title: A pilot study to assess feasibility of value based pricing in Cyprus through pharmacoeconomic modelling and assessment of its operational framework: sorafenib for second line renal cell cancer.
abstract: BACKGROUND
  The continuing increase of pharmaceutical expenditure calls for new approaches to pricing and reimbursement of pharmaceuticals. Value based pricing of pharmaceuticals is emerging as a useful tool and possess theoretical attributes to help health system cope with rising pharmaceutical expenditure.
  
  
  OBJECTIVE
  To assess the feasibility of introducing a value-based pricing scheme of pharmaceuticals in Cyprus and explore the integrative framework.
  
  
  METHODS
  A probabilistic Markov chain Monte Carlo model was created to simulate progression of advanced renal cell cancer for comparison of sorafenib to standard best supportive care. Literature review was performed and efficacy data were transferred from a published landmark trial, while official pricelists and clinical guidelines from Cyprus Ministry of Health were utilised for cost calculation. Based on proposed willingness to pay threshold the maximum price of sorafenib for the indication of second line renal cell cancer was assessed.
  
  
  RESULTS
  Sorafenib value based price was found to be significantly lower compared to its current reference price.
  
  
  CONCLUSIONS
  Feasibility of Value Based Pricing is documented and pharmacoeconomic modelling can lead to robust results. Integration of value and affordability in the price are its main advantages which have to be weighed against lack of documentation for several theoretical parameters that influence outcome. Smaller countries such as Cyprus may experience adversities in establishing and sustaining essential structures for this scheme.
authors.affiliation: HealthCare Management Program, Open University of Cyprus, 33 Giannou Kranidioti Avenue 2220, P.O BOX 12794, 2252 Nicosia, Cyprus.
authors.forename: Panagiotis
authors.initials: P
authors.lastname: Petrou
authors.affiliation: HealthCare Management Program, Open University of Cyprus, 33 Giannou Kranidioti Avenue 2220, P.O BOX 12794, 2252 Nicosia, Cyprus.
authors.forename: Michael A
authors.initials: MA
authors.lastname: Talias
keywords: JEL 110; JEL 130; JEL 300; Markov Model; Pharmacoeconomic modelling; Sorafenib; Value based pricing