World Health Organization (WHO) officials told press in a briefing on Thursday that the agency has serious reservations with value-based pharmaceutical pricing.
"What’s the value of life? This structure is good for luxury goods because you have a choice…if I’m sick with cancer, what’s the choice? We think value-based pricing is not feasible for products that are indispensable," Dr. Marie-Paule Kieny, assistant director-general of health systems and innovation at WHO, said.
Value-based drug pricing systems, like with the UK’s National Institute for Health Care Excellence, decide what’s cost effective based on the price and outcome. Generally, NICE considers that interventions costing the UK’s National Health Service less than £20,000 ($26,000) per quality adjusted life year (QALY) gained are cost effective.
Kieny spoke following a gathering of about 200 stakeholders from countries around the world at the first, one-day Fair Pricing Forum in Amsterdam this week, sponsored by WHO and the Netherlands Ministry of Health, Welfare and Sport.
She called on countries to increase transparency around drug prices as "countries sometimes think they have the best deal and if too many countries believe this, there’s no movement, no sharing of information."
And while Kieny acknowledged that "innovation doesn’t come for free," she also said talks need to center on "the real cost of R&D [research and development]," and the cost of failure, as well as systems that set a maximum price that a payer is willing to pay.
A new study published this week on the cost of cancer medicines worldwide found that although prices are the highest in the US, they are the least affordable in India "by a large margin." And despite lower prices, cancer drugs are less affordable in middle-income countries than in high-income countries.
Dr. Suzanne Hill, director of essential medicines and health products at WHO, reiterated Kieny’s points on value-based systems, adding, "Who decides what value is?" She also said the forum "is our initial attempt to start an actionable agenda to understand what the drivers of the current pricing structure."
She noted interest at the forum in collaborations between governments on "horizon scanning," or assessing industry product pipelines for what’s important and what’s worth paying for in the future, as well as a need for WHO to identify a list of vulnerable essential medicines, such as those in shortage worldwide.
Fair Pricing Forum: Informal Advisory Group Meeting report