No cure, no costBMJ 2007; 335 doi: https://doi.org/10.1136/bmj.39267.432153.94 (Published 19 July 2007) Cite this as: BMJ 2007;335:122
All rapid responses
Matthew Brougham(1) correctly points out that "the concepts and
strategies [of value-for-money] are not new and are a normal feature in
purchasing decisions all around the world". Of interest is also the
observation that "the idea of an individual refund for ineffective
treatments is interesting, but one PHARMAC [New Zealand's funder] has not
implemented due to definitional and monitoring concerns"(1).
In fact, refunding individual cases of drug ineffectiveness seems to be
an even too creative solution mainly because this approach implies that no
evidence-based methods exist for estimating failure rates and therefore
implicitly assigns no role to widely used tools such as the number needed
There is a wide background of methods for drug pricing based on
value-for-money or cost-effectiveness(2). On 17th February, the BMJ
published a personal view(3) that completely ignored the existence of
these methods(2). Four months later (21 July 2007), the feature article
by Andrew Jack(4) continues to ignore all previous knowldedge in this
area, but has the merit of mentioning that value-for-money approaches
should be welcome. In the next four months can we hope to see at last a
good-quality commentary of the BMJ on drug pricing?
1) Brougham M. Medicines funding: value-for-money is nothing new
(rapid response). bmj.com, 31 July 2007,
2) Messori A, Caccese E, Orsi C. A missed opportunity (rapid
response). bmj.com, 17 March 2007,
3) Sotelo J. Making the prices of new drugs fairer. BMJ
4) Jack A. Drug pricing - No cure, no cost. BMJ 2007;335:122-123
Competing interests: No competing interests
"No cure, no cost" (Andrew Jack, 21 July) was a welcome commentary on value-based drug pricing, adding to other recent commentaries about the importance of a "tougher attitude to reimbursement around the world". It is a shame though that pursuing value-for-money is characterised as "tough" and "novel" – neither is true.
Value-for-money is a central consideration in most purchasing decisions, whether in our private lives, in companies, not-for-profit organisations or within government. It is arguably even more important when spending taxpayer funds.
Citizens rightly expect value-for-money – a cornerstone of the usual requirements of probity and accountability for government activity. However, value-for-money has not been mainstream in medicines funding globally, possibly due to the uncomfortable nature of considering costs and benefits alongside people’s wellbeing.
Government spending is never infinite and so trade-offs must be made, even in medicines funding. It is an obvious point but often forgotten: every $1 spent on one medicine is $1 less to spend on another, or on another service. Considered in this light, it is hard to argue with the desirability of securing the best possible health outcomes from any level of spending (irrespective of its level).
Medicines funding trade-offs should be made through a well-defined process; robust consideration of evidence, and with value-for-money top of mind (alongside other important criteria). This is the only way to consistently make the best quality judgements, including being fair to all patients and taxpayers – not just those desiring treatment, but those who do not or who want other treatments.
PHARMAC (New Zealand’s funder) has had a strong focus on value-for-money for 14 years. We are very mindful of funding trade-offs through explicit use of a fixed budget – a desirable and powerful incentive to ensure value-for-money remains top of mind.
PHARMAC has used the tools referred to in the article for a number of years, including reference pricing, tendering, rebates and risk sharing arrangements.[4-6] Built around a strong core of independent clinical and economic assessment, the strategies have successfully improved value-for-money, freeing up resources for funding of other medicines or health services.
The idea of an individual refund for ineffective treatments is interesting, but one PHARMAC hasn’t implemented due to definitional and monitoring concerns. The mechanism is an attempt to deal with a fundamental mismatch between pricing and value (health outcomes) to populations – an issue that can generally be more cost-effectively managed in other ways. These mechanisms comprise appropriate (value-for-money) pricing, targeting treatment to those who will benefit most (access criteria; use of specialist panels, e.g. for multiple sclerosis), or other population-based risk sharing arrangements.
The profile on value-for-money in medicines funding is welcome and overdue. In this light, a novel feel is understandable, but the concepts and strategies are not new and are a normal feature in purchasing decisions all around the world.
1. Jack A. No cure, no cost. BMJ 2007;335:122-3. http://www.bmj.com/cgi/content/full/335/7611/122
2. PHARMAC. A prescription for pharmacoeconomic analysis (version 2). May 2007. http://www.pharmac.govt.nz/pdf/PFPAFinal.pdf
3. Brougham M, Metcalfe S, McNee W. Our Advice? Get a budget! HealthCare Papers 2002;3:83-6. http://www.longwoods.com/hp/3-1DrugPolicy/HP31DrugPolicy.pdf
4. Braae R, McNee W, Moore D. Managing pharmaceutical expenditure while increasing access. The pharmaceutical management agency (PHARMAC) experience. Pharmacoeconomics 1999;16:649–60.
6. Davies A, Metcalfe S, Moodie P, McNee W. PHARMAC responds to Stewart Mann on dihydropyridine calcium channel antagonists. N Z Med J. 2005 Aug 12;118(1220):U1621. http://www.nzma.org.nz/journal/118-1220/1621/
Competing interests: No competing interests