This publication has been discontinued on September 9, 2011.
Abstract
Pharmaceutical Pricing and Reimbursement - Reference Pricing and Economic
Evaluations Will Dominate Future Pricing and Reimbursement Strategies
Summary
GBI Research, the leading business intelligence provider, has released its
latest research, “Pharmaceutical Pricing and Reimbursement - Reference
Pricing and Economic Evaluations Will Dominate Future Pricing and
Reimbursement Strategies”. It provides key data, information and
analysis of the major issues affecting the pricing and reimbursement decisions
across the globe. It discusses the major changes that have been observed in
the pharmaceutical and healthcare industry at the global level. The report
also covers issues specific to particular geographies. The geographies covered
include the US and countries within Western Europe, Asia-Pacific, Central and
Eastern Europe, and Scandinavia. It covers pricing and reimbursement
mechanisms in different countries as well as the impact of issues on the key
stakeholders. The report puts a special emphasis on orphan drugs since the
pricing and reimbursement patterns for orphan drugs are different from the
traditional mechanisms.
This report is built using data and information sourced from proprietary
databases, primary and secondary research and in house analysis by GBI
Research’s team of industry experts.
Scope
The scope of this report includes:
- Identification and analysis of major
issues that are affecting the pricing and reimbursement decisions across five
different geographies. These include North America, Western Europe,
Asia-Pacific, Central and Eastern Europe and Scandinavia
- Analysis of the
issues and potential impact of pricing and reimbursement decisions on the key
stakeholders
- Study of the pricing and reimbursement mechanisms in
different countries and the identification of trends in the context of a
particular geography as a whole
- Qualitative analysis of the forces that
are driving and restraining the prices and reimbursements within a particular
geography
- Future outlook of the pricing and reimbursement patterns for
geographies under consideration
Reasons to buy
The report will enhance your decision making and will enable you to:
-
Build understanding of the major issues in the pricing and reimbursement
landscape
- Identify the impact of each issue on your business and develop
solutions for adverse impacts
- Negotiate better with the government
agencies to maximize the reimbursement on the drugs by understanding the
pricing and reimbursement mechanism
- Develop effective business
strategies for pricing a drug which is to be launched in any of the markets
considered in this report
- Identify and exploit the factors that could
help to maximize returns on the drugs for a particular geography in future
Table of Contents
1 Table of Contents
1 Table of Contents 4
1.1 List of Tables 6
1.2
List of Figures 7
2 Introduction 8
2.1 GBI Research Report Guidance
8
3 Pharmaceutical Pricing & Reimbursement Issues at Global Level -
Innovative Mechanisms To Decrease the Healthcare Costs 10
3.1 Introduction
10
3.2 Issues at Global level 12
3.2.1 Value Based Pricing and
Risk-Sharing Models 12
3.2.2 Increased Focus on Evidence-based Medicine
and Health Technology Assessment (HTA) 14
3.2.3 Role of Pharmacoeconomics
in Pricing and Reimbursement 16
3.3 Conclusion 19
4 Pricing and
Reimbursement Issues in US - Government’s Cost Rationalization
Efforts Will Make Future Tough for Big Pharma 21
4.1 New Nationwide
Database to Set Healthcare Reimbursement Rates 22
4.2 Medicaid Pricing for
Dual Eligibles of Medicare Part - D 24
4.3 New ICD-10 (International
Classification of Diseases - 10) Coding System 26
4.4 Generic Price War at
Retail Sector 28
4.5 MIPPA (Medicare Improvement for Patients and
Providers Act), the AMP Rule Litigation 30
4.6 First DataBank/Medi-Span
Settlement and the Impact on AWP 31
4.7 Conclusion 32
5 Pricing and
Reimbursement Issues in Western Europe - Cost-Effectiveness is the Key
to Success 34
5.1 Parallel Trade 34
5.2 EU Single Pricing - Still an
Issue 36
5.3 International Price Referencing 38
5.4 Status quo of P&R
in Western Europe 40
5.4.1 UK 42
5.4.2 France 42
5.4.3 Germany
42
5.4.4 Italy 43
5.4.5 Spain 43
5.5 Conclusion 43
6 Pricing
and Reimbursement Issues in Central & Eastern Europe (CEE) and Scandinavia
- Reference Pricing and Centralization Proves Detrimental for High Price
Drugs 45
6.1 Central & Eastern Europe - Cost-Effectiveness is of
Paramount Importance 45
6.1.1 Czech Republic 47
6.1.2 Poland 48
6.1.3 Austria 48
6.1.4 Romania 49
6.1.5 Hungary 50
6.2 Scandinavia
- Moving Towards Centralized Healthcare Regime 51
6.2.1 Denmark
53
6.2.2 Norway 54
6.2.3 Sweden 54
6.2.4 Future Landscape 55
6.3 Conclusion 55
7 Pricing and Reimbursement Issues in Asia-Pacific
- Negative Pricing Pressures Leaves Less Hope for Expensive Medicines
57
7.1 DPC (Diagnosis Procedure Combination) Reimbursement System in Japan
- Immense Savings for the Government 57
7.2 Reforms in Chinese
Pharmaceutical Market: Tougher Landscape for Generic and Off-Patent Brands
58
7.2.1 Active Ingredient Based Reimbursement: Restricted Market for
Original Branded Products 59
7.2.2 New Regulatory Reforms: Stricter Rules
for Innovation Seal 61
7.2.3 Price Cuts and Hospital Tendering Process:
Erosion of Generic Margins 61
7.2.4 Future Scenario: Innovation is the Key
for Western Pharmaceutical Companies 62
7.3 Transparency Issues with PBS
in Australia 62
7.3.1 AUSFTA (Australia-United States Free Trade
Agreement) - Boon for Branded Pharma 63
7.3.2 Access Issues for HCM (High
Cost Medicines) and Controversial Selection Criteria 64
7.3.3 Consumer
Participation in the PBS Drug Listing - A Move towards Greater Transparency
and Cost-Efficiency 65
7.4 Conclusion 65
8 Pricing and Reimbursement
Issues for Orphan Drugs - Excessive Prices of Orphan Drugs Increasing
Financial Pressures on Government 67
8.1 Exploiting Orphan Drug Act;
Maximizing Revenues 68
8.1.1 Ovation’s Indocin and Questcor’s
H.P. Acthar Gel 68
8.2 Pricing of an Orphan Drug 69
8.3 Price Control
Measures 71
8.3.1 Global Approach for Orphan Drug Development 71
8.3.2
Introducing Sales Ceiling and Flexible Market Exclusivity 71
8.3.3 Price
Revisions 72
8.4 Conclusion 73
9 Key Takeaway 74
10 Appendix
75
10.1 Market Definitions 75
10.2 Key Support Data 75
10.3
Abbreviations 78
10.4 Research Methodology 80
10.4.1 Coverage 81
10.4.2 Secondary Research 81
10.4.3 Primary Research 81
10.4.4 Expert
Panel Validation 82
10.5 Contact Us 82
10.6 Disclaimer 82
10.7
Sources 82
1.1 List of Tables
Table 1: Examples of
Pharmacoeconomic Evaluations in Ireland 18
Table 2: Drug Manufacturers
Receiving Largest Windfalls, ($m), 2006-2007 25
Table 3: Pricing and
Reimbursement Mechanisms in Western European countries 41
Table 4: Pricing
and Reimbursement Mechanisms in Czech Republic, Romania, Austria, Poland and
Hungary 46
Table 5: Different Pricing Mechanisms used in Czech Republic,
Poland, Austria, Romania and Hungary 47
Table 6: Box Model for
Reimbursement in Austria 49
Table 7: Comparative Analysis of Per Capita
Healthcare Expenditures in the Scandinavian Countries, 2006 51
Table 8:
Pricing and Reimbursement Mechanisms in the Scandinavian Countries 53
Table 9: Norway - Step Price System, 2008 54
Table 10: Trend in the
Revision Rates of Reimbursement Prices in Japan, 1992-2008 57
Table
11: Sales in Pharmaceutical Industry, China, $bn, 1998-2008 59
Table
12: Increase in the Per Capita Expenditure for Medical Services in the Urban
and Rural Households, China, $m, 1990-2006 60
Table 13: Ratio of
Retail v/s Wholesale Price in Eight European Countries and China, 2005 61
Table 14: Definition and Incentives for Orphan Drugs in US, EU, Japan and
Australia 67
Table 15: Average Annual Premiums for Family and Single
Coverage. US, ($), 1999-2009 76
Table 16: Australia Drug Price Components
and Payment Structure 77
Table 17: GDP (Nominal) Comparison Between
Western Europe and Central & Eastern Europe, ($bn), 2008 78
1.2 List
of Figures
Figure 1: Comparison of Per Capita Expenditure on Health at
Average Exchange Rate ($) v/s Life Expectancy, 2006 10
Figure 2:
Comparison of CAGR of R&D Expenditure v/s Turnover Over the Last Five Years
for the Top 5 Companies, 2003-2008 11
Figure 3: Value Based Pricing
- Concept and Process 12
Figure 4: Impact Analysis: Value Based
Pricing 14
Figure 5: Drivers and Restraints for EBM (Evidence Based
Medicine) 15
Figure 6: Impact Analysis: Evidence Based Medicine 16
Figure 7: ISPOR 33 Guidelines for Pharmacoeconomics Assessment 17
Figure
8: Impact Analysis: Pharmacoeconomics 19
Figure 9: Average Annual
Percentage Change in Manufacturer Prices for Most Widely Used Prescription
Drugs in US 21
Figure 10: Case: An Example Of Data Tampering To Provide
Artificially Low Reference Prices For Reimbursements Of Out-Of-Network Medical
Expenses 22
Figure 11: Impact Analysis: New Database for Reimbursement
Rates of Out-of-Network Medical Expenses 23
Figure 12: Comparison of
Medicare Part D and Medicaid Discounts 24
Figure 13: Impact Analysis:
Medicaid Pricing for Dual Eligibles in MPD (Medicare Part D) 26
Figure 14:
ICD-10 Coding System; Features and Benefits 27
Figure 15: Impact Analysis:
ICD-10 Coding System 28
Figure 16: Impact Analysis: Generic Price War
29
Figure 17: Impact Analysis: MIPPA (Medicare Improvement for Patients
and Providers Act) 31
Figure 18: Impact Analysis: First DataBank/Medi-Span
Settlement 32
Figure 19: Parallel Import Market Break-down, Europe, 2007,
Total Size = $7.5bn 34
Figure 20: Impact Analysis: Parallel Trade 35
Figure 21: Price Level Indices for Pharmaceutical Products, EU25 = 100, 2005
37
Figure 22: Impact Analysis: EU Single Pricing 38
Figure 23: Impact
Analysis: International Reference Pricing 39
Figure 24: Overshooting
Actual Budget Expenditure, Hungary,(%), 1994-2005 51
Figure 25:
Impact Analysis: P&R Issues in CEE and Scandinavia 56
Figure 26: Impact
Analysis: DPC (Diagnosis Procedure Combination) Reimbursement System 58
Figure 27: Sales in Pharmaceutical Industry, China, $m, 1998-2008 59
Figure 28: Increase in the Per Capita Expenditure for Medical Services in the
Urban and Rural Households, China, ($m), 1990-2006 60
Figure 29:
Impact Analysis: Reforms in Chinese Pharmaceutical Market 62
Figure 30:
Arguments For and Against the AUSFTA 63
Figure 31: Impact Analysis: AUSFTA
64
Figure 32: Number of Orphan Drugs Approved by FDA, 2000-2009
68
Figure 33: Factors Influencing the Pricing of an Orphan Drug 69
Figure 34: Correlation Between the Prevalence and the Annual Cost of Therapy
for Orphan Drugs 70
Figure 35: Impact Analysis: Price Control Measures
on Orphan Drugs 73
Figure 36: The US Healthcare Expenditure, Historical,
$tn, 1980-2008 75
Figure 37: The US Healthcare Expenditure,
Projections, ($tn), 2009-2018 76
Figure 38: GBI Research Methodology
80
