How Can Pricing and Reimbursement Policies Improve Affordable Access to Medicines? Lessons Learned from European Countries.

This article discusses pharmaceutical pricing and reimbursement policies in European countries with regard to their ability to ensure affordable access to medicines. A frequently applied pricing policy is external price referencing. While it provides some benchmark for policy-makers and has been shown to be able to generate savings, it may also contribute to delay in product launch in countries where medicine prices are low. Value-based pricing has been proposed as a policy that promotes access while rewarding useful innovation; however, implementing it has proven quite challenging. For high-priced medicines, managed-entry agreements are increasingly used. These agreements allow policy-makers to manage uncertainty and obtain lower prices. They can also facilitate earlier market access in case of limited evidence about added therapeutic value of the medicine. However, these agreements raise transparency concerns due to the confidentiality clause. Tendering as used in the hospital and offpatent outpatient sectors has been proven to reduce medicine prices but it requires a robust framework and appropriate design with clear strategic goals in order to prevent shortages. These pricing and reimbursement policies are supplemented by the widespread use of Health Technology Assessment to inform decision-making, and by strategies to improve the uptake of generics, and also biosimilars. While European countries have been implementing a set of policy options, there is a lack of thorough impact assessments of several pricing and reimbursement policies on affordable access. Increased cooperation between authorities, experience sharing and improving transparency on price information, including the disclosure of confidential discounts, are opportunities to address current challenges.

Cost-effectiveness thresholds: pros and cons.

Cost-effectiveness analysis is used to compare the costs and outcomes of alternative policy options. Each resulting cost-effectiveness ratio represents the magnitude of additional health gained per additional unit of resources spent. Cost-effectiveness thresholds allow cost-effectiveness ratios that represent good or very good value for money to be identified. In 2001, the World Health Organization's Commission on Macroeconomics in Health suggested cost-effectiveness thresholds based on multiples of a country's per-capita gross domestic product (GDP). In some contexts, in choosing which health interventions to fund and which not to fund, these thresholds have been used as decision rules. However, experience with the use of such GDP-based thresholds in decision-making processes at country level shows them to lack country specificity and this - in addition to uncertainty in the modelled cost-effectiveness ratios - can lead to the wrong decision on how to spend health-care resources. Cost-effectiveness information should be used alongside other considerations - e.g. budget impact and feasibility considerations - in a transparent decision-making process, rather than in isolation based on a single threshold value. Although cost-effectiveness ratios are undoubtedly informative in assessing value for money, countries should be encouraged to develop a context-specific process for decision-making that is supported by legislation, has stakeholder buy-in, for example the involvement of civil society organizations and patient groups, and is transparent, consistent and fair.

Les analyses de rentabilité permettent de comparer les coûts et les résultats de différentes options politiques. Chaque ratio coût-efficacité qui en découle indique l'importance des avantages supplémentaires pour la santé par unité supplémentaire de ressources dépensée. Les seuils de rentabilité permettent de déterminer les ratios coût-efficacité qui représentent une bonne ou une très bonne rentabilité. En 2001, la Commission macroéconomie et santé de l'Organisation mondiale de la Santé a suggéré des seuils de rentabilité définis d'après des multiples du produit intérieur brut (PIB) par habitant d'un pays. Dans certains pays, ces seuils ont servi de règles pour décider quelles interventions financer ou non. Cependant, l'expérience d'utilisation de ces seuils fondés sur le PIB dans les processus décisionnels des pays montre qu'ils ne tiennent pas compte des spécificités des pays; cela, ajouté à une certaine incertitude concernant la modélisation des ratios coût-efficacité, peut entraîner la prise de mauvaises décisions quant à l'utilisation des ressources sanitaires. Les informations sur la rentabilité des interventions devraient être prises en compte parallèlement à d'autres considérations, comme l'impact budgétaire et la faisabilité, dans le cadre d'un processus décisionnel transparent et non de façon isolée sur la base d'une seule valeur seuil. Bien que le caractère informatif des ratios coût-efficacité soit indéniable lorsqu'il s'agit d'évaluer la rentabilité des interventions, les pays devraient être encouragés à développer un processus de prise de décision spécifique au contexte, qui soit encadré par la législation et qui ait l'adhésion des parties intéressées, avec par exemple l'implication d'organisations de la société civile et de groupes de patients, et qui soit transparent, cohérent et équitable.

El análisis de rentabilidad se utiliza para comparar los costes y resultados de opciones políticas alternativas. Cada relación de rentabilidad resultante representa la magnitud de sanidad adicional obtenida por unidad adicional de recursos utilizados. Los umbrales de rentabilidad permiten la identificación de las relaciones de rentabilidad que representan un valor bueno o muy bueno del capital. En 2001, los umbrales de rentabilidad propuestos por la Comisión sobre Macroeconomía y Salud de la Organización Mundial de la Salud se basaron en múltiplos del producto interior bruto (PIB) per cápita de un país. En algunos contextos, se han utilizado estos umbrales para decidir qué intervenciones sanitarias financiar y cuáles no. No obstante, la experiencia con el uso de dichos umbrales basados en el PIB en los procesos de toma de decisiones a nivel nacional muestra la ausencia de especificidad según el país. Esto, además de la incertidumbre de las relaciones de rentabilidad modelo, puede dar lugar a una toma de decisiones equivocada sobre cómo emplear los recursos sanitarios. La información relativa a la rentabilidad debería utilizarse teniendo en cuenta otros factores (por ejemplo, el impacto presupuestario y aspectos de viabilidad) en un proceso transparente de toma de decisiones, en lugar de únicamente teniendo como referencia un solo valor del umbral. A pesar de que las relaciones de rentabilidad son indudablemente esclarecedoras a la hora de evaluar el valor del capital, es necesario fomentar que los países desarrollen un proceso específico del contexto apoyado por la legislación para tomar decisiones, como, por ejemplo, si las partes interesadas han aceptado la implicación de las organizaciones de la sociedad civil y grupos de pacientes y si es transparente, coherente y justa.

Policy interventions related to medicines: Survey of measures taken in European countries during 2010-2015.

BACKGROUND: Policy-makers can use a menu of pharmaceutical policy options. This study aimed to survey these measures that were implemented in European countries between 2010 and 2015. METHODS: We did bi-annual surveys with competent authorities of the Pharmaceutical Pricing and Reimbursement Information network. Additionally, we consulted posters produced by members of this network as well as further published literature. Information on 32 European countries (all European Union Member States excluding Luxembourg; Iceland, Norway, Serbia, Switzerland, Turkey) was included. RESULTS: 557 measures were reported between January 2010 and December 2015. The most frequently mentioned measure was price reductions and price freezes, followed by changes in patient co-payments, modifications related to the reimbursement lists and changes in distribution remuneration. Most policy measures were identified in Portugal, Greece, Belgium, France, the Czech Republic, Iceland, Spain and Germany. 22% of the measures surveyed could be classified as austerity. CONCLUSIONS: Countries that were strongly hit by the financial crisis implemented most policy changes, usually aiming to generate savings and briefly after the emergence of the crisis. Improvements in the economic situation tended to lead to an easing of austerity measures. Countries also implemented policies that aimed to enhance enforcement of existing measures and increase efficiency.

Prices, Costs, and Affordability of New Medicines for Hepatitis C in 30 Countries: An Economic Analysis.

INTRODUCTION: New hepatitis C virus (HCV) medicines have markedly improved treatment efficacy and regimen tolerability. However, their high prices have limited access, prompting wide debate about fair and affordable prices. This study systematically compared the price and affordability of sofosbuvir and ledipasvir/sofosbuvir across 30 countries to assess affordability to health systems and patients. METHODS AND FINDINGS: Published 2015 ex-factory prices for a 12-wk course of treatment were provided by the Pharma Price Information (PPI) service of the Austrian public health institute Gesundheit Österreich GmbH or were obtained from national government or drug reimbursement authorities and recent press releases, where necessary. Prices in Organisation for Economic Co-operation and Development (OECD) member countries and select low- and middle-income countries were converted to US dollars using period average exchange rates and were adjusted for purchasing power parity (PPP). We analysed prices compared to national economic performance and estimated market size and the cost of these drugs in terms of countries' annual total pharmaceutical expenditure (TPE) and in terms of the duration of time an individual would need to work to pay for treatment out of pocket. Patient affordability was calculated using 2014 OECD average annual wages, supplemented with International Labour Organization median wage data where necessary. All data were compiled between 17 July 2015 and 25 January 2016. For the base case analysis, we assumed a 23% rebate/discount on the published price in all countries, except for countries with special pricing arrangements or generic licensing agreements. The median nominal ex-factory price of a 12-wk course of sofosbuvir across 26 OECD countries was US$42,017, ranging from US$37,729 in Japan to US$64,680 in the US. Central and Eastern European countries had higher PPP-adjusted prices than other countries: prices of sofosbuvir in Poland and Turkey (PPP$101,063 and PPP$70,331) and of ledipasvir/sofosbuvir in Poland (PPP$118,754) were at least 1.09 and 1.63 times higher, respectively than in the US (PPP$64,680 and PPP$72,765). Based on PPP-adjusted TPE and without the cost of ribavirin and other treatment costs, treating the entire HCV viraemic population with these regimens at the PPP-adjusted prices with a 23% price reduction would amount to at least one-tenth of current TPE across the countries included in this study, ranging from 10.5% of TPE in the Netherlands to 190.5% of TPE in Poland. In 12 countries, the price of a course of sofosbuvir without other costs was equivalent to 1 y or more of the average annual wage of individuals, ranging from 0.21 y in Egypt to 5.28 y in Turkey. This analysis relies on the accuracy of price information and infection prevalence estimates. It does not include the costs of diagnostic testing, supplementary treatments, treatment for patients with reinfection or cirrhosis, or associated health service costs. CONCLUSIONS: Current prices of these medicines are variable and unaffordable globally. These prices threaten the sustainability of health systems in many countries and prevent large-scale provision of treatment. Stakeholders should implement a fairer pricing framework to deliver lower prices that take account of affordability. Without lower prices, countries are unlikely to be able to increase investment to minimise the burden of hepatitis C.

Pharmaceutical policies in a crisis? Challenges and solutions identified at the PPRI Conference.

In October 2015, the third international Pharmaceutical Pricing and Reimbursement Information (PPRI) Conference was held in Vienna to foster discussion on challenges in pricing and reimbursement policies for medicines. The research presented highlighted that commonly used pharmaceutical pricing and reimbursement policies are not sufficiently effective to address current challenges. Conference participants called for fundamental reforms to ensure access to medicines, particularly to new and potentially more effective and/or safe medicines, while safeguarding the financial sustainability of health systems and working towards universal health coverage.

Medicines availability for non-communicable diseases: the case for standardized monitoring.

BACKGROUND: In response to the global burden of non-communicable diseases (NCDs), the World Health Organization (WHO) has developed a Global Action Plan that includes a voluntary medicines target of 80% availability and affordability of essential medicines for the prevention and treatment of diabetes, cardiovascular disease and respiratory disease both in public and private health facilities. Reliable measures of medicines availability are needed to track progress towards meeting this target. The results of three studies measuring the availability of medicines for hypertension and diabetes conducted in Tanzania in 2012-2013 were compared to assess the consistency of the results across the studies. METHODS: Availability was defined by observation of the medicine (no minimum quantity) on the day of the survey. The three studies involved 24, 107 and 1297 health facilities. Estimates of the availability of medicines for hypertension and diabetes were compared for medicines availability overall, by managing authority (government, mission/faith-based, private-for-profit), by facility level (hospital, health centre, dispensary) and by setting (urban, rural). RESULTS: Comparisons of the availability of medicines were limited by differences in the definitions of the medicines and the classifications of the facilities surveyed. Metformin was variously reported as available in 33%, 39%, 46%, and 57% of facilities. Glibenclamide availability ranged from 19% to 52%. One study reported low levels of insulin availability (9-16% depending on insulin type) compared to 34% in a second study. Captopril (or angiotensin converting enzyme [ACE] inhibitor) availability ranged from 13% to 48%while availability of calcium channel blockers was 29% to 57% and beta-blockers 15% to 50%. Trends were similar across studies with lower availability in government compared to mission or private facilities, in dispensary and health centres compared to hospitals, and in rural compared to urban facilities. CONCLUSIONS: All three studies showed suboptimal availability of NCD medicines, however the estimates of availability differed. Regular monitoring using reproducible methods and measuring key medicines must replace ad-hoc studies, small selected samples and differences in definitions. Low and middle-income countries need to implement monitoring and evaluation systems to track progress towards meeting the NCD medicines target and to inform country-level interventions to improve access to NCD medicines.

Effect of the economic recession on pharmaceutical policy and medicine sales in eight European countries.

OBJECTIVE: To identify pharmaceutical policy changes during the economic recession in eight European countries and to determine whether policy measures resulted in lower sales of, and less expenditure on, pharmaceuticals. METHODS: Information on pharmaceutical policy changes between 2008 and 2011 in eight European countries was obtained from publications and pharmaceutical policy databases. Data on the volume and value of the quarterly sales of products between 2006 and 2011 in the 10 highest-selling therapeutic classes in each country were obtained from a pharmaceutical market research database. We compared these indicators in economically stable countries; Austria, Estonia and Finland, to those in economically less stable countries, Greece, Ireland, Portugal, Slovakia and Spain. FINDINGS: Economically stable countries implemented two to seven policy changes each, whereas less stable countries implemented 10 to 22 each. Of the 88 policy changes identified, 33 occurred in 2010 and 40 in 2011. They involved changing out-of-pocket payments for patients in 16 cases, price mark-up schemes in 13 and price cuts in 11. Sales volumes increased moderately in all countries except Greece and Portugal, which experienced slight declines after 2009. Sales values decreased in both groups of countries, but fell more in less stable countries. CONCLUSION: Less economically stable countries implemented more pharmaceutical policy changes during the recession than economically stable countries. Unexpectedly, pharmaceutical sales volumes increased in almost all countries, whereas sales values declined, especially in less stable countries.

Is Europe still heading to a common price level for on-patent medicines? An exploratory study among 15 Western European countries.

BACKGROUND: Previous studies have suggested that medicines prices in Europe converge over time as a result of policy measures such as external price referencing. OBJECTIVE: To explore whether ex-factory prices of on-patented medicines in Western European countries have converged over a recent period of time. METHODS: Prices of ten on-patent medicines in five years (2007, 2008, 2010, 2011, 2012) of 15 European countries were analyzed. The unit of analysis was the ex-factory price in Euro per defined daily dose (exchange rate indexed to 2007). A score (deviation from the average price) per country as well as the ranges were calculated for all medicines. RESULTS: The prices between countries and selected products varied to a great extent from as low as an average price of € 1.3/DDD for sitagliptin in 2010-2012 to an average of € 221.5/DDD for alemtuzumab in 2011. Between 2008 and 2012, a price divergence was seen which was fully driven by two countries, Germany (up to 27% more expensive than the average) and Greece (up to 32% cheaper than the average). All other countries had stable prices and centered around the country average. Prices of less expensive as well as expensive medicines remained relatively stable or decreased over time, while only the price of sirolimus relatively increased. CONCLUSIONS: Our study period included the time of the recession and several pricing policy measures may have affected the prices of medicines. Instead of the expected price convergence we observed a price divergence driven by price changes in only two of the 15 countries. All other European countries remained stable around the country average. Further research is needed to expand the study to a bigger sample size, and include prescribing data and Eastern European countries.

Differences in external price referencing in Europe: a descriptive overview.

OBJECTIVE: This study aimed to provide an up-to-date description as well as comparative analysis of the national characteristics of pharmaceutical external price referencing (EPR) in Europe. METHODS: Review of the country-specific PPRI (Pharmaceutical Pricing and Reimbursement Information) Pharma Profiles written by representatives of the PPRI Network. The Profiles were analysed according to predefined criteria. RESULTS: Of 28 analysed European countries 24 applied EPR in 2010. The majority of countries have statutory rules to implement EPR. Most countries had less than 10 countries in their reference baskets. Higher income countries tend to include higher income countries in their basket, whereas lower income countries refer to lower income countries. Taking the average price of all countries in the basket as the basis to calculate the national price was the most common strategy (n=8). The methodology of EPR has changed in most European countries over the past 10 years (n=19). CONCLUSIONS: EPR is a widely used pricing policy in Europe and is still actively used as well as adjusted by national authorities. However, we still see room for improvement by implementing more detailed legislations in terms of the revision of prices and by identifying alternative countries in case a product is not on the market. We also see the need for formal information sharing (e.g. congresses dedicated to pricing strategies and systems) with other public pricing authorities to learn about the different EPR methodologies as well as the national experiences. These congresses might also give room to better understand national pricing methods including discussions on possible limitations of these pricing methods.

Impact of external price referencing on medicine prices - a price comparison among 14 European countries.

OBJECTIVES: This study aims to examine the impact of external price referencing (EPR) on on-patent medicine prices, adjusting for other factors that may affect price levels such as sales volume, exchange rates, gross domestic product (GDP) per capita, total pharmaceutical expenditure (TPE), and size of the pharmaceutical industry. METHODS: Price data of 14 on-patent products, in 14 European countries in 2007 and 2008 were obtained from the Pharmaceutical Price Information Service of the Austrian Health Institute. Based on the unit ex-factory prices in EURO, scaled ranks per country and per product were calculated. For the regression analysis the scaled ranks per country and product were weighted; each country had the same sum of weights but within a country the weights were proportional to its sales volume in the year (data obtained from IMS Health). Taking the scaled ranks, several statistical analyses were performed by using the program "R", including a multiple regression analysis (including variables such as GDP per capita and national industry size). RESULTS: This study showed that on average EPR as a pricing policy leads to lower prices. However, the large variation in price levels among countries using EPR confirmed that the price level is not only driven by EPR. The unadjusted linear regression model confirms that applying EPR in a country is associated with a lower scaled weighted rank (p=0.002). This interaction persisted after inclusion of total pharmaceutical expenditure per capita and GDP per capita in the final model. CONCLUSIONS: The study showed that for patented products, prices are in general lower in case the country applied EPR. Nevertheless substantial price differences among countries that apply EPR could be identified. Possible explanations could be found through a correlation between pharmaceutical industry and the scaled price ranks. In conclusion, we found that implementing external reference pricing could lead to lower prices.

Pharmaceutical policies in European countries in response to the global financial crisis.

OBJECTIVE: The objective of this paper is to analyze which pharmaceutical policies European countries applied during the global financial crisis. METHODS: We undertook a survey with officials from public authorities for pharmaceutical pricing and reimbursement of 33 European countries represented in the PPRI (Pharmaceutical Pricing and Reimbursement Information) network based on a questionnaire. The survey was launched in September 2010 and repeated in February 2011 to obtain updated information. RESULTS: During the survey period from January 2010 to February 2011, 89 measures were identified in 23 of the 33 countries surveyed which were implemented to contain public medicines expenditure. Price reductions, changes in the co-payments, in the VAT rates on medicines and in the distribution margins were among the most common measures. More than a dozen countries reported measures under discussion or planned, for the remaining year 2011 and beyond. The largest number of measures were implemented in Iceland, the Baltic states (Estonia, Latvia, Lithuania), Greece, Spain and Portugal, which were hit by the crisis at different times. CONCLUSIONS: Cost-containment has been an issue for high-income countries in Europe - no matter if hit by the crisis or not. In recent months, changes in pharmaceutical policies were reported from 23 European countries. Measures which can be implemented rather swiftly (e.g. price cuts, changes in co-payments and VAT rates on medicines) were among the most frequent measures. While the "crisis countries" (e.g. Baltic states, Greece, Spain) reacted with a bundle of measures, reforms in other countries (e.g. Poland, Germany) were not directly linked to the crisis, but also aimed at containing public spending. Since further reforms are under way, we recommend that the monitoring exercise is continued.

Review of the Estonian pharmaceutical sector: towards the development of a national medicines policy: final report

This report argues that it is important that a comprehensive medicines policy be developed in Estonia, withclear objectives to address issues of financing, equity in access, protection of vulnerable segments of thepopulation, improvements in rational drug use, macroeconomic efficiency and allocative efficiency. Thiscould be done under the stewardship of the competent authorities, the Ministry of Social Affairs inparticular, and involve all relevant stakeholders in consultations to provide input. The areas identified inthis report for improvement were: (a) The concerns over increasing and significant out-of-pocket expensesfor prescription medicines; (b) Streamlining of the process for drug selection for positive list inclusion andsubsequent reimbursement; (c) Stimulate the prescribing and dispensing of generics; (d) Facilitate genericsubstitution; (e) Market incentives for pharmacies to dispense generics; (f) Simplifying and reducing copayments for patients; (g) Implementing a national program/system to improve prescribing and use ofmedicines; (h) Monitoring the availability of medicines at pharmacy level; (i) Ensuring adequate and timelydistribution of prescription medicines (both wholesale and retail); (j) Reducing VAT on prescriptionmedicines; and (k) Developing a comprehensive medicines policy to include all important areas.