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

Vogler, Sabine; Schneider, Peter A.; Zimmermann, Nina

doi:10.1007/s41669-019-0120-9

Cited by 28 publications

(20 citation statements)

References 32 publications

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“…In addition, the Korean government made reimbursement decisions of new drugs based on the prices of A7, which caused a downward convergence on the prices of new drugs. With the increasing use of external reference pricing, a low price for a new product on a given market could affect the pricing strategy of a company elsewhere [ 27 ]. A recent study found that among 29 European countries adopting an external reference pricing system, 15 countries used the average price, and seven countries used the lowest price [ 28 ].…”

Section: Discussionmentioning

confidence: 99%

International Price Comparisons of Anticancer Drugs: A Scheme for Improving Patient Accessibility

Jung

Kim

Suh

et al. 2021

IJERPH

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Background: The demand for implementing a new listing scheme to expedite patient access to novel oncology drugs has increased in South Korea. This study was conducted to compare the prices of anticancer drugs between eight countries and to explore the feasibility of a ‘pre-listing and post-evaluation’ scheme to expedite patient access to oncology drugs. Methods: This study included 34 anticancer drugs, which were reimbursed between 1 January 2007 and 31 December 2017. The unit price and sales volume of the study drugs were collected from eight countries and IQVIA data, respectively. The prices were adjusted to estimate the ex-factory prices using the discount/rebate rate suggested by the Health Insurance Review Agency (HIRA). The four price indices of Laspeyres, Paasche, Fisher, and the unweighted index were calculated using the price in each country, the average price, and lowest price among the study countries. Each currency was converted using the currency exchange rate and purchasing power parity (PPP). The budget impact of implementing the proposed pre-listing and post-evaluation scheme on payers was calculated. Results: Based on the currency exchange rate, anticancer drug prices were higher in other countries (index range: 1.05–2.78) compared to Korea. The prices in Korea were similar to countries with the lowest prices. When the PPP was applied, prices were higher in the US, Germany, Italy, and Japan than in Korea (range: 1.10–2.13); however, the prices were lower in the UK, France, and Switzerland than in Korea (range: 0.72–0.99). The financial burden of implementing the pre-listing and post-evaluation scheme was calculated at 0.83% of the total anticancer drug sales value in Korea from 2013–2017. Conclusions: The prices of anticancer drugs in Korea were similar to the lowest prices among the seven other study countries. A pre-listing and post-evaluation scheme should be considered to improve patient access to novel anticancer drugs by reducing the reimbursement review time and uncertainties.

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Section: Discussionmentioning

confidence: 99%

International Price Comparisons of Anticancer Drugs: A Scheme for Improving Patient Accessibility

Jung

Kim

Suh

et al. 2021

IJERPH

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“…With regard to the latter, it is common sense that a focus on lower-priced reference countries will eventually lead to lower prices. There is, however, the risk that particularly in the beginning price setting might be di cult because medicines might not have a price and be marketed in lower-priced countries due to strategic launches of pharmaceutical companies in response to the widespread use of EPR (32,51,52). Thus, countries, particularly those referring to lower-priced countries, are advised to have a mechanism in place which allows setting the price even with the product being marketed in a few countries (e.g.…”

Section: Discussionmentioning

confidence: 99%

“…To kick-off, a launch price of 100 euro was assumed for Germany and of 70 euro for Italy. Germany was selected for the kick-off since empirical evidence pointed to its status of rst launch market in many cases (32,33)). Italy quali ed as the second starting country because it was referenced by several other countries and it had a large basket of reference countries (12).…”

Section: Assumptions and Simulation Scenariosmentioning

confidence: 99%

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

Vogler

Schneider

Lepuschütz

2020

Preprint

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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.

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“…With regard to the latter, it is common sense that a focus on lower-priced reference countries will eventually lead to lower prices. There is, however, the risk that particularly in the beginning price setting might be difficult because medicines might not have a price and be marketed in lower-priced countries due to strategic launches of pharmaceutical companies in response to the widespread use of EPR (32,50,51). Thus, countries, particularly those referring to lower-priced countries, are advised to have a mechanism in place which ensures finalising price setting even in early phases (e.g.…”

Section: Discussionmentioning

confidence: 99%

“…Simulations were run for assumed (not real) prices (ex-factory price level) for a period of ten years (120 months). To kick-off, a launch price of 100 euro was assumed for Germany (as empirical evidence points to Germany being a first launch country in many cases (32,33)) and of 70 euro for Italy. Prices based on EPR would only be determined after the prices in the defined (minimum) number of reference countries were available.…”

Section: Simulation Scenariosmentioning

confidence: 99%

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

Vogler

Schneider

Lepuschütz

2020

Preprint

Self Cite

View full text Add to dashboard 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 the EPR policy. 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, 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 in place were run for a period of 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: 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 further 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 and to take appropriate methodological choices in the design of EPR.

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

Cited by 28 publications

References 32 publications

International Price Comparisons of Anticancer Drugs: A Scheme for Improving Patient Accessibility

International Price Comparisons of Anticancer Drugs: A Scheme for Improving Patient Accessibility

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

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

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