Italian Health Authorities Instituted Refund for Ineffective Cancer Treatment

January 15
5:12 PM 2016

Italian Medicines Agency, the national authority that is responsible for drugs regulation in Italy, has formulated an innovation in drug spending. The agency established a payment method based on degree of patient's response to treatment. In case the medicine failed, the drugmaker must give a full refund.

According to Bloomberg, Italy is signing more such contracts as growing numbers of medications receive regulatory approval after mid-stage trials of fewer than 100 patients.Therefore, experimental treatment will have to ensure its degree of success and minimize the risk of failure.

Pierluigi Russo, head of pricing and reimbursement office at the agency explained that such payment system is aimed to ensure success level of treatment, because he said, "It is problematic to reimburse a high-cost treatment with evidence that is very preliminary."

The innovative payment system will assign a single drug cancer to multiple contracts that vary based on a higher risk of failure for certain type of cancer. Subsequently, Italy secured around 200 million euros ($220 million) in refunded payments for ineffective treatments in 2015. According to Russo, that is only about 1% of total pharmaceutical spending.

The Italian Medicines Agency or Agenzia Italiana del Farmaco (AIFA) worked under the Ministry of Health. The agency operates according to cost-effectiveness criteria, autonomous and transparency.

The system has been a model for both countries and drugmakers around the world. Roche Holding AG is currently examining whether the Italian pricing scheme would work in France. While Ameican's Express Scripts Holding Co., the largest prescription drug benefits manager, has been studying the Italian model to launch a roll out program in cancer treatment medicine.

United States need this kind of model to prevent pharmaceutical company controlling the price. Such as recent price-gouging case of Daraprim, and massive price hike of drugs from pharmaceutical companies in the beginning of this year,

Endless debate about universal healthcare shows American government has not found the right formula for healthcare system. Recent debate as reported by CNN, are between between presidential candidate Bernie Sanders and Hillary Clinton.

The debate which according to Wall Street Journal will pose a risk of winding both candidates on the wrong side of an issue they care about deeply. It is because the divide between them goes deeper than health policy, but also reflects the different style of leadership between Hillary and Sanders.

As U.S. is still looking for its right healthcare system, Italian has found a way to prevent drugmaker to control the price. The innovative drug pricing for medicine based on its performance require a full refund when a medicine fail to produce a good result.

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