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The perverse impact of external reference pricing (ERP): a comparison of orphan drugs affordability in 12 European countries. A call for policy change.

ABSTRACT: Objective: The study compared the relative cost differences of similar orphan drugs among high and low GDP countries in Europe: Bulgaria, France, Germany, Greece, Hungary, Italy, Norway, Poland, Romania, Spain, Sweden, UK. Methods: Annual treatment costs per patient were calculated. Relative costs were computed by dividing the costs by each economic parameter: nominal GDP per capita, GDP in PPP per capita, % GDP contributed by the government, government budget per inhabitant, % GDP spent on healthcare, % GDP spent on pharmaceuticals, and average annual salary. An international comparison of the relative costs was done using UK as the reference country and results were analysed descriptively. Results: 120 orphan drugs were included. The median annual costs of orphan drugs in all countries varied minimally (cost ratios: 0.87 to 1.08). When the costs were adjusted using GDP per capita, the EU-5 and Nordic countries maintained minimal difference in median cost. However, the lower GDP countries showed three to six times higher relative costs. The same pattern was evident when costs were adjusted using the other economic parameters. Conclusion: When the country's ability to pay is taken into consideration, lower GDP countries pay relatively higher costs for similarly available orphan drugs in Europe.

SUBMITTER: Young KE

PROVIDER: S-EPMC5645904 | biostudies-other | 2017

REPOSITORIES: biostudies-other

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The perverse impact of external reference pricing (ERP): a comparison of orphan drugs affordability in 12 European countries. A call for policy change.

Young K E KE Soussi I I Toumi M M

Journal of market access & health policy 20170903 1

<b>Objective</b>: The study compared the relative cost differences of similar orphan drugs among high and low GDP countries in Europe: Bulgaria, France, Germany, Greece, Hungary, Italy, Norway, Poland, Romania, Spain, Sweden, UK. <b>Methods</b>: Annual treatment costs per patient were calculated. Relative costs were computed by dividing the costs by each economic parameter: nominal GDP per capita, GDP in PPP per capita, % GDP contributed by the government, government budget per inhabitant, % GDP ...[more]

PMID: 29081920

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Project description:Background and objectivesExternal reference pricing (ERP) is a price regulation tool widely used by policy makers in the European Union (EU) Member States (MS) to contain drug cost, although in theory, it may contribute to modulate prices up and down. The objective of this article was to summarise and discuss the main findings of part of a large project conducted for the European Commission ('External reference pricing of medicinal products: simulation-based considerations for cross-country coordination'; see www.ec.europa.eu/health/healthcare/docs/erp_reimbursement_medicinal_products_en.pdf) that aimed to provide an overview of ERP systems, both on processes and potential issues in 31 European countries (28 EU MS, Iceland, Norway, and Switzerland).MethodsA systematic structured literature review was conducted to identify and characterise the use of ERP in the selected countries, to describe its impact on the prices of pharmaceuticals, and to discuss the possible cross-country coordination issues in EU MS. This research was complemented with a consultation of competent authorities' and international organisations' representatives to address the main issues or uncertainties identified through the literature review.ResultsAll selected countries applied ERP, except the United Kingdom and Sweden. Twenty-three countries used ERP as the main systematic criterion for pricing. In the majority of European countries, ERP was based on legislated pricing rules with different levels of accuracy. ERP was applied either for all marketed drugs or for specific categories of medicines; it was mainly used for publicly reimbursed medicines. The number of reference countries included in the basket varied from 1 to 31. There was a great variation in the calculation methods used to compute the price; 15 countries used the average price, 7 countries used the lowest price, and 7 countries used other calculation methods. Reported limitations of ERP application included the lack of reliable sources of price information, price heterogeneity, exchange rate volatility, and hidden discounts. Spill-over effect and downward price convergence have often been mentioned as ERP's consequences leading to pricing strategies from pharmaceutical companies.ConclusionWhile ERP is widely used in Europe, processes and availability of price information vary from one country to another, thus limiting ERP implementation. Furthermore, ERP spill-over effect is a major concern of pharmaceutical firms leading to implementation of the so-called 'launch sequence strategies'.

Project description:Objective: To review the reimbursement recommendations issued by selected European health technology assessment agencies for orphan drugs and the reimbursement status of these drugs; to assess the relationship between the type of recommendation and reimbursement status. Methods: The list of orphan drugs to be included in the analysis was obtained from the European Medicines Agency and Orphanet. Seven European states were included in the analysis: Belgium, England, France, Germany, Poland, Scotland, and Spain. For all identified orphan drugs, relevant data on the reimbursement status and type of recommendation were collected for each country. The relationship between the type of recommendation and reimbursement status was evaluated separately for each considered country, using Cohen's kappa coefficient for the measurement of agreement; sub-analyses for oncology and metabolic drugs were performed. Results: Most reimbursement recommendations for orphan drugs were positive (71%), while approximately 17% were negative and almost 13% were conditional. The highest percentage of positive reimbursement recommendations was observed in Spain (97%) and France (95%) and the highest percentage of negative reimbursement recommendations was revealed for Poland (49%). On average, 65% of the 163 analyzed orphan drugs were reimbursed from public funds. The highest number of reimbursed orphan drugs was observed in Germany (n = 148), while the lowest, in Poland (n = 41). Considering all analyzed drugs, the highest agreement between recommendations and reimbursement status was observed for Spain (value of 1), and the lowest, for Germany (? = -0.03). Conclusions: On average, more than 60% of identified orphan drugs were reimbursed from public funds in the included countries, and the majority of reimbursement recommendations were found to be positive. The agreement between reimbursement recommendations and reimbursement status differed between the countries, but overall, it did not show any patterns, as it ranged from -0.03 to 1 (? coefficient).

Project description:BackgroundMedications and their prices are key issues for healthcare. Although access to medicines at affordable prices had been specified as a key objective of the European Health Policy, it seems that these goals have not been achieved. Therefore, we attempted an evaluation of affordability of selected medicines at full prices.MethodsThe analysis concerned 2012 and was conducted between 2013 and 2015 in all the European Union (EU) countries divided into 3 groups depending on the date of their accession to the EU. Finally, we considered 9 originators used in the treatment of schizophrenia and multiple sclerosis. Information on drug prices were collected from pharmacies. Participation in the study was voluntary and anonymous in order to avoid accusations of advertising. To evaluate affordability, several factors were used (e.g. minimum earnings and Gini coefficient). Due to unavailability in some countries, the exact number of analyzed medicines varies.ResultsDrug prices vary significantly between EU Member States. Almost eleven fold difference was observed between Germany (EUR 1451.17) and Croatia (EUR 132.77) in relation to Interferone beta-1a 22 μg. Generally, prices were the highest in Germany. The cheapest drugs were found in various countries but never in the poorest ones like Bulgaria or Romania. Discrepancies in wages were observed too (the smallest minimum wage was EUR 138.00 in Bulgaria and the highest EUR 1801.00 in Luxembourg). Full price of olanzapine 5mg, however, was higher in Bulgaria (EUR 64.53) than, for instance, in Belgium (EUR 37.26).ConclusionsAnalyzed medications are still unaffordable for many citizens of the EU. Besides, access to medicines is also impaired e.g. due to parallel trade. Unaffordability of medications may lead to the patients' non-compliance and therefore to increased direct and indirect costs of treatment. Common European solutions are needed to achieve a real affordability and accessibility of medications.

Dataset Information

The perverse impact of external reference pricing (ERP): a comparison of orphan drugs affordability in 12 European countries. A call for policy change.

Publications

The perverse impact of external reference pricing (ERP): a comparison of orphan drugs affordability in 12 European countries. A call for policy change.

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