Characterizing the Drug Development Pipeline for Precision Medicines

Amitabh  Chandra; Craig  Garthwaite; Ariel Dora Stern

Chapter | Economic Dimensions of Personalized and Precision Medicine | 2019

Characterizing the Drug Development Pipeline for Precision Medicines

by Amitabh Chandra, Craig Garthwaite and Ariel Dora Stern

Abstract

BOOK ABSTRACT: Personalized and precision medicine (PPM)—the targeting of therapies according to an individual’s genetic, environmental, or lifestyle characteristics—is becoming an increasingly important approach in health care treatment and prevention. The advancement of PPM is a challenge in traditional clinical, reimbursement, and regulatory landscapes because it is costly to develop and introduces a wide range of scientific, clinical, ethical, and socioeconomic issues. PPM raises a multitude of economic issues, including how information on accurate diagnosis and treatment success will be disseminated and who will bear the cost; changes to physician training to incorporate genetics, probability and statistics, and economic considerations; questions about whether the benefits of PPM will be confined to developed countries or will diffuse to emerging economies with less developed health care systems; the effects of patient heterogeneity on cost-effectiveness analysis; and opportunities for PPM’s growth beyond treatment of acute illness, such as prevention and reversal of chronic conditions. This volume explores the intersection of the scientific, clinical, and economic factors affecting the development of PPM, including its effects on the drug pipeline, on reimbursement of PPM diagnostics and treatments, and on funding the requisite underlying research. The research also examines recent empirical applications of PPM.

Keywords: healthcare; precision medicine;

Format: Print

Citation:

Chandra, Amitabh, Craig Garthwaite, and Ariel Dora Stern. "Characterizing the Drug Development Pipeline for Precision Medicines." Chap. 5 in Economic Dimensions of Personalized and Precision Medicine, edited by Ernest R. Berndt, Dana P. Goldman, and John W. Rowe, 115–158. University of Chicago Press, 2019.

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Article | Health Affairs | July 2020

Lessons From The Impact Of Price Regulation On The Pricing Of Anticancer Drugs In Germany

Victoria D. Lauenroth, Aaron S. Kesselheim, Ameet Sarpatwari and Ariel Dora Stern

Worldwide spending on prescription drugs has increased dramatically in recent years. Although this increase has been particularly pronounced in the US, it remains largely unaddressed there. In Europe, however, different approaches to regulating drug prices have been implemented. Under the 2011 German Pharmaceutical Market Restructuring Act (Arzneimittelmarktneuordnungsgesetz, or AMNOG), for example, manufacturers freely set the prices of newly authorized drugs during their first year on the market. Benefit assessments are carried out during this year and then used in price negotiations between manufacturers and representatives of the country’s statutory health insurers. Using data on fifty-seven anticancer drugs launched in Germany from 2002 to 2017, we found that implementation of AMNOG was associated with drug prices being more closely aligned with clinical benefit. Introducing price negotiations led to a 24.5 percent decrease in negotiated prices relative to launch prices. We did not find evidence that manufacturers responded by setting higher launch prices. AMNOG is an example of how government price negotiation can be designed to better align prices with clinical benefit without delaying patient access.

Keywords: Pharmaceuticals; prescription drug costs; drug pricing; Access to care; cost reduction; Health Care and Treatment; Price; Governing Rules, Regulations, and Reforms; Cost Management; Germany;

Citation:

Lauenroth, Victoria D., Aaron S. Kesselheim, Ameet Sarpatwari, and Ariel Dora Stern. "Lessons From The Impact Of Price Regulation On The Pricing Of Anticancer Drugs In Germany." Health Affairs 39, no. 7 (July 2020): 1185–1193. View Details

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Characterizing the Drug Development Pipeline for Precision Medicines

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