PP123 Fair Drug Pricing: Review Of Literature And Models

Abstract

IntroductionConstantly rising costs of pharmaceuticals and biologics spurred a debate in recent years leading to increasingly persistent public calls to overhaul the existing system of pricing and distributing health technologies. The COVID-19 pandemic exposed the controversies of the current model of access to health commodities in all evidence when the existing discrepancy between the global supply and the global demand in health technology can be viewed as an illustration of a conflict between the neoliberal free market ideal of health innovation genesis and ownership and the original democratic principles of what would now be called sustainable human development.MethodsPresented here is an integrative literature review of over 265 publications in peer-reviewed journals on Pubmed and Web of Science, academic and “grey” literature, mainly publicism, published in English. We reviewed and analyzed included literature for the purposes of identifying leading ideas with regards to ethical frameworks for evaluating or referencing value for pricing health commodities.ResultsSeven drug pricing models were analyzed in terms of them satisfying the three most common criteria of price adequacy – its fairness (viewed from the point of view of main schools of ethical thought), accountability-for-reasonableness (including transparency of decisions, relevance, existing mechanisms of revisions and governance to ensure compliance), and price functionality. One of the central ideas under controversy is value, its relative character for different contexts due to the high weight of the willingness-to-pay in the value-based health technology assessment (HTA) decisions and the relative value of money, and the attempts to quantify value in a universal way for institutions, patients, and originators.ConclusionsWhile the review scored the pricing models on their “public fairness” with volume-based rather than value-based pricing models leading the rating, the main conclusion of the review is that the main meaningful divide is between value creation and value extraction when pricing health innovation.