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A new reimbursement system for innovative pharmaceuticals combining value-based and free market pricing.

Persson, Ulf LU ; Svensson, Johanna and Pettersson, Billie (2012) In Applied Health Economics and Health Policy 10(4). p.217-225
Abstract
Sweden has experienced a national value-based pricing (VBP) system for innovative outpatient drugs operated by the Pharmaceutical Benefits Board - LFN (now called the Dental and Pharmaceutical Benefits agency - TLV) since 2002. VBP has the character of a monopoly system, leading to reimbursement decisions where usage of new medicines is limited to subgroups and not the population for which the drug is approved. VBP relies on a broad societal perspective, encouraging innovations by signaling to firms that value-adding treatments are demanded. However, the VBP system is operated without a drug budget responsibility. The budget responsibility lies at the regional level, not operating VBP, thus an intrinsic conflict is built into the system.... (More)
Sweden has experienced a national value-based pricing (VBP) system for innovative outpatient drugs operated by the Pharmaceutical Benefits Board - LFN (now called the Dental and Pharmaceutical Benefits agency - TLV) since 2002. VBP has the character of a monopoly system, leading to reimbursement decisions where usage of new medicines is limited to subgroups and not the population for which the drug is approved. VBP relies on a broad societal perspective, encouraging innovations by signaling to firms that value-adding treatments are demanded. However, the VBP system is operated without a drug budget responsibility. The budget responsibility lies at the regional level, not operating VBP, thus an intrinsic conflict is built into the system. The aim of this article is to suggest a modification to the current reimbursement system in Sweden where payment for pharmaceuticals is split between the regional and national levels. The system is expected to make new innovative pharmaceuticals accessible to a larger number of patients and provide more consumer surplus without reducing the producer surplus. In short, the county councils pay the marginal cost of production while the state pays for the innovation. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Applied Health Economics and Health Policy
volume
10
issue
4
pages
217 - 225
publisher
Springer
external identifiers
  • pmid:22676213
  • scopus:84862517335
ISSN
1179-1896
DOI
10.2165/11633930-000000000-00000
language
English
LU publication?
yes
id
4798d681-3243-4317-91dd-48b5175c912e (old id 2859682)
date added to LUP
2012-12-17 12:04:42
date last changed
2017-01-01 04:04:32
@article{4798d681-3243-4317-91dd-48b5175c912e,
  abstract     = {Sweden has experienced a national value-based pricing (VBP) system for innovative outpatient drugs operated by the Pharmaceutical Benefits Board - LFN (now called the Dental and Pharmaceutical Benefits agency - TLV) since 2002. VBP has the character of a monopoly system, leading to reimbursement decisions where usage of new medicines is limited to subgroups and not the population for which the drug is approved. VBP relies on a broad societal perspective, encouraging innovations by signaling to firms that value-adding treatments are demanded. However, the VBP system is operated without a drug budget responsibility. The budget responsibility lies at the regional level, not operating VBP, thus an intrinsic conflict is built into the system. The aim of this article is to suggest a modification to the current reimbursement system in Sweden where payment for pharmaceuticals is split between the regional and national levels. The system is expected to make new innovative pharmaceuticals accessible to a larger number of patients and provide more consumer surplus without reducing the producer surplus. In short, the county councils pay the marginal cost of production while the state pays for the innovation.},
  author       = {Persson, Ulf and Svensson, Johanna and Pettersson, Billie},
  issn         = {1179-1896},
  language     = {eng},
  number       = {4},
  pages        = {217--225},
  publisher    = {Springer},
  series       = {Applied Health Economics and Health Policy},
  title        = {A new reimbursement system for innovative pharmaceuticals combining value-based and free market pricing.},
  url          = {http://dx.doi.org/10.2165/11633930-000000000-00000},
  volume       = {10},
  year         = {2012},
}