The price of global health drug pricing strategies to balance patient access and the funding of innovation, 2 edition

Ed Schoonveld does an extraordinary job of making one of the most complex and vital topics in the industry intelligible to both new and experienced audiences Best of all, he leverages case studies and straightforward frameworks to provide a pragmatic approach for mastering the theory of global pricing and access I keep his book in easy reach for my own reference or to share with others Susanne Laningham, Executive Director Global Value Access & Policy, Amgen This book gives a great overview and offers several perspectives on drug pricing issues It provides comprehensive new insights such as the need to take benefits assessments of pharmaceuticals into consideration during all steps of drug development and market access The mix of theory, in the form of underlying arguments and analytical frameworks, along with practical and up-to-date real-world solutions, makes this book an outstanding reference Thomas Mueller, Head of Pharmaceutical Department Gemeinsamer Bundesausschuss (Federal Joint Committee), Germany The Price of Global Health is the most informative and comprehensive book I have read on the topic of global pharmaceutical pricing and market access Ed is able to distill complex topics into simplified and pragmatic frameworks, including insightful perspectives on market segmentation, communicating value, and pricing The final section provides a useful reference, describing how key global healthcare systems are structured and their approach for assessing value I have recommended this book for members of my team as part of their initial training David Kaplan, Senior Advisor Global Payer Market Research, Eli Lilly Ed’s book has been a huge addition to the global pharmaceutical pricing educational process I have used the book to teach pharmaceutical pricing since the book first arrived on the market It fills a huge unmet need The students find that Ed’s book transforms the complex global pricing environment and the factors that influence the pricing process into an understandable and manageable entity The book takes a lot of data and transforms the information into key concepts I can’t imagine teaching global pharmaceutical pricing without Ed’s book Richard Truex Ph.D., Adjunct Professor St Joseph’s University, Philadelphia The Price of Global Health is a rare book in pharmaceutical market access strategy that develops an understandable strategic perspective It is based on considerable real-world experience and has been updated as the dynamics of the global pharma market have evolved We used it as an important part of our onboarding process for all junior market access staff Highly recommended Keith Hendricks, Vice President, Decision Support Group, Corporate Strategic Planning, AbbVie This book should be on the shelves of every pharmaceutical company executive—in whatever discipline—and will prove invaluable to anyone interested in providing and financing modern healthcare Joe Zammit-Lucia, President and CEO Cambridge Pharma Consultancy This book is fantastic! … People will love it It’s very well suited for a broad audience from student to professionals to non experts and will hopefully be useful to demystify the subject a little … THE pharma pricing book! Ulf Staginnus, Executive Director, Head Market Access & Pricing Europe at Endocyte The Price of Global Health is a compelling and holistic introduction into the art and science of pricing Andreas Altemark, Head of Global Pricing & MACS Reporting Bayer HealthCare Pharmaceuticals The Price of Global Health To my wife, Hana: my love and true partner in life The Price of Global Health Drug Pricing Strategies to Balance Patient Access and the Funding of Innovation Second Edition Ed Schoonveld © Ed Schoonveld 2015 All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher Ed Schoonveld has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this work Published by Gower Publishing Limited Gower Publishing Company Wey Court East 110 Cherry Street Union Road Suite 3-1 Farnham Burlington, VT 05401-3818 Surrey, GU9 7PT USA England www.gowerpublishing.com British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library The Library of Congress has cataloged the printed edition as follows: Schoonveld, Ed The price of global health: drug pricing strategies to balance patient access and the funding of innovation / by Ed Schoonveld pages cm Includes bibliographical references and index ISBN 978-1-4724-3880-5 (hardback: alk paper)—ISBN 978-1-4724-3881-2 (ebook)—ISBN 978-1-4724-3882-9 (epub) Drugs—Prices Pharmaceutical industry—Prices Medical care Globalization I Title HD9665.5.S364 2014 338.4’36151—dc23 2014018598 ISBN 9781472438805 (hbk) ISBN 9781472438812 (ebk – ePDF) ISBN 9781472438829 (ebk – ePUB) Printed in the United Kingdom by Henry Ling Limited, at the Dorset Press, Dorchester, DT1 1HD Contents List of Figures List of Tables List of Abbreviations   Foreword by Andrea Mantovani   Acknowledgments   Preface to the Second Edition   Preface to First Edition   About the Author   Introduction   xiii xvii xix xxv xxvii xxix xxxi xxxv Part A Drug Market Access and Pricing Basics Chapter The Drug Pricing Challenge   Drug Pricing   Market Access   Regulatory and Other Drug Approval Systems   Market Access and Pricing Controls – Why?   Global Pricing Issues   11 11 13 14 17 28 Chapter Payers   Global Payer Systems   The Payer Perspective   Drug Budget   Overview of Payer Cost Control Mechanisms   Similarities and Differences between Payer Systems   37 37 38 41 42 47 Chapter Fundamentals of Pricing   Importance of Setting the Right Price   Pricing in a Free Market Economy   49 49 50 vi T h e P r i c e o f G lo ba l H ea lt h Drug Pricing   Government Control   Price Sensitivity under US Managed Care   Patient Impact   55 58 60 62 Chapter Reference-Based Pricing   ATC Classification System   Problems with Referenced-Based Pricing Systems   Adoption of RBP-II Systems   65 65 69 70 Chapter Health Outcomes and Health Economics   73 What Is It?   73 Health Outcomes and Quality of Life   75 Importance of Health Outcomes and Health Economics  76 Role of Health Outcomes and Health Economics  in MA&P   82 Chapter Features, Benefits, Value and Price   Benefits   Value   Customer Preferences   Setting the Right Price   87 88 90 92 97 Part B Structured Market Access and Pricing Approaches Chapter Pricing and Drug Development   Asset Shaping Stage   Evidence-Building Stage   Implementation and Adjustment Stage   103 107 114 120 Chapter Payer Segmentation   Segmentation Dimensions and Archetypes    Global Payer Segmentation   Competitive Insurance-Based System   Therapeutic Reference Systems    Health Economics-Driven Systems   Emerging Cash Markets   127 127 130 133 138 141 145 vii contents Chapter Key Situation Factors: The PODiUM Approach   Patient and Treatment Flow   Promise Options   Direct Competition   Unmet Needs   Money Flow   147 148 150 152 153 154 Chapter 10 The BEST PRICE Framework to Market Access and Pricing   Benefits Analysis   Assess Evidence Needs   Payer Value STory   PRICE Evaluation   159 160 166 172 174 Chapter 11 Payer Value Story   Value Dossier   TEMPLE Framework   187 188 188 Part C Developing an Integrated Global Strategy Chapter 12 Developing a Global Pricing Strategy   Objective of a Global Pricing Strategy   Impact of Price Cascading on Profits   Global Strategy Development   205 205 207 210 Chapter 13 Public Policy and Ethical Considerations   Profit versus Right to Healthcare   Compulsory Licensing   Differential or Equity Pricing   Global Trade versus Social Policy   227 227 230 231 235 Chapter 14 Oncology and Orphan Drugs   Oncology is Different … (?)   Orphan Drugs   239 239 246 Chapter 15 Payer and Pricing Research   Research and Payer Understanding   Qualitative Payer and Pricing Research   Van Westendorp   Monadic Testing   251 251 254 259 264 ... meet them if you wish List of Tables 5.1 5 .2 5.3 8.1 12. 1 12. 2 12. 3 12. 4 12. 5 15.1 19.1 19 .2 19.3 19.4 21 .1 21 .2 21.3 23 .1 24 .1 26 .1 28 .1 NIH Definitions Examples of clinical and long-term patient. .. The Library of Congress has cataloged the printed edition as follows: Schoonveld, Ed The price of global health: drug pricing strategies to balance patient access and the funding of innovation... life The Price of Global Health Drug Pricing Strategies to Balance Patient Access and the Funding of Innovation Second Edition Ed Schoonveld © Ed Schoonveld 20 15 All rights reserved No part of