Drug Price/Cost Debate: Coping with Escalating Pricing Pressures

Drug Price/Cost Debate: Coping with Escalating Pricing Pressures published by Decision Resources, Inc. in November, 2009. This report consists of 35 Pages and the price starts from US $ 4600.

Introduction

Abstract

Introduction

Insinuations of profiteering were made against an H1N1 swine fl u vaccine manufacturer in the summer of 2009. As the swine fl u epidemic began to take on serious proportions, public scrutiny in the United Kingdom focused on manufacturers developing vaccines for the prevention of this disease and on what constitutes a fair price for a drug. The U.K. public' s suspicion of pharmaceutical profiteering in the H1N1 vaccine arena is just the tip of the iceberg in the ongoing and acrimonious battle over the prices that pharmaceutical companies charge for drugs and the costs that payers must cover to meet the increasing demands for healthcare. With global economies in the tank owing to the ongoing worldwide recession, the pitch of the battle increased in 2009. Some companies are developing new strategies to combat increased price/cost pressures. Who has been successful, and who has not? What strategies are in play, and which ones are working? What duck-and-cover strategies are skittish manufacturers attempting? In this report, we discuss elements of the escalating drug price/cost battle, the cost-containment measures that governments are implementing, and the new strategies that companies are devising to cope with increasing pricing pressures.

Questions Answered in This Report

The inescapable fact is that governments have to make decisions about how limited healthcare budgets will be spent. What cost-containment measures have European countries adopted? What new pricing strategies are companies inventing to make their drugs acceptable to reimbursement authorities such as NICE and IQWiG? Which pharma companies will be the winners in the drug price/cost debate? After a tortuous process that involved both judicial review and a court appeal, NICE published amended guidance on four medicines for the treatment of Alzheimer' s disease. Why are NICE' s decisions so controversial? What recommendations did NICE make in its technology appraisals for new drugs in 2009? What recent decisions did IQWiG make that will impact drug manufacturers in Germany? What lessons can drug manufacturers learn? Companies are developing new approaches to cope with increasing pricing pressures and changing market dynamics. What ten tactics are companies using? Why are companies entering generics markets? How are companies spreading risk?

Scope

• Drug pricing: Swine fl u vaccine, profiteering, comparison of drug prices in different countries, free pricing markets, generic pricing.
• Cost-containment measures: Cost-effectiveness, value-for-money, reference prices, arbitrary price cuts, generics, biosimilars, claw-back systems, technology appraisals, price caps, China, European countries, Japan, Sweden, the Philippines, revocation of operating licenses, suspension of marketing permits, value-based pricing, biennial price cuts, price cuts on generics, Taiwan, United Kingdom, Pharmaceutical Price Regulation Scheme, controlling drug company profits, controlling pharmacy profits, generic prescribing, generic substitution, generic promotion, European Generic Association, generic penetration rates across Europe, Pharmaceutical Pricing and Reimbursement Information Project, ten measures to promote the use of generic medicines.
• NICE: National In titute for Health and Clinical Excellence, guidance documents published in 2009, Alzheimer' s disease, renal cell carcinoma, Eisai/Pfizer' s Aricept, Shire' s Reminyl, Novartis' s Exelon, Lundbeck' s Ebixa, judicial decision, Court of Appeal, Roche' s Avastin, Bayer' s Nexavar, Wyeth' s Torisel, Pfizer' s Sutent, life-extending, end-of-life treatments, incremental cost-effectiveness ratio (ICER), quality-adjusted life year (QALY), locally proven efficacy, Roche' s Pegasys, Gilead Sciences' Adefovir, Sanofi -Aventis' s Plavix, Pfizer' s Macugen, Abbott' s Humira, Wyeth' s Enbrel, Schering-Plough' s Remicade, Servier' s Protelos.
• IQWiG: Institute for Quality and Efficiency in Health Care, Gemeinsame Bundesausschuss (GBA), Federal Joint Committee, evidence-based decisions, Novo Nordisk' s Novorapid, Eli Lilly' s Humalog/ Liprolog, Sanofi-Aventis' s Apidra, insulin analogues, value added, Pfizer' s Exubera, Sanofi-Aventis' s Lantus, Novo Nordisk' s Levemir, cancer risk, Pfizer' s Edronax, GlaxoSmithKline' s bupropion, Essex Pharma' s mirtazapine.
• Price-coping strategies: Ten tactics that companies are using to cope with increasing pricing pressures, Center for Responsible Politics, Pfizer' s Sutent, Celgene' s Revlimid, Novartis' s Lucentis, Pfizer' s Macugen, GlaxoSmithKline' s Tyverb, Bayer' s Nexavar.

Table of Contents

Contents

• Executive Summary
• Strategic Considerations
• Stakeholder Implications
• What Constitutes a Fair Price for a Drug?
• Cost-Containment Measures
• Value-for-Money Criteria
• The United Kingdom' s National Institute for Health and Clinical Excellence
• Drugs for Alzheimer' s Disease
• Drugs for Kidney Cancer
• Germany' s Institute for Quality and Efficiency in Health Care
• Short-Acting Insulin Analogues
• Duck-and-Cover Strategy
• Arbitrary Price Cuts
• Measures to Promote Generic Prescribing and Dispensing
• Lobbying to Stem the Tide
• Results from New Pricing Strategies
• Pfizer' s Sutent for Advanced and/or Metastatic Renal Cell Carcinoma
• Celgene' s Revlimid for Multiple Myeloma
• Novartis' s Lucentis for Wet Age-Related Macular Degeneration
• GlaxoSmithKline' s Tyverb for Breast Cancer
• Bayer' s Nexavar for Liver Cancer
• Entering Generics Markets
• Looking Elsewhere
• Will Obama Be NICE to the U.S. Pharmaceutical Industry?
• Winners of the Drug Price/Cost Debate

Tables

• 1. Comparative Drug Prices in Different Pharmaceutical Markets as a Percentage of U.S. Prices
• 2. Drug Price Control Measures in Select Countries
• 3. National Institute for Health and Clinical Excellence: Technology Appraisal Guidance, 2009
• 4. National Institute for Health and Clinical Excellence: Results of Select Health Technology Assessments
• 5. Institute for Quality and Efficiency in Health Care: Findings from Select Publications, 2008 and 2009
• 6. Pharmaceutical Pricing and Reimbursement Information Project: Promotion of Generics in European Countries, 2006-2007
• 7. National Institute for Health and Clinical Excellence: Technology Appraisal for Avastin, Nexavar, Sutent, and Torisel for Renal Cell Carcinoma, 2009

Figures

• 1. National Institute for Health and Clinical Excellence: Three Areas of Guidance
• 2. National Institute for Health and Clinical Excellence: Convoluted Process to Arrive at a Technology Appraisal for Four Alzheimer' s Drugs
• 3. Generic Market Shares in Europe, 2006
• 4. Lobbying Spend by Different Industries to Infl uence the U.S. Congress and Federal Agencies, First Half of 2009
• 5. Top Health-Related Spenders Lobbying the U.S. Congress and Federal Agencies, First Half of 2009

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