A Framework for Using Cost-effectiveness Analysis to Support Pricing and Reimbursement Decisions for New Pharmaceuticals in a Context of Evolving Treatments, Prices, and Evidence

Beth Woods (), Alfredo Palacios () and Mark Sculpher ()
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Beth Woods: University of York
Alfredo Palacios: University of York
Mark Sculpher: University of York

PharmacoEconomics, 2025, vol. 43, issue 4, No 1, 363-373

Abstract: Abstract Current approaches to the pricing and funding of new pharmaceuticals often focus on a one-time decision about a product for each clinical indication. This can result in multiple options being available to health systems without a clear signal about how to prioritise between them. This runs the risk that, as available treatments, evidence, and drug prices evolve, clinical and patient choices may not be aligned with the objective of allocating resources to promote population health. We propose a framework for using cost-effectiveness analysis to support pricing and funding policies for new pharmaceuticals in multi-comparator indications, some of the key aspects of which evolve over time. The framework comprises three core considerations: (1) designing proportionate processes, (2) assessing the costs and benefits of recommending multiple treatment options, and (3) appropriate application of cost-effectiveness analysis ‘decision rules’ to support recommendations and price negotiations. We highlight that proportionate processes require prioritisation of topics for reassessment to be aligned with clear objectives, the need for full flexibility of decision making at the point of reassessment, and that in some contexts contractual re-specification rather than typical deliberative health technology assessment processes may be more appropriate. We discuss reasons why the recommendation of multiple treatment options rather than a single cost-effective treatment may be appropriate and urge health technology assessment bodies to explicitly address the trade-offs that may be associated with recommending multiple treatments. Finally, we discuss how value-based pricing could be achieved when multiple competitor manufacturers offer confidential discounts.

Date: 2025
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DOI: 10.1007/s40273-024-01450-3

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