Background: The Dental and Pharmaceutical Benefits Agency (TLV) decides what prescription drugs should be included in the Swedish high-cost protection. For drugs to be included, TLV requires that they achieve a reasonable balance between health effects and costs. This requirement is operationalized as Cost-Effectiveness Thresholds(CETs) that vary with disease severity and represent the maximum tolerated cost per unit of health. Objectives: To investigate how close to the CETs pharmaceutical producers set their prices, and if they act on opportunities to raise them when permitted by higher disease severity. Methods: I reviewed 335 of TLV’s publicly available reimbursement decisions between 2017 and 2024 and extracted Incremental Cost-Effectiveness Ratios (ICERs) where available (n = 91) along with TLV’s severity classifications. These were analyzed descriptively and with an Ordinary Least Squares (OLS) model explaining ICERs with severity classifications. In extended OLS models, I added a dummy variable indicating whether a drug had previously been approved for subsidy, and another to control for systematic differences in ICERs between drugs approved for restricted and general subsidy. Results: Pharmaceutical producers do not price to the CETs, but ICERs increase significantly with severity. Previous subsidy approval was negatively associated with ICERs whereas being approved for restricted subsidy was associated with a higher ICER, but both dummies were statistically insignificant. Additionally, a majority of ICERs were higher than previous estimates of the healthcare system’s marginal cost for producing a unit of health. Key Implications: Reimbursement authorities like TLV should expect pharmaceutical producers to act on opportunities to raise prices when weighing additional benefits and cost-savings into their reimbursement decisions. However, researchers should be careful to assume that producers will price to CETs when developing theoretical frameworks. Furthermore, TLV should consider revising their CETs to reflect the opportunity cost of healthcare to avoid incurring net health losses to society
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:liu-205072 |
| Date | January 2024 |
| Creators | Klockhoff, Anton |
| Publisher | Linköpings universitet, Nationalekonomi, Linköpings universitet, Filosofiska fakulteten |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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