Issue link: http://clhia.uberflip.com/i/406567
12 Beginning in January 2014, the U.K. is also moving to more of a value-based method of pricing. In their new model, the existing Pharmaceutical Pricing Regulation Scheme (PPRS) will be replaced with value-based pricing for branded medicines sold to the National Health Service (NHS) 8 . The PMPRB currently uses a form of value-based pricing in that breakthrough prescription drugs have higher prices accorded to them than "me-too" type drugs. However, we believe that there is scope for Canada to be more aggressive in this regard. Value-based pricing provides an incentive for innovation in the marketplace as medications that offer no, or only limited, benefits would not receive premium pricing. In addition, a more aggressive use of value-based pricing would align with the industry's views and, as stated above, would move the PMPRB to a competitive, market-based approach to setting prices. THEREFORE, THE CLHIA RECOMMENDS THAT: • THE PMPRB EXAMINE WAYS TO BE MORE AGGRESSIVE IN USING VALUE-BASED PRICING APPROACHES TO SETTING PRICES. b.1.3 Regular Review and Adjustment of Therapeutic Class Prices The PMPRB rewards true pharmaceutical innovation with better pricing than "me-too" type drugs. 9 However, all new drugs, even those that have no incremental therapeutic value, can price up to the top of their respective Therapeutic Class. Of the 109 New Drug Products 8 The U.K. will begin with a basic price threshold, expressed as cost per QALY or other outcome metric, and then include three factors: (1) BOI in terms of unmet treatment need or severity of illness; (2) extent of medication innovation involved; and (3) wider societal benefits. 9 It does this by applying the following pricing framework which is based on a therapeutic assessment of each new drug as follows: 1) Breakthrough – Median of International Price Comparison (MIPC) 2) Substantial Improvement – Higher of top of Therapeutic Class Comparison (TCC) and the MIPC 3) Moderate Improvement – Higher of mid-point between top of TCC test and the MIP, and top of TCC 4) Slight/No Improvement – Top of TCC.