Healthy Skepticism Library item: 11183

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Towse A.
If it ain't broke, don't price fix it: the OFT and the PPRS.
Health Econ 2007 Jul; 16:(7):653-65
http://www3.interscience.wiley.com/cgi-bin/abstract/114282445/ABSTRACT?CRETRY=1&SRETRY=0

Abstract:

The Office of Fair Trading (OFT) Report on the UK Pharmaceutical Price Regulation Scheme (PPRS) recommends that when the current five-year PPRS expires in 2010 it be replaced with ‘value-based pricing’ which involves pre-launch centralised government price setting based on a cost-per-QALY threshold plus periodic ex post reviews. I examine the validity of the OFTs criticisms of the existing PPRS, review its proposals and propose an alternative way forward. I conclude that PPRS has performed well as a procurement bargain between industry and the UK government. It does not, however, incentivise efficient relative prices. That is not its job. I identify a number of problems with the OFT proposals. I recommend that key elements of a reformed UK pharmaceutical environment for 2010 should include an expanded role for HTA but with companies retaining freedom to set prices at launch; HTA use targeted via a contingent value of information approach; a retained backstop PPRS, perhaps moving to an RPI-X type control; the use of risk sharing and non-linear pricing arrangements; measures to ensure more effective therapeutic switching at local level; and measures to improve the take up of cost-effective treatments.

Keywords:
Publication Types: Research Support, Non-U.S. Gov't MeSH Terms: Commerce/economics* Commerce/legislation & jurisprudence Costs and Cost Analysis/economics* Costs and Cost Analysis/legislation & jurisprudence Drug Industry/economics* Drug Industry/legislation & jurisprudence Economics, Pharmaceutical* Government Regulation Great Britain Internationality* Quality-Adjusted Life Years Technology Assessment, Biomedical

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Far too large a section of the treatment of disease is to-day controlled by the big manufacturing pharmacists, who have enslaved us in a plausible pseudo-science...
The blind faith which some men have in medicines illustrates too often the greatest of all human capacities - the capacity for self deception...
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we need a stern, iconoclastic spirit which leads, not to nihilism, but to an active skepticism - not the passive skepticism, born of despair, but the active skepticism born of a knowledge that recognizes its limitations and knows full well that only in this attitude of mind can true progress be made.
- William Osler 1909