Abstract
The concluding chapter presents the guide for regulators to playing and winning the new drug reimbursement game. The results from the previous chapters are summarised as four rules and four tools in this guide. Some of the counterintuitive results from applying these rules are discussed, including the result that if the new drug has additional benefits beyond health gains, that this could lead to a reduced rather that increased threshold. Likely criticisms of these rules by clinicians, social decision makers and some health economists are discussed. The regulator should not respond to these criticisms by increasing the threshold for “special cases”. Instead she should present information about the opportunity cost of the strategy to reimburse at a premium above the health shadow price to decision makers. This response goes some way in addressing the failure of the market and institutions to invest in the development of evidence of unpatented interventions. The possibility that the factor that is common to such criticism is that stakeholders value novelty per se and are willing to trade-off population health benefits to gain novelty is introduced.
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Notes
- 1.
“Analyst A” (misrepresenting Mishan) would have been calculating the shadow price of inputs rather than the maxWTP. “Analyst B” could benefit from reading Pekarsky (2012, Appendix 10). “Analyst C” (representing Williams) should not have been excused for ignoring the market’s failure to provide evidence of the cost and consequences of unpatented and unpatentable programs. [See Drummond et al. (2005) p. 18 for details of these Analysts]
- 2.
Some health economists might argue that this is “first best economics gone mad”. However, the ongoing neglect of the failure of the market to generate incentives for evidence relating to unpatented or unpatentable programs while generating (inflated) incentives to firms to provide evidence of patented technologies is a consequence of the neglect of the first best world.
- 3.
For a discussion of this character, see the Glossary of Characters. This is the Social Decision maker that Analyst C provides information to [See Drummond et al. (2005) p. 18].
- 4.
Towse (2010, p 316) describes this problem as comparing the benefits to a “known” group of patients with the potential loss to an unknown group of patients whose health benefits are foregone. He describes the choice of decision threshold as being a choice between a choice between a “known group of patients against the unknown” and the choice of valuing the unknown patients’ foregone benefits above those of the known patients’ benefits as “pessimistic”.
- 5.
There is now a sizeable body of literature looking at the practicalities and merits of disinvestment strategies. A number of the studies associated with NICE also raise the relationship with the choice of threshold (Culyer et al. 2007; Elshaug et al. 2007; Pearson and Littlejohns 2007; Walker et al. 2007).
- 6.
The Reimburser has grown to be quite tolerant of hard-core economics. However, if β C < 0 because the existing budget has significant allocative inefficiency … well, she can see the headlines now—“Companies asked to pay the government if drugs are innovative”. She understands that this will not necessarily be the effect of a threshold below zero, and firms could still make an economic profit on these drug sales (see Chaps. 8, 9 and 10). But why let economic sense stand in the way of a good headline? Such is the political economy of new drugs.
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Pekarsky, B.A.K. (2015). Conclusion. In: The New Drug Reimbursement Game. Adis, Cham. https://doi.org/10.1007/978-3-319-08903-4_11
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