A New Reimbursement System for Innovative Pharmaceuticals Combining Value-Based and Free Market Pricing.
Summary of "A New Reimbursement System for Innovative Pharmaceuticals Combining Value-Based and Free Market Pricing."
Sweden has experienced a national value-based pricing (VBP) system for innovative outpatient drugs operated by the Pharmaceutical Benefits Board - LFN (now called the Dental and Pharmaceutical Benefits agency - TLV) since 2002. VBP has the character of a monopoly system, leading to reimbursement decisions where usage of new medicines is limited to subgroups and not the population for which the drug is approved. VBP relies on a broad societal perspective, encouraging innovations by signaling to firms that value-adding treatments are demanded. However, the VBP system is operated without a drug budget responsibility. The budget responsibility lies at the regional level, not operating VBP, thus an intrinsic conflict is built into the system. The aim of this article is to suggest a modification to the current reimbursement system in Sweden where payment for pharmaceuticals is split between the regional and national levels. The system is expected to make new innovative pharmaceuticals accessible to a larger number of patients and provide more consumer surplus without reducing the producer surplus. In short, the county councils pay the marginal cost of production while the state pays for the innovation.
Affiliation
School of Economics, Lund University, Lund, Sweden.
Journal Details
This article was published in the following journal.
Name: Applied health economics and health policy
ISSN: 1179-1896
Pages:
Links
- PubMed Source: http://www.ncbi.nlm.nih.gov/pubmed/22676213
- DOI: http://dx.doi.org/10.2165/11633930-000000000-00000
Medical and Biotech [MESH] Definitions
Prospective Payment System
A system wherein reimbursement rates are set, for a given period of time, prior to the circumstances giving rise to actual reimbursement claims.
Reimbursement Mechanisms
Processes or methods of reimbursement for services rendered or equipment.
Crack Cocaine
The purified, alkaloidal, extra-potent form of cocaine. It is smoked (free-based), injected intravenously, and orally ingested. Use of crack results in alterations in function of the cardiovascular system, the autonomic nervous system, the central nervous system, and the gastrointestinal system. The slang term "crack" was derived from the crackling sound made upon igniting of this form of cocaine for smoking.
Cell-free System
A fractionated cell extract that maintains a biological function. A subcellular fraction isolated by ultracentrifugation or other separation techniques must first be isolated so that a process can be studied free from all of the complex side reactions that occur in a cell. The cell-free system is therefore widely used in cell biology. (From Alberts et al., Molecular Biology of the Cell, 2d ed, p166)
Reimbursement, Disproportionate Share
Payments that include adjustments to reflect the costs of uncompensated care and higher costs for inpatient care for certain populations receiving mandated services. MEDICARE and MEDICAID include provisions for this type of reimbursement.
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