Is It Possible to Estimate the Welfare Economic Loss to Society of Not Having Value-Based Differential Pricing for Multi-Indication Pharmaceuticals: An Empirical Analysis in Denmark, Norway, and Sweden

OBJECTIVES: By not having a value-based pricing (VBP) system that can reflect the differential value of pharmaceuticals across different indications, there is a risk that many EMA-approved multi-indication pharmaceuticals will not obtain reimbursement for all indications. Our aim was to evaluate whether it is possible to empirically estimate the welfare loss resulting from the absence of VBP policies for multi-indication pharmaceuticals in Denmark, Norway, and Sweden.

METHODS: We conducted a literature review to identify different types of potential measurable losses to society resulting from not having VBP policies. Three multi-indication pharmaceuticals, manufactured by different companies, with a total of 18 indications were selected for each country (n=54). Data from the national HTA organizations in the three countries (DMC, NoMA, TLV) were used to extract relevant outcomes including national reimbursement, annual number of patients, QALYs, and life years (LYs) compared to existing treatment i.e., the opportunity costs in terms of QALYs and LYs which could have been gained if indications were reimbursement.

RESULTS: We identified different measurable types of loss to society: a) EMA indications not applied for/withdrawn, b) non-reimbursed indications, and c) indications with longer time to reimbursement than average. The preliminary results, based on the three pharmaceuticals’ non-reimbursed indications, revealed a total loss of 323 QALYs and 396 LYs per incident annual population in the three countries. Thirteen indications across countries were registered as ‘not applied for/withdrawn’ while ten indications were registered as still in process

CONCLUSIONS: The results demonstrate that not having VBP policies for multi-indication pharmaceuticals may result in a measurable welfare loss to society in terms of QALYs and LYs lost. However, the societal loss may be associated with other causes as well, emphasizing the need for further research. Implementing VBP policies has the potential to mitigate welfare loss and improve patient access to multi-indication pharmaceuticals.