Multiple criteria qualitative value-based pricing framework “MARIE” for new drugs

Abstract

Objectives

Value-based pricing (VBP) could improve allocation of healthcare resources. We created and evaluated a simple VBP method that qualitatively considers broad values for drugs.

Method

First, we established the value elements that determine the value of drugs. Then, we decided on the criteria for scoring the value elements, constructed a method for estimating daily drug prices from the value elements and the maximum number of patients, and used this framework to estimate daily drug prices.

Results

Four base value elements and 8 additional elements were identified. We applied our scoring criteria to calculate scores for 39 drugs already listed in Japan and estimated the daily drug price of each drug by creating a conversion table of base drug prices according to base points and maximum number of patients and adding points for additional elements. For all hepatitis C drugs, the estimated daily drug prices were lower than the actual prices, whereas for the other drugs, they were higher or, in some cases, lower.

Conclusion

Our VBP framework comprises 4 steps: 1. gathering information on value elements; 2. scoring value elements; 3. calculating the base drug price from the base points and the maximum number of patients by using the conversion table; and 4. calculating the daily drug price by adding points for additional value elements. Our framework, which we refer to as MARIE (multiple criteria qualitative value-based pricing framework), is a versatile, practical, and simple option for pricing new drugs that can be easily adapted to different healthcare environments.

Public Interest Summary

Drug prices do not necessarily reflect the values provided by drugs in Japanese current drug pricing system. It is not fully discussed how to quantify the value of drugs for prices by considering a broad range of value elements. We created and evaluated VBP method for drug pricing that would be applicable in Japan considering the current pharmaceutical regulations, medical environment, and availability of data at the timing of pricing negotiation process for new drugs. The study summarizes the value elements to be considered in determining drug prices and proposed VBP framework. It also revealed that qualitative factors can be used for drug pricing. Our proposed approach for drug pricing system enables to capture and reflect broader values of new drug.