Monday, July 15, 2024

Value-Aligned Pricing for Combination Therapies in Europe

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Combination therapies can provide effective treatment options and significantly improve patient outcomes. However, significant barriers to patient access persist, largely due to the prevailing pricing models in Europe. This article discusses the need for innovative pricing strategies to address these barriers, drawing on lessons from multi-indication pricing and proposing a framework for combination-based differential pricing (CBDP).

Current pricing models in Europe represent a substantial barrier to the accessibility of combination therapies (CTs). Issues such as affordability, value attribution, legal constraints, and availability of evidence complicate the adoption of these therapies. As combination therapies become more common, particularly in oncology, the need for tailored and effective pricing strategies is increasingly evident. This report introduces a strategic framework to support the identification of suitable pricing models for CTs, aiming to address these complex challenges and facilitate market access.

Framework for Pricing Models

The proposed framework involves classifying combination therapies based on specific scenarios, including therapy configuration, developer configuration, patent status, and therapy uses. This classification supports the identification of the most appropriate pricing model for each scenario. By drawing on the literature on multi-indication pricing, the report outlines various pricing models such as net price adjustments, weighted prices, multiple prices for the same therapies, and outcome-based payments. The concept of CBDP is introduced, allowing for flexibility in adopting differential pricing mechanisms that reflect the value and volume of CTs.

Stakeholders are encouraged to pursue combination-based differential pricing and specifically, value-aligned combination pricing. Differential prices or payments should be agreed upon according to the value generated by the treatments in different uses. Implementing CBDP effectively requires a precise specification of the scenario for each combination therapy, enabling stakeholders to navigate the associated challenges and select the most suitable pricing model. In many cases, net price adjustments should be the preferred strategy. When evidence of value is lacking, volume-aligned combination pricing may serve as a viable interim solution while a system to support value-aligned pricing is developed.

Combination therapies

Strategic Approach for Decision-Makers

The report outlines a strategic approach for decision-makers to implement CBDP by precisely specifying the scenario for a given combination therapy. This enables stakeholders to overcome challenges and barriers, ensuring that CTs are priced in a manner that reflects their value to patients and the healthcare system. By adopting this framework, stakeholders can support the progress towards a system where patient access to clinically effective combination therapies is timely and affordable. Decision-makers should use this approach as a foundation to implement combination-based differential pricing, pursue value-aligned combination pricing, and consider volume-aligned combination pricing where necessary.

The need for innovative pricing strategies for combination therapies is clear. By adopting a framework that supports value-aligned pricing, stakeholders can ensure that CTs are accessible and affordable, reflecting their true value to patients and the healthcare system. This approach will help create a more equitable and efficient market for combination therapies, encouraging continued innovation in this important area of medical treatment.

 

Resource: The Office of Health Economics, June 25, 2024

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