Pricing combination products: not how but who?

Adrian Towse (), Andrew Briggs () and Lotte Steuten ()
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Adrian Towse: Office of Health Economics
Andrew Briggs: London School of Hygiene & Tropical Medicine
Lotte Steuten: Office of Health Economics

The European Journal of Health Economics, 2025, vol. 26, issue 4, No 1, 537-540

Abstract: Abstract In the last decade progress has been made in identifying solutions to the “technical problem” of attributing the value of combinations between component parts, but not in adapting mechanisms to implement solutions. We propose a way forward to address the “mechanism problem”, arguing that it is essential HTA bodies and/or pricing and reimbursement authorities get actively involved in setting out attribution rules or methods. HTA and pricing/reimbursement authorities have, in essence, adopted one of three strategies: (i) “Do nothing”; (ii) Take a simplistic and arbitrary approach, such as the German law imposing a “haircut” of 20% on the prices of products used in combination or (iii) “Passing the parcel” to the companies and to competition authorities, hoping they will solve the problem for them. Even if a competition law compatible solution is possible, three challenges remain. First, the cost and effort of using it may be too high in relation to any likely gains. Second, the bargaining power of the backbone owner under current HTA / pricing rules is so high that, likely, no solutions that incentivise add-on therapy development will emerge from a process from which HTA bodies absent themselves. Third, most solutions emerging from such a process which give any returns to the add-on likely need the backbone to have a different price (i.e. lower) in combination use as compared to monotherapy use, requiring payer approval for multi-indication pricing. Resolution of the combination challenge thus requires HTA and reimbursement bodies involvement in value attribution.

JEL-codes: I18 L51 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10198-025-01773-8

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