The document titled “Calculation of a Justified Price for Tafamidis” is a report authored by Michel Romanens on behalf of the Foundation for Fairness in Health Care. It focuses on evaluating the pricing of the drug Tafamidis, which is used to treat transthyretin amyloid cardiomyopathy. The report critiques existing health economic models, particularly those that use QALY (Quality Adjusted Life Years), arguing that these models often overlook critical factors such as the quality of life of relatives and the broader social costs associated with the disease.
Key Points:
1. Pricing Critique : The report references a Swiss Drug Pricing Model (SDPM) that estimates a justified price for Tafamidis at CHF 2,987.75 per month, compared to the actual price of CHF 9,975.05 per month, indicating a potential overpricing of around 70%.
2. Alternative Model (FDPM) : The report introduces an alternative model called the Fairfond Drug Price Model (FDPM). This model incorporates additional factors such as social costs, the quality of life for patients and their relatives, and the broader impact of side effects. Using this model, the report suggests that a fair price for Tafamidis would be CHF 5,820 per month, which still indicates a significant overpricing by 42%.
3. Importance of Social Factors : The FDPM model emphasizes the importance of including social factors in drug pricing, which are often neglected in traditional models. This includes considering the indirect costs of the disease on family, work, and social activities.
4. Dynamic Pricing Model : The FDPM allows for adjustments based on different input values, suggesting that drug pricing should be a dynamic process that can adapt to changing assumptions and willingness to pay.
5. Conclusion : The report concludes that while the official pricing of Tafamidis is overestimated, the FDPM offers a more comprehensive approach to drug pricing by avoiding the traditional QALY method and including the social value of treatments.
The document calls for more transparency in drug pricing and suggests that the pharmaceutical industry should move away from the policy of window pricing, advocating for more realistic and socially inclusive cost assessments.