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Over the past decade there has been a growing interest in the application of 'value-based pricing' to pharmaceutical and medical technologies. More recently the Office of Fair Trading (OFT) in the UK has suggested abandoning the current Pharmaceutical Price Regulatory Scheme (PPRS), which serves as a profit control pricing system, and adopting a value-based pricing system which could deliver better value for money from the NHS budget (1). Historically value-based pricing for medicines has been mostly applied in smaller markets such as Australia, Canada, and Sweden. However, because of the size of the UK market and its importance as an international pricing reference, interest has intensified as pharmaceutical and medical technology firms seek to understand the relative value of their products in a value based pricing system.
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Value-based pricing is broadly speaking an approach used to set prices based on the relative benefits of a product in comparison with similar products. The most common methodologies used for value based pricing are cost-effectiveness analysis and budget impact, however in reality there are no universal standards for establishing value based prices.
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