by Nick Hudson
LONDON, Nov 18 (APM) - Novartis's CEO has told a conference an outcomes-based approach to reimburse pharma will take hold, but the process will be gradual.
Joseph Jimenez predicted global healthcare spending will double over the next decade. "There will be a shift from a transactional approach to an outcomes approach," he told the FT Global Pharmaceutical and Biotechnology conference in London on Monday.
"There will be more and more steps towards an outcomes-based approach." But he emphasised there are very few payers who have a system in place to approve an outcomes-based model.
Under an outcomes approach, where innovators are reimbursed according to a drug's therapeutic value, he said Novartis would not want to be in a position where it went unpaid because patients did not comply with their therapies.
He said there would be "small steps" towards that model "based on measurability and trackability".
CEO of Shire Dr Flemming Ornskov suggested prices of his company's drugs for rare diseases were justifiable given their therapeutic value and high cost of research.
The cost of clinical trials for rare diseases is between 20 and 25 times higher than for common diseases, such as diabetes, he said. Acknowledging this is a controversial area, he stressed Shire's expensive therapies are targeted at patients who have little or no hope, many of whom are children.
The conference heard from a number of speakers that drug prices remain under pricing pressure. Dr Julie Gerberding, president of Merck Vaccines, told the conference with an array of technical innovations having come on stream, it would seem logical developing a drug would be cheaper than 15 years ago.
"It is not, it is more expensive, largely because of the regulatory environment. The bar is being raised higher and higher."
Dr John Reed, head of pharma research and early development at Hoffmann La-Roche said payers were also contributing to the cost of drug development. "The bar gets raised by payers."
Simon Stevens, chief executive of NHS England, said there was a balance between encouraging and deterring innovation.
"If products are free, there will be no new products, or if products are priced at such a point, countries couldn't afford them, but between those two extremes there is a zone for discussion."
nh/hlc
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