A critical consideration in the economic evaluation and pricing of new medicines is the specification of an appropriate cost-effectiveness ‘threshold’. Until now, health economists have focused on two conceptually different approaches for specifying this threshold: estimation of society’s ‘willingness-to-pay’ for health gains (a ‘demand side’ approach); and estimation of the ‘opportunity cost’ of adopting new medicines (a ‘supply side’ approach).
In this international workshop, Mike Paulden, Assistant Professor at the School of Public Health, University of Alberta (Canada), will present a new conceptual framework for pricing medicines which moves beyond these two approaches. Building upon conventional considerations of willingness-to-pay and opportunity cost, the proposed framework allows decision makers to take account of the economic benefits that new medicines provide to ‘consumers’ and ‘producers’.
This supports decision makers in setting balanced prices for new medicines – prices that are high enough for manufacturers to realize a return on their investment, yet low enough for medicines to improve population health. This framework was included in a recent report published by the PMPRB, the federal government agency responsible for setting maximum prices for medicines in Canada: http://www.pmprb-cepmb.gc.ca/view.asp?ccid=1449#app1. A response will be given by Chris Sampson, Principal Economist at the Office of HealthEconomics (UK). Chris works with the Association of the British Pharmaceutical Industry and industry clients on matters relating to cost-effectiveness thresholds, so is ideally placed to comment upon the proposed framework from both a consumer and producer perspective.
After the presentation and response, a question and answer session will be moderated by James O’Mahony, Research Assistant Professor at the Centre for Health Policy and Management, Trinity College Dublin (Ireland).
11:45am: Presentation by Mike Paulden (45 minutes)
12:30pm: Response by Chris Sampson (20 minutes)
12:50pm: Q&A moderated by James O’Mahony (25 minutes)
Mike Paulden, School of Public Health, University of Alberta (Presenter)
Mike Paulden is an Assistant Professor at the School of Public Health, University of Alberta. He is a health economist with an interest in developing methods for the economic evaluation of health technologies. In addition to a substantial body of theoretical work, Mike has contributed to numerous economic evaluations in the UK and Canada. As chair of the Patented Medicine Prices Review Board (PMPRB)’s Technical ‘Working Group’ in 2018-19, he authored a report that provided recommendations to the PMPRB, a Canadian federal government agency, on the use of pharmacoeconomic value in setting maximum prices for medicines. Following a major update to Canada’s Patented Medicines Regulations in August 2019, this report informed the development of the PMPRB’s revised guidelines, which incorporate pharmacoeconomic value considerations for the first time. Mike is a founding member of the Canadian Agency for Drugs and Technologies in Health (CADTH)’s Health Economic Advisory Council. He teaches health economics to students at the University of Alberta, and leads the instruction of CADTH’s ‘HealthEconomics 101’ workshops to federal and provincial decision makers across Canada.
Chris Sampson, Office of Health Economics (Responder)
Chris Sampson is a Principal Economist at the Office of Health Economics, where he works with the Association of the British Pharmaceutical Industry and industry clients on matters relating to cost-effectiveness thresholds and health technology assessment policy. His research includes trial- and model-based economic evaluation and health outcomes development. Chris also runs The Academic Health Economists’ blog, which provides a platform for discussion of current issues in the field.
James O’Mahony, Centre for Health Policy and Management, Trinity College Dublin (Moderator)
James O’Mahony is a Research Assistant Professor at the Centre for Health Policy and Management at Trinity College Dublin. He is employed under an Emerging Investigator Award, funded by the Health Research Board. He is an economist by training and his research addresses the cost-effectiveness analysis (CEA) of cancer prevention, primarily concerning cervical screening. His research interests are in CEA methods in general, modelling and the use of CEA by decision makers. James is a member of Ireland's National Screening Advisory Committee convened following the Scally Report in response to the CervicalCheck controversy