HEALTH
Who's in Charge of Combination Product Pricing?
Thu Apr 17 2025
The world of healthcare technology assessment (HTA) and pricing has seen some progress in figuring out how to value combination products. These are products made up of different parts that work together. However, the real challenge is not just about figuring out the value. It is about who should be in charge of setting the rules for this valuation.
There are a few different ways HTA bodies and pricing authorities have handled this issue. Some have chosen to do nothing at all. Others have taken a simple but unfair approach, like Germany's 20% price reduction rule for combined products. A third group has basically passed the problem to the companies and competition authorities, hoping they will sort it out.
Even if competition law can offer a solution, there are still big hurdles. First, the cost and effort to use these solutions might be too high compared to the benefits. Second, the company that owns the main product (the backbone) has a lot of power. This makes it unlikely that any solutions will encourage the development of add-on therapies if HTA bodies stay out of the process. Third, most solutions that give any returns to the add-on likely need the backbone to have a different price (i. e. lower) in combination use as compared to monotherapy use, requiring payer approval for multi-indication pricing.
So, who should be in charge of setting the rules for valuing combination products? It seems clear that HTA and reimbursement bodies need to get involved. They need to step up and take an active role in figuring out how to attribute value to these combination products. Without their involvement, it is unlikely that the problem will be solved in a fair and effective way. The companies involved in making these products might not have the right incentives to work together. This could slow down the development of new and potentially life-saving therapies.
The key question is: how can HTA and reimbursement bodies get involved in a way that encourages innovation and fairness? It is not an easy question to answer. But it is an important one. The way that combination products are valued can have a big impact on patients' lives. It can also affect how much companies invest in developing new therapies. So, it is crucial that the right rules are in place.
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questions
Is the German 'haircut' method a covert way to control pharmaceutical pricing and limit innovation in combination therapies?
Imagine if combination products were priced based on a game of rock-paper-scissors between HTA bodies and pharmaceutical companies—who would win?
What if the 'haircut' approach was applied to pizza toppings? Would a 20% reduction in cheese really solve the value attribution problem?
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