News Release
Alternative Financing Schemes May Be Needed to Pay for Expensive New Medications
Mar 11, 2015
This paper offers a research-grounded perspective on innovative financing mechanisms to facilitate access to expensive yet highly effective breakthrough medical treatments. The authors outline the scope of the problem; describe several policy and market options, including bond financing and linking repayment to real-world value generation; and describe real-world applications.
Format | File Size | Notes |
---|---|---|
PDF file | 0.1 MB | Use Adobe Acrobat Reader version 10 or higher for the best experience. |
Recent market entries of breakthrough pharmaceutical products have reignited the debate about the affordability of high-priced drugs for public and private payers worldwide. Payers had voiced concerns about such drugs before but, faced with a possible outcry of patients and advocates, grudgingly accepted them. But as more high-cost drugs reach the market and treat more-prevalent conditions, medical professionals and government ministers have complained that this "blank check" might not be sustainable. Concerns about short-term budget impact have led countries to restrict access to expensive drugs, even when they met cost-effectiveness criteria and could lead to long-term savings. This paper offers a research-grounded perspective on innovative financing mechanisms to facilitate access to expensive yet highly effective breakthrough medical treatments. The authors outline the scope of the problem; describe several policy and market options, including bond financing and linking repayment to real-world value generation; and describe real-world applications.
The research underlying this paper was conducted in RAND Health Advisory Services, the consulting practice of RAND Health.
This commentary is part of the RAND Corporation Expert insight series. RAND Expert Insights present perspectives on timely policy issues. All RAND Expert Insights undergo peer review to ensure high standards for quality and objectivity.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.