An Optional Delinked Reward System: Making Pharmaceutical Innovation Work for Everyone

Aidan Hollis

Applied Health Economics and Health Policy, 2024, vol. 22, issue 2, No 4, 155-164

Abstract: Abstract Conflicts over pharmaceutical pricing are driven by the patients’ need for affordable medicines and the producer’s reward for the investments in developing innovative medicines. A single price cannot achieve both goals, as it will either obstruct access by patients or provide too low a return to investors. This has led to calls to “delink” the payment for innovation from the price paid for drugs, so that both goals can be met efficiently and without conflict. However, the details of how best to do that are unclear. This paper proposes a specific implementation for delinking the Optional Delinked Reward System (ODRS), which integrates ideas from numerous pharmaceutical reimbursement systems. The ODRS would allow firms to choose either to negotiate a sales price for a drug (as is the current practice in most countries) or to sell their drug at a low “generic” price with a supplementary “delinked” reward based on assessed health benefit. This model builds on recent innovations in drug reimbursement including the UK’s Antibiotic Subscription Pilot and the Pneumococcal Vaccine Advanced Market Commitment. The ODRS would ensure affordable and immediate access for patients and a fair reward for innovators.

Date: 2024
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DOI: 10.1007/s40258-023-00860-2

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