April 12th 2017 – “Healthcare spending regulation needs to be made on a rational basis”
Valerie Paris, Senior Health Policy analyst, OECD (Organisation for Economic Co-operation and Development)
Nextep: In which context, did OECD provide the “New Health technologies: managing access value and sustainability” report and tackle the question of drug costs?
V. Paris: Our intention was not to work mainly on prices though we were under the impression that innovation always comes at growing costs, whereas it does not in other sectors. That is why a whole part of the report analyses the contributions of new technologies to costs and benefits.
Studies show an increase between 25 and 50% regarding expenses in the last few years but it is difficult to identify precisely what is directly linked to innovation, and that is even more true when it comes to benefits, because they are very often not directly related to the expenses, which is why we had to make some hypotheses. That being said it is quite striking to see the growing trend of expenses per life year earned, not forgetting that they did not take into account the quality of life.
We have identified different types of technologies: the major ones, those which have some interest but have a reduced cost /efficacy ratio because of indication extensions and those that are not sufficiently relevant. It is important to take this into account in order to build the healthcare offer. To do that, one has to remember there are more and more HTA evaluation since the 90s, especially when it comes to drugs.
Technology progress is booming in the healthcare sector, as in other sectors. But in healthcare, as itis more about needs than about choices, systems that are about providing access to technology can be put at risk and require extra carefulness.
Nextep: Is OECD going to keep on working on the issue of drug prices?
V. Paris: There are two separate projects: the report on new technologies that has just been published, which was ordered two years ago by the OECD Council, which brings together representatives of the health ministries on the one hand and the work on drug prices which was asked from us after France gave that topic a boost at the G7 summit.
When it comes to the latter, intermediary progress report called “Sustainable access to new therapies “, currently kept confidential, was submitted to France. But that report is going to be enriched with a prospective study on certain pathologies, for which 13 countries have volunteered. We are also going to consult patients, practitioners, industrials and high-level experts in order to provide analytic work and review the available political options. The conclusions of this work should be made public by the end of the year.
Drug prices is a trendy subject in media and some instances, that is often discussed without formulating any precise diagnosis. It is no general issue but more focused on some sectors. That does not mean the whole model should be aborted, but it should be enhanced in terms of efficiency and economic incitations in order to make it work better. We are aware that controlling volumes and prices is no attractive business model. So, we have to find options in order to compensate and maintain the implication of laboratories. That is what we offer in a model: more participation, public private and to be developed for instance in Alzheimer’s.
Nextep: Until now financial regulation has allowed expenses to be contained; is there going to be a change about that?
V. Paris : The impression is that, if we do not make explicit choices we have to expect shortages in most countries. And that will amplify under the effects of the economic crisis.
Until now, cuts have been made where it was politically easy. Some cuts went on drugs but prevention for instance was affected more generally. From that point of view, we try to demonstrate that regulation should be made on the rational basis.
A recent study made by the OECD on waste in health care systems show that there is leeway left: we found out waste could reach 30% in some countries!
As regards prices there is probably a middle way between current systems and total transparency. But looking for better data is even more important as OECD countries use benchmark in order to set up prices in their countries. Countries such as France essentially have issues with prices which enter the markets as the US also have price increase after the drugs entered the market.
The perspective of a global purchasing office is quite distant in time because we need common characteristics as regards lifestyle standards, objectives etc. But it looks more feasible for some types of products such as vaccines. Some local initiatives already happened, especially in South America and Europe. We are going to study these examples in the framework of an extensive work on prices.
Nextep: What are the main recommendations in order to optimise the market access to healthcare technologies?
V. Paris : First of all it is necessary to specify that the impression of France being the country most hostile to innovation is not founded. Quite on the contrary, France has some interesting measures, especially as regards early access (Temporary Authorisation for Use) and derogatory financing. It must also be noted that some technologies have trouble emerging, not because of administrative difficulties or political blockage, but because the actors of the system are engaged in lobbying in order to avoid “competition”.
However, there is clearly progress to be made in France regarding healthcare data especially on secondary use, for instance registry construction. From this point of view there is an incredible paradox between the sum of data given by people voluntarily in their everyday life and the reluctance of the administration to use the data about healthcare. If risks of misuse must be taken into account, one also has to be aware that not exploiting them can potentially bring negative, if not dangerous, consequences.
Valerie Paris has been working since 2005 as an economist at OECD, healthcare division.
She has run several studies and publications, among which the 2017 “New Health technologies: managing access value and sustainability” report.
She holds a Master in Economics and Statistics (Paris I University, 1990) and was previously a researcher at the Institute for Research and Information in Health Economics (IRDES).