Practice of External Price Referencing

Zimmermann

2019

PharmacoEconomics Open

Self Cite

Background There are indications of staggered market entry of medicines in the national markets, with medicines being marketed first in countries with high prices. This study aimed to analyse the availability and evolution of medicine prices in the European Union (EU). Methods This research was performed for an illustrative sample of five medicines (abiraterone, emtricitabine/rilpivirine/tenofovir disoproxil, fingolimod, linagliptin and sofosbuvir) in 27 EU Member States. Price data at 6, 12, 18, 36 and 60 months after marketing authorisation were retrieved from national administrative price databases and registers accessible through the Pharma Price Information service. Results In the first year after marketing authorisation, price data for the selected medicines were only available in a small number of EU Member States—usually high-income countries. Availability increased over time. However, some countries, for instance Central and Eastern Europe, had price data available only several years after marketing authorisation. The average European price of the surveyed medicines decreased by at least 7.1% between 6 months and 3 years and at least 9.5% between 6 months and 5 years after marketing authorisation. Price data availability in lower-income countries at later stages, and price decreases in some countries, appear to be major reasons for the reductions in average prices. Conclusions If policymakers aim to apply the pricing policy of external price referencing (i.e. price setting based on prices in other countries) for cost-containment purposes, they are recommended to undertake continuous price revisions over the years. Electronic supplementary material The online version of this article (10.1007/s41669-019-0120-9) contains supplementary material, which is available to authorized users.

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Evolution of Average European Medicine Prices: Implications for the Methodology of External Price Referencing

Zimmermann

2019

PharmacoEconomics Open

Self Cite

“…Applying this policy, the pricing authority or public payer considers the prices of a medicine in one or more other countries in order to derive a price benchmark for the purposes of setting or negotiating the price of a medicine in the own country [ 8 ]. Meanwhile, EPR has been implemented in many high-income countries and several middle-income countries [ 9 – 11 ]. Some countries without price regulation that aim to introduce price control have also opted for EPR as the primary pricing policy [ 12 ].…”

Section: Introductionmentioning

confidence: 99%

Impact of changes in the methodology of external price referencing on medicine prices: discrete-event simulation

Lepuschütz

2020

Cost Eff Resour Alloc

Self Cite

Background Several governments apply the policy of external price referencing (EPR), which considers the prices of a medicine in one or more other countries for the purpose of setting the price in the own country. Different methodological choices can be taken to design EPR. The study aimed to analyse whether, or not, and how changes in the methodology of EPR can impact medicine prices. Methods The real-life EPR methodology as of Q1/2015 was surveyed in all European Union Member States (where applicable), Iceland, Norway and Switzerland through a questionnaire responded by national pricing authorities. Different scenarios were developed related to the parameters of the EPR methodology. Discrete-event simulations of fictitious prices in the 28 countries of the study that had EPR were run over 10 years. The continuation of the real-life EPR methodology in the countries as surveyed in 2015, without any change, served as base case. Results In most scenarios, after 10 years, medicine prices in all or most surveyed countries were—sometimes considerably—lower than in the base case scenario. But in a few scenarios medicine prices increased in some countries. Consideration of discounts (an assumed 20% discount in five large economies and the mandatory discount in Germany, Greece and Ireland) and determining the reference price based on the lowest price in the country basket would result in higher price reductions (on average − 47.2% and − 34.2% compared to the base case). An adjustment of medicine price data of the reference countries by purchasing power parities would lead to higher prices in some more affluent countries (e.g. Switzerland, Norway) and lower prices in lower-income economies (Bulgaria, Romania, Hungary, Poland). Regular price revisions and changes in the basket of reference countries would also impact medicine prices, however to a lesser extent. Conclusions EPR has some potential for cost-containment. Medicine prices could be decreased if certain parameters of the EPR methodology were changed. If public payers aim to apply EPR to keep medicine prices at more affordable levels, they are encouraged to explore the cost-containment potential of this policy by taking appropriate methodological choices in the EPR design.

“…Applying this policy, the pricing authority or public payer considers the prices of a medicine in one or more other countries in order to derive a price benchmark for the purposes of setting or negotiating the price of a medicine in the own country (8). Meanwhile, EPR has been implemented in many high-income countries and several middle-income countries (9)(10)(11). Some countries without price regulation that aim to introduce price control have also opted for EPR as the primary pricing policy (12).…”

Section: Introductionmentioning

confidence: 99%

Impact of changes in the methodology of external price referencing on medicine prices: discrete-event simulation

Lepuschütz

2020

Preprint

Self Cite

Background: Several governments apply the policy of external price referencing (EPR), which considers the prices of a medicine in one or more other countries for the purpose of setting the price in the own country. Different methodological choices can be taken to design EPR. The study aimed to analyse whether, or not, and how changes in the methodology of EPR can impact medicine prices.Methods: The real-life EPR methodology as of Q1/2015 was surveyed in all European Union Member States (where applicable), Iceland, Norway and Switzerland through a questionnaire responded by national pricing authorities. Different scenarios were developed related to the parameters of the EPR methodology. Discrete-event simulations of fictitious prices in the 28 countries of the study that had EPR were run over 10 years. The continuation of the real-life EPR methodology in the countries as surveyed in 2015, without any change, served as base case.Results: In most scenarios, after ten years, medicine prices in all or most surveyed countries were – sometimes considerably – lower than in the base case scenario. But in a few scenarios medicine prices increased in some countries. Consideration of discounts (an assumed 20% discount in five large economies and the mandatory discount in Germany, Greece and Ireland) and determining the reference price based on the lowest price in the country basket would result in higher price reductions (on average -47.2% and -34.2% compared to the base case). An adjustment of medicine price data of the reference countries by purchasing power parities would lead to higher prices in some more affluent countries (e.g. Switzerland, Norway) and lower prices in lower-income economies (Bulgaria, Romania, Hungary, Poland). Regular price revisions and changes in the basket of reference countries would also impact medicine prices, however to a lesser extent.Conclusions: EPR has some potential for cost-containment. Medicine prices could be decreased if certain parameters of the EPR methodology were changed. If public payers aim to apply EPR to keep medicine prices at more affordable levels, they are encouraged to explore the cost-containment potential of this policy by taking appropriate methodological choices in the EPR design.