Financingand Reimbursement in Biomedical Product Development
Financingand Reimbursement in Biomedical Product Development
Throughoutthe evolution and progress of the economy of the world, there arevarious market access variables present in the United States andother international markets. As such the healthcare system is adocket that varies from one region to another about the aspect offinancing for the procurement and application of biomedical products.Despite having some differences, healthcare systems across the globeare also similar in one way or another. For instance, the Europeanmarket is composed of Bismarck healthcare system and theBeveridge-type as well (Kulesher & Forrestal, 2014). Apparently,the Bismarckian type is characterized by funding drawn from socialinsurance while the Beveridge system is where the source of funds isobtained mainly via taxation. Countries such as France and Germanyhave employed the Bismarck approach, and the Beveridge strategy isused mostly by the United Kingdom, Italy, and Spain. This paper looksat these two systems and analyses how they differ from each other aswell as the variation from the United States System of market accessto healthcare.
Approvalof Pharmaceuticals in the European Market
Oneof the world’s renowned market is Europe more so in countries suchas Germany, Italy, Spain, France, United Kingdom and Austria amongmany other nations. France mainly has gained much praise for itssystem of health care access, and it is thus a good representative ofthe Europe region. Concerning the approval of pharmaceuticals, the EUhas developed a legal framework that not only guarantees high-qualitystandards for medicinal products but also emphasizes on the safety ofmedicines, promotion of internal market and encouraging motivation,innovation, and competitiveness. As such, competent authorities haveto grant authorization before medicinal products can be placed on themarket. A significant legislation entity has been set up and taskedwith the continuous harmonization of the core requirements in theentire Europe. Currently, pharmaceuticals can either be approved bythe European Commission at the EU level, or at the national level bythe competent authorities established in the respective memberstates. Several special laws govern the authorization process. Afterapproval, the entity maintains constant monitoring of the product inthe market throughout its entire lifespan. The body that does thiswork is also known as the EU system of pharmacovigilance (Remuzat etal., 2013). Earlier in 1995, the EU established the EuropeanMedicines Agency which is a centralized authorization that ensurescollaboration and coordination between the competent nationalauthorities. The agency is comprised of more than 40 nationalregulatory authorities that facilitate constant informationdissemination about the assessment of medicinal products in thisunion. France is thus one of the countries that benefit from thisarrangement. Although the EU leadership has marketing experiences,the decentralized procedure can still be improved further [ CITATION Sea14 l 1033 ].
PharmaceuticalApproval in France
Marketingauthorization in France is done in the same way described above andthat is at the national or European levels. The regulatory body inthe country is also known as the National agency for the Safety ofMedicine and Health products (ANSM). In the entire Europe, theregulatory agency is known as the European Medicines Agency (EMA).The process of marketing, pricing and reimbursement in France has tobe taken through the Transparency committee. This committee is ascientific one under the French National authority tasked with theprovision of relevant scientific advice about the usefulness,interest and the proper utilization or application of drugs.Additionally, the Transparency Committee is also responsible for theassessment of the medical benefits, and the improvement of medicalbenefit for any particular new drug or medicine that has beenpresented by a given pharmaceutical company. Pricing, on the otherhand is set and established by the Economic Committee on Healthcareproducts (Kashyap & Gupta, 2013).
Furthermore,France is a country that also allows approval through the EMA. Assuch, drug companies are provided with the opportunity for approvalthrough the European Medicines Agency. In addition to the centralauthorization function, the EMA also takes part in the arbitrationprocesses during disagreements while at the same time offeringscientific opinions, recommendations and advice on the assessmentissues that were observed in the decentralized approach. Oneimportant characteristic of the centralized process is that it hasvarious restrictions on duplicates and it may sometimes require morethan a single authorization (Kashyap & Gupta, 2013). The primaryprinciple of decentralization of the pharmaceutical approval is justto ensure that work sharing among member states the receiving ofsimilar applications is maintained. However, pertinent issues thathave proven to be challenging include the measurement ofbioequivalence, the summary of product characteristics and theproblem of dealing with information updates that arise from processvariation [ CITATION Pau161 l 1033 ].
Bismarckversus Beveridge types of Healthcare Systems
Anin-depth outlook on the types of healthcare systems concerningfinances and social insurance indicates that there are substantivedifferences although the two primary systems can still be definedseparately. The Bismarck system, in particular, is founded on thecontributions obtained through social insurance contributions whereasthe Beveridge system is based on financing from taxes. Simply put,the optimal Bismarck system leads to a situation where there is noevident redistribution between the various economic groups. However,the Beveridge approach has an element of redistribution. The Bismarckmodel originated from Otto Von Bismarck, a German Chancellor whopaved the way for the introduction of a comprehensive socialinsurance system. His goal was to deal with the challenges of socialunrest and socialism as well as to encourage the dwindling ofeconomically voluntary social insurance brought by trade unions andthe church-managed labor organizations. As such, the Bismarck systemis characterized by the insurance of persons who are employees orgainfully employed finances are obtained via contribution thatcorresponds to the income and lastly, the contributions are paid byremuneration [ CITATION Jos111 l 1033 ].
TheBeveridge system, on the other hand, is based on William HenryBeveridge’s presentation of a comprehensive report to the BritishParliament concerning the construction of social policies. In hisreport, Beveridge systematically highlighted the concrete proposalthat suggested the need to have a comprehensive social insuranceprogram that includes integration of social insurance forms,development of an overall health service that takes care ofworkplace-related accidents, family assistance, preservation of highand stable employment patterns and also the protection againstunemployment. His proposal turned out to be the building block forthe British social insurance project after the war. A criticalanalysis of the Beveridge system shows that it includes the wholepopulation, it is financed mainly by the government’s budget and itpromotes uniform, lump-sum contributions [ CITATION Jos111 l 1033 ].
Acomparison of these two systems clearly illustrates that theobjective of the Bismarck system is to assure the maintenance of astandard of living. On the contrary, the Beveridge approach is aimedat securing a subsistence platform. It is not distinct as to whichcountries in the European Union apply which system since no singlecountry utilize either of the two approaches in their purestdefinitions. The deviations observed among the particular benefitsare excellent. As time has gone by, there are significant shiftstowards the Beveridge strategy or the Bismarck model from both sidesand thus attributing an explicit allocation to a nation is not alwayspractical (Kulesher & Forrestal, 2014).
Classifythe Financing of Healthcare Products as either Bismarck of BeveridgeSystem
Inthe European Union, some states for example Czech, Slovak, Austria,Belgium, Estonia, and Slovenia receive social insurance contributionsthat exceed 65% of the overall amount. On the other hand, Cyprus,Denmark, Ireland, United Kingdom and Norway seem to finance theirsocial systems through the taxes. This is just but one of theexamples that illustrate the methods used in the EU. A historicalexplanation can be connoted to this observation since the Northernnations have strong relations to the Beveridge system while those inthe middle are more inclined towards the Bismarck approach [ CITATION Sea14 l 1033 ][ CITATION Jos111 l 1033 ].However, the primary trend in Europe is that these two financingsystems seem to converge. Over time, the differences betweencountries using either system is becoming more and more negligible,and France is no exception. A good example is seen in the past ten orso years where tax financing drew in France, a country where it waspreviously little likewise to Italy and Portugal. Similarly, theimportance of government contributions and grants have significantlyincreased. Since the convergence of the Bismarck and Beveridge systemhas become apparent, there must be a reason as to why this happeningis taking place[ CITATION Jos111 l 1033 ].
HowFrance’s financing fits the Bismarckian System
Previously,the trends in France depicted that the Bismarckian model was still inuse. This observation is evident based on the implementation of theLFSS (the Social Security Funding Law) specifically to control thesocial and health budget. The policy’s primary function is todetermine the conditions necessary for the maintenance of financialequilibrium of this social security system. Another function is toassess and determine the budget goals though revenue forecasting.This approach is typically Bismarckian especially due to theimportant efforts aimed at the consolidation of social accounts.However, the pressure to deal with the ever rising account deficitsin the healthcare sector have increased due to the dwindlingeconomies. The new turn of events have prompted the adoption of othermeasures that affect the drug market. Such measures include reductionof prices for generic products, encouraging generic markets and thecutting of reimbursement rates (Remuzat et al., 2013).
Thesepressures have also made the country to use a system that is inbetween Beveridge and Bismarckian. The main reason behind this changeis based on the goals of the two systems. Both the Bismarck andBeveridge strategies have two goals which include dealing with thechallenge of poverty and lack of equality when it comes to wages.This is the first goal that attempts to foster social cohesion and toimprove the efficacy of the economy at large. Secondly, the twostrategies aim to improve personal security while at the same timeeliminating potentially unrecognized social risks. This problem wasdealt with by employing the unemployment, health, and old-ageinsurance policies. Since the introduction of the structures,economic and social conditions changed in France, in addition todemographic changes [ CITATION Pau161 l 1033 ].For example, life expectancy increased translating to longer periodsof unemployment and dependency. Fertility rate changes also affectedthe finances allocated to social insurance pressing the socialinsurance contributors to support the ever increasing number ofnon-contributing persons. Now this is an issue that the Bismarcksystem was not prepared to tackle. The Beveridge system is alsoexperiencing the demographic burden since healthcare is impacted bydemographic alterations causing pressure on tax revenuesqualitatively and quantitatively as older and sickness proneindividuals’ increase and medical services more expensive. It istherefore not easy to finance the health care docket withoutcompeting with other policy areas. Therefore, a genuine systemicchange cannot be the solution. As long as the presence of variedliving standards exist, a full convergence or the application of asingle system is not realistic [ CITATION Sea14 l 1033 ].
ComparativeAnalysis for Reimbursement
Healthinsurance companies are tasked with the responsibility of paying forthe cost of particular prescription medications. The covered drugsare usually based on the approved list of the company while all theothers can be bought out of pocket. In the United States, all healthplans cover prescription drugs. Essentially, coverage is done by thecompanies which remit some amount to the pharmaceutical company in away that the price becomes affordable to the individual who hassubscribed. In France, the system is a bit different since costs arecarried by the patient and reimbursed later on through a smart cardwith the patient’s and company’s information. Additionally,patients are free to choose the facility to receive healthcare(Kulesher & Forrestal, 2014).
Thehealth care market in the EU and the United States experiencesseveral imperfections which has motivated the administrations of bothregions to intervene. The lack of government involvement would havecaused lack of access to health care services. The steps taken tofacilitate coverage include the promotion of health insurance andgrouping of the customers to create an equilibrium between risk andthe cost [ CITATION Jos111 l 1033 ].The United States system is more oriented towards private insurers.Despite a few similarities such as worker and employer payment ofmedical care through premiums on wages, there are several differencesconcerning the standard facility practices, efficiency, coding andthe coverage of preventive and curative health services. In France,the hospitals are more of public sectors, and the doctors aresalaried. TheUnited States on the other hand benefits from the relatively low paidinterns and residents who are present in the regional medicalcenters. Also, the French system is renowned for its expensivenessacross the world. However, the high cost is still outdone by theUnited States spending. Apparently, France uses $2,047 per capitawhile the U.S. uses $4,095. This enormous difference is attributed tothe relatively higher earnings of healthcare professionals in the US.The American physicians tend to earn five or more times the regularwage while French doctors earn a mere twice the average remunerationof the usual. As such, the French physicians are more fee-for-serviceoriented while the Americans focus more on a high level ofprescriptive freedom [ CITATION Pau161 l 1033 ].
Secondly,the comparatively lower income obtained by French doctors is affectedby two factors namely practice reliability and a tort adverse legalsystem. These two aspects tend to enable French physicians to jointhe healthcare market with little or no debt to pay as well as thevery low malpractice premiums. Moreover, different strengths inefficacy can be observed in the American and French systems. The U.S,for instance, has had the development of care providers leading toincreased widespread productivity. On the contrary, France has takena longer time to implement such measures. French practitionersthought of this strategy as a threat to prescriptive freedoms.Additionally, the need for computerization for coding, informationgathering analysis, and processing has lagged behind in Francecompared to the United States [ CITATION Pau161 l 1033 ].
Lastbut not least, the French medical confidentiality law has shown to beimportant in progress towards improvements since information codingand sharing between providers and insurers is constrained. The Frenchhealth consumers are typically attached to direct visits tospecialists, a practice that has only yielded limited success.American medical officers put an end to this practice rapidly henceavoiding the boggles that disturb the French [ CITATION Sea14 l 1033 ].
Americanand European systems seem to have similar principles that encouragethe exchange of policy strategies. Notably, French insurers andgovernment representatives must develop the plan to have the mostrecent technical methods present in the American system. It isevident that new discoveries in the medical science and pharmacologyhave ensured critical improvements in healthcare delivery not only inthe United States but also in Europe and the rest of the world. Theseenhancements can be quickly underused when best frameworks forcontaining the costs, socio-dynamic issues and the expensive medicalcare are not determined and streamlined as soon as possible. Suchchallenges will after that affect the cost containment, deliveryefficiency and equitable access to services. The concurrent masteryof the fundamental objectives is paramount to the health andsustenance of well-being.
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