ISSUE: In many healthcare systems, reimbursement decisions are based on health technology assessments using a cost-effectiveness threshold (CET) to support decisions. The CET acts as a price ceiling to the value-based price. What should the CET reflect and how does that split value between developers and payers? Should payer and developer surplus coming from multiple indications or across multiple health systems be considered when setting the CET value? Should payer and developer bargaining power be considered too? 

OVERVIEW: This panel will discuss the implications of setting CETs for value distribution between payers (consumers) and developers (producers). They will debate how CETs should be determined. Nancy Devlin will introduce the issue and moderate the panel, ensuring debate and audience participation. Mike Paulden will discuss theoretical work that informed a recent technical report for the Canadian PMPRB. This work implies that short run payer benefit is maximised when the CET is set below the supply side opportunity cost threshold. Mike will also describe issues for considering payer and developer surplus arising from health technologies with different market size, across multiple indications, and across multiple public health systems. Mikel Berdud, from an economics of innovation perspective, will argue that different degrees of payer and developers bargaining power affect the optimal CET (i.e. maximises access in the short run without compromising innovation in the long-run) and, if some conditions hold, it may make sense to set the CET above the supply side CET. Laura Vallejo Torres will comment on the supply and demand perspectives for setting a CET, based on her work estimating a CET in Spain using both approaches. She will discuss methodological aspects and issues around different decision-making contexts in relation to the use of CETs to inform decisions. Implications for the share of value apportion to payers and developers will be discussed.