Assessing social preferences in reimbursement negotiations for new Pharmaceuticals in Oncology: an experimental design to analyse willingness to pay and willingness to accept

Abstract

Background: Price negotiations for specialty pharmaceuticals take place in a complex market setting. The determination of the added value of new treatments and the related societal willingness to pay are of increasing importance in policy reform debates. From a behavioural economics perspective, potential cognitive biases and other-regarding concerns affecting outcomes of reimbursement negotiations are of interest. An experimental setting to investigate social preferences in reimbursement negotiations for novel, oncology pharmaceuticals was used. Of interest were differences in social preferences caused by incremental changes of the patient outcome. Methods: An online experiment was conducted in two separate runs (n = 202, n = 404) on the Amazon Mechanical Turk (MTurk) platform. Populations were split into two (run one) and four (run two) equally sized treatment groups for hypothetical reimbursement decisions. Participants were randomly assigned to the role of a public price regulator for pharmaceuticals (buyer) or a representative of a pharmaceutical company (seller). In run two, role groups were further split into two different price magnitude framings (“real world” vs unconverted “real payoff” prices). Decisions had real monetary effects on other participants (in the role of premium payers or investors) and via charitable donations to a patient organisation (patient benefit). Results: 56 (run one) and 59 (run two) percent of participants stated strictly monotone preferences for incremental patient benefit. The mean incremental cost-effectiveness ratio (ICER) against standard of care (SoC) was higher than the initial ICER of the SoC against no care. Regulators stated lower reservation prices in the “real world” prices group compared to their colleagues in the unconverted payoff group. No price group showed any reluctance to trade. Overall, regulators rated the relevance of the patient for their decision higher and the relevance of their own role lower compared to sellers. Conclusions: The price magnitude of current oncology treatments affects stated preferences for incremental survival, and assigned responsibilities lead to different opinions on the relevance of affected stakeholders. The design is useful to further assess effects of reimbursement negotiations on societal outcomes like affordability (cost) or availability (access) of new pharmaceuticals and test behavioural policy interventions.