drugs and money Photo by Marek Studzinski on Unsplash
A growing number of new prescription drugs are entering the market despite high prices and limited data on their efficacy, resulting in variable benefits to patients when compared to existing alternatives. This is having a significant impact on the healthcare landscape to the detriment of patients, driving up pharmaceutical spending while potentially displacing cheaper yet equally effective treatments and services.
To break this cycle, policymakers should more closely integrate health and industrial policy, strengthen regulation to enforce meaningful evidence standards for new drugs (including requiring high-quality clinical trials), promote greater transparency throughout the drug lifecyle, and explicitly link drug prices to the value they offer relative to existing treatments in the health system.
These are the four key recommendations made by Dr Huseyin Naci and Robin Forrest of the Department of Health Policy at LSE, who publish three reports on pharmaceutical policy today (Wed 1 March). The reports set out the challenges of current pharmaceutical landscape, the key trade-offs that policymakers must make to incentivise innovation and encourage greater access and affordability of new medicines.
The researchers emphasise that while many debilitating and life-threatening diseases have become preventable, treatable or curable as a result of pharmaceutical innovation, not all new drugs offer clinically meaningful benefits over existing treatments. Instead, the majority of new drugs provide variable (and often only minor additional) benefits to patients than existing alternatives.
Despite this, drug regulatory agencies are increasingly tolerating greater uncertainty associated with new drugs. Such uncertainty of effectiveness complicates decision-making in clinical practice, the researchers highlight, as well as pricing and reimbursement decisions downstream of regulatory approval.
The price of prescription drugs is noted to have increased substantially over the past few decades, with some new drugs becoming more expensive relative to the benefits they provide. High prices of new drugs are a major driver of increasing pharmaceutical spending in health systems. Adopting new, expensive drugs in health care systems may displace existing health care services. Health lost as a result of the displacement of existing health care services is defined as the ‘health opportunity cost’, the reports conclude.
Dr Huseyin Naci, Associate Professor of Health Policy at LSE, said: “Policymakers should ask whether resources allocated to new, expensive drugs could be spent more efficiently on other (existing) services or treatments that offer better value for money in the health system, having a greater impact on overall population health.
“Adopting the four key principles we suggest would create a more coherent pharmaceutical system that better balances the innovation, access and affordability aims of pharmaceutical policies.”
A Primer on Pharmaceutical Policy and Economics sets out the current pharmaceutical policy and economic landscape from a global perspective; looking at current processes around innovation, R&D and the approval, pricing and adoption of pharmaceuticals. Pharmaceutical Policy in the UK focuses on the pharmaceutical policy landscape in the UK. Design Principles for a Coherent Pharmaceutical System presents design principles for building a coherent pharmaceutical system. Find out more about the Pharmaceutical Policy: balancing innovation, access and affordability project.