How do we value innovation? In particular, how do we value innovation in
healthcare? And how much are we prepared to pay for it? Take, for
example, a new analogue insulin, a novel opioid analogue for pain
relief, or a sustained-release version of a generic immediate-release
agent. How much more would we be willing to pay for these? How much more
should we be expected to pay? These questions are far from theoretical,
in fact they are very specific and real consequences for NHS budgets,
pharmaceutical industry profits and, perhaps most of all, for those
patients who need these new drugs.
We could start by looking at
how we deal with innovation in everyday life. Believe it or not, there
are four iPads in my house. How did this happen? Well, like many people,
I am always keen to have the latest gadget. So as each new iPad comes
out - slimmer, quicker, with a retina display or whatever - I want to
own it. And I then I hand down my old iPad to my wife or one of my
children. Recently, I started to wonder how much more I had paid for my
iPad 2 than my iPad 1.
I expected it to be quite a bit more. But
when I looked back at my records, was it 20 percent more? Thirty percent
more? No, they were the same price. I then checked the receipt for my
iPad 3 - lo and behold, that too cost exactly the same. When innovation
comes at the same price as the original model, it is very tempting to
buy!
So why doesn't Apple charge extra for innovation? The answer
is: to keep its market share. What has happened is that consumers have
become very astute. We want our gadgets to be better, thinner, lighter,
and faster; we love innovation. But we don't want to pay extra for it.
In the competitive market for consumer goods, innovation is the way to
maintain market share - provided the price is right.
And that's
why I have four iPads in my house. I am certain that if there had been a
price increase when each new version came out, I would probably have
waited or perhaps just kept the previous model. When further iPads are
launched, will I need the new features each one offers? Probably not.
The truth is that I am fine with what I have. But will I want to buy
them? Yes. I will want them because I haven't got them. Whether I need
them or not is irrelevant.
Can we apply any of this to innovation
in medicine? Recent decisions from NICE have shown that despite patient
pressure, paying over £90,000 for innovation is simply not considered
value for money. Abandoning human insulin in favour of using insulin
analogues across the board has been seen as buying into the concept of
innovation whilst ignoring the economic realities. The NHS is
increasingly reluctant to pay for innovation for its own sake, and is
insisting that it has to translate into real benefits for patients and
demonstrably improved outcomes. In essence, the health service wants its
iPad 6, but at the same price it paid for the iPad 5 - and it wants to
be sure that the new features are really worth it. As a consequence,
there is considerable unease in the medicines marketplace.
Pharmaceutical companies are wary of value-based pricing assessments.
More and more, they are seeing CCGs commissioning on outcomes and
looking for risk-sharing arrangements.
The development of new
medicines is a good thing, but for both sides to benefit, we need to
strike a balance. We want innovation to drive the marketplace, but not
to break the budget. G
Stoptober 2014: stop smoking challenge
This October, Public Health England (PHE) is encouraging smokers to go 28 days without a cigarette in their annual Stoptober campaign. The 2013 campaign saw 250,000 people take part and 65% of those who took part successfully quit for 28 days.
Stoptober 2014 will provide smokers with free support tools and comedy content, including:
- a new stop smoking pack
- a 28-day mobile phone app
- text support with daily updates and jokes
- quitting advice and tips for coping.
For further information on Stoptober please visit:
stoptober.smokefree.nhs.uk
Update your knowledge:
GP curriculum heading 3.01 - Healthy people: promoting health and preventing disease
To find out more about tobacco harm reduction strategies and stop smoking services, please read the Guidelines in Practice article at: egln.co.uk/go/40215
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