Last week, a group called No Patient Left Behind released a report suggesting that the drug value assessments used widely across Europe and in countries such as Canada are flawed. No Patient Left Behind argues that the Cost Effectiveness Analyses (CEAs) used in these countries undervalue innovative medicines by up to 94% and mislead US policymakers into thinking that Americans are overpaying.
High-income foreign countries that rely on central planning and traditional CEAs as their justification for capping drug prices may be using it as an excuse to pay less, which also gives the US public, policymakers, physicians, and payers the (inaccurate) impression that medicines are not worth what the US is paying for them. Traditional CEA can thus create the appearance that the US market-based system is broken and in need of a regulatory fix, namely price controls. But our analyses showed that a good case can be made the US’s patent-based, market-based competitive framework is working reasonably well, despite an imperfect insurance system, to bring about affordable biomedical innovation that benefits not only US citizens, but everyone worldwide²³. Should US policymakers impose foreign price controls on novel medicines in a misguided effort to spare US payers from perceived ”overpaying”, they would be undermining innovation that would be cost-effective for the US and beneficial globally.
Using a broader societal value-based assessment model, Generalized Cost-Effectiveness Analysis (GCEA), across various treatments evaluated by Canada’s Drug Agency (CDA), it was found that the median ratio of Canadian recommended prices to societal value was 10%, and for some treatments CDA valued drugs at 4% of their societal value.
Some examples provided (the drugs were not identified) were:
Cystic fibrosis drug - Est. societal value of $422, 292, Canadian RP of $25,542
MS drug - Est. societal value of $146,363, Canadian RP of $ 20,497
Obesity drug - Est. societal value of $44,312, Canadian RP of $1,589
Diabetes Drug - Est. societal value of $26,933, Canadian RP of $2,298
Cardiovascular drug - Est. societal value of $24,147, Canadian RP of $1,033
Whether one agrees with the view of No Patient Left Behind or not, what is clear is that the Cost Effectiveness Analysis model applied by the Canadian authorities consistently values medicines at a fraction of their US price.
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