Disinvestment and value-based purchasing strategies for pharmaceuticals: an international review

Bonny Parkinson, Catherine Sermet, Fiona Clement, Steffan Crausaz, Brian Godman, Sarah Garner, Moni Choudhury, Sallie-Anne Pearson, Rosalie Viney, Ruth Lopert, Adam G. Elshaug

Research output: Contribution to journalArticle

33 Citations (Scopus)

Abstract

Pharmaceutical expenditure has increased rapidly across many OECD countries over the past three decades. This growth is an increasing concern for Governments and other third party payers seeking to provide equitable and comprehensive healthcare within sustainable budgets. In order to create headroom for increasing utilisation, and to fund new high cost therapies there is an active push to ‘disinvest’ from low-value drugs. The aim of this article is to review how reimbursement policy decision makers have sought to partially or completely disinvest from drugs in a range of OECD countries (UK, France, Canada, Australia and New Zealand) where they are publicly funded or subsidised. We employed a systematic literature search strategy and the incorporation of grey literature known to the authorship team. We canvass key policy instruments from each country to outline: key approaches to the identification of candidate drugs for disinvestment assessment (passive approaches versus more active approaches); Methods of disinvestment and value-based purchasing: de-listing, restricting treatment, price or reimbursement rate reductions, encouraging generic prescribing; Lessons learnt from the various approaches; The potential role of coverage with evidence development, and; The need for careful stakeholder management. Dedicated sections are provided with detailed coverage of policy approaches (with drug examples) from each country. Historically countries have relied on ‘passive disinvestment’, however due to (i) the availability of new cost-effectiveness evidence or (ii) ‘leakage’ in drug utilisation or (iii) market failure in terms of price competition, there is an increasing focus towards ‘active disinvestment’. Isolating low-value drugs that would create headroom for innovative new products to enter the market is also motivating disinvestment efforts by multiple parties, including industry. Historically disinvestment has mainly taken the form of price reductions, especially when market failures are perceived to exist, and restricting treatment to sub-populations, particularly when a drug is no longer considered value for money. There is considerable experimentation internationally in mechanisms for disinvestment and the opportunity for countries to learn from each other. Ongoing evaluation of disinvestment strategies is essential, and ought to be reported in the peer-reviewed literature.
LanguageEnglish
Pages905-924
Number of pages20
JournalPharmacoEconomics
Volume33
Issue number9
Early online date6 Jun 2015
DOIs
Publication statusPublished - Sep 2015

Fingerprint

Value-Based Purchasing
Pharmaceutical Preparations
Comprehensive Health Care
Drug Utilization
Authorship
Health Insurance Reimbursement
Literature
Budgets
Financial Management
Health Expenditures
Administrative Personnel
New Zealand
France
Cost-Benefit Analysis
Canada
Industry
Therapeutics
Costs and Cost Analysis

Keywords

  • pharmaceutical expenditure
  • drug markets
  • drug pricing

Cite this

Parkinson, B., Sermet, C., Clement, F., Crausaz, S., Godman, B., Garner, S., ... Elshaug, A. G. (2015). Disinvestment and value-based purchasing strategies for pharmaceuticals: an international review. PharmacoEconomics, 33(9), 905-924. https://doi.org/10.1007/s40273-015-0293-8
Parkinson, Bonny ; Sermet, Catherine ; Clement, Fiona ; Crausaz, Steffan ; Godman, Brian ; Garner, Sarah ; Choudhury, Moni ; Pearson, Sallie-Anne ; Viney, Rosalie ; Lopert, Ruth ; Elshaug, Adam G. / Disinvestment and value-based purchasing strategies for pharmaceuticals : an international review. In: PharmacoEconomics. 2015 ; Vol. 33, No. 9. pp. 905-924.
@article{f949551212a5401a871f46db8d56cadd,
title = "Disinvestment and value-based purchasing strategies for pharmaceuticals: an international review",
abstract = "Pharmaceutical expenditure has increased rapidly across many OECD countries over the past three decades. This growth is an increasing concern for Governments and other third party payers seeking to provide equitable and comprehensive healthcare within sustainable budgets. In order to create headroom for increasing utilisation, and to fund new high cost therapies there is an active push to ‘disinvest’ from low-value drugs. The aim of this article is to review how reimbursement policy decision makers have sought to partially or completely disinvest from drugs in a range of OECD countries (UK, France, Canada, Australia and New Zealand) where they are publicly funded or subsidised. We employed a systematic literature search strategy and the incorporation of grey literature known to the authorship team. We canvass key policy instruments from each country to outline: key approaches to the identification of candidate drugs for disinvestment assessment (passive approaches versus more active approaches); Methods of disinvestment and value-based purchasing: de-listing, restricting treatment, price or reimbursement rate reductions, encouraging generic prescribing; Lessons learnt from the various approaches; The potential role of coverage with evidence development, and; The need for careful stakeholder management. Dedicated sections are provided with detailed coverage of policy approaches (with drug examples) from each country. Historically countries have relied on ‘passive disinvestment’, however due to (i) the availability of new cost-effectiveness evidence or (ii) ‘leakage’ in drug utilisation or (iii) market failure in terms of price competition, there is an increasing focus towards ‘active disinvestment’. Isolating low-value drugs that would create headroom for innovative new products to enter the market is also motivating disinvestment efforts by multiple parties, including industry. Historically disinvestment has mainly taken the form of price reductions, especially when market failures are perceived to exist, and restricting treatment to sub-populations, particularly when a drug is no longer considered value for money. There is considerable experimentation internationally in mechanisms for disinvestment and the opportunity for countries to learn from each other. Ongoing evaluation of disinvestment strategies is essential, and ought to be reported in the peer-reviewed literature.",
keywords = "pharmaceutical expenditure, drug markets, drug pricing",
author = "Bonny Parkinson and Catherine Sermet and Fiona Clement and Steffan Crausaz and Brian Godman and Sarah Garner and Moni Choudhury and Sallie-Anne Pearson and Rosalie Viney and Ruth Lopert and Elshaug, {Adam G.}",
note = "The final publication is available at Springer via http://dx.doi.org/10.1007/s40273-015-0293-8",
year = "2015",
month = "9",
doi = "10.1007/s40273-015-0293-8",
language = "English",
volume = "33",
pages = "905--924",
journal = "PharmacoEconomics",
issn = "1170-7690",
number = "9",

}

Parkinson, B, Sermet, C, Clement, F, Crausaz, S, Godman, B, Garner, S, Choudhury, M, Pearson, S-A, Viney, R, Lopert, R & Elshaug, AG 2015, 'Disinvestment and value-based purchasing strategies for pharmaceuticals: an international review' PharmacoEconomics, vol. 33, no. 9, pp. 905-924. https://doi.org/10.1007/s40273-015-0293-8

Disinvestment and value-based purchasing strategies for pharmaceuticals : an international review. / Parkinson, Bonny; Sermet, Catherine; Clement, Fiona; Crausaz, Steffan; Godman, Brian; Garner, Sarah; Choudhury, Moni; Pearson, Sallie-Anne; Viney, Rosalie; Lopert, Ruth; Elshaug, Adam G.

In: PharmacoEconomics, Vol. 33, No. 9, 09.2015, p. 905-924.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Disinvestment and value-based purchasing strategies for pharmaceuticals

T2 - PharmacoEconomics

AU - Parkinson, Bonny

AU - Sermet, Catherine

AU - Clement, Fiona

AU - Crausaz, Steffan

AU - Godman, Brian

AU - Garner, Sarah

AU - Choudhury, Moni

AU - Pearson, Sallie-Anne

AU - Viney, Rosalie

AU - Lopert, Ruth

AU - Elshaug, Adam G.

N1 - The final publication is available at Springer via http://dx.doi.org/10.1007/s40273-015-0293-8

PY - 2015/9

Y1 - 2015/9

N2 - Pharmaceutical expenditure has increased rapidly across many OECD countries over the past three decades. This growth is an increasing concern for Governments and other third party payers seeking to provide equitable and comprehensive healthcare within sustainable budgets. In order to create headroom for increasing utilisation, and to fund new high cost therapies there is an active push to ‘disinvest’ from low-value drugs. The aim of this article is to review how reimbursement policy decision makers have sought to partially or completely disinvest from drugs in a range of OECD countries (UK, France, Canada, Australia and New Zealand) where they are publicly funded or subsidised. We employed a systematic literature search strategy and the incorporation of grey literature known to the authorship team. We canvass key policy instruments from each country to outline: key approaches to the identification of candidate drugs for disinvestment assessment (passive approaches versus more active approaches); Methods of disinvestment and value-based purchasing: de-listing, restricting treatment, price or reimbursement rate reductions, encouraging generic prescribing; Lessons learnt from the various approaches; The potential role of coverage with evidence development, and; The need for careful stakeholder management. Dedicated sections are provided with detailed coverage of policy approaches (with drug examples) from each country. Historically countries have relied on ‘passive disinvestment’, however due to (i) the availability of new cost-effectiveness evidence or (ii) ‘leakage’ in drug utilisation or (iii) market failure in terms of price competition, there is an increasing focus towards ‘active disinvestment’. Isolating low-value drugs that would create headroom for innovative new products to enter the market is also motivating disinvestment efforts by multiple parties, including industry. Historically disinvestment has mainly taken the form of price reductions, especially when market failures are perceived to exist, and restricting treatment to sub-populations, particularly when a drug is no longer considered value for money. There is considerable experimentation internationally in mechanisms for disinvestment and the opportunity for countries to learn from each other. Ongoing evaluation of disinvestment strategies is essential, and ought to be reported in the peer-reviewed literature.

AB - Pharmaceutical expenditure has increased rapidly across many OECD countries over the past three decades. This growth is an increasing concern for Governments and other third party payers seeking to provide equitable and comprehensive healthcare within sustainable budgets. In order to create headroom for increasing utilisation, and to fund new high cost therapies there is an active push to ‘disinvest’ from low-value drugs. The aim of this article is to review how reimbursement policy decision makers have sought to partially or completely disinvest from drugs in a range of OECD countries (UK, France, Canada, Australia and New Zealand) where they are publicly funded or subsidised. We employed a systematic literature search strategy and the incorporation of grey literature known to the authorship team. We canvass key policy instruments from each country to outline: key approaches to the identification of candidate drugs for disinvestment assessment (passive approaches versus more active approaches); Methods of disinvestment and value-based purchasing: de-listing, restricting treatment, price or reimbursement rate reductions, encouraging generic prescribing; Lessons learnt from the various approaches; The potential role of coverage with evidence development, and; The need for careful stakeholder management. Dedicated sections are provided with detailed coverage of policy approaches (with drug examples) from each country. Historically countries have relied on ‘passive disinvestment’, however due to (i) the availability of new cost-effectiveness evidence or (ii) ‘leakage’ in drug utilisation or (iii) market failure in terms of price competition, there is an increasing focus towards ‘active disinvestment’. Isolating low-value drugs that would create headroom for innovative new products to enter the market is also motivating disinvestment efforts by multiple parties, including industry. Historically disinvestment has mainly taken the form of price reductions, especially when market failures are perceived to exist, and restricting treatment to sub-populations, particularly when a drug is no longer considered value for money. There is considerable experimentation internationally in mechanisms for disinvestment and the opportunity for countries to learn from each other. Ongoing evaluation of disinvestment strategies is essential, and ought to be reported in the peer-reviewed literature.

KW - pharmaceutical expenditure

KW - drug markets

KW - drug pricing

UR - http://link.springer.com/journal/40273

U2 - 10.1007/s40273-015-0293-8

DO - 10.1007/s40273-015-0293-8

M3 - Article

VL - 33

SP - 905

EP - 924

JO - PharmacoEconomics

JF - PharmacoEconomics

SN - 1170-7690

IS - 9

ER -