Paying for Cures- Perspectives on Solutions to the “Affordability Issue”

Abstract

Curative therapies and other medicines considered “game-changing” in terms of health gain can be accompanied by high demand and high list prices that pose budget challenges to public and private payers and health systems—the so-called affordability issue. These challenges are exacerbated when longer term effectiveness, and thus value for money, is uncertain, but they can arise even when treatments are proven to be highly cost-effective at the time of launch. This commentary reviews innovative payment solutions proposed in the literature to address the affordability issue, including the use of credit markets and of staged payments linked to patient outcomes, and draws on discussions with payers in the United States and Europe on the feasibility or desirability of operationalizing any of the alternative financing and payment strategies that appear in the literature. This included a small number of semistructured interviews. We conclude that there is a mismatch between the enthusiasm in the academic literature for developing new approaches and the scepticism of payers that they can work or are necessary. For the foreseeable future, affordability pressures will continue to be handled by aggressive price bargaining, high co-pays (in systems in which this is possible), and restricting access to subgroups of patients. Of the mechanisms we explored, outcomes-based payments were of most interest to payers, but the costs associated with operating such schemes, together with implementation challenges, did not make them an attractive option for managing affordability.

Authors

Sarah Karlsberg Schaffer Donna Messner Jorge Mestre-Ferrandiz Ellen Tambor Adrian Towse

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