Pricing and Reimbursement
Expert-defined terms from the Advanced Skill Certificate in Market Access for Pharmaceuticals course at HealthCareStudies (An LSPM brand). Free to read, free to share, paired with a globally recognised certification pathway.
**Budget Impact Analysis (BIA)** #
**Budget Impact Analysis (BIA)**
BIA is a type of health economic evaluation that examines the financial conseque… #
It assesses the impact of a new intervention on the overall budget of a healthcare system, taking into account the number of patients who are likely to use the intervention, the cost of the intervention, and any potential cost savings from the reduction in the use of other healthcare resources. BIA is an essential tool for decision-makers in determining the affordability and sustainability of new interventions.
**Co #
payment**
Co #
payment is the amount of money that a patient pays out of pocket for a healthcare service or medication, with the remainder covered by insurance or a third-party payer. Co-payments are designed to encourage patients to use healthcare services more judiciously and to share in the cost of their care. Co-payments can vary depending on the type of service or medication, and they can be fixed or percentage-based.
**Cost #
Effectiveness Analysis (CEA)**
CEA is a type of health economic evaluation that compares the costs and outcomes… #
It measures the cost per unit of health outcome, such as cost per quality-adjusted life year (QALY) gained, to determine which intervention provides the best value for money. CEA is an essential tool for decision-makers in determining which interventions to fund and how to allocate healthcare resources.
**Cost #
Minimization Analysis (CMA)**
CMA is a type of health economic evaluation that compares the costs of two or mo… #
It measures the difference in costs between the interventions to determine which one is less expensive. CMA is an essential tool for decision-makers in determining which intervention to adopt when the clinical outcomes are equivalent.
**Cost #
of-Illness (COI)**
COI is an economic analysis that estimates the total cost of a particular diseas… #
It includes direct costs, such as the cost of healthcare services and medications, and indirect costs, such as lost productivity due to illness or death. COI is an essential tool for decision-makers in determining the burden of a particular disease or condition and in prioritizing healthcare resources.
**Cost #
Plus Pricing**
Cost #
plus pricing is a pricing strategy that sets the price of a product or service based on the cost of production plus a fixed percentage or markup. It is a commonly used pricing strategy in the pharmaceutical industry, where the cost of research and development, manufacturing, and marketing is high. Cost-plus pricing ensures that the manufacturer recovers its costs and earns a profit.
**Deductible** #
**Deductible**
A deductible is the amount of money that a patient pays out of pocket for health… #
Deductibles are designed to encourage patients to use healthcare services more judiciously and to share in the cost of their care. Deductibles can vary depending on the type of insurance plan and can be annual or per-service.
**Direct costs** #
**Direct costs**
Direct costs are the costs associated with the direct provision of healthcare se… #
Direct costs are a significant component of healthcare expenditures and are often used in health economic evaluations to determine the cost-effectiveness of interventions.
**Health Technology Assessment (HTA)** #
**Health Technology Assessment (HTA)**
HTA is a systematic evaluation of the medical, economic, social, and ethical imp… #
It assesses the safety, efficacy, and cost-effectiveness of a technology or intervention, as well as its impact on the healthcare system and society. HTA is an essential tool for decision-makers in determining which technologies or interventions to adopt and how to allocate healthcare resources.
**Indirect costs** #
**Indirect costs**
Indirect costs are the costs associated with the indirect consequences of a dise… #
Indirect costs are often used in health economic evaluations to determine the total cost of a disease or condition to society.
**Market Access** #
**Market Access**
Market access refers to the process of making a healthcare technology or interve… #
It involves regulatory approval, pricing and reimbursement, and distribution. Market access is an essential component of the pharmaceutical industry, as it determines the ability of a product to reach patients and generate revenue.
**Out #
of-pocket costs**
Out #
of-pocket costs are the costs associated with healthcare services or medications that are not covered by insurance or a third-party payer. Out-of-pocket costs can include co-payments, deductibles, and the cost of services or medications that are not covered by insurance. Out-of-pocket costs can be a significant burden for patients, particularly those with chronic conditions or low incomes.
**Pricing and Reimbursement** #
**Pricing and Reimbursement**
Pricing and reimbursement refer to the process of setting the price of a healthc… #
Pricing and reimbursement are essential components of market access, as they determine the ability of a product to reach patients and generate revenue. Pricing and reimbursement are often based on health economic evaluations, such as cost-effectiveness analysis, that assess the value of a technology or intervention.
**Price Control** #
**Price Control**
Price control is a regulatory mechanism that sets the price of a healthcare tech… #
Price control is often used in situations where the price of a technology or intervention is deemed to be excessive or where there is a lack of competition. Price control can take the form of price caps, price floors, or price referencing.
**Price Discrimination** #
**Price Discrimination**
Price discrimination is a pricing strategy that sets different prices for the sa… #
Price discrimination is a common practice in the pharmaceutical industry, where prices can vary based on the income level of the country or the size of the purchase. Price discrimination is used to maximize revenue and to ensure that products are accessible to a wider range of patients.
**Price Elasticity** #
**Price Elasticity**
Price elasticity is a measure of the responsiveness of demand for a product or s… #
Price elasticity is an essential concept in pricing and reimbursement, as it determines the impact of price changes on revenue and market access. If demand is elastic, a price increase will lead to a decrease in revenue, while a price decrease will lead to an increase in revenue. If demand is inelastic, a price increase will not significantly impact revenue, while a price decrease will lead to a decrease in revenue.
**Price Referencing** #
**Price Referencing**
Price referencing is a pricing strategy that sets the price of a healthcare tech… #
Price referencing is often used in situations where there is a lack of competition or where prices are deemed to be excessive. Price referencing can take the form of external reference pricing, where the