The impact of managed entry agreements on pharmaceutical prices

Abstract

Managed entry agreements (MEAs) have been used for several years, with the aim of curbing the growth of pharmaceutical expenditure and enhancing patient access to innovation. Yet, much remains to be understood about their economic implications. This paper studies the impact of MEAs on list prices, that is, prices before the deduction of any discount. Using a theoretical model, we show that, under most price setting regimes, the introduction of an MEA leads to a higher list price. This is confirmed by our empirical analysis of a sample of 156 medicines in six countries, providing a conservative estimate of the increase in price due to the MEA of 5.9%. A relevant policy implication is that payers may overestimate the financial gains that can be achieved through this tool.

Implications of drugs with rebate in Europe

“…Gamba et al. [ 6 ], used a theoretical model which was confirmed by an empirical analysis of a sample of 156 medicines in six countries to show that under most price setting regimes, MEAs are associated with a 5.9% increase of the price list.…”

The value of evaluating and implementing pharmaceuticals

“…Paper 1 outlines why it would be important to allow for confidential discounts to get lower prices when public list prices are referenced by other countries. However, a recent study found that allowing for confidential discounts appear to increase "gaming" and lead to higher initial price offers, 146 a risk also discussed in this paper. Therefore, it is important to consider how and when to allow for confidential discounts, and it is probably also worth increasing rigor or specificity of the appraisal process when allowing for such discounts.…”

Innovation, aging, and health care: Unraveling “silver” from “red” herrings?

“…Certainly, not only financial incentives matter for innovation, managed entry agreements (MEA), sometimes differently defined risk sharing agreements can make a difference. However, Gamba et al (2020) in this issue show that they use of MEA may give rise to a higher price (estimated to be about 5.9%), hence savings might be overestimated.…”