme of pharmaceuticals in Cyprus and explore the integrative framework.

Methods

A probabilistic Markov chain Monte Carlo model was created to simulate progression of advanced renal cell cancer for comparison of sorafenib to standard best supportive care. Literature review was performed and efficacy data were transferred from a published landmark trial, while official pricelists and clinical guidelines from Cyprus Ministry of Health were utilised for cost calculation. Based on proposed willingness to pay threshold the maximum price of sorafenib for the indication of second line renal cell cancer was assessed.

Results

Sorafenib value based price was found to be significantly lower compared to its current reference price.

Conclusion

Feasibility of Value Based Pricing is documented and pharmacoeconomic modelling can lead to robust results. Integration of value and affordability in the price are its main advantages which have to be weighed against lack of documentation for several theoretical parameters that influence outcome. Smaller countries such as Cyprus may experience adversities in establishing and sustaining essential structures for this scheme.

Classification codes

JEL 110, JEL 130, JEL 300
Appendix
Available only for authorised users
Literature
1.
Orszag PR, Ellis P: The challenge of rising health care costs – a view from the Congressional Budget Office. N Engl J Med 2007, 357: 1793–1795. 10.1056/NEJMp078190PubMedCrossRef
2.
Bach PB: Limits on medicare’s ability to control rising spending on cancer drugs. New Engl J Med 2009, 360: 626–633. 10.1056/NEJMhpr0807774PubMedCrossRef
3.
Petrou P: Power of r- Pharmaceutical sales decomposition in Cyprus public health care sector. Any lessons learned? Expert reviews of pharmacoeconomics and outcomes research. Expert Rev Pharmacoecon Outcomes Res 2014,14(2):289–300. 10.1586/14737167.2014.889565PubMedCrossRef
4.
Paris V, Belloni A: “Value in Pharmaceutical Pricing”. Paris, France: OECD Health Working Papers, No. 63, OECD Publishing; 2013.CrossRef
5.
6.
7.
Camps-Walsh G, Aivas I, Barratt H: How can value-based pricing improve access to and adoption of new treatments? 2020health 2009, 1–105.
8.
Brown MM, Brown GC, Sharma S: Evidence-Based to Value-Based Medicine. Chicago: AMA Press; 2005:151–265.
9.
Kanavos PK, Nicod E, Espin J, Van Den Aardweg S: Short- and Long-Term Effects of Value-Based Pricing vs. External Price Referencing. Brussels: LSE Health - London School of Economics, Andalusian School of Public Health; 2010.
10.
Sussex J, Towse A, Devlin N: Operationalizing value-based pricing of medicines a taxonomy of approaches. Pharmacoeconomics 2013, 31: 1–10. 10.1007/s40273-012-0001-xPubMedCrossRef
11.
Drummond DHl, Petrou S, Carswell C, Moher D, Greenberg D, Augustovski F, Briggs A, Mauskopf J, Loder E: Consolidated Health Economic Evaluation Reporting Standards (CHEERS)—explanation and elaboration: a report of the ISPOR health economic evaluations publication guidelines task force. Cost Effect Resour Allocation 2013, 11: 6. 10.1186/1478-7547-11-6CrossRef
12.
Thompson Coon J, Hoyle M, Green C, Liu Z, Welch K, Moxham T, Stein K: Bevacizumab, sorafenib tosylate, sunitinib and temsirolimus for renal cell carcinoma:a systematic review and economic evaluation. Health Technol Assess 2010,14(2):1–184.PubMedCrossRef
13.
Escudier B, Eisen T, Porta C, Patard JJ, Khoo V, Algaba F, Mulders P, Kataja V: Renal Cell carcinoma: Esmo clinical guidelines for diagnosis, treatment and follow-up. Ann Oncol 2012,23(Suppl 7):65–71.CrossRef
14.
Robert M, Russell LB, Paltiel AD, Chambers M, McEwan P, Krahn M: Conceptualizing a model: A report of the ISPOR-SMDM modeling good research practices task force-2. Value Health 2012, 15: 804–815. 10.1016/j.jval.2012.06.016CrossRef
15.
Briggs A, Sculpher M: An introduction to Markov modelling for economic evaluation. Pharmacoeconomics 1998,13(4):397–409. 10.2165/00019053-199813040-00003PubMedCrossRef
16.
Gilks WR, Richardson S, Spiegelhalter DJ: Markov Chain Monte Carlo in Practice. London: Chapman & Hall/CRC; 1996.
17.
Welton NJ, Sutton AJ, Cooper NJ, Abrams KR, Ades AE: Evidence Synthesis for Decision Making in Healthcare. 1st edition. West Sussex, UK: Wiley; 2012.CrossRef
18.
Cooper NJ, Sutton AJ, Abrams KR: Decision Analytical Economic Modelling Within a Bayesian Framework. University of Leicester, UK: Technical Report 02–03 Department of Epidemiology and Public Health; 2002.
19.
20.
Parmigiani G: Modeling in Medical Decision Making. A Bayesian Approach. West Sussex: John Wiley & Sons; 2002.
21.
Spiegelhalter D, Abrams KE, Myles J: Bayesian Approaches to Clinical Trials and Health-Care Evaluation. West Sussex: John Wiley & Sons, Ltd; 2004.
22.
Claxton K: The irrelevance of inference: a decision-making approach to the stochastic evaluation of health care technologies. J Health Econ 1999,18(3):341–364. 10.1016/S0167-6296(98)00039-3PubMedCrossRef
23.
Baio G: Bayesian Methods in Health Economics. Boca Raton, FL: Chapman Hall, CRC; 2012.CrossRef
24.
Dias S, Welton NJ, Sutton AJ, Ades AE: Evidence synthesis for decision making the baseline natural history model. Med Decis Making 2013,33(5):657–670. 10.1177/0272989X13485155PubMedCentralPubMedCrossRef
25.
Moher D, Liberati A, Tetzlaff J, Altman DG, The PRISMA Group (2009): Preferred Reporting Items for Systematic Reviews and Meta-Analyses: the PRISMA statement. PLoS Med 2009,6(6):e1000097. doi:10.1371/journal.pmed1000097PubMedCentralPubMedCrossRef
26.
Escudier B, Eisen T, Stadler WM, Szczylik C, Oudard S, Siebels M, Negrier S, Chevreau C, Solska E, Desai AA, Rolland F, Demkow T, Hutson TE, Gore M, Freeman S, Schwartz B, Shan M, Simantov R, Bukowski RM: Sorafenib in advanced clear-cell renal-cell carcinoma. N Engl J Med 2007, 356: 125–134. 10.1056/NEJMoa060655PubMedCrossRef
27.
Miller D, Homan S: Determining transition probabilities: confusion and suggestions. Med Decis Mak 1994,14(1):52–58. 10.1177/0272989X9401400107CrossRef
28.
Purmonen T, Martikainen JA, Soini E, Kataja V, Vuorinen RL, Kellokumpu-Lehtinen PL: Economic evaluation of Sunitinib Malate in second line treatment of metastatic renal cell cancer in Finland. Clin Ther 2008,30(2):382–392. 10.1016/j.clinthera.2008.02.013PubMedCrossRef
29.
Gelman A, Carlin J, Stren H, Rubin D: Bayesian Data Analysis. London: Chapman & Hall; 1995.
30.
Briggs AH, Goeree R, Blackhouse G, O’Brien BJ: Probabilistic analysis of cost-effectiveness models: choosing between treatment strategies for gastroesophageal reflux disease. Med Decis Mak 2002, 22: 290–308. 10.1177/027298902400448867CrossRef
31.
Carreras G, Baccini M, Accetta G, Biggeri A: Bayesian probabilistic sensitivity analysis of Markov models for natural history of a disease: an application for cervical cancer. IJPH 2012, 9: 7537–1-7537–9.
32.
Briggs A: Handling uncertainty in cost-effectiveness models. Pharmacoeconomics 2000,17(5):479–500. 10.2165/00019053-200017050-00006PubMedCrossRef
33.
34.
35.
Murray CJ, Evans DB, Acharya A, Baltussen RM: Development of WHO guidelines in generalized cost effectiveness analysis. Health Econ 2000, 9: 235–251. 10.1002/(SICI)1099-1050(200004)9:3<235::AID-HEC502>3.0.CO;2-OPubMedCrossRef
36.
37.
Briggs A, Nixon R, Dixon S, Thompson S: Parametric modelling of cost data: some simulation evidence. CHEBS Seminar 2003.
38.
Hall AR: Generalized Method of Moments. Oxford,. UK: Oxford University Press; 2004.
39.
Briggs A: Probabilistic Cost-Effectiveness Modelling: Overview of Methods and Challenges with an interactive Illustration. 7 th Annual Meeting ISPOR MAY 2002: Rotterdam ,The Netherlands. 2002.
40.
Ara R, Wailoo AJ: NICE DSU Technical Support document 12:The use of health state utility values in decision models. 2011.
41.
Cyprus Ministry of Health: Ministry of Health Medical Institute and Services Law. Cyprus; 2013.
42.
43.
Carlson B: “Satisfaction Guaranteed: Or your Money Back”. Biotechnol Healthc 2009.
44.
Petrou P, Talias M: A framework for applying health technology assessment in cyprus: thoughts, success stories, and recommendations. Value Health Reg Issues 2013, 2: 273–278. 10.1016/j.vhri.2013.06.016CrossRef
45.
46.
47.
Towse A: Should NICE's threshold range for cost per QALY be raised? Yes. BMJ 2009, 338: 181. 10.1136/bmj.b181CrossRef
48.
National Institute for Clinical Excellence: Update report on the Application of the ‘End-of- Life’ Supplementary Advice in Health Technology Appraisals. London; 2009. (2009a)
49.
Pinto-Prades J-L, Fernando-Ignacio S-M, Corbacho B: Valuing qalys at the end of Life. Seville, Spain: Andalusian Agency for Health Technology Assessment; 2012.
50.
Mason H, Jones-Lee M, Donaldson C: Modelling the monetary value of a QALY: A new approach based on UK data. Health Econ 2009,18(8):933–950. 10.1002/hec.1416PubMedCrossRef
51.
Hemmett L, Holmes J, Barnes M, Russell N: What drives quality of life in multiple sclerosis? QJM: An Int J Med 2004,97(10):671–676. 10.1093/qjmed/hch105CrossRef
52.
Maor Y, King M, Olmer L, Mozes B: A comparison of three measures: the time trade-off technique, global health-related quality of life and the SF-36 in dialysis patients. J Clin Epidemiol 2001, 54: 565–570. 10.1016/S0895-4356(00)00338-3PubMedCrossRef
53.
Hanneke WM, Van L, Schilderman J, Constans AHHVM, Verhagen M, Prins J: Time perception of cancer patients without evidence of disease and advanced cancer patients in a palliative, end-of-life-care setting. Cancer Nurs 2011,34(6):453. 10.1097/NCC.0b013e31820f4eb7CrossRef
54.
Devlin N, Sussex J: Incorporating Multiple Criteria in HTA: Methods and Processes. London: Office of Health Economics; 2011.
55.
Kanavos P, Taylor D, Manning J, Carr M: Implementing Value Based Pricing for Medicines An introduction. London: University of London; 2010.
56.
Hughes D: Value-based pricing incentive for innovation or zero net benefit? Pharmacoeconomics 2011,29(9):731–735. 1170–7690/11/0009–0731/$49.95/0 10.2165/11592570-000000000-00000PubMedCrossRef
57.
Persson U: Value Based Pricing in Sweden: Seminar Briefing no12. London: Office of Health Economics; 2012:1–10.
58.
Kielstra P: Reinventing Biopharma: Strategies for an Evolving Marketplace. The Value Challenge. London: Economist intelligence Unit; 2012.
59.
Greiner W: Germany’s drug pricing after AMNOG – What comes next? In 7th American & German Healthcare Forum Minneapolis, June 21st. Minneapolis, USA; 2011.
60.
Mcguire A, Raikou M, Kanavos P: Pricing pharmaceuticals: Value based pricing in what sense? Eurohealth 2008,14(2):3–5.
61.
Dranitsaris G: The application of pharmacoeconomic modelling to estimate a value-based price for new cancer drugs. J Eval Clin Pract 2012, 18: 343–351. 10.1111/j.1365-2753.2010.01565.xPubMedCrossRef
Metadata
Title
A pilot study to assess feasibility of value based pricing in Cyprus through pharmacoeconomic modelling and assessment of its operational framework: sorafenib for second line renal cell cancer
Authors
Panagiotis Petrou
Michael A Talias
Publication date
01-12-2014
Publisher
BioMed Central
Published in
Cost Effectiveness and Resource Allocation / Issue 1/2014
Electronic ISSN: 1478-7547
DOI
https://doi.org/10.1186/1478-7547-12-12

Other articles of this Issue 1/2014

Cost Effectiveness and Resource Allocation 1/2014 Go to the issue

Research

Economic evaluation of policy initiatives in the organisation and delivery of healthcare: a case study of gastroenterology endoscopy services

Research

Cost-effectiveness of community vegetable gardens for people living with HIV in Zimbabwe

Review

Health research priority setting in selected high income countries: a narrative review of methods used and recommendations for future practice

Methodology

The impact of incorporating Bayesian network meta-analysis in cost-effectiveness analysis - a case study of pharmacotherapies for moderate to severe COPD

Research

Incremental cost of increasing access to maternal health care services: perspectives from a demand and supply side intervention in Eastern Uganda

Research

Lifetime QALY prioritarianism in priority setting: quantification of the inherent trade-off