Transcript Antimicrobial resistance

Medicines Pricing Policies in Europe
Richard Laing with materials provided by
Kees de Joncheere
WHO HQ and WHO Regional Office for Europe
and
Claudia Habl
GÖG ÖBIG
And
Overview

Health and health care in Europe : some data

Pharmaceutical markets in Europe

Pharmaceutical policies and strategies on improving
use and containing costs

Challenges and conclusions
Health care expenditures in Europe as % of GDP,
2000 or last
3
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Pharmaceutical expenditure/capita in Europe (year
2003)
600
500
400
300
200
100
0
FR
IT
GR
AT
SE
FI
NL
DK
ES
IR
EL
Pharmaceutical Expenditure in € per capita
Source: OECD 2005
HU
CZ
SK
PL
Pharmaceutical expenditure/GDP in Europe (year
2003)*
2.5
2.0
1.5
1.0
0.5
0.0
SK
FR
HU
PL
IT
ES
GER
EL
CZ
AT
SE
FI
NL
Total pharmaceutical expenditure in % of GDP
* HU: 2002
Source: OECD 2005
DK
IR
Patient share of Price of Medicines
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
LV
LT
PL
DK
FI
EE
PT
SL
HU
SE
FR
Public coverage
Source: WHO, Alcimed, Member States, Industry associations
SK
BE AT
Patient share
EL
CZ
IR
ES GER UK
IT
NL
Medicines in Europe – key data
Number of prescriptions
per capita 2000/latest
LU
5.0
FI
5.0

EU average (BE, FR, GR missing): 8.3
DK

changes 1990 – 2000: highest increase in
SE (elderly populat.)
NL
5.7
IT
5.8



particular decrease in 90s in DE and IT
due to cost-containment
no direct connection between the
number of prescriptions and extent of
public PE
EU average expenditure per prescription
at the expense of Social Insurance/NHS:
€ 20,-
5.4
SE
6.9
IE
7.3
EU
8.3
DE
9.5
GB
10.6
11.4
PT
AT
12.5
ES
14.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0
average number of prescriptions per inhabitant
14.0
16.0
The use of Statins in Europe 2000
(EURO-MED-STAT data)
DDD per 1000 persons covered per
day
Statins
70
60
Total*
50
Fluvastatin
40
Lovastatin
Cerivastatin
30
Pravastatin
Atorvastatin
20
Simvastatin
10
0
NOR
FRA
NED
BEL
SWE
FIN
GER
IRL
Country
SPA
UK
AUS
PRT
DNK
ITA
Variation in outpatient antibiotic use in 26
European countries in 2002
35
DDD per 1000 inh. per day
30
25
20
15
10
5
0
FR GR LU PT
IT
BE SK HR PL IS
IE ES
FI BG CZ SI
SE HU NO UK DK DE LV AT EE NL
Source: Goosens et al, Lancet, 2005; 365: 579-587; ESAC project.
Goals for pharmaceutical policies in Europe

Equitable access for patients to effective, safe and
good quality medicines

Enhancing appropriate use of medicines for better
health outcomes

Ensuring value for money

Balance with industrial policy objectives

Underpinning values : equity, solidarity, access, quality,
participation
Medicines provision in Europe

Funded by State taxes or through compulsory social
insurance, or a combination

In many countries “private” or semi-private delivery of
services :


in many countries physicians and pharmacists are privately
employed professionals who are fully contracted by the
national health system

hospitals are often privately or semi-government owned, but
get contracted by the health service
Overall stewardship role of government / state
The rising costs on medicines
Higher volumes and higher price component

Ageing

Shift to new medicines in same therapeutic category

New drugs for prevention, and for diseases that could
not be treated e.g. AIDS, MS

“Life-style drugs”

Hospital - primary care shifts

especially for Eastern Europe : increase public
coverage and close treatment gap
Mind the gap

Public finance cannot keep up with increase in drug
expenditures

Options for policy-makers

Increase health budgets : funding from …?

Limit range of drugs to be reimbursed : medical need
and quality treatment

Increase efficiency (regulation of prices, prescribing,
use, …) : requires sustainable funding and
programmes

Shift expenditures to patients :
equity, solidarity …?
Increasing use of strategies to select medicines
for public provision








Positive list for reimbursement ( NL, DK, Swe, …)
Reference pricing, with generic or therapeutic groups (D,
Ita, NL, Por, Rom, …)
Differential reimbursement % ( Fr, Bul, …)
Economic evaluation of medicines ( Fin, NL, Swe, UK,…)
Promote use of generics ( UK, DK, D, Fr, …)
Co-payment mechanism (DK, N, Esp, …)
Standard treatment guidelines (UK, DK, Esp, …)
…
Ways of pricing –
Manufacturer / importer level

Free pricing, Price notification

Public procurement / Tendering

Direct pricing (e.g. cost-plus pricing, statutory price fixing with
different methods like international price comparisons)

Price negotiations (price-volume agreements, pay-backs,
discounts)

(Indirect) Profit control
Pricing (manufacturer level) 2005 - EU-15
Free Pricing
Price Negotiations
Statutory Pricing
AT
(in general: all pharm.)
-
(legal basis for all ph.)
BE
OTC
-
POM
DK
for non-reimbursable pharm
-
reimburs. ph. (alternate)
DE
for innovative pharm. (~ not under reference price
system)
-
indirect via reference price system
FI
for non-reimbursable pharm.
-
reimburs. ph.
FR
for non-reimbursable pharm.
EL
reimburs. Pharm.
-
-
all pharmaceuticals
IR
OTC
POM
-
IT
for non-reimbursable pharm.
reimb. p. (EU registrat.)
LU
for non-reimbursable pharm.
-
reimburs. ph.
NL
for non-reimbursable pharm.
-
reimburs. ph.
PT
OTC
SE
non-reimbursed pharm.
-
reimburs. ph.
ES
EFP = non-reimb. OTC
-
Eticas= POM+reim.OTC
UK
for non-reimbursable pharm. and reimbursable brands but profit is controlled through PPRS
Reimburs. Pharm.
reimb. p. (nat. registrat.)
POM
generics
Internal Reference Price Systems
Definition

Operates by grouping similar products together and specifying
a relative price. The use of a reference price as a
reimbursement benchmark, implies that the government will
only pay that particular price. Any excess above the reference
price has to be paid by the insured.

Germany, Sweden, Denmark, Italy, Belgium, Netherlands,
Norway, Australia, New Zealand, Canada [British Columbia]
External price referencing
Def.: International, cross-country price comparisons using different, socalled country “baskets”

Careful selection of methodology used (e.g. selection of comparative
products, price levels etc) is crucial for success

Prices in countries are interlinked, as they influence each other  poorer
countries pay more, rich pay less

Most often referenced country in Europe: Germany

Only 4 Countries (AT, FI, IT, PL) reference to all other EU Members (or even
other countries)

Industry tries to react using price bands

External price referencing, like parallel trade, benefits the
rich countries at the expense of poor countries
Price comparison in 24 EU Member States
Fluoxetine 20 mg capsule of Eli Lilly
€ 1,20
€ 1,00
€ 0,80
€ 0,60
€ 0,40
€ 0,20
€ 0,00
AT
BE CY CZ
Source: ÖBIG 2005
GR DK
ES
ET
FR
EL
HU
IT
IR
LT
LU
NL
PT
SK
SE UK
VAT
in
the
EU
Member State
Austria
Belgium
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Slovakia
Slovenia
Spain
Sweden
United Kingdom
Standard VAT
20%
21%
0%
19%
25%
18%
22%
20.6%
16%
18%
25%
21%
20%
18%
18%
15%
0%
19%
22%
19%
19%
20%
16%
25%
17.5%
Pharm s
Specific regs
20%
6%
0%
5%
25%
5%
8%
2,1% (reimb.) 5,5% (non-reimb.)
16%
9%
5%
0% (oral) 21% (non-oral)
10%
5%
5%
3%
0%
6%
7%
5%
19%
8.5%
4%
0% (POM)
25% (OTC)
0% (NHS) 17,5% (OTC)
Price regulation pharmacies

Regulating distribution margins

In Europe, pharmacies 10-30% and wholesalers 1-10%

Use degressive margins

How to deal with rebates and discounts ?
Pharmacy Margins 2005 - EU-10
Statutory provisions
Regulation
EST
for all products
regressive scheme with maximum margins and flat rate elements (15-40%)
LV
1 for reimbursable products, 1 for nonreimbursable
2 diff. regressive scheme with max. mark-ups (reimbursables: 5-30%, non-reimbursables: 1040%)
LT
for reimbursable Rx
regressive scheme with maximum mark-ups (4-22%)
M
for all products
maximum linear mark-up on wholesale/import price
PL
for reimbursable products
regressive margin scheme (average 23%)
SK
for all products
maximum mark-up (plus additional maximum dispensing mark-up for wholesaler and
pharmacist) (average 34%)
SLO
no regulation
no margin, but fee for service
CZ
for all products
maximum dispensing mark-up for wholesaler and pharmacist together (29%)
HU
for all products
regressive scheme with mark-ups
CY
for all products
maximum linear margin on wholesale price (25%)
My Personal Conclusions

All price control systems have problems!
Start with the easier options.

Remember that there is a difference
between being a payer and a price
regulator.

The Health Ministry is not responsible for
the profitability of the local pharmaceutical
industry. The Health Ministry is responsible
for the health (both physical & financial) of
their people.
My Personal Conclusions (2)

Remove duties and taxes on medicines.

For innovator patent protected products for which there are
no therapeutic alternatives, use pharmaco economic analysis
to determine prices (See Australia PBS)

Where there are therapeutic alternatives e.g. statins use
internal reference pricing system if possible

If there is a political decision to use international price
comparisons choose your comparator countries carefully and
review frequently (Remember New Zealand)

For generic products for which there are multiple competitive
suppliers consider having no price controls and provide
information to consumers about quality and pricing of
products. Provide international price comparisons such as
MSH IDPIG

If generic prices MUST be price controlled, set the prices UP
from procurement prices not DOWN from originator prices
My Personal Conclusions (3)

Whatever is done, monitor for intended and unintended
effects on price, prescribing and dispensing practices and
volumes. Use time series analysis.

Collect information regularly from HAI Medicine Prices web
site and WHO Sources of Price Information sites

There is a lot of money in medicines. Reducing prices may
result in reduced profits! This can result in political or other
such responses!

Be careful and ensure that you use the best available data
and information in a transparent fashion!

Good luck!
Time Series Analysis Results
60%
50%
Value
40%
30%
20%
10%
0%
0
2
4
6
8
10
12
Time
Policy Group
Control Group
14
16
18
20