Achieving dynamic efficiency in pharmaceutical innovation: Identifying the optimal share of value and payments required.

It has been argued that cost-effectiveness analysis of branded pharmaceuticals only considers static efficiency, neglects dynamic effects and undermines incentives for socially valuable innovation. We present a framework for designing pharmaceutical pricing policy to achieve dynamic efficiency. We develop a coherent framework that identifies the long-term static and dynamic benefits and costs of offering manufacturers different levels of reward. The share of value that would maximise long-term population health depends on how the quantity and quality of innovation responds to payment. Using evidence of the response of innovation to payment, the optimal share of value of new pharmaceuticals to offer to manufacturers is roughly 20% (range: 6%-51%). Reanalysis of a sample of NICE technology appraisals suggests that, in most cases, the share of value offered to manufacturers and the price premium paid by the English NHS were too high. In the UK, application of optimal shares would offer considerable benefits under both a public health objective and a broader view of social welfare. We illustrate how an optimal share of value can be delivered through a range of payment mechanisms including indirect price regulation via the use of different approval norms by an HTA body.

Patient characteristics associated with all-cause healthcare costs of alopecia areata in the United States.

Evidence on the factors of medical costs involved in the care of people with alopecia areata (AA) is limited, but mounting evidence points to significant variation in financial impact for patients with AA in the absence of effective treatments. This study explored drivers of medical costs among privately insured adults and adolescents with AA in the United States. The study found that patients of middle age (45­64 years), located in the Northeast region, with comprehensive health insurance, with greater extent of hair loss, or with other health disorders face greater all-cause medical costs. Adult females of young (18­44 years) and older (65+ years) age also faced greater costs on average. This research confirms high variability in the burden of AA, pointing to population subgroups that may be more affected by the disease and its commonly associated disorders.

Cost analysis of the impact of caplacizumab in the treatment of acquired thrombotic thrombocytopenic purpura from a US hospital perspective.

AIM: This study aimed to model the financial impact of caplacizumab with therapeutic plasma exchange (TPE) + immunosuppression for patients experiencing an acute acquired thrombotic thrombocytopenic purpura (aTTP) episode versus TPE + immunosuppression, from a US hospital's perspective. METHODS AND MATERIALS: We developed an economic model to estimate the impact of caplacizumab on a US hospital's budget. Cost offsets from caplacizumab utilization targeted inpatient general ward days, intensive care unit (ICU) days, and TPE utilization. Costs and event probabilities were estimated from primary data analyses of the phase 3 HERCULES trial and peer-reviewed literature or other public sources. Plan reimbursement was obtained from 2019 Medicare Fee Schedules and adjusted to represent reimbursement from different US payers. Cost of ICU and general ward utilization were estimated from Medicare Provider Analysis and Review data analyses capturing hospital discharges. RESULTS: The model results indicate that caplacizumab leads to hospitalization cost savings of over $8,000 ($23,148 versus $14,904) along with TPE cost savings of over $14,000 ($37,150 versus $23,033) per patient. When the cost of caplacizumab and plan reimbursement are incorporated into the results, the per-patient cost of TPE + immunosuppression is $23,120 versus $70,068 for caplacizumab with TPE + immunosuppression, an incremental cost of $46,948. The model was robust to several scenario analyses; however, when limited to Medicare fee-for-service (FFS), the incremental cost of caplacizumab per patient was reduced to $4,852 due to add-on payments. CONCLUSIONS: Caplacizumab with TPE + immunosuppression is associated with an increase in costs; however, the increase is nominal among payers who provide an add-on payment consistent with that of Medicare FFS.

Do Medicare's Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists?

Within the past decade, the U.S. health care market has undergone massive vertical integration, prompting economists to study the underlying causes and consequences of hospital-physician integration. This paper examines whether or not hospitals strategically choose to vertically integrate with clinical oncologists in order to capture facility fees, a commonly cited reason for increased consolidation in the health care market. To address this question, I match data on hospitals' ownership of clinical oncologists with Medicare payment data disaggregated to the physician and specific service level. I leverage a 2014 policy change that drastically altered the payment structure of Medicare's facility fees paid to hospitals for evaluation and management services-and yet, it did not alter the direct payments made to physicians. Contrary to popular belief, I find no evidence that the financial incentives of facility fees have an effect on the probability that a hospital and a clinical oncologist vertically integrate.

Comparison of cost-effectiveness of implantable cardioverter defibrillator therapy in patients for primary prevention in Latin America: an analysis using the Improve SCA study.

OBJECTIVE: The mortality benefit of implantable cardioverter defibrillators (ICDs) for primary prevention (PP) of sudden cardiac arrest (SCA) has been well-established, but ICD therapy remains globally underutilized. The results of the Improve SCA study showed a 49% relative risk reduction in all-cause mortality among ICD patients with 1.5 primary prevention (1.5PP) characteristics (patients with one or more risk factors, p < 0.0001). We evaluated the cost-effectiveness of ICD compared to no ICD therapy among patients with 1.5PP characteristics in three Latin American countries and analyzed the factors involved in cost-effectiveness. METHODS: We used a published Markov model that compares costs and outcomes of ICD to no ICD therapy from local payers' perspective and included country-specific and disease-specific inputs from the Improve SCA study and current literature. We used WHO-recommended willingness-to-pay (WTP) thresholds to assess cost-effectiveness and compared model outcomes between countries. RESULTS: Incremental costs per QALY (quality-adjusted life year) saved by ICD compared to no ICD therapy are Colombian Pesos COP$46,729,026 in Colombia, Mexican Pesos MXN$246,016 in Mexico, and Uruguayan Pesos UYU$1,213,614 in Uruguay in the base case scenario; all three figures are between 1-3-times GDP per capita for each country. One-way and probabilistic sensitivity analyses confirm the base case scenario results. Non-cardiac accumulated deaths are lower in Mexico, resulting in a comparatively increased cost-effective ICD therapy. LIMITATIONS: The Improve SCA study was not randomized, so clinical results could be biased; however, measures were taken to reduce this bias. Costs and benefits were modelled beyond the timeline of direct observation in the Improve SCA study. CONCLUSIONS: ICD therapy is cost-effective in Mexico and Uruguay and potentially cost-effective in Colombia for a 1.5PP population. Variability in ICER estimates by country can be explained by differences in non-cardiac deaths and cost inputs.

Healthcare resource utilization and costs in patients with myelodysplastic syndromes treated with hypomethylating agents: a SEER-Medicare analysis.

AIMS: To describe healthcare resource utilization (HRU) and costs in patients with myelodysplastic syndromes (MDS) treated with hypomethylating agents (HMA) based on HMA-treatment response. MATERIALS AND METHODS: SEER-Medicare data (January 2006-December 2016) were used to identify adults diagnosed with MDS (SEER: January 2009-December 2015) initiated on HMA (index date). HMA-treatment success (indicators: ≥7 HMA cycles, stem cell transplantation, and transfusion independence) or failure (indicators: acute myeloid leukemia [AML], AML-like treatment, and death) was determined using a claim-based algorithm. HRU and costs were assessed from the index date to 1-year post-index, overall and stratified by HMA-treatment success or failure. Among patients with HMA-treatment failure, HRU and costs were also assessed from failure to 1-year post-failure. RESULTS: The study included 3,046 patients (mean age: 77.4 years; females: 36.8%). Rates of HMA-treatment success and failure were 44.4% and 76.2%, respectively (20.6% had HMA-treatment success then failure). Overall, patients had 15.2 inpatient admissions per-100-patients-per-month (median follow-up: 5.9 months). Patients with HMA-treatment success had 7.5 inpatient admissions per-100-patients-per-month (median follow-up: 12.0 months), while those with HMA-treatment failure had 20.4 and 35.3 admissions per-100-patients-per-month pre- and post-HMA-treatment failure, respectively (median follow-up: 4.3 and 1.8 months, pre- and post-HMA-treatment failure, respectively). Mean total healthcare costs were $12,494 per-patient-per-month overall, $8,069 per-patient-per-month among patients with HMA-treatment success, and $13,809 and $19,242 per-patient-per-month pre- and post-HMA-treatment failure, respectively. Outpatient costs (68.3%) were the main contributor of total healthcare costs overall, while inpatient costs (80.3%) were the main cost driver post-HMA-treatment failure. LIMITATIONS: Without available laboratory test results, clinical indicators observed in claims were used to assess HMA-treatment response. CONCLUSIONS: Over 75% of patients with MDS failed HMA-treatment within 6 months of initiation and were observed with more inpatient admissions than those with HMA-treatment success, translating into substantially higher healthcare costs. HMA-treatment failure results in an important economic burden in MDS patients.

Losing body weight for money: How provider-side financial incentives cause weight loss in Swiss low-birth-weight newborns.

Facing steadily rising health care costs, Switzerland introduced a system of diagnosis-related groups (DRGs) for hospital payment in 2012 (SwissDRG) along with cost-efficiency benchmarking between hospitals. On the one hand, SwissDRG puts hospitals at financial risk and strengthens incentives for efficiency by setting a fixed price per case. On the other hand, hospitals are incentivized to game the system and exploit adverse incentives. We investigate hospitals' behavioral response to financial incentives in Swiss neonatology. First, we provide strong evidence for manipulations of reported birth weight among low-birth-weight newborns. Using a difference-in-difference-in-difference design, we find that 14-27% of birth weights are manipulated around specific birth weight cutoffs. Second, we find evidence of an upward-sloping supply curve of cheating, indicating that hospitals increasingly engage in fraudulent behavior as financial incentives increase. Our estimates indicate a supply-sided price elasticity of cheating between 0.16 and 0.52.

The impact of prescription drug co-payments for publicly insured families.

Co-payments for prescription drugs are a common feature of many healthcare systems, although often with exemptions for vulnerable population groups. International evidence demonstrates that cost-sharing for medicines may delay necessary care, increase use of other forms of healthcare and result in poorer health outcomes. Existing studies concentrate on adults and older people, particularly in the US, with relatively less attention afforded to paediatric and European populations. In Ireland, prescription drug co-payments were introduced for the first time for medical cardholders (i.e. those with public health insurance) in October 2010, initially at a cost of €0.50 per item, rising to €1.50 in January 2013, and further increasing to €2.50 in December 2013. Using data from the Growing Up in Ireland longitudinal study of children, and a difference-in-difference research design, we estimate the impact of the introduction (and increase) of these co-payments on health, healthcare utilisation and household financial wellbeing. The introduction of modest co-payments on prescription items was not estimated to impinge on the health of children and parents from low-income families. For the younger Infant Cohort, difference-in-difference estimates indicated that the introduction (and increase) in co-payments was associated with a decrease in GP visits and hospital nights, and a decrease in the proportion of households reporting 'difficulties with making ends meet'. In contrast, for the older cohort of children (the Child Cohort), co-payments were associated with an increase in GP visiting, and an increase in household deprivation. While the parallel trends assumption for difference-in-difference analysis appeared to be satisfied, further investigation revealed that there were other time-varying observable factors (such as exposure to the economic recession over the period) that affected the treatment and control groups, as well as the two cohorts of children differentially, that may partly explain these divergent results. For example, while the analysis suggests that the introduction of the €0.50 co-payment in 2010 was associated with an increase in the probability of treated families in the Child Cohort being deprived by 9.4 percentage points, the proportion of treated families experiencing unemployment and reductions in household income also increased significantly around the time of the co-payment introduction. This highlights the difficulty in identifying the effect of the co-payment policy in an environment in which assignment to the treatment (i.e. medical cardholder status) was not randomly assigned.

Vertigo and dizziness cause considerable more health care resource use and costs: results from the KORA FF4 study.

OBJECTIVES: Vertigo is a common reason for primary care consultations, and its diagnosis and treatment consume considerable medical resources. However, limited information on the specific cost of vertigo is currently available. The aim of this study is to analyse the health care costs of vertigo and examine which individual characteristics would affect these costs. STUDY DESIGN: We used cross-sectional data from the German KORA ("Cooperative Health Research in the Augsburg Region") FF4 study in 2013. METHODS: Impact of personal characteristics and other factors was modelled using a two-part model. Information on health care utilisation was collected by self-report. RESULTS: We included 2277 participants with a mean age of 60.8 (SD = 12.4), 48.4% male. Moderate or severe vertigo was reported by 570 (25.0%) participants. People with vertigo spent 818 Euro more than people without vertigo in the last 12 months (2720.9 Euro to 1902.9 Euro, SD = 4873.3 and 5944.1, respectively). Consultation costs at primary care physicians accounted for the largest increase in total health care costs with 177.2 Euro (p < 0.01). After adjusting for covariates, the presence of vertigo increased both the probability of having any health care costs (OR = 1.6, 95% CI =[1.2;2.4]) and the amount of costs (exp(ß) = 1.3, 95% CI = [1.1;1.5]). The analysis of determinants of vertigo showed that private insurance and a medium level of education decreased the probability of any costs, while higher income increased it. CONCLUSIONS: The presence of vertigo and dizziness required considerable health care resources and created significantly more related costs in different health care sectors for both primary and pertinent secondary care.

Análise da assistência à saúde com a Naturologia na perspectiva do usuário / Analysis of health care with Naturology in perspective of the users

A pesquisa realizada objetivou analisar a assistência à saúde na perspectiva do usuário, atendido na Seção de Naturologia Aplicada da Assembleia Legislativa do Estado de Santa Catarina (ALESC). Trata-se de um estudo descritivo, exploratório de natureza quantitativa. Foi realizado entre o período de Setembro a Outubro de 2012. A amostra foi constituída por 80 usuários. Os dados foram obtidos por meio de questionário. A coleta de dados enfocou questões referentes ao conhecimento e aceitação das práticas naturais, à satisfação do usuário e à resolutividade da assistência à saúde com a Naturologia. A análise dos dados ocorreu através da estatística descritiva e para comparação entre as porcentagens utilizou-se o Teste Exato de Fisher. Os resultados demonstraram que a maioria (67,1%) conhecia as práticas naturais, mas grande parte (52,5%) não fazia uso. A prática natural mais popular foram os florais, tanto no conhecimento quanto no uso. A análise da satisfação dos usuários pela assistência com a Naturologia mostrou-se positiva, onde a maioria (83,8%) se considera satisfeito pelo atendimento no local, (85,3%) relataram que o atendimento com a Naturologia melhorou sua saúde e (49,4%) que o seu problema de saúde foi resolvido com o atendimento. A maioria (97,4%) acredita que a Seção de Naturologia tem resolutividade no atendimento de seu usuário, (95,0%) acredita no efeito das práticas naturais, (97,4%) indicariam o tratamento com a Naturologia para outras pessoas, demonstrando que as práticas naturais são aceitas. Este estudo apontou que é possível analisar a assistência à saúde sob as diferentes perspectivas do usuário, identificando fatores que possam melhorar a qualidade das ações prestadas pela Naturologia.(AU)

The research aimed to analyze the health care in the user´s perspective, attended the Section of Naturology of the Assembleia Legislativa do Estado de Santa Catarina (ALESC). The study was descriptive, exploratory and quantitative analysis was descriptive, performed between September and Octuber 2012. The sample consisted of 80 users and data collection was made by means of questionnaire. The analysis focused on issues related to knowledge and acceptance of natural practices, user satisfaction and resoluteness of health care with Naturology. The results showed that the majority (67,1%) knew the natural practices, but most, but (52,5%) was not used. The analysis of user satisfaction for assistance with Naturology was positive, where the majority (83,8%) is considered satisfied with the service, (85,3%) reported that the treatment with naturology improved their health and (49,4%) that this health problem was solved with the service. Most (97,4%) believes that Naturology has resoluteness in the service of their user, (95.0%) believe the effect of natural practices, (97,4%) indicate treatment with Naturology to others demonstrating that natural practices are accepted. This study showed that is possible to analyze the health care unde different user perspectives, indentifying faactors that can improve the quality of the actions provided by Naturology.(AU)

The New and Old Europe: East-West Split in Pharmaceutical Spending.

HIGHLIGHTS Since the geopolitical developments of 1989, former centrally planned economies of Eastern Europe followed distinctively different pathways in national pharmaceutical expenditure evolution as compared to their free market Western European counterparts.Long term spending on pharmaceuticals expressed as percentage of total health expenditure was falling in free market economies as of 1989. Back in early 1990s it was at higher levels in transitional Eastern European countries and actually continued to grow further.Public financing share of total pharmaceutical expenditure was steadily falling in most Central and Eastern European countries over the recent few decades. Opposed scenario were EU-15 countries which successfully increased their public funding of prescription medicines for the sake of their citizens.Pace of annual increase in per capita spending on medicines in PPP terms, was at least 20% faster in Eastern Europe compared to their Western counterparts. During the same years, CEE region was expanding their pharmaceuticals share of health spending in eight fold faster annual rate compared to the EU 15.Private and out-of-pocket expenditure became dominant in former socialist countries. Affordability issues coupled with growing income inequality in transitional economies will present a serious challenge to equitable provision and sustainable financing of pharmaceuticals in the long run.