Prof. Lieven Annemans proposes a value informed, affordable ('via') payment model for innovative (cancer) drugs

CRIG group leader Prof. Lieven Annemans recently published a conceptual paper on a new payment model for innovative medicines including orphan medicines and cancer drugs. As stated by the Expert Panel on Effective ways of investing in Health, new models are needed to ensure that 1) innovation 'that matters' is produced, that 2) patients have access to innovation and that 3) the developed health systems are financially sustainable.

Existing models are typically based on cost plus pricing (based on the R&D costs) or different types of value based pricing. Next to the inherent problems with these models (including the definition of ‘value’), these models do not account for the budget impact and  affordability for the healthcare system. Therefore, a more comprehensive model is needed, taking into account both cost effectiveness, medical need and budget impact for the assessment and appraisal of the price and reimbursement level of innovative medicines.

The model prof. Annemans proposes in the paper turns value based pricing into value informed, affordable (‘via’) pricing, taking into account affordability and budget impact next to rewarding value (as schematized in the figure below). Although this model is only part of a bigger picture and research is required to a.o. better estimate disease severity and quantify the trade-off between cost-effectiveness and budget impact, it can help in tackling the current challenges around this topic.

You can download the full article here, or read it online.