Do pharmaceutical prices rise anticipating branded competition?

To control costs and improve access, nations can adopt strategies employed in the United Kingdom to control pharmaceutical prices and spending. Current policy evolved from a system created in 1957 that allowed manufacturers to set launch prices, capped manufacturers’ rates of return, and later cut list prices. These policies did not effectively control spending and had limited effects on purchase prices. The United Kingdom currently controls pharmaceutical spending in 4 ways. (a) Since 1999, it has typically paid no more than is cost-effective. (b) Since 2017, for medicines that will have a significant budget impact, National Health Service England seeks discounts from cost-effective prices or seeks to limit access for 2 years to patients with the greatest need. (c) Since 2014, statutes and a voluntary scheme have required branded manufacturers to pay the government rebates to recoup the difference between the global pharmaceutical budget and actual spending. (d) For hospitals, generics and some patented drugs are procured through competitive bidding; community pharmacies are reimbursed through a system that provides an incentive to beat average generic market prices. These policies controlled the growth of spending, with the largest effects following budget controls in 2014. Changes since 2008 have reduced savings, first by paying more than is cost-effective for cancer drugs and then by applying higher cost-effectiveness thresholds for some drugs used to treat cancer and certain other drugs.

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Factors Impacting Pharmaceutical Prices and Affordability: Narrative Review

Pharmacy ◽

10.3390/pharmacy9010001 ◽

2020 ◽

Vol 9 (1) ◽

pp. 1

Author(s):

Kah Seng Lee ◽

Yaman Walid Kassab ◽

Nur Akmar Taha ◽

Zainol Akbar Zainal

Keyword(s):

Narrative Review ◽

Financial Advisors ◽

Cost Information ◽

Electronic Prescription ◽

Related Information ◽

Pharmaceutical Distribution ◽

Out Of Pocket Expenses ◽

Additional Charges ◽

The Impact ◽

Pharmaceutical Prices

Increasing prescription drug pricing often reflects additional work stress on medical professionals because they function as financial advisors for patients and help them manage out-of-pocket expenses. Providers or prescribers wish to help patients with prescription costs but often lack related information. Healthcare plan providers try to display prescription and drug cost information on their websites, but such data may not be linked to electronic prescription software. A mark-up is defined as the additional charges and costs that are applied to the price of a product for the purpose of covering overhead costs, distribution charges, and profit. Therefore, the policies implemented in the pharmaceutical distribution chain might include the regulation of wholesale and retails mark-ups and pharmaceutical remuneration. If mark-ups are regulated, countries are highly recommended to use regressive mark-ups rather than fixed percentage mark-ups. This narrative review provides insights into the framework of pharmaceutical mark-up systems by describing different factors impacting pharmaceutical prices and affordability. These include the interplay of medicine pricing and the supply chain, the impact of pertinent laws and regulation and out-of-pocket expenditure.

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What if the Federal Government Negotiated Pharmaceutical Prices for Seniors? An Estimate of National Savings

Journal of General Internal Medicine ◽

10.1007/s11606-008-0689-7 ◽

2008 ◽

Vol 23 (9) ◽

pp. 1435-1440 ◽

Cited By ~ 16

Author(s):

Walid F. Gellad ◽

Sebastian Schneeweiss ◽

Phyllis Brawarsky ◽

Stuart Lipsitz ◽

Jennifer S. Haas

Keyword(s):

Federal Government ◽

Pharmaceutical Prices

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Regulating Pharmaceutical Prices

Health Care Policy and Regulation ◽

10.1007/978-1-4615-2219-5_7 ◽

1995 ◽

pp. 105-141 ◽

Cited By ~ 1

Author(s):

Thomas A. Abbott

Keyword(s):

Pharmaceutical Prices

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6.F. Round table: What is the evidence for and against price transparency in pharmaceutical pricing and procurement?

European Journal of Public Health ◽

10.1093/eurpub/ckaa165.305 ◽

2020 ◽

Vol 30 (Supplement_5) ◽

Author(s):

Keyword(s):

Full Range ◽

Round Table ◽

World Health ◽

Pharmaceutical Pricing ◽

Price Inflation ◽

Price Transparency ◽

Goods And Services ◽

Pharmaceutical Procurement ◽

Lower Ability ◽

Pharmaceutical Prices

Abstract Although the potential for price transparency in pharmaceutical systems has been widely debated, there has been less discussion of the empirical basis to inform policymaking in this area. The lack of price transparency is viewed as one of the biggest barriers to joint pharmaceutical procurement, an initiative that has the potential to drive down pharmaceutical prices by pooling the purchasing power of smaller populations and thus improve the affordability of medicines. However, critics of the call for increased transparency in pharmaceutical pricing argue that such policies would lead to price inflation, particularly for countries with lower ability to pay or limited negotiating power. Given the widespread use of negotiated confidential discounts granted to different payers by manufacturers and the pervasiveness of international reference pricing as a policy mechanism for determining pharmaceutical prices, transparency policies would not only affect countries directly implementing them. As a result, policy-makers are often reluctant and unsure about how to proceed; this became readily apparent in the discussions around the Transparency Resolution at the World Health Assembly in May 2019. A concise overview of the evidence on the consequences of transparency policies is lacking. This panel draws on a wide-ranging literature review that sought to answer the following key research questions: Is there empirical evidence that examines the effect of price transparency on price development (within countries implementing the policy as well as other countries) In the area of pharmaceuticals? Regarding other types of healthcare goods and services? Regarding products from other industries? What insights can we learn from the available evidence and how transferrable is evidence from other healthcare dimensions or other industries to the issue of price transparency for pharmaceuticals? In this workshop we will bring together researchers to discuss the type of evidence available the extent to which it is empirically grounded. The workshop aims to address this issue and highlight evidence gaps for and against price transparency policies. Each panellist will talk for a maximum of 10 minutes presenting insights from their work; audience members will be actively invited to share their insights and reflections. Key messages The debate on price transparency in pharmaceutical systems needs to advance by looking at the full range of evidence available. Highlighting evidence gaps can endorse real world experiments to test theoretical arguments.

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