A three-tiered approach
Another novel idea would link drug prices to value, but allow costs to change with new information. The proposal would create a three-part pricing model where prices vary over fixed time intervals, according to an article published in the New England Journal of Medicine Catalyst.
First, drugmakers would agree to launch a drug with a low price, with a potentially significant increase after a specified period to observe performance. During a second period, the price would be adjusted up or down based on newly emergent evidence. After a window of higher prices to reward innovation, the cost would then decline in a third period to ensure long-term access.
The advantage is access to truly miraculous therapies in a very short time – from 3 to 5 years earlier than the current system, said Luca Pani, MD, a coauthor of the paper and professor of psychiatry at the University of Miami.
Dr. Luca Pani
“Another advantage emerges when it comes to drugs that treat patient populations with inaccurate epidemiology, in which we do not know exactly how many patients we have,” Dr. Pani said. “The model in this case allows to reduce the economic impact of this uncertainty.”
The main challenge would be finding a drug manufacturer that would agree to the arrangement, said Erik Snowberg, PhD, a coauthor of the study and a research associate for the National Bureau of Economic Research.
Dr. Erik Snowberg
“There’s a lot of uncertainty right now,” Dr. Snowberg said. “The big challenge would be to find a drugmaker that would think about implementing this and finding the right payer for whom this would solve a pressing need.”
Despite the barriers to the idea, Dr. Pani said a more cost-effective drug cost structure is imperative, especially as the rapid rate of new therapies continues.
“We have a moral obligation to find alternative models that allow access and that are not only scientifically and economically sound and sustainable but also realistic and logical to implement,” he said.