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Pharm Exec talks value-based healthcare with Professor Bengt Jönsson of the Stockholm School of Economics.
A pioneer in the field of healthcare economics, Bengt Jönsson founded the Swedish Institute for Health Economics in 1979 and in 1982 became professor of health economics at the University of Linköping, where he founded the Center for Medical Technology. In 1991, he moved to the Stockholm School of Economics, where he is now Professor Emeritus. Pharm Exec caught up with Bengt this month at The Economist's Value-based Healthcare in Europe conference to get his perspective on the latest thinking on value and its implications for industry, patients, and payers.
PharmExec: Can value ever be satisfactorily defined across markets?
Bengt Jönsson: In the old, traditional pharma market drugs were regulated for safety and efficacy and it was the patient and the doctor who made a decision about value. Now, with new drugs in smaller markets, the cost-per-patient is really very high and it has become a public expenditure decision. It’s like spending on bridges, and when you’re spending public money you have to have objective criteria. But it’s not only the outcomes criteria that matter, it’s the process. When you’re looking at building a bridge, for example, you are making a long-term assessment of the investment and there has to be something of a political process around this. For the healthcare industry, this is a new situation. I think the question of value will have to be solved on a case-per-case basis. The pharma industry has a long-term perspective and everyone likes to have predictability, but I’m not so sure that we can guarantee that predictability.
What are the current value-related challenges for market ‘advanced’ in this field, such as Sweden?
The problem is implementation. In Sweden we’ve had the reimbursement agency and the regulatory agency making recommendations, but the healthcare system, which has to implement them, has not been part of the process. Traditionally, the healthcare system has not been involved in innovation. We now have something called the systematic introduction of new drugs, which is a process that brings all the stakeholders together, but I can’t predict how this will develop. But healthcare systems are getting stronger as far as defining value is concerned; the reimbursement and regulatory agencies now have to share more of their ‘power’ with healthcare systems. But it is of course a much more complicated process than the old model.
Is the patient playing more of a role in defining value?
One of the consequences of public decision-making is that patients have organized themselves into lobby groups, for example. In a way it’s a zero sum game: if one patient gets more it means another patient has to get less.
In public decision-making you have to have data and patient organizations will occasionally bring much more data to the table. But pharmaceutical development is about evidence, and real-world data is real-world data - it is not necessarily evidence. Translating real-world data to evidence is quite a complicated process.
Are the countries that need to define value the most urgently also those that may find it hardest to implement such systems?
Yes. To arrange outcomes-based payment systems, a country needs to be very well organized. They need to have a very secure and honest healthcare system. In certain countries one might hesitate to implement such complicated payment systems. But if you look at the regulatory field, there may be 28 countries in the EU, but it’s really down to four or five countries that have really done a good job of regulation in Europe. Other countries benefit from this. With regard to drug evaluation, we already see some countries looking at NICE, for example, and saying, “We should do what NICE does; why should we spend time trying to devise a system that replicates it?” We have to start trusting each other when it comes to evaluation.
Is the general shift towards transparency helping in defining value?
We have much more transparency now than we ever had in the public healthcare system. The biggest problem is using all the data. We already have a lot of what I call data graveyards - “Here rests millions of data” - where the data is totally dead because no-one ever uses them.
So, as I said, we have to be able to trust each other. We have to be able to rely on one agency for one evaluation, another agency for another evaluation. There is so much to do; we desperately need to share the work, and that requires trust. If we look again at regulatory, however, it took quite a bit of time for the different agencies, the different countries, to build that kind of trust. But after 20 years it is quite frustrating that we are still talking about trusting each other and sharing work when it comes to drug evaluation. It’s nice to talk methodology and what-have-you but it’s time for a little more action! Maybe now it will finally start to happen…