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Policy Brief Issue 186 : Value Distribution in New Branded Medicines: How Much Benefits Patients Versus Manufacturers?

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  • Thailand has successfully implemented economic evaluation to inform the inclusion of new, branded medicines within its National List of Essential Medicines (NLEM). This method can be used to assess the health value that new medicines will generate for patients after accounting for the health lost due to other healthcare interventions not being funded in order to fund the new medicine.
  • New methods for economic evaluation developed by Woods et al. (2021) account for the lifetime value of new medicines, both when the branded version is sold and once generics are available, and enable researchers to determine how much of that lifetime value directly benefits patients in the healthcare system and how much of it goes to manufacturers.
  • Thailand applied these new methods for the first time to a low- and middle-income country (LMIC) healthcare system, and was the first country outside the country of origin to apply these methods. The aim was to evaluate how the value of branded medicines funded under the NLEM is distributed between the patients in the Thai healthcare system and originator manufacturers.
  • The findings show that in Thailand, delayed adoption of branded medicines and the existence of generic versions result in over 90% of the lifetime value of cost-effective medicines included in the NLEM accruing to the healthcare system with less than 10% going to manufacturers. However, for cost-ineffective medicines included in the NLEM under other considerations, manufacturers accrue more than 100% of the lifetime value in part due to the lack of availability of generic versions of these products to date.

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