Implications Of External Price Referencing of Pharmaceuticals in Middle East Countries

Abstract

In 2009, Greece entered into one of the most serious economic downturns in its modern history. In May 2010, the country was put under the supervision of Troika (EU, ECB and IMF). Retail pharmaceutical market with size c. a. € 6.5 bn in retail prices for 2009 (public pharmaceutical expenditure € 5.2 bn), was one of the main targets for change through the implementation of new policies and drastic spending cuts. The purpose of this study was to measure the impact that these new policies for pharmaceutical spending had and how this was attributed to the levers of price, market volume and product mix. MethOds: An economic model was used, based on IMS Hellas' and Hellenic Statistical Authority data, to measure the contribution that (a) price; (b) market volume; and (c) product mix had on the reduction in the size of the retail market for pharmaceuticals in the period 2009-2014. The detailed approach decomposes the market change, as measured in values, into those attributed to (a) price (assuming market volume and product mix are constant); (b) market volume (assuming prices and product mix are unchanged); (c) product mix. Results: The analysis indicated that, the major contributor in the reduction of the pharmaceutical market size was the price of medicines. It has been estimated that 87% of the reduction (> € 1.2 bn) is coming from price. Volume contributed an additional c. a. 38% (> € 0.5 bn) in the reduction of the size but, at the same time, it was partially offset from substitution with pricier medicines. cOnclusiOns: Price was the major driver for the reduction in the size of the retail pharmaceutical market during the period of crisis. Volume had an impact as well but it was partially offset by switch towards more expensive medicines.

A systematic review of pharmaceutical pricing policies in developing countries

“…Two of the studies covered multiple countries, that is Kalό et al . covering seven middle eastern countries and Ford et al . covering Brazil and Thailand .…”

“…Table shows the main characteristics of the studies included. The articles’ objectives can be summarized in three main categories: assessment of medicines availability and affordability; analysis of pharmaceutical and pricing policy; and assessment of pharmaceutical expenditure and prices pre‐/post‐policy reforms . The targeted medicines under the policies or initiatives included essential medicines in Brazil, Bangladesh, China and Mali, antiretroviral drugs in Brazil and Thailand or covering all classes of medicines as was the case in China, Mozambique, Mexico, Jordan and Kuwait .…”

“…The targeted medicines under the policies or initiatives included essential medicines in Brazil, Bangladesh, China and Mali, antiretroviral drugs in Brazil and Thailand or covering all classes of medicines as was the case in China, Mozambique, Mexico, Jordan and Kuwait . The studies were conducted in various settings with the majority taking place in hospitals and pharmacies …”

“…Thirteen of the studies addressed one single pricing policy adopted in the country/countries where the study was conducted . Seven of the studies assessed countries where two or more policies were implemented .…”

“…Although developing countries are implementing policies as recommended by WHO guidelines, such policies have not always been successful as reported in China and Indonesia . ERP, which uses benchmarking against a basket of countries, is simple to apply and is one of the most widely used policies .…”