A case study of ex ante, value-based price and reimbursement decision-making: TLV and rimonabant in Sweden.

Value-based pricing (VBP) is a method of setting prices for products based on perceived benefits to the consumer. When information is symmetric and freely available and agency is perfect, VBP is efficient and desirable. Because of substantial information asymmetries, medical insurance distortions, and the prescribing monopoly of physicians, VBP is rare for prescription drugs, though a number of countries have recently moved in this direction. Because the potential benefits can be sizable, it is high time for a review of actual VBP-based decision-making in practice. Sweden, with its pharmaceutical benefits board (TLV), was an early adopter of VBP decision-making. We illustrate actual decision-making, thus, using the case of Acomplia for the treatment of obesity in Sweden, with and without the presence of co-morbid conditions. This example has a number of features that will be useful in illustrating the strengths and weaknesses of VBP in actual practice, including multiple indications, a need for not just one but two economic simulation models, considerable sub-group analysis, and requirements for additional evidence development. TLV concluded, in 2006, that Acomplia was cost-effective for patients with a body mass index (BMI) exceeding 35 kg/m2 and patients with a BMI exceeding 28 kg/m2 and either dyslipidemia or type 2 diabetes. Because of uncertainty in some of the underlying assumptions, reimbursement was granted only until 31 December 2008, at which time the manufacturer would be required to submit additional documentation of the long-term effects and cost-effectiveness in order to obtain continued reimbursement. Deciding on reimbursement coverage for pharmaceutical products is difficult. Ex ante VBP assessment is a form of risk sharing, which has been used by TLV to speed up reimbursement and dispersion of effective new drugs despite uncertainty in their true cost-effectiveness. Manufacturers are often asked in return to generate additional health economic evidence that will establish cost-effectiveness as part of ex post review. The alternative is to delay the reimbursement approval until satisfactory evidence is available.

The Swedish cost burden of overweight and obesity--evaluated with the PAR approach and a statistical modelling approach.

The rising trend in the prevalence of obesity, which is a major risk factor for a number of diseases notably diabetes and cardiovascular diseases, has become a major public health concern in many countries during the past decades. This development has also led to an increased cost burden on the public health care delivery system that has been documented in many studies. The standard approach taken for estimating the cost burden attributed to a risk factor is the so-called PAR (Population Attributed Risk) approach; an approach that is based on cross-sectional data. In this paper, the methods and findings of two studies that have documented the cost burden attributed to overweight and obesity on the public health care delivery system in Sweden are contrasted: one using the PAR approach and one using a statistical modeling approach based on longitudinal hospital care data for 15 years for 33 000 individuals. The main motivation for this paper is that the study using the PAR approach is only available in the Swedish language. The PAR approach estimated a cost burden of 3 600 million SEK (390 million Euro), equavalent to 1.9% of national health care expenditure, out of which 1 800 million SEK (190 million Euro) were spent on hospital care. The statistical modeling approach estimated the corresponding cost burden for hospital care at 2 100 million SEK (230 million Euro). The statistical modeling approach presents no estimates of the total cost burden attributed to overweight and obesity.

Obesity, survival, and hospital costs-findings from a screening project in Sweden.

OBJECTIVE: Our aims were to estimate 1) the costs of hospital treatment and 2) the value of lost production due to early death associated with overweight and obese patients, and then to extrapolate the findings to national costs. METHODS: We use regression models to analyze survival, expected number of days in hospital treatment for patients with different body mass index (BMI), and costs with data obtained from screening of 33,196 middle-aged subjects living in Malmö, Sweden, and collected during a 15-year follow-up period. We subsequently scale up costs to national aggregate level using the BMI prevalence data from the screening project to the national population. RESULTS: The total excess hospital (somatic, psychiatric) care cost (Swedish krona or SEK) for the national health-care budget, excess as compared to normal weight patients for obese (BMI > 30) and overweight (25 < or = BMI < 30) was estimated to SEK2155 million per annum (269 million dollars, assuming 1 dollar = SEK8), or about 2.3% of total hospital care costs in Sweden. The corresponding indirect costs due to early death were estimated to SEK2935 million (367 million dollars). For males at age 55, the potential hospital costs saving, excluding costs of the intervention that could be gained by an intervention that successfully and safely could alter the weight of an obese individual to become normal weight, was estimated on average to SEK4434 (554 dollars) per annum. CONCLUSION: Hospital treatment costs are found to be higher for obese and overweight patients than for normal weight patients indicating potential cost savings especially on indirect costs by effective, safe and low cost weight-loss intervention.