22 March 2016 - Deciding on public funding for pharmaceuticals on the basis of value for money is now widespread. We suggest that evidence-based assessment of value has restricted the availability of medicines in Australia in a way that reflects the relative bargaining power of government and the pharmaceutical industry.

Harris et al. propose a simple informal game-theoretic model of bargaining between the funding agency and industry and test its predictions using a logistic multiple regression model of past funding decisions made by the Pharmaceutical Benefits Advisory Committee in Australia.

Evidence from Australia suggests that the determinants of public funding and pricing decisions for medicines reflect the relative bargaining power of government and drug companies. Value for money depends on the quality of evidence, timing, patient need, perceived benefit and opportunity cost; these factors reflect the potential gains from striking a bargain and the risk of loss from not doing so.

For more details, go to: http://link.springer.com/article/10.1007/s40273-015-0354-z?wt_mc=alerts.TOCjournals