The challenge of pricing combination therapies: Why payer involvement is no longer optional

The rise of combination and sequencing therapies involving multiple medicines continues to expose a significant challenge in health technology assessment (HTA) and reimbursement systems: how to fairly and efficiently attribute value across multiple products.

A recent publication is urging HTA bodies and pricing authorities to actively engage in developing attribution methods, warning that current approaches are inadequate for today’s complex treatment landscape and innovative health technologies, especially in oncology.

“It is essential HTA bodies and/or pricing and reimbursement authorities get actively involved in setting out attribution rules or methods,” the authors argue.

So far, responses from HTA and pricing agencies have fallen into three broad categories. First, some have opted to do nothing. Others have taken a blunt, overly simplistic approach – such as Germany’s automatic 20% price reduction for combination therapies – regardless of clinical nuance. A third strategy has involved deflecting responsibility to pharmaceutical companies and competition authorities in the hope that they will sort out the issue independently.

Even if competition law could theoretically support a workable solution, three major hurdles remain. First, the cost and complexity of legal proceedings may outweigh any potential benefit for companies. Second, under current HTA and pricing regimes, the “backbone” drug in a combination typically retains overwhelming bargaining power – discouraging meaningful negotiation and making it unlikely that add-on therapies will receive fair value. Third, solutions that do reward add-on products often rely on differential pricing, where the backbone drug would be reimbursed at a lower rate when used in combination – a model that requires explicit payer approval and a shift to multi-indication pricing.

The bottom line? Solving the combination pricing conundrum cannot happen without payer involvement.

Several pilot initiatives are underway across Europe. These include the use of third-party intermediaries or trading platforms to streamline pricing negotiations, as well as the active involvement of HTA bodies in coordinating and managing information exchange between negotiating companies.

“Without payer ownership of the attribution issue, sustainable and efficient solutions are likely to remain distant,” the authors conclude. “Resolution of the combination challenge therefore requires HTA and reimbursement bodies involvement in value attribution on behalf of their payers.”

In reimagining healthcare across the entire patient journey, Health Industry Hub^TM is the only one-stop-hub uniting the diversity of the Pharma, MedTech, Diagnostics & Biotech sectors to inspire meaningful change.

The Health Industry Hub^TM content is copyright protected. Access is available under individual user licenses. Please click here to subscribe and visit T&Cs here.