The Price of Global Health: Drug Pricing Strategies to Balance Patient Access and the Funding of Innovation

495 Pages·2015·6.92 MB·English

by  Ed Schoonveld

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) 1. Drugs—Prices. 2. Pharmaceutical industry—Prices. 3. Medical
care. 4. 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 xiii
List of Tables xvii
List of Abbreviations   xix
Foreword by Andrea Mantovani   xxv
Acknowledgments   xxvii
Preface to the Second Edition   xxix
Preface to First Edition   xxxi
About the Author   xxxv
Introduction   1
Part a Drug Market access anD Pricing Basics
Chapter 1 The Drug Pricing Challenge   11
DrugPricing   11
MarketAccess   13
RegulatoryandOtherDrugApprovalSystems   14
MarketAccessandPricingControls–Why?   17
GlobalPricingIssues   28
Chapter 2 Payers   37
GlobalPayerSystems   37
ThePayerPerspective   38
DrugBudget   41
OverviewofPayerCostControlMechanisms   42
SimilaritiesandDifferencesbetweenPayerSystems   47
Chapter 3 Fundamentals of Pricing   49
ImportanceofSettingtheRightPrice   49
PricinginaFreeMarketEconomy   50
vi The Price of Global healTh
DrugPricing   55
GovernmentControl   58
PriceSensitivityunderUSManagedCare   60
PatientImpact   62
Chapter 4 Reference-Based Pricing   65
ATCClassificationSystem   65
ProblemswithReferenced-BasedPricingSystems   69
AdoptionofRBP-IISystems   70
Chapter 5 Health Outcomes and Health Economics   73
WhatIsIt?   73
HealthOutcomesandQualityofLife   75
ImportanceofHealthOutcomesandHealthEconomics  76
RoleofHealthOutcomesandHealthEconomics
inMA&P   82
Chapter 6 Features, Benefits, Value and Price   87
Benefits   88
Value   90
CustomerPreferences   92
SettingtheRightPrice   97
Part B structureD Market access anD Pricing
APPROACHEs
Chapter 7 Pricing and Drug Development   103
AssetShapingStage   107
Evidence-BuildingStage   114
ImplementationandAdjustmentStage   120
Chapter 8 Payer segmentation   127
SegmentationDimensionsandArchetypes   127
GlobalPayerSegmentation   130
CompetitiveInsurance-BasedSystem   133
TherapeuticReferenceSystems   138
HealthEconomics-DrivenSystems   141
EmergingCashMarkets   145
conTenTs vii
Chapter 9 Key situation Factors: The PODiUM Approach   147
PatientandTreatmentFlow   148
PromiseOptions   150
DirectCompetition   152
UnmetNeeds   153
MoneyFlow   154
Chapter 10 The BEsT PRICE Framework to Market Access
and Pricing   159
BenefitsAnalysis   160
AssessEvidenceNeeds   166
PayerValueSTory   172
PRICEEvaluation   174
Chapter 11 Payer Value story   187
ValueDossier   188
TEMPLEFramework   188
PART C DEVElOPIng An InTEgRATED glOBAl sTRATEgy
Chapter 12 Developing a global Pricing strategy   205
ObjectiveofaGlobalPricingStrategy   205
ImpactofPriceCascadingonProfits   207
GlobalStrategyDevelopment   210
Chapter 13 Public Policy and Ethical Considerations   227
ProfitversusRighttoHealthcare   227
CompulsoryLicensing   230
DifferentialorEquityPricing   231
GlobalTradeversusSocialPolicy   235
Chapter 14 Oncology and Orphan Drugs   239
OncologyisDifferent…(?)   239
OrphanDrugs   246
Chapter 15 Payer and Pricing Research   251
ResearchandPayerUnderstanding   251
QualitativePayerandPricingResearch   254
VanWestendorp   259
MonadicTesting   264