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IMS Institute Identifies Innovative Payment Models for Pharmaceuticals at Forbes Healthcare Summit
[December 18, 2014]

IMS Institute Identifies Innovative Payment Models for Pharmaceuticals at Forbes Healthcare Summit


New approaches for determining how much drugs should cost, and for setting the price for innovative treatments, were highlighted in a keynote presentation by Murray Aitken, IMS Health senior vice president and executive director of the IMS Institute for Healthcare Informatics (News - Alert), at the Forbes Healthcare Summit held earlier this month in New York City. In his remarks, Aitken focused on three ways that big data can drive a more constructive understanding of the role and value of medicines in total patient treatment, costs and outcomes:

  • Payment by Use, in which different prices are paid for drugs depending on the specific indication. This is particularly relevant for new cancer drugs and biologics for which there can be a four- to five- fold difference in the economic value of a single drug, depending on what it is used to treat. With big data, providers can now capture actual use by indication, and multiple reimbursement levels can be set and applied accordingly.
  • Outcomes-based Payment, where payment levels for particular drugs are based on the total savings resulting from their use. This approach is especially important for personalized medicines, where drugs not only bring the benefit to the patient but also yield savings to the health system through avoiding use of drugs by non-responders. Big data analysis can be leveraged by payers and providers to measure efficacy, and serve as the basis for negotiating drug prices with manufacturers.
  • Conditional Approval/Conditional Pricing, in which conditional regulatory approval is accompanied by conditional pricing for medicines prior to full information of a drug's value being determined - an approach that can help with the pricing of urgently needed new medicines. Big data can enable the monitoring and assessment of drugs launched with conditional regulatory approval, measuring and tracking de-identified patient use, outcomes and treatment costs in real time.

Each of these approaches draws on the growing availability of data, and supports greater transparencyby giving payers, providers, regulators and manufacturers the ability to access and leverage the same data stream.



Said Aitken, "At a time of heightened interest in the cost of innovative medicine treatments, the application of big data provides us with an opportunity to rethink conventional approaches to pricing. While there currently are barriers to implementation, opening up a discussion of these new ideas is important - particularly at a time when remarkable new medicines are becoming available and big data is coming on stream."

The Forbes Healthcare Summit is one of the most influential healthcare events held each year. Attendees include doctors, medical professionals, academics and executives from hospitals, pharmaceutical firms and insurance businesses. The 2014 Summit showcased several examples of how the production and analysis of new kinds of data are changing patient care - leading to new treatments and cost savings.


Aitken's remarks from the 2014 Forbes Healthcare Summit are available by clicking here.

About IMS Health

IMS Health (NYSE:IMS) is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. By applying sophisticated analytics and proprietary application suites hosted on the IMS One intelligent cloud, the company connects more than 10 petabytes of complex healthcare data on diseases, treatments, costs and outcomes to help its clients run their operations more efficiently. Drawing on information from 100,000 suppliers, and on insights from more than 45 billion healthcare transactions processed annually, IMS Health's approximately 10,000 employees drive results for healthcare clients globally. Customers include pharmaceutical, consumer health and medical device manufacturers and distributors, providers, payers, government agencies, policymakers, researchers and the financial community.

As a global leader in protecting individual patient privacy, IMS Health uses anonymous healthcare data to deliver critical, real-world disease and treatment insights. These insights help biotech and pharmaceutical companies, medical researchers, government agencies, payers and other healthcare stakeholders to identify unmet treatment needs and understand the effectiveness and value of pharmaceutical products in improving overall health outcomes. Additional information is available at www.imshealth.com.

About the IMS Institute for Healthcare Informatics

The IMS Institute for Healthcare Informatics provides key policy setters and decision makers in the global health sector with unique and transformational insights into healthcare dynamics derived from granular analysis of information. It is a research-driven entity with a worldwide reach that collaborates with external healthcare experts from across academia and the public and private sectors to objectively apply IMS Health's proprietary global information and analytical assets. More information about the IMS Institute can be found at: http://www.theimsinstitute.org.


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