Gladwell, D., Bullement, A., Cowell, W. et al. (2 more authors) (2020) "Stick or Twist?” : negotiating price and data in an era of conditional approval. Value in Health, 23 (2). pp. 191-199. ISSN 1098-3015
Abstract
Background: Changes in the regulatory context enable faster approval of transformative medicines. They also lead to HTA agencies having to make decisions with less evidence. In response HTA agencies have also initiated forms of conditional approval. When the evidence base for a new oncology treatment leaves substantial uncertainty, the new Cancer Drugs Fund allows the National Institute for Heath and Care Excellence to give the manufacturer two options: (i) offer a low price based on conservative assumptions and obtain immediate approval (“stick”); or (ii) wait until the evidence base has further matured before finalising a potentially higher agreed price (“twist”).
Objectives: The purpose of this article is to explain how, using the theoretical framework of the expected value of sample information, simulation methods can help inform manufacturer’s decisions when faced with the option to “stick” or “twist”.
Methods: We first summarise a general model to help frame the manufacturer’s negotiating strategy. We then use a motivating case study, based on a hypothetical immunotherapy, to illustrate how manufacturers can use simulation methods to robustly characterise the uncertainty inherent to further data collection and incorporate this uncertainty within their decision making.
Results: Our approach allows us to estimate the commercial value of generating additional data (the difference between “stick” and “twist’s” estimated net present value). We test the sensitivity of the results to different assumptions via scenario analyses.
Conclusions: This article shows that simulation methods can be used to help pharmaceutical managers make informed strategic decisions in contexts of uncertainty.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019, ISPOR–The Professional Society for Health Economics and Outcomes Research. This is an author produced version of a paper subsequently published in Value in Health. Uploaded in accordance with the publisher's self-archiving policy. Article available under the terms of the CC-BY-NC-ND licence (https://creativecommons.org/licenses/by-nc-nd/4.0/). |
Keywords: | uncertainty; value of information; conditional approval; health technology assessment |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Medicine, Dentistry and Health (Sheffield) > School of Health and Related Research (Sheffield) > ScHARR - Sheffield Centre for Health and Related Research |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 23 Sep 2019 12:01 |
Last Modified: | 16 Dec 2021 09:57 |
Status: | Published |
Publisher: | Elsevier |
Refereed: | Yes |
Identification Number: | 10.1016/j.jval.2019.09.001 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:151195 |
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Licence: CC-BY-NC-ND 4.0