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Healthcare Taps ‘Value Purchase’

Nov 09-2022   



Since 2018, negotiations concerning medicines to be included in the national healthcare catalogue have borne fruitful results with substantial benefits for the people. The practice is underpinned by ‘value purchase’ based on pharma-economic assessments, wrote Prof. Liu Guo’en of the NSD and Prof. Wu Jing of Tianjin University in a commentary for People’s Daily. They are Director and Vice Director, respectively, of China Pharma-economics Professional Committee.

 

Assessing the value of a medicine is a scientific philosophy aiming to identify the average price of the medicine based on its value. Rooted in cost-return analysis, the method compares the incremental health output and incremental cost of innovative medicines and that of reference ones, so as to find the basis price for new medicines that are to be added to the national healthcare catalogue. Widely used in developed countries, the practice in the short term does a good job in balancing the efficiency of national healthcare funds and fairness for patients, and in the long run shall be conducive to the research and development of the pharmaceutical industry, said the two authors.

 

Decisions to include a medicine in the catalogue used to be based on experts’ opinions before 2018. Since then, they have been evidence-based and currently the assessment procedure mainly consists of two links, namely expert evaluation and medicine price calculation.

 

While ensuring the basic needs of patients, the catalogue has been giving extra attention to include innovative drugs. In 2021, 74 new drugs were added to cover tumor diseases, high blood pressure and diabetes, hepatitis D and HIV, rare diseases, COVID-19 and some other areas, showing an optimization of the catalogue’s structure. Moreover, innovative drugs were accepted at a faster pace; of the 74 drugs, 27 were newly approved in 2021. Moreover, the authors believed that the accomplishments of the catalogue debunk the myth of innovative drugs as highly expensive ones. Of the 85 medicines included in negotiations in 2021, 67 (or78.85) passed and offered a price cut of 61.71%, both rates higher than in the previous two years.

 

In 2021, the catalogue had 221 drugs that recorded 140 million reimbursements. Had they not been in the catalogue, they would have cost patients 149.49 billion yuan more.

Healthcare Taps ‘Value Purchase’

Nov 09-2022   



Since 2018, negotiations concerning medicines to be included in the national healthcare catalogue have borne fruitful results with substantial benefits for the people. The practice is underpinned by ‘value purchase’ based on pharma-economic assessments, wrote Prof. Liu Guo’en of the NSD and Prof. Wu Jing of Tianjin University in a commentary for People’s Daily. They are Director and Vice Director, respectively, of China Pharma-economics Professional Committee.

 

Assessing the value of a medicine is a scientific philosophy aiming to identify the average price of the medicine based on its value. Rooted in cost-return analysis, the method compares the incremental health output and incremental cost of innovative medicines and that of reference ones, so as to find the basis price for new medicines that are to be added to the national healthcare catalogue. Widely used in developed countries, the practice in the short term does a good job in balancing the efficiency of national healthcare funds and fairness for patients, and in the long run shall be conducive to the research and development of the pharmaceutical industry, said the two authors.

 

Decisions to include a medicine in the catalogue used to be based on experts’ opinions before 2018. Since then, they have been evidence-based and currently the assessment procedure mainly consists of two links, namely expert evaluation and medicine price calculation.

 

While ensuring the basic needs of patients, the catalogue has been giving extra attention to include innovative drugs. In 2021, 74 new drugs were added to cover tumor diseases, high blood pressure and diabetes, hepatitis D and HIV, rare diseases, COVID-19 and some other areas, showing an optimization of the catalogue’s structure. Moreover, innovative drugs were accepted at a faster pace; of the 74 drugs, 27 were newly approved in 2021. Moreover, the authors believed that the accomplishments of the catalogue debunk the myth of innovative drugs as highly expensive ones. Of the 85 medicines included in negotiations in 2021, 67 (or78.85) passed and offered a price cut of 61.71%, both rates higher than in the previous two years.

 

In 2021, the catalogue had 221 drugs that recorded 140 million reimbursements. Had they not been in the catalogue, they would have cost patients 149.49 billion yuan more.