Health Economics, what's up in 2009?

Dear Readers,

Just looking at the news of Pfizer, Elan and other Pharma’s laying off a lot of people reminds my to squeeze in a reflection post towards the end of the year. This has truly not been an easy last quarter with financial crises kicking in big time and stock market tumbling, an unpleasant event for all of us with varying degrees of intensity.. ;(
But what does this all mean for pharma and the health economics, pricing & reimbursement fraction like ourselves? The layoffs as we know are due to some well known reasons but its also true that cash strapped governments – with all rescue efforts for banks and automotive companies, the scope is truly amazing to every liberal economist – will start, and have done so already, eyeing at drug prices once more again in order to cut the healthcare bill. The good news of the financial disaster is one finally feels like a customer again when stepping close to bank counter... incredible what is possible if they truly need your money… anyway back to the topic: Many mandatory price reductions are underway or being announced in various countries, especially Eastern Europe. This clearly means for 2009 more challenges for the health economists and pricing folks but where is this all going? Some of my friends are not convinced that health economics has a too bright future in its current application (e.g. developing models for dossiers and haggling until thresholds are met - than its mostly too late) given the shift towards personalized medicines for limited populations where static cost-effectiveness criteria, such as the 30.000 pounds applied by NICE, will never be met anyhow – so why bother developing those expensive economic models in the first place? Indeed it seems that certain commercial arrangements etc. are more successful going foreward than focusing too much on the model details. I guess health economics must be shifting much more towards aiding internal commercial decision making such as licensing/development (with the pipelines drying up of outmost importance when going on the biotech shopping tour) but moreover overall pricing strategy. That is something very much discussed for a long time but in the end still not very well done in many circumstances, at least as I have been told. Decisions about product development and initial pricing have serious consequences at launch these days and therefore early models will become more crucial in “crash testing” commercial viability with payors - of course that brings us back to the threshold problem unless more flexibility is build into the sytem (in that regard I recommend to read a recent post from HTA blog “The QALY must change” http://www.htablog.com/2008/12/qaly-must-change-says-industry.html).
The latest announcements in the UK in order to reform the PPRS (a company will still set the initial launch price for its new product and will be able to increase or decrease this price, as further evidence or new indications change the value that the medicine provides to patients, but only after NICE has conducted an appraisal to determine whether the revised price provides value) certainly point towards that direction. I am curious to hear as to how you see things evolving?
Anyhow it will remain entertaining and surely will we be very busy again in 2009. Until than Merry Christmas, Happy New Year and relaxing holidays to everyone!

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