Transcript Slide 1

Current Medicine Pricing
Policies in EMR & Jordan
Samia Saad
Independent Consultant
Medicines Transparency Alliance (MeTA)
Dead Sea, Jordan, 4th December 2007
OUTLINE
1.
Common Practice & Medicine Price Setting
Models in EMR Countries
2.
Challenges with Common Practice
3.
Possible Solutions
- new tools & strategies for price negotiation
4.
Recommendations
5.
Jordan’s 2004 Pricing Criteria & revisions
6.
Generics Policies in Jordan
Why do we need
Pricing Policies?
Common Practice & Medicine Price Setting
Models in EMR Countries
Locally Manufactured
Innovator
Reference
Pricing
Negotiation
based on cost
analysis
Generic
Priced down as
set % of
innovator
Negotiation
based on cost
analysis
Imported
Innovator
Reference
Pricing
Generic
Priced down as
set % of
innovator
Negotiation
based on cost
analysis
Reference Price (Imported Innovator Medicines)
- Ref. Countries & Strategies commonly used in EMR
1.
Country of origin
2.
Basket of European Countries that use Cost Effectiveness
Analysis (Jordan)
3.
Neighbouring countries- Saudi Arabia often used ( Jordan, GCC,
4.
India, Australia, NZ, Canada (Pakistan)
5.
Cost of Therapeutic equivalents already in market (Pakistan,
6.
As many countries as possible from a varied panel of 32
countries (Saudi Arabia)
7.
France (Tunis , Morocco)
8.
BNF – 30% (Sudan);
9.
Pharmaco - econmics tools such as CEA (Jordan, Egypt, Saudi
Arabia)
Pakistan, Yemen)
Yemen)
BNF -(15-20%) (Yemen)
Pricing Down Mechanisms for Generics
•
Set % of price of underlying Innovator (with max.
ceiling)
•
Some countries give price advantage based on order
of market entry, whereby each new entrant is priced
10% lower than previous generic Kuwait, Saudi
Arabia, Bahrain)
•
Some countries check lowest generic in market and
reduce by set % (Pakistan)
Challenges in Price Setting for EMR countries
1.
NDP & implementation
2.
Negotiation of price of Innovator Brand
no bargaining power with pharma, what market can bear!
3.
high prices/cost new/high tech medicines
4.
Re-pricing - withdrawal
5.
Local agents can be barrier
6.
Volume and market segmentation
7.
Physician & Medical Association pressure to import high cost IB
medicines
8.
Weak regulatory authority
Recommendations
1.
Volume & flat price for new technologies - improved bargaining through:
-
Collective bargaining through joint CIF medicine price setting (regional or
subregional according to socioeconomic indictators). Use GCC experience as model.
better information sharing on price setting with neighbouring countries
2.
Use registration of new medicines to reduce older brands (IB) from same
pharma company (eg. Pakistan)
3.
Better information on prices and price setting mechanisms in EMR countries
4.
Reference countries
(eg. through price lists on websites)
-
increase no. of countries (eg. Saudi Arabia model)
-
look South (eg. Australia and NZ where prices of IB lower than USA and
Europe)
5.
Use more pharmaco-economic tools such as CEA
6.
Re-price whole class of therapeutic medicines NOT just individual medicine
7.
Physician/Professional Association pressure – EDUCATION, EDUCATION,
EDUCATION!
Structure and Process of
Regulating Medicine Prices
Separate Pricing Department within JFDA (used to be
joint committee for registration and pricing)
•
JFDA has a bioequivalence studies committee that
reports to the registration committee and pricing
department
•
On 29/1/2004 new pricing criteria was released;
available on JFDA website and JFDA official Gazette
which the HAI/WHO medicine price survey was under
conducted
•
Modifications to pricing criteria were released by
JFDA on on 09/05/2007
•
JFDA Medicine Price Setting for
Jordanian Market
MSP/FOB/CIF price is set by the Pricing
Department by implementing the official
pricing criteria
•
•
The mark ups of wholesalers and retailers
are set by the Pharmacy and Drug Law &
bylaws
Where no international reference price
exists for new medicines, JFDA utilises
pharmaco-economics (eg. costeffectiveness analysis) to set the price
•
Price Setting - INNOVATOR MEDICINES
Final price is taken from whichever of mechanisms (1-4) below is less:
Pricing Formula/cost analysis:
1. Drug price is computed from cost price on the basis of the factorylisted price in the invoice issued from the party designated to issue
invoices (Article 2)
2. Cost of imported drug on the basis of the selling price to public in
Country of Origin after deducting Value Added Tax there, if applicable,
and after deducting the profits of wholesalers and retailers (Article 3)
Reference Price:
3. Median price resulting from prices of public in Britain, France, Spain,
Italy, Germany, Greece and the Netherlands computed from applying
Article (3) of this Regime. If not priced in all of those countries, median
price where available in these countries is computed, provided number
thereof is not less than three countries.(Article 4.c)
4. Price computed from the export price to the Saudi Market if available
Additional Negotiation
If drug is registered and priced in Country of
Origin only and the application of Article 4.c
becomes impracticable, then it shall be priced on
basis of drug prices having close chemical
composition and/or therapeutic effect provided
the extent of this resemblance shall be
determined by the Committee for registering New
Drugs through Specimen No. (1), approved for
such purpose (Article 4.e), using pharmacoeconomic tools
Price Setting - Generic Medicines
The pricing of generic drugs manufactured by local •
companies in Jordan is directly linked to the prices of
the underlying innovator drugs
The same pricing policies relating to innovator drugs •
apply, such that the price should not exceed 80% of
the price of the underlying innovator drug (Article 5)
when registered and priced initially or upon re-pricing
it by virtue of Article (15), whichever is less
Supply Chain add-on Costs
holesale19%; Retail 26%
xes &
% import tariff; 4% sales tax
Markups:
Duties:
ny medicines, excluding antibiotics, are charged
to 5% import fee, depending on country & trade
eements with Jordan, often resulting in a
mulative mark-up of up to 70%
Trade Agreements
Jordan has been a member of World Trade organisation
since 11th April 2000.
Important Existing Trade Agreements:
FTA with USA (17/12/2001)
•
Association agreement with EU (1/5/2002) aims
to create FTA with EU by 2010
FTA with EFTA States (Iceland, Liechtenstein,
Norway and Switzerland) 21/6/ 2001
FTA with Singapore (16/5/2004)
•
•
•
Since January 2006, agreements between Jordan and
the EU as well as with EFTA countries have resulted in
customs duties being reduced from 5% to 0%.
Revision to Pricing Criteria - May 2007
Germany has been replaced by Belgium in
the basket of countries used to calculate
median.
JFDA’s rationale
Belgium has lower, more reasonable
prices
access to its prices is publicly available
Further revisions will be discussed in the
panel
Generics Policies (I)
Quality Assurance:
bioequivalence studies are required for generics at
the time of registration
Patents:
Patent Law 21 of 2001 is in force. In addition, the
Unfair Competition and Trade Secrets Law 15 of
2000 provides considerable protection for
pharmaceutical products. Under this Law, the
duration of data protection is for five years
starting on the date of receiving marketing approval
and covers products registered by foreign
companies after the Law became enacted,
regardless of whether or not the product is still inpatent.
Generics Policies (II)
Regulation & Registration:
Bolar like provision exists - 9 months before patent expiry, •
generic manufacturers can submit bioequivalence test results and
start the market application procedure. However, if the product is
protected by Data Protection filed under Law 15 of 2000, the
JFDA does not accept any applications for regulatory approval
Differential registration fees: Innovator: 1200 JD ,Generic •
200 JD
Average period of registration is maximum of 180 days from •
date of complete submission of documentation. No difference for
Generics
Registration period after which companies have to re-register •
their products:
Innovator :after initial registration, innovator is re-priced after 2 years. Thereafter every 5 years.
Generic: every five years for re-registration and re-pricing -
Generics Policies (III)
Competition: There are sufficient numbers of •
manufacturers (17 local) and importers for generic price
competition to occur. Competition not fully free - JFDA
regulates prices (sets maximum price ceiling for generics
as 80% of innovator)
Labelling: Branded Generic names usually used, but •
active substances must be labeled on outer and inner
packaging (no font size or position stipulated in law)
Generics Policies (IV)
Reimbursement:
In public sector, patient has to pay anything above cost •
of lowest priced generic (LPG). If patient obtains
medicine under public health insurance from private
sector they will only get reimbursed LPG price
A committee for procurement tendering determines •
which drugs will be reimbursed in public sector and
under national health insurance
In general innovator not available in public sector so •
difficult to assess if co-payment above LPG leads to
higher generic use
Generics Policies (V)
escribing Policies
neric prescribing is required in the public sector. In •
private sector there no requirement or
couragement to prescribe generics and innovator
prevalent
ysicians are not provided with sources of •
ormation for generic names
ception from physicians is that they prefer •
novator medicines, although they do have
nfidence in locally produced Generics
Generics Policies (VI)
Sales and dispensing policies:
- No laws allowing substitution
No financial incentive exists for the Generics to be sold preferentially, since Innovator and Generic
medicines have the same % mark up
Public Education:
- No official public education campaign or strategy on
generic medicines to patients, pharmacists or
prescribers.
Overall, poor perception of generics. Jordan has a brand culture!
Thank You!