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The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need

New discoveries are a critical priority for the pharmaceutical industry. However, the use of fixed incremental cost-effectiveness (ICER) thresholds for health technology assessment (HTA) may compromise incentives to innovate and affect future treatment options. This paper highlights the impact of ge...

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Autores principales: Dionne, Pierre-Alexandre, Ali, Farzad, Grobler, Mendel
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Columbia Data Analytics, LLC 2016
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8341815/
https://www.ncbi.nlm.nih.gov/pubmed/34430665
http://dx.doi.org/10.36469/9838
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author Dionne, Pierre-Alexandre
Ali, Farzad
Grobler, Mendel
author_facet Dionne, Pierre-Alexandre
Ali, Farzad
Grobler, Mendel
author_sort Dionne, Pierre-Alexandre
collection PubMed
description New discoveries are a critical priority for the pharmaceutical industry. However, the use of fixed incremental cost-effectiveness (ICER) thresholds for health technology assessment (HTA) may compromise incentives to innovate and affect future treatment options. This paper highlights the impact of generic drug price policies on pharmaceutical innovation in the context of fixed ICER thresholds and proposes a new consideration for the cost-effectiveness analysis (CEA). There is a direct causal relationship between HTA and the market price of a drug; in jurisdictions where HTA agencies apply fixed ICER thresholds as an important reimbursement listing criterion, the incremental cost of a new drug is expected to be proportional to its incremental benefit over the comparator. However, the comparator price is subject to market forces or sudden policies and may change markedly affecting the cost-effectiveness assessment (e.g. where the comparator patent has expired). Since recent generic price regulations increased the price gap between drugs’ generic and patented versions, it is harder to achieve a sufficient level of incremental benefits in order to offset incremental prices of new treatments. Consequently, even promising drugs may have challenges to show attractive ICERs and research and development (R&D) investments may become unattractive in certain disease area. In order to promote innovation in therapeutic fields with unmet medical needs, a compromise would be to include the comparator’s patented price in the CEA instead of the generic drug. By identifying the relevant disease areas, decision makers and HTA authorities could therefore convey the importance of investing in these therapeutic areas to manufacturers.
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spelling pubmed-83418152021-08-23 The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need Dionne, Pierre-Alexandre Ali, Farzad Grobler, Mendel J Health Econ Outcomes Res Methodology and Healthcare Policy New discoveries are a critical priority for the pharmaceutical industry. However, the use of fixed incremental cost-effectiveness (ICER) thresholds for health technology assessment (HTA) may compromise incentives to innovate and affect future treatment options. This paper highlights the impact of generic drug price policies on pharmaceutical innovation in the context of fixed ICER thresholds and proposes a new consideration for the cost-effectiveness analysis (CEA). There is a direct causal relationship between HTA and the market price of a drug; in jurisdictions where HTA agencies apply fixed ICER thresholds as an important reimbursement listing criterion, the incremental cost of a new drug is expected to be proportional to its incremental benefit over the comparator. However, the comparator price is subject to market forces or sudden policies and may change markedly affecting the cost-effectiveness assessment (e.g. where the comparator patent has expired). Since recent generic price regulations increased the price gap between drugs’ generic and patented versions, it is harder to achieve a sufficient level of incremental benefits in order to offset incremental prices of new treatments. Consequently, even promising drugs may have challenges to show attractive ICERs and research and development (R&D) investments may become unattractive in certain disease area. In order to promote innovation in therapeutic fields with unmet medical needs, a compromise would be to include the comparator’s patented price in the CEA instead of the generic drug. By identifying the relevant disease areas, decision makers and HTA authorities could therefore convey the importance of investing in these therapeutic areas to manufacturers. Columbia Data Analytics, LLC 2016-10-27 /pmc/articles/PMC8341815/ /pubmed/34430665 http://dx.doi.org/10.36469/9838 Text en https://creativecommons.org/licenses/by/4.0/ This is an open access article distributed under the terms of the Creative Commons Attribution License (4.0) (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Methodology and Healthcare Policy
Dionne, Pierre-Alexandre
Ali, Farzad
Grobler, Mendel
The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need
title The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need
title_full The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need
title_fullStr The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need
title_full_unstemmed The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need
title_short The Impact of Recent Generic Drug Price Policies on Pharmaceutical Innovation: A Theoretical Rationale and Proposal of a Method Supporting Innovation in Areas of Unmet Medical Need
title_sort impact of recent generic drug price policies on pharmaceutical innovation: a theoretical rationale and proposal of a method supporting innovation in areas of unmet medical need
topic Methodology and Healthcare Policy
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8341815/
https://www.ncbi.nlm.nih.gov/pubmed/34430665
http://dx.doi.org/10.36469/9838
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