Valuing Medicines in Different Health Systems

IN A NUTSHELL
Authors' Note
…A more pressing problem faces health systems in all countries, rich or poor: how to value a new medicine and decide whether to pay for it or not. That process, known as health technology assessment, requires access to the evidence of the benefits and harms associated with the medicine, compared with the alternative options that may already be used, and information about the costs incurred when using the medicine and the savings that may be achieved with its use. The costs, in particular, can be viewed from different perspectives. Considering only the costs borne by the health systems is justifiable, but ignores the costs that may be incurred by patients, their families and caregivers…

By Andy Gray*

and Christiane Fischer**

 

*Andy Gray, BPharm MSc (Pharm) PhD FPS FFIP

Division of Pharmacology, Discipline of Pharmaceutical Sciences, University of KwaZulu-Natal, Durban, South Africa

WHO Collaborating Centre on Pharmaceutical Policy and Evidence Based Practice

**Dr. med. Christiane Fischer is the first chairwoman of the People’s Health Movement Germany https://phmovement.de and teaches public health. She is the medical advisor to the MSK e.V. https://www.multiple-sklerose-e-v.de/

Valuing Medicines in Different Health Systems

 

That the health systems (governments and health insurers) in high-income countries can afford to pay more for new medicines that may bring important health benefits than the health systems in low- and middle-income countries seems obvious. That does mean, however, inequitable access to such medicines and other health technologies (such as diagnostic tests). It also obscures a very important point – that every health system, whether rich or poor, is facing demands for new medicines that are so expensive or so complicated to use that they exceed the capacity of the health system to pay for them.

Many new medicines, particularly for conditions such as cancer, require sophisticated diagnostic tests to identify the patients most likely to respond positively. A genetic test may be needed, for example, to detect a mutation that allows for a particular treatment to work, or which predicts a better outcome. Those tests may not be easily accessed in low- and middle-income countries.

Many new medicines also contain large molecules, such as proteins or antibodies. These biological medicines are more difficult to copy once the period of patent protection ends, making the entry of more affordable biosimilar versions less certain. The difference in prices between the original biological medicine and the biosimilar version may also be less than is seen with generic versions of small molecule medicines compared to their originator versions.

A more pressing problem faces health systems in all countries, rich or poor: how to value a new medicine and decide whether to pay for it or not. That process, known as health technology assessment, requires access to the evidence of the benefits and harms associated with the medicine, compared with the alternative options that may already be used, and information about the costs incurred when using the medicine and the savings that may be achieved with its use. The costs, in particular, can be viewed from different perspectives. Considering only the costs borne by the health systems is justifiable, but ignores the costs that may be incurred by patients, their families and caregivers.

While much progress has been made in making the evidence of benefits and harms as transparent as possible, far less is known about how the prices demanded by the pharmaceutical industry, for both original and follow-on products (biosimilars and generics), are determined. By registering clinical trials before they are conducted, the results that are finally announced and published in peer-reviewed journals can be compared with the planned protocols. Increasingly, medical journals encourage researchers to make the data that underpins their articles available to others. By contrast, the costs of doing those clinical trials, as well as the basic and pre-clinical research, and of bringing a commercial product to market are not transparent. One is left with the impression that the prices demanded are based on what the market will bear, rather than the actual costs of research and development and a reasonable return on investment. Governments and their health systems are also under pressure to agree to confidential pricing terms for new and expensive medicines, in order to make them available.

An example – multiple sclerosis

Valuing a medicine depends on the confidence with which the evidence of benefits and harms can be described. That is not always a simple task. Multiple sclerosis (MS) provides a useful example of the challenges facing health systems. MS is an inflammatory disease of the central nervous system (brain and spinal cord) which causes a loss of the fatty protective layer around nerves (the myelin sheath), resulting in damage and disability. Most patients are diagnosed with MS as young adults, and 2-3 times more female than male patients are affected. In most patients, MS presents as a relapsing–remitting condition.i  In other words, periods of acute symptoms (relapses) are separated by periods of fewer symptoms (remissions). Patients may enter remission without specific treatment, but may also suffer a relapse while on treatment. The extent to which MS is diagnosed varies dramatically across the globe. For example, while 280 000 MS patients have been identified in Germany (representing about 300 per 100 000 population), only about 5000 MS patients have been diagnosed in South Africa (or 8 per 100 000 population).ii While access to sophisticated diagnostic tests (such as magnetic resonance imaging) can explain some of the difference, other factors may well be at play. The exact causes of MS are not perfectly understood.iii MS appears to be associated with a range of environmental (lifestyle), genetic and possible infectious triggers. Until that process is clearly understood, targeting the treatment is challenging.

While the treatment of acute episodes is better known, and relies on corticosteroid medicines which are off-patent, affordable and widely accessible, far less is known about the best options for long term treatment. The first treatments for MS were approved by medicines regulatory authorities in the early 1970s, but newer options have been approved as late as 2022. The comparative advantages of newer over older treatments remains unclear, despite these years of research and development.

The newer of these treatments, which are monoclonal antibodies, are available in all high-income countries, but in no low-income countries. The most important barrier to access remains the price demanded for these newer, patent-protected biological medicines. In addition, the adverse effects of some of the newer medicines, such as an increased risk of infections, may be more important in lower income countries where infectious disease burdens are still high. For example, an increased risk of tuberculosis would be a serious consideration in countries with high tuberculosis incidence, especially where drug-resistant forms are prevalent.

One way in which countries can start their discussions about whether to purchase or pay for medicines is to consult the World Health Organization (WHO) Model List of Essential Medicines.iv

These are medicines which have been considered by an expert committee at WHO and which should be available in all health systems. In 2023, the WHO committee recommended adding three medicines for MS to the Model List – cladribine, glatiramer acetate and rituximab. However, it refused to add a newer biological medicine, ocrelizumab.v It argued that there was a lack of evidence of the superiority of ocrelizumab over rituximab, which was already widely used and more affordable in several countries. All three MS treatments appear on the complementary portion of the Model List, as they require either specialised diagnostic or monitoring facilities, specialist medical care or specialist training to be used safely and effectively.

An example – cystic fibrosis

In 2025, the WHO expert committee was presented with proposals to include three new and very expensive medicines for the management of cystic fibrosis – elexacaftor, tezacaftor and ivacaftor.vi Cystic fibrosis is a rare genetic disease which affects about 190 000 people globally. However, only 60% are diagnosed.vii More than 80% of those who are undiagnosed live in low- and middle-income countries. Currently, the WHO Model List only includes pancreatic enzymes, which are a supportive treatment but do not address the cause of cystic fibrosis. The new immune modulator therapies have the potential to dramatically alter the course of the disease. If they are started early, patients with cystic fibrosis may live as long as the general population without the disease. While all the immune modulators are now under patent, the first generic versions may be available after 2027. More affordable access is therefore a possibility. It is not yet known how the WHO expert committee, which met in May 2025, has decided in respect of this application. A positive decision will place pressure on health systems to provide access to these expensive medicines immediately. Many will struggle to do so, until more affordable alternatives become available. In addition, treatment is likely to be needed lifelong.

A way forward

These two examples have shown how challenging it is for health systems to decide how much they are willing to spend on new and expensive medicines, especially where there is uncertainty about their benefits and harms. Two ways in which the decisions can be made easier would be:

  1. to share the assessments of benefits, harms and costs and the ways in which health technology assessment bodies have modelled these considerations in order to get to a decision; and
  2. to improve the transparency of pricing, and particularly the costs incurred in research and development (including the contributions made by governments and academic scientists), so that better judgments can be made about what a reasonable price would be, without hiding behind non-disclosure agreements and confidential agreements.

Both of these interventions can assist high-income countries to make better decisions, but they can also, if shared openly, assist low- and middle-income countries to build their own models.

Transparency ensures that those who supply new medicines do not have an unfair advantage over those who buy them).

 

References

i MS international federation https://www.msif.org/about-ms/ (access: 16.07.2025)

ii MS international federation, Atlas global epidemiology, https://atlasofms.org/map/global/epidemiology/number-of-people-with-ms (access: 16.07.2025)

iii MS international federation, Resources, https://www.msif.org/resources/ (access: 16.07.2025)

iv World Health Organisation, Model List of Essential Medicines, https://list.essentialmeds.org/(access: 16.07.2025)

v World HealthOrganisation, Model List of Essential Medicines, recommendations, https://list.essentialmeds.org/recommendations/1349 (access: 16.07.2025)

vi World HealthOrganisation, Model List of Essential, selction, https://www.who.int/groups/expert-committee- on-selection-and-use-of-essential-medicines/25th-expert-committee-on-selection-and-use-of-essential-medicines/a.11-elexacaftor-tezacaftor-ivacaftor-cystic-fibrosis (access: 16.07.2025)

vii Guo J, King I, Hill A. International disparities in diagnosis and treatment access for cystic fibrosis. Pediatric Pulmonology. 2024/06/01;59(6) https://doi.org/10.1002/ppul.26954 (access: 16.07.2025)