Pharmaceutical Pricing, Reimbursement, and Prescribing News in the First Quarter of 2007

This publication has been discontinued on December 21, 2011.

Introduction

Abstract

Introduction:

In the fi rst quarter of 2007, political intervention in drug pricing and reimbursement in the world' s major pharmaceutical markets greatly increased. In the United States, for example, a new Democratic majority in Congress is intent on curbing the prices of branded medicines and facilitating the launch of generic drugs. In the United Kingdom, a complete overhaul of the country' s pricing and reimbursement system has been proposed. The goal in all major pharmaceutical markets is to cut health care costs, and the pharmaceutical industry is an easy target.

Questions Answered in This Spectrum Report:

• In January 2007, U.S. lawmakers proposed a series of bills to improve U.S. consumers' access to lowpriced generic drugs, including biogenerics. Which bills have been proposed, how much savings are they purported to offer, and what are their chances of being made into law?
• According to the Centers for Medicare and Medicaid Services, the Medicare Part D prescription drug benefit is saving benefi ciaries an average of $1,200 per year. On January 12, 2007, in a further attempt to lower drug prices, the House of Representatives passed the Medicare Prescription Drug Price Negotiation Act of 2007, which would empower the Department of Health and Human Services to negotiate Medicare Part D drug prices. What is the Congressional Budget Offi ce' s argument against this proposal?
• In February 2007, the United Kingdom' s Offi ce of Fair Trading (OFT) published a highly critical review of the Pharmaceutical Price Regulation Scheme, which controls the level of profi t companies may make on sales of branded prescription drugs to the National Health Service. What were the OFT' s criticisms, and what two options did the agency propose to better control prescription drug prices?
• The announcement, in March 2007, by Japan' s Ministry of Health, Labor, and Welfare that it is considering overhauling the national pricing and reimbursement system has galvanized the international pharmaceutical industry, which has long been critical of the system. What reforms is the Federation of Pharmaceutical Manufacturers' Associations of Japan planning to propose?

Scope:

• First quarter news in 2007: major events in the pharmaceutical pricing, reimbursement, and prescribing environment in the United States, Europe (France, Germany, Italy, Spain, and the United Kingdom), and Japan.
• Cost-containment programs: legislation that has been proposed in the United States and elsewhere to reduce drug expenditures and make medication more affordable to patients.
• Outlook: our assessment of the implications of these events for the pharmaceutical industry in the major markets under study.

Table of Contents

• Executive Summary
  • Strategic Considerations
  • Stakeholder Implications
• Introduction
• United States
  • Slowdown in U.S. Health Care Spending in 2005
  • Solid Growth in U.S. Pharmaceutical Market in 2006
  • Increased Scrutiny of Drug Prices for Federal Programs
  • Continued Growth in Medicare Part D Enrollment
  • Pressure for Government Price Negotiations for Medicare Part D
  • Prospect of Increased Medicaid Rebates
  • Measures to Improve Access to Generic Drugs
  • Regulation of Biogenerics
  • Drug Importation
• France
  • National Frame of Reference for the Good Use of Expensive and Innovative Drugs
  • Parallel Imports
  • Obesity Therapy Qualifi es for Limited Reimbursement
  • GlaxoSmithKline Fined for Predatory Pricing
• Germany
  • Slowdown in Pharmaceutical Spending
  • New Health Care Reforms Enacted
  • Growth of Manufacturer Rebates
  • Daily Cost-of-Therapy Limits
• Italy
  • Concern over Regional Reference Pricing Initiatives
  • Industry Calls for a Change in Pharmaceutical Policy
• Spain
  • Implementation of New Reference Pricing System
  • New System to Monitor Parallel Exports
• United Kingdom
  • Proposal to Replace the Pharmaceutical Price Regulation Scheme
  • New Candidates for Single Technology Appraisals
  • Adjustments to Prescription Charges
• Japan
  • Expected Reform of the Pricing and Reimbursement System
  • Limited Level of Generics Substitution
  • Outlook and Implications for the Pharmaceutical Industry

Figures

• 1. Evolution of Prescription Drug Expenditures in the United States in Select Years from 1970 to 2005
• 2. Main Sources of Funding for U.S. Prescription Drug Expenditures, 2005
• 3. Medicare Benefi ciaries' Prescription Drug Coverage, January 2007

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