Feasibility of value based healthcare pricing model in pharmaceutical industry
Ryhänen, Anssi (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023111629640
https://urn.fi/URN:NBN:fi:amk-2023111629640
Tiivistelmä
We are living longer than ever as median life expectancy has been steadily rising after second world war. Even so that this is statement of our values and merit to our healthcare, it has also led to another problem. Population in Finland is aging fast. As birth rate has been declining during last decades this has led to problematic age distribution. One of the problems of aging population is higher incidence of cancer. It has been estimated that in over 65 years old population there is ten times higher risk for cancer. One of drivers, or solution, for rising cancer care cost are pharmaceuticals. New drugs offer better tolerated and more effective treatment options for elderly patients, but they are often more expensive. Pricing of pharmaceuticals in Europe and in Finland is complex and often country level decisions are connected to each other.
Value-Based Healthcare (VBHC) is suggested to be one of possible solutions for rising healthcare costs. VBHC is healthcare delivery model where health outcomes are closely measured and linked to payments at patient level. In the core of VBHC is patient experienced health benefits that are defined outcomes. These outcomes are measured, classified, and followed. In this thesis writer researched feasibility to create VBHC pricing model for pharmaceutical product. Would it be possible to create pricing model that linked patient benefit more closely to pricing?
Research followed Design Research methodology as it allowed creating synthesis for several negotiations and adjusting needed. Suggested workflow was created for pricing model. Actual modelling and implementation were done with imaginary product to protect trade secret.
Thesis argues that Value-Based Pricing is feasible at hospital environment in Finland’s two-channel reimbursement system, but hospital procurement doesn’t currently recognize it in tenders. This creates risk for parallel trade for the company. Thesis has limitations as there has been several changes in environment during long thesis process. In future topic needs further investigation, especially how to add VBHC pricing models into tenders.
Value-Based Healthcare (VBHC) is suggested to be one of possible solutions for rising healthcare costs. VBHC is healthcare delivery model where health outcomes are closely measured and linked to payments at patient level. In the core of VBHC is patient experienced health benefits that are defined outcomes. These outcomes are measured, classified, and followed. In this thesis writer researched feasibility to create VBHC pricing model for pharmaceutical product. Would it be possible to create pricing model that linked patient benefit more closely to pricing?
Research followed Design Research methodology as it allowed creating synthesis for several negotiations and adjusting needed. Suggested workflow was created for pricing model. Actual modelling and implementation were done with imaginary product to protect trade secret.
Thesis argues that Value-Based Pricing is feasible at hospital environment in Finland’s two-channel reimbursement system, but hospital procurement doesn’t currently recognize it in tenders. This creates risk for parallel trade for the company. Thesis has limitations as there has been several changes in environment during long thesis process. In future topic needs further investigation, especially how to add VBHC pricing models into tenders.