Health Technology Assessment, International Reference Pricing, and Budget Control Tools from China's Perspective: What Are the Current Developments and Future Considerations?

BACKGROUND: China is investing considerably in health care reforms to address issues in its health care system. An example is access to innovative drugs, which remains challenging because it is largely dependent on patient self-pay. Recognizing this, the government has invested considerably in its basic medical insurance. As health care expenditure increases, there are growing concerns on budget control. Several health policy tools have been discussed recently such as health technology assessment, international reference pricing, and hospital budget control tools, which can be viewed as addressing the affordability concerns of the government budget. China has also listed her health outcomes goals in "Healthy China 2020" initiative. OBJECTIVES: This article aimed to discuss the "fit-for-purpose" of these tools to address budget concerns and support China in reaching her health outcomes goals. METHODS: The findings are informed by a panel discussion at ISPOR Asia Pacific 2014, literature review, and authors' experience. This review looks at the current developments in China and the considerations and implications for using these tools by drawing experiences from countries where they are used. RESULTS: These tools are generally used in countries with advanced health care systems. China's health care spending is still below that of countries with advanced health care systems and below World Health Organization recommendation. CONCLUSIONS: China has not yet reached the "critical mass" necessary for the effective use of these tools. As China continues its health care reforms, increase in health care spending to balance the health needs of the population would be key.

Equity in Pharmaceutical Pricing and Reimbursement: Crossing the Income Divide in Asia Pacific.

OBJECTIVES: The article takes a three-dimensional approach (triangulation) in defining international pricing policy for pharmaceuticals using cost-effectiveness analysis (CEA), willingness-to-pay (WTP) analysis, and ability-to-pay (ATP) analysis. It attempts to find a balance between the various economic methods of which some focus on effectiveness while others are geared toward incorporating equity in the equation. METHODS: A critical review of the first two established economic methods and their ability to evaluate not only "efficacy" but also "fairness" in pricing decisions identifies a gap in the latter. Therefore, a third analytic method is presented that measures the ATP based on a country's score in the human development index of the United Nations Development Program for 120 countries. This approach allows practicing differential pricing among and within countries. To refine this equity-driven pricing concept, two additional parameters can be added to the model: the Oxford "Multidimensional Poverty Index" and the "Out-of-Pocket" or "Self Pay" health expenditure as reported by the World Bank. RESULTS: There is no hierarchy between the above three pricing methods. Because one method provides further insight into the other, however, it is recommended to start with CEA followed by WTP analysis. These types of analysis are closely linked in that the first provides the CE ratio for the compound investigated and the other sets the anticipated ceiling threshold of the payer's WTP (in a particular country). The ATP method provides a supplementary "equity" check and facilitates the process of equity-based differential pricing. CONCLUSIONS: A third method should be used in conjunction with the standard CEA and WTP analysis that measures the ATP with the human development index as yardstick to provide sustainable and equitable access to medicines. We recommend that ATP analysis becomes an additional practice in policy decision making and in defining international pricing strategies for pharmaceuticals.