Article Impact Level: HIGH Data Quality: STRONG Summary of The Milbank Quarterly, 1468-0009.12714. https://doi.org/10.1111/1468-0009.12714 Iselin Dahlen Syversen et al.
Points
- The study compared drug price negotiation practices in several high-income countries and the U.S. Veterans Affairs Health System to evaluate improvements for the U.S. under the Inflation Reduction Act (IRA).
- All studied countries negotiate brand-name drug prices soon after approval and conduct formal clinical assessments comparing new drugs with existing treatments, but methods differ in structure and criteria.
- Differences across countries include the separation of clinical assessment and negotiation bodies, the use of health benefit assessments, and explicit willingness-to-pay thresholds.
- Some countries, such as the U.K. and Canada, have specific mechanisms for prioritizing drug negotiations in critical disease areas, improving efficiency and focus.
- The study suggests that U.S. policymakers consider adopting more transparent health benefit criteria, willingness-to-pay thresholds, and structured frameworks for addressing priority diseases to enhance Medicare drug price negotiations.
Summary
This study compares the drug price negotiation frameworks in several high-income countries to evaluate how they could inform the U.S. approach under the Inflation Reduction Act (IRA). The IRA allowed Medicare to begin negotiating prices for high-cost brand-name drugs for the first time. However, the negotiation scope under the IRA is more limited than the approaches used in other countries. The authors examined price negotiation practices in Canada, France, Germany, the U.K., Belgium, the Netherlands, and Norway, along with the Veterans Affairs Health System in the U.S., to explore the diversity and effectiveness of these frameworks.
The researchers analyzed legislation, government publications, and guidelines for each system, conducting interviews with key drug price negotiators. They found that all countries studied negotiated prices for brand-name prescription drugs soon after approval and conducted formal clinical assessments comparing new drugs with existing treatments. However, the methods varied across systems. For example, differences existed in the separation of clinical assessment and negotiation bodies, the assessment of added health benefits, and whether explicit willingness-to-pay thresholds were used. Some systems, such as those in the U.K. and Canada, have specific mechanisms to address priority disease areas.
The findings suggest that incorporating some aspects of international systems could improve the effectiveness of U.S. drug price negotiations. U.S. policymakers may consider adding features such as clearer criteria for assessing health benefits and willingness-to-pay thresholds and establishing more structured frameworks for handling high-priority disease areas. By adopting these practices, the U.S. could enhance its ability to negotiate more favorable drug prices, improving affordability for Medicare beneficiaries.
Link to the article: https://onlinelibrary.wiley.com/doi/10.1111/1468-0009.12714
References Syversen, I. D., Schulman, K., Kesselheim, A. S., & Feldman, W. B. (2024). A comparative analysis of international drug price negotiation frameworks: An interview study of key stakeholders. The Milbank Quarterly, 1468-0009.12714. https://doi.org/10.1111/1468-0009.12714
