International Journal of Technology Assessment in Health Care

GENERAL ESSAYS

Why licensing authorities need to consider the net value of new drugs in assigning review priorities: Addressing the tension between licensing and reimbursement

Christopher McCabea1, Karl Claxtona2 and Anthony O'Hagana3

a1 Leeds Institute of Health Sciences

a2 University of York

a3 University of Sheffield

Abstract

Pharmaceutical regulators and healthcare reimbursement authorities operate in different intellectual paradigms and adopt very different decision rules. As a result, drugs that have been licensed are often not available to all patients who could benefit because reimbursement authorities judge that the cost of therapies is greater than the health produced. This finding creates uncertainty for pharmaceutical companies planning their research and development investment, as licensing is no longer a guarantee of market access. In this study, we propose that it would be consistent with the objectives of pharmaceutical regulators to use the Net Benefit Framework of reimbursement authorities to identify those therapies that should be subject to priority review, that it is feasible to do so and that this would have several positive effects for patients, industry, and healthcare systems.