IDEAS home Printed from https://ideas.repec.org/a/spr/pharme/v34y2016i10d10.1007_s40273-016-0416-x.html
   My bibliography  Save this article

Sustainable Financing of Innovative Therapies: A Review of Approaches

Author

Listed:
  • Aidan Hollis

    (University of Calgary)

Abstract

The process of innovation is inherently complex, and it occurs within an even more complex institutional environment characterized by incomplete information, market power, and externalities. There are therefore different competing approaches to supporting and financing innovation in medical technologies, which bring their own advantages and disadvantages. This article reviews value- and cost-based pricing, as well direct government funding, and cross-cutting institutional structures. It argues that performance-based risk-sharing agreements are likely to have little effect on the sustainability of financing; that there is a role for cost-based pricing models in some situations; and that the push towards longer exclusivity periods is likely contrary to the interests of industry.

Suggested Citation

  • Aidan Hollis, 2016. "Sustainable Financing of Innovative Therapies: A Review of Approaches," PharmacoEconomics, Springer, vol. 34(10), pages 971-980, October.
  • Handle: RePEc:spr:pharme:v:34:y:2016:i:10:d:10.1007_s40273-016-0416-x
    DOI: 10.1007/s40273-016-0416-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40273-016-0416-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s40273-016-0416-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Appleby, John & Devlin, Nancy & Parkin, David & Buxton, Martin & Chalkidou, Kalipso, 2009. "Searching for cost effectiveness thresholds in the NHS," Health Policy, Elsevier, vol. 91(3), pages 239-245, August.
    2. Liu, Ming & La Croix, Sumner, 2015. "A cross-country index of intellectual property rights in pharmaceutical inventions," Research Policy, Elsevier, vol. 44(1), pages 206-216.
    3. Chatterjee, Chirantan & Kubo, Kensuke & Pingali, Viswanath, 2015. "The consumer welfare implications of governmental policies and firm strategy in markets for medicines," Journal of Health Economics, Elsevier, vol. 44(C), pages 255-273.
    4. Jessica Ochalek & James Lomas & Karl Claxton, 2015. "Cost per DALY averted thresholds for low- and middle-income countries: evidence from cross country data," Working Papers 122cherp, Centre for Health Economics, University of York.
    5. Beth Woods & Paul Revill & Mark Sculpher & Karl Claxton, 2015. "Country-level cost-effectiveness thresholds: initial estimates and the need for further research," Working Papers 109cherp, Centre for Health Economics, University of York.
    6. Christopher McCabe & Richard Edlin & Peter Hall & Klemens Wallner, 2013. "Leasing health technologies- an affordable and effective reimbursement strategy for innovative technologies?," Working Papers 1302, Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jessica Ochalek & Karl Claxton & Paul Revill & Mark Sculpher & Alexandra Rollinger, 2016. "Supporting the development of an essential health package: principles and initial assessment for Malawi," Working Papers 136cherp, Centre for Health Economics, University of York.
    2. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for timing when assessing health-related policies," LSE Research Online Documents on Economics 100038, London School of Economics and Political Science, LSE Library.
    3. Peter J. Neumann & David D. Kim & Thomas A. Trikalinos & Mark J. Sculpher & Joshua A. Salomon & Lisa A. Prosser & Douglas K. Owens & David O. Meltzer & Karen M. Kuntz & Murray Krahn & David Feeny & An, 2018. "Future Directions for Cost-effectiveness Analyses in Health and Medicine," Medical Decision Making, , vol. 38(7), pages 767-777, October.
    4. Niek Stadhouders & Xander Koolman & Christel van Dijk & Patrick Jeurissen & Eddy Adang, 2019. "The marginal benefits of healthcare spending in the Netherlands: Estimating cost‐effectiveness thresholds using a translog production function," Health Economics, John Wiley & Sons, Ltd., vol. 28(11), pages 1331-1344, November.
    5. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for Timing when Assessing Health-Related Policies," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(S1), pages 73-105, April.
    6. Laura Catherine Edney & Hossein Haji Ali Afzali & Terence Chai Cheng & Jonathan Karnon, 2018. "Estimating the Reference Incremental Cost-Effectiveness Ratio for the Australian Health System," PharmacoEconomics, Springer, vol. 36(2), pages 239-252, February.
    7. Patricia Laurens & Christian Le Bas & Antoine Schoen, 2019. "Worldwide IP coverage of patented inventions in large pharma firms: to what extent do the internationalisation of R&D and firm strategy matter?," Post-Print hal-01725229, HAL.
    8. Paul Revill & Simon Walker & Valentina Cambiano & Andrew Phillips & Mark J Sculpher, 2018. "Reflecting the real value of health care resources in modelling and cost-effectiveness studies—The example of viral load informed differentiated care," PLOS ONE, Public Library of Science, vol. 13(1), pages 1-13, January.
    9. Vincent T Janmaat & Marco J Bruno & Suzanne Polinder & Sylvie Lorenzen & Florian Lordick & Maikel P Peppelenbosch & Manon C W Spaander, 2016. "Cost-Effectiveness of Cetuximab for Advanced Esophageal Squamous Cell Carcinoma," PLOS ONE, Public Library of Science, vol. 11(4), pages 1-10, April.
    10. Campi, Mercedes & Dueñas, Marco, 2019. "Intellectual property rights, trade agreements, and international trade," Research Policy, Elsevier, vol. 48(3), pages 531-545.
    11. Michael Drummond, 2015. "When do performance-based risk-sharing arrangements make sense?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(6), pages 569-571, July.
    12. Toon van der Gronde & Carin A Uyl-de Groot & Toine Pieters, 2017. "Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks," PLOS ONE, Public Library of Science, vol. 12(8), pages 1-34, August.
    13. Laura Levaggi & Rosella Levaggi, 2017. "Rationing in health care provision: a welfare approach," International Journal of Health Economics and Management, Springer, vol. 17(2), pages 235-249, June.
    14. Madan Dhanora & Ruchi Sharma & Walter G. Park, 2021. "Technological Innovations and Market Power: A Study of Indian Pharmaceutical Industry," Millennial Asia, , vol. 12(1), pages 5-34, April.
    15. Helen Dakin & Nancy Devlin & Yan Feng & Nigel Rice & Phill O'Neill & David Parkin, 2015. "The Influence of Cost‐Effectiveness and Other Factors on Nice Decisions," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1256-1271, October.
    16. Suma Athreye & Lucia Piscitello & Kenneth C. Shadlen, 2020. "Twenty-five years since TRIPS: Patent policy and international business," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 315-328, December.
    17. Bhaskarabhatla, Ajay & Chatterjee, Chirantan, 2017. "The role of physicians in prescribing irrational fixed-dose combination medicines in India," Social Science & Medicine, Elsevier, vol. 174(C), pages 179-187.
    18. Papageorgiadis, Nikolaos & McDonald, Frank, 2019. "Defining and Measuring the Institutional Context of National Intellectual Property Systems in a post-TRIPS world," Journal of International Management, Elsevier, vol. 25(1), pages 3-18.
    19. Ryota Nakamura & James Lomas & Karl Claxton & Farasat Bokhari & Rodrigo Moreno-Serra & Marc Suhrcke & Peter Berman, 2020. "Assessing the Impact of Health Care Expenditures on Mortality Using Cross-Country Data," World Scientific Book Chapters, in: Paul Revill & Marc Suhrcke & Rodrigo Moreno-Serra & Mark Sculpher (ed.), Global Health Economics Shaping Health Policy in Low- and Middle-Income Countries, chapter 1, pages 3-49, World Scientific Publishing Co. Pte. Ltd..
    20. Martina Garau & Grace Hampson & Nancy Devlin & Nicola Amedeo Mazzanti & Antonio Profico, 2018. "Applying a Multicriteria Decision Analysis (MCDA) Approach to Elicit Stakeholders’ Preferences in Italy: The Case of Obinutuzumab for Rituximab-Refractory Indolent Non-Hodgkin Lymphoma (iNHL)," PharmacoEconomics - Open, Springer, vol. 2(2), pages 153-163, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:pharme:v:34:y:2016:i:10:d:10.1007_s40273-016-0416-x. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.