Establishing Value of Medical Products

Payers everywhere are saying -  SHOW ME THE EVIDENCE

The current global recession has accelerated the implementation of rules that dictate how new medical products are reimbursed.  Certain products already on the market are being withdrawn when benefits are not considered significant.   Many European health agencies have established rules concerning the type of data they require to evaluate the value of new medical treatments.  In the United States, both physicians and patients have taken actions to counter the rapidly rising costs of new drugs and medical services.  Although the rules differ in each country and are evolving, it is certain that the pharma industry, as well as providers of medical services, will need to provide evidence of the value of their products in order to establish their level of reimbursement. 

Factors Considered in Establishing Value
    The Situation in Europe

  • Real world data is required

  • Comparison with current standard of care
        - no reimbursement for inferior products
        - no or reduced reimbursement for identical
        - higher prices for superior products

  • National healthcare budgets are shrinking or flat

  • Rules vary from country-to-country

Factors Considered in Establishing Value
    The Changing Situation in USA

  • Real world data is desirable

  • There are no national standards or requirements

  • Physicians at Memorial Sloan-Kettering Cancer Center in New York refused to use a new colon cancer drug because it was twice as expensive an another drug without being better
        - More than 100 oncologists protested the high cost
          of cancer drugs in an editorial in the journal Blood

  • Patients in USA become medical tourists to reduce costs
        - A new hip costs $78,000 in USA and
          $13,660 in Belgium

The data is from the International Federation of Health Plans, a global insurance trade association that includes more than 100 insurers in 25 countries.  The data represents the prices insurers are actually paying for drugs, devices and medical services.  As noted above patients are waking up to the fact that healthcare is much more expensive in the US than in other countries and are going to other countries for the same procdure.

Prices in the US are expressed as a range because each insurer negotiates its own prices, and different insurers pay vastly different amounts.  In other countries, prices are set centrally and vary very little.

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