Actual retail prices and reimbursement tariffs for a neck brace and a knee brace exceeded prices based on estimated costs. Therefore, there appears to be scope for reducing tariffs.
This study estimated costs of production and distribution of ostomy appliances, and compared cost estimates with tariffs in Belgium. The cost model took into account manufacturing costs, overhead, R&D, warehousing, profits, and distribution margins. Data were derived from manufacturers, a decomposition of finished products, and interviews with stakeholders. The cost model generated estimated retail prices of euro 2.96 for one-piece appliances, euro 1.62 for two-piece pouches, and euro 2.06 for two-piece flanges. Production and distribution costs accounted for 40 and 60% of retail prices, respectively. Estimated retail prices corresponded well with tariffs for one-piece appliances and for two-piece pouches. For two-piece regular flanges, a substantial difference was observed between the calculated price of euro 2.06 and the tariffs of euro 6.05. In the absence of publicly disclosed information on the cost structure of appliances, estimating ostomy appliance costs is valuable to reimbursement agencies when setting tariffs.
Market prices varied substantially between countries, indicating that manufacturers adapt their pricing strategy to the policy environment existing in the ostomy appliance market of each country. Also, there appears to be scope for reducing prices in some countries.
This study compared market prices (i.e. third-party reimbursement and patient co-payment) of prefabricated neck, wrist and knee braces in Belgium, France, the Netherlands, Ontario (Canada) and the UK. Data were collected through contacts with health authorities, health insurance funds, manufacturers and distributors. Market prices varied substantially between countries, indicating that manufacturers adapt their price setting strategy to the policy environment and the structure of the brace market of a country. Belgian prices tended to exceed prices in other countries for the selected neck, wrist and knee braces. There seems to be scope for reducing Belgian prices of selected braces.
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