Case 5: Pharmaceuticals as typical product innovations in healthcare
Learning goals
1. How does a drug come into the market? What is the role of research & development?
2. What is the fourth hurdle?
3. Why is taking the fourth hurdle not a straightforward process?
4. Which factors and criteria are used in priority setting of pharmaceuticals?
5. What is coverage with evidence development (CED)?
a. What are other types of coverage options (framework by Walker)?
Keywords of the case
Clinical trials, drug development process, fourth hurdle, health technology assessment, marketing
authorisation (similar to ´licensing´), reimbursement and pricing phase, pharmaceutical market,
priority setting, risk-sharing arrangements and overage with evidence development.
Literature
- Erntoft S (2011). Pharmaceutical priority setting and the use of health economic evaluations: a
systematic literature review. Value in Health; 14(4):587-99.
- European Medicines Agency (2019). From laboratory to patient: the journey of a centrally
authorised medicine. Available from URL
https://www.ema.europa.eu/en/documents/other/laboratory-patient-journey- centrally-authorised-
medicine_en.pdf
- European Parliament. Toward a harmonised EU assessment of added therapeutic value of medicine.
2015. Available from URL
http://www.europarl.europa.eu/RegData/etudes/STUD/2015/542219/IPOL_STU(2
015)542219_EN.pdf
(Chapters 1 and 2; Chapters 3, 4 and 5 as illustration)
- Hutton, J, Trueman, P, & Henshall, C. (2007). Coverage with evidence development: an examination
of conceptual and policy issues. International Journal of Technology Assessment in Health Care,
23(4), 425-432.
- Taylor RS, Drummond MF, Salkeld G, Sullivan SD. (2004). Inclusion of cost effectiveness in licensing
requirements of new drugs: the fourth hurdle. BMJ. 2004; 329(7472): 972–975.
- Rawlins MD (2012). Crossing the fourth hurdle. British Journal of Clinical Pharmacology.73(6):855-
60.
,- Walker S, Sculpher M, Claxton K, Palmer S (2012). Coverage with evidence development, only in
research, risk sharing, or patient access scheme? A framework for coverage decisions. Value in
Health.;15(3):570-579
1. How does a drug come into the market? What is the role of research & development?
The roles of the pharmaceutical industry:
- To develop and produce medicines and vaccines
à Drugs as a method to preserve health and save live, next to nutrition, sanitation and
medical care.
- To drive innovation in drugs
à To develop, test and produce drugs safety for human use; early years very successful:
insulin (diabetes), antibiotics, polio-vaccination.
- Economic growth factor worldwide
Challenges in drug development
- High costs: spending on pharmaceutical account for a significant proportion of total health
spending in European countries due to:
o Ageing of the population;
o Reform of drugs
o Higher demand for care
- Budget impact vs. cost-effectiveness
- Unequal access
- Lack of transparency
- What is value?
- Uncertainty; new coverage decisions
- Harmonization between reimbursement and regulatory approval
Example of the pharmaceutical success:
, From laboratory to patient
Learning goals
1. How does a drug come into the market? What is the role of research & development?
2. What is the fourth hurdle?
3. Why is taking the fourth hurdle not a straightforward process?
4. Which factors and criteria are used in priority setting of pharmaceuticals?
5. What is coverage with evidence development (CED)?
a. What are other types of coverage options (framework by Walker)?
Keywords of the case
Clinical trials, drug development process, fourth hurdle, health technology assessment, marketing
authorisation (similar to ´licensing´), reimbursement and pricing phase, pharmaceutical market,
priority setting, risk-sharing arrangements and overage with evidence development.
Literature
- Erntoft S (2011). Pharmaceutical priority setting and the use of health economic evaluations: a
systematic literature review. Value in Health; 14(4):587-99.
- European Medicines Agency (2019). From laboratory to patient: the journey of a centrally
authorised medicine. Available from URL
https://www.ema.europa.eu/en/documents/other/laboratory-patient-journey- centrally-authorised-
medicine_en.pdf
- European Parliament. Toward a harmonised EU assessment of added therapeutic value of medicine.
2015. Available from URL
http://www.europarl.europa.eu/RegData/etudes/STUD/2015/542219/IPOL_STU(2
015)542219_EN.pdf
(Chapters 1 and 2; Chapters 3, 4 and 5 as illustration)
- Hutton, J, Trueman, P, & Henshall, C. (2007). Coverage with evidence development: an examination
of conceptual and policy issues. International Journal of Technology Assessment in Health Care,
23(4), 425-432.
- Taylor RS, Drummond MF, Salkeld G, Sullivan SD. (2004). Inclusion of cost effectiveness in licensing
requirements of new drugs: the fourth hurdle. BMJ. 2004; 329(7472): 972–975.
- Rawlins MD (2012). Crossing the fourth hurdle. British Journal of Clinical Pharmacology.73(6):855-
60.
,- Walker S, Sculpher M, Claxton K, Palmer S (2012). Coverage with evidence development, only in
research, risk sharing, or patient access scheme? A framework for coverage decisions. Value in
Health.;15(3):570-579
1. How does a drug come into the market? What is the role of research & development?
The roles of the pharmaceutical industry:
- To develop and produce medicines and vaccines
à Drugs as a method to preserve health and save live, next to nutrition, sanitation and
medical care.
- To drive innovation in drugs
à To develop, test and produce drugs safety for human use; early years very successful:
insulin (diabetes), antibiotics, polio-vaccination.
- Economic growth factor worldwide
Challenges in drug development
- High costs: spending on pharmaceutical account for a significant proportion of total health
spending in European countries due to:
o Ageing of the population;
o Reform of drugs
o Higher demand for care
- Budget impact vs. cost-effectiveness
- Unequal access
- Lack of transparency
- What is value?
- Uncertainty; new coverage decisions
- Harmonization between reimbursement and regulatory approval
Example of the pharmaceutical success:
, From laboratory to patient
