The effect of new drug pricing systems and new reimbursement guidelines on pharmaceutical expenditures and prescribing behavior among hypertensive patients in Korea

Implementation of medicines pricing policies in sub-Saharan Africa: systematic review

BACKGROUND

High medicine prices contribute to increasing cost of healthcare worldwide. Many patients with limited resources in sub-Saharan Africa (SSA) are confronted with out-of-pocket charges, constraining their access to medicines. Different medicine pricing policies are implemented to improve affordability and availability; however, evidence on the experiences of implementations of these policies in SSA settings appears limited. Therefore, to bridge this knowledge gap, we reviewed published evidence and answered the question: what are the key determinants of implementation of medicines pricing policies in SSA countries?

METHODS

We identified policies and examined implementation processes, key actors involved, contextual influences on and impact of these policies. We searched five databases and grey literature; screening was done in two stages following clear inclusion criteria. A structured template guided the data extraction, and data analysis followed thematic narrative synthesis. The review followed best practices and reported using PRISMA guidelines.

RESULTS

Of the 5595 studies identified, 31 met the inclusion criteria. The results showed thirteen pricing policies were implemented across SSA between 2003 and 2020. These were in four domains: targeted public subsides, regulatory frameworks and direct price control, generic medicine policies and purchasing policies. Main actors involved were government, wholesalers, manufacturers, retailers, professional bodies, community members and private and public health facilities. Key contextual barriers to implementation were limited awareness about policies, lack of regulatory capacity and lack of price transparency in external reference pricing process. Key facilitators were favourable policy environment on essential medicines, strong political will and international support. Evidence on effectiveness of these policies on reducing prices of, and improving access to, medicines was mixed. Reductions in prices were reported occasionally, and implementation of medicine pricing policy sometimes led to improved availability and affordability to essential medicines.

CONCLUSIONS

Implementation of medicine pricing policies in SSA shows some mixed evidence of improved availability and affordability to essential medicines. It is important to understand country-specific experiences, diversity of policy actors and contextual barriers and facilitators to policy implementation. Our study suggests three policy implications, for SSA and potentially other low-resource settings: avoiding a 'one-size-fits-all' approach, engaging both private and public sector policy actors in policy implementation and continuously monitoring implementation and effects of policies.

SYSTEMATIC REVIEW REGISTRATION

PROSPERO CRD42020178166.

The impact of the reference pricing policy in China on drug procurement and cost

High drug costs are putting pressures on health care budgets and posing an obstacle for China to achieve universal coverage. Policies such as the direct price ceiling, and the Essential Medicines Program-with the Zero Markup Drug Policy (ZMDP) one key component-were implemented, coming out with limited evidence for a success. As a benchmark of China's recent health reform, Sanming city initiated the ZMDP in January 2013; and further piloted the first reference pricing (RP) policy in China in September 2014, with the intention to dis-incentivize the use of costly original drugs. In this study, we used hospital-based drug procurement data of 14 drug substances that were subjected to the RP, from four hospitals in Sanming and a neighbouring city Longyan, between 2012 and 2016. Adopting the difference-in-difference (DID) approach, we evaluated the impacts of the RP together with the ZMDP. On the one hand, we found that the ZMDP had no impact on drugs' procurement prices, volumes and costs. While on the other hand, we found that the introduction of RP was not associated with changes in unit prices for the 14 drugs in Sanming. However, the RP pilot was associated with a 25.9% [95% confidence interval (CI), 12.9-37.0%] decrease in monthly drug procurement volumes and a 47.7% (95% CI, 33.7-58.7%) decrease in the total drug costs. In particular, it reduced the procurement volumes of original drugs by 56.8% (95% CI, 47.0-64.7%). Subgroup analyses by hospital level and therapeutic class found similar results. We draw lessons for the Chinese government to experiment RP on a larger scale, considering the development and effective regulation of the generic market. This is a first report on the effects of RP in China, Asia and middle-income countries.

Cost-Effectiveness Analysis of Spending on Research and Development to Address the Needs for Innovative Therapeutic Products in Indonesia

Background

The annual gross domestic expenditure on research and development (GERD) per capita of Indonesia ($24) remains relatively lower than the annual GERD per capita of neighboring countries, such as Vietnam ($36), Singapore ($1804), Malaysia ($361), and Thailand ($111).

Objective

The aim of this study was to conduct a cost-effectiveness analysis of spending on healthcare R&D to address the needs of developing innovative therapeutic products in Indonesia.

Methods

A decision tree model was developed by taking into account four stages of R&D: stage 1 from raw concept to feasibility, stage 2 from feasibility to development, stage 3 from development to early commercialization, and stage 4 from early to full commercialization. Considering a 3-year time horizon, a stage-dependent success rate was applied and analyses were conducted from a business perspective. Two scenarios were compared by assuming the government of Indonesia would increase GERD in health and medical sciences up to 2- and 3-times higher than the baseline (current situation) for the first and second scenario, respectively. Cost per number of innovative products in health and medical sciences was considered as the incremental cost-effectiveness ratio (ICER). Univariate sensitivity analysis was conducted to investigate the effects of different input parameters on the ICER.

Results

There was a statistically significant association (P-value<0.05) between countries’ GERD in medical and health sciences with the number of innovative products. We estimated the ICER would be $8.50 million and $2.04 million per innovative product for the first and second scenario, respectively. The sensitivity analysis showed that the success rates in all stages and total GERD were the most influential parameters impacting the ICER.

Conclusion

The result showed that there was an association between GERD in medical and health sciences with the number of innovative products. In addition, the second scenario would be more cost-effective than the first scenario.

The speed of adoption of new drugs and prescription volume after the amendments in reimbursement coverage: the case of non-vitamin K antagonist oral anticoagulants in South Korea

Background

The speed of adoption of new drugs and frequencies of substitutions leads to changes in health care expenditures as well as patient outcomes. In this study, we aim to understand the speed of adoption of new drugs and their prescription volume in health care institutions and evaluate the impact of policy options to manage pharmaceutical expenditure.

Methods

We conducted a retrospective cohort study of health care institutions prescribing NOACs, including Apixaban, Dabigatran, and Rivaroxaban, to address the speed of adoption and their substitution from October 1, 2010, through December 31, 2015, using the National Health Insurance Service-National Sample Cohort. Two threshold time points, including the extension of reimbursement with the need for the letter of opinion and the withdrawal of the letter of opinion, were noted in this study. Then, we applied a survival analysis to elucidate factors that affected the speed of adoption of NOACs, and interrupted time series analysis to estimate the effect of amendments in reimbursement coverage in prescription volume.

Results

Among 934 health care institutions in a study population, 334 institutions (36%) had prescribed NOACs at least one time during the study period, indicating that health care institutions were conservative in adopting new drugs. However, the speed of adoption was related to the characteristics of health care institution. We also found that prescriptions of NOACs before the withdrawal of the need for the letter of opinion were marginal, and the prescription volume of NOACs was significantly increased after the withdrawal of a letter of opinion.

Conclusions

Health care institutions were conservative in adopting new drugs, and the speed of adoption is not closely related to an increased prescription volume in the short run. Thus, policies that are centered on managing pharmaceutical expenditure should be devised with considering the impact of introducing new drugs in the long run. A letter of opinion, which was devised to manage prescriptions of NOACs, was effective in managing pharmaceutical expenditures in health care institutions, particularly for tertiary institutions. Conversely, the withdrawal of the need for the letter of opinion should be implemented with caution.

Government pharmaceutical pricing strategies in the Asia-Pacific region: an overview

Background and objectives: Governments in Asia Pacific (APAC) are increasingly using pharmaceutical pricing strategies to contain rising healthcare costs. The objective of this narrative review is to discuss formal pricing strategies for reimbursed prescription medication in APAC, supported by relevant examples of implementation differences across countries. In the discussion section, we examine key advantages and disadvantages of each strategy. Methods: A narrative review of the peer-reviewed and grey literature was undertaken to retrieve information, including strategy definitions, practising countries, country-specific implementation considerations, and merits and demerits of each strategy. Results: Seven strategies (Internal Reference Pricing, External Reference Pricing, Special Pricing Agreements, Pharmacoeconomic Evaluation, Cost plus pricing, Price Maintenance Premium, and Tendering and negotiations) were identified as most commonly practised in APAC through the review process. Most countries use multiple strategies that differ in how they are implemented. Conclusion: APAC countries use multiple strategies simultaneously with varying implementation methods, including different formulae and sub-types of medication that a strategy applies to, whether the strategy is a mandate or guideline, and the extent of negotiations and transparency. Strategies are instituted partly with the aim of cost containment, and may also promote price stability, innovation, and increased access in the short and longer term. Abbreviations: APAC - Asia Pacific; WHO - World Health Organisation; IRP - Internal Reference Pricing; ERP - External Reference Pricing; SPA - Special Pricing Agreement; MES - Managed Entry Scheme; PVA - Price-Volume Agreement; RSA - Risk Sharing Agreement; NHIS - National Health Insurance System; PE - Pharmacoeconomic Evaluation; CEA - Cost-Effectiveness Analysis; QALY - Quality-adjusted Life Year; BIA - Budget Impact Analysis; PMP - Price Maintenance Premium; R&D - Research & Development.

Decomposing the effect of drug benefit program on antihypertensive medication adherence among the elderly in urban China

PURPOSE

Hypertension is a rapidly growing epidemic in People's Republic of China, yet it remains inadequately controlled. This study aimed to identify the relative contributions of program effects and patients' characteristics to the differences in antihypertensive medication nonadherence between drug benefit program enrollees and non-enrollees.

PATIENTS AND METHODS

Data were from a cross-sectional survey of 1,969 community-dwelling elderly adults with hypertension. Self-reported adherence was measured following previous studies in People's Republic of China. The Blinder-Oaxaca nonlinear decomposition method was used to identify the relative contributions of program effects and patients' individual characteristics.

RESULTS

Eleven percent of the drug benefit program enrollees were nonadherent to their medication, while 17% of non-enrollees were. Blinder-Oaxaca decomposition identified that over 60% of the gap between the two groups was due to the program effects (P=0.024). The rest could be explained by differences in observable characteristics (P<0.001), such as diabetic status, duration of hypertension, and blood pressure control.

CONCLUSION

The study confirmed that drug benefit program enrollees were more likely to be adherent to their antihypertensive medication than non-enrollees in the context of People's Republic of China.

Perception and attitude of Korean physicians towards generic drugs

Background

In 2012, a new pharmaceutical policy was introduced in Korea. According to the new policy, off-patent brand-name drugs (original drugs) and generic drugs must be priced the same.

Methods

This study aims to investigate the perception and attitude of Korean physicians towards generic drugs before and after the policy reform. Surveys were conducted with registered doctors at the Health Insurance Review Agency (HIRA) twice, in 2011 and 2013, by means of email and HIRA online survey systems.

Results

In the 2011 survey, 82% knew about the bioequivalent (BE) guideline, whereas only 25.7% trusted BE testing results. More than half preferred original drugs to generic drugs because of clinical experience and generic drugs confidence limits. 64.2% pointed out that the Korean generic drugs prices are more expensive than in other counties. In the 2013 survey, 73% preferred original drugs to generic drugs because of believed difference in drug effectiveness. After the pricing policy reform, 35.5% stated that they didn’t change their prescribing pattern, whereas 29.7% stated that they began prescribing generic drugs.

Conclusions

The Korean government has revised and strengthen the guideline on BE test to improve the quality and confidence of generic drugs. Although generic drugs prescription was increased slightly more than the 2011 survey, 2013 survey showed that around 70% of respondents still preferred original drugs.

Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks

CONTEXT

Recent public outcry has highlighted the rising cost of prescription drugs worldwide, which in several disease areas outpaces other health care expenditures and results in a suboptimal global availability of essential medicines.

METHOD

A systematic review of Pubmed, the Financial Times, the New York Times, the Wall Street Journal and the Guardian was performed to identify articles related to the pricing of medicines.

FINDINGS

Changes in drug life cycles have dramatically affected patent medicine markets, which have long been considered a self-evident and self-sustainable source of income for highly profitable drug companies. Market failure in combination with high merger and acquisition activity in the sector have allowed price increases for even off-patent drugs. With market interventions and the introduction of QALY measures in health care, governments have tried to influence drug prices, but often encounter unintended consequences. Patent reform legislation, reference pricing, outcome-based pricing and incentivizing physicians and pharmacists to prescribe low-cost drugs are among the most promising short-term policy options. Due to the lack of systematic research on the effectiveness of policy measures, an increasing number of ad hoc decisions have been made with counterproductive effects on the availability of essential drugs. Future challenges demand new policies, for which recommendations are offered.

CONCLUSION

A fertile ground for high-priced drugs has been created by changes in drug life-cycle dynamics, the unintended effects of patent legislation, government policy measures and orphan drug programs. There is an urgent need for regulatory reform to curtail prices and safeguard equitable access to innovative medicines.

Prediction of Change in Prescription Ingredient Costs and Co-payment Rates under a Reference Pricing System in South Korea

BACKGROUND

The reference pricing system (RPS) establishes reference prices within interchangeable reference groupings. For drugs priced higher than the reference point, patients pay the difference between the reference price and the total price.

OBJECTIVES

To predict potential changes in prescription ingredient costs and co-payment rates after implementation of an RPS in South Korea.

METHODS

Korean National Health Insurance claims data were used as a baseline to develop possible RPS models. Five components of a potential RPS policy were varied: reference groupings, reference pricing methods, co-pay reduction programs, manufacturer price reductions, and increased drug substitutions. The potential changes for prescription ingredient costs and co-payment rates were predicted for the various scenarios.

RESULTS

It was predicted that transferring the difference (total price minus reference price) from the insurer to patients would reduce ingredient costs from 1.4% to 22.8% for the third-party payer (government), but patient co-payment rates would increase from a baseline of 20.4% to 22.0% using chemical groupings and to 25.0% using therapeutic groupings. Savings rates in prescription ingredient costs (government and patient combined) were predicted to range from 1.6% to 13.7% depending on various scenarios. Although the co-payment rate would increase, a 15% price reduction by manufacturers coupled with a substitution rate of 30% would result in a decrease in the co-payment amount (change in absolute dollars vs. change in rates).

CONCLUSIONS

Our models predicted that the implementation of RPS in South Korea would lead to savings in ingredient costs for the third-party payer and co-payments for patients with potential scenarios.

Strategies for Expanding Access and Improving the Quality of Pharmaceutical Services

Pharmaceutical services are among the most accessible healthcare assistance systems worldwide, being provided generally in enterprises like Drugstores and Compounding Pharmacies. Pharmacists are highly accessible healthcare professionals considering also the availability, geographic distribution and location of pharmaceutical enterprises. However, there are several challenges for providing these services for patients with limitations such as low education, difficulties on reaching the Pharmacist, and the need for individualized monitoring (due to the complexity of therapy). Reports of low quality services are growing worldwide, and in order to expand access and improve the quality of pharmaceutical services, Pharmacists must move from being medication dispensers with focus in administrative management to a clinically-oriented practice with a humanistic view. The aim of this chapter is to make an approach on the implementation of effective strategies and ways to improve the quality of Pharmacists' work as specialized healthcare providers.

Effects of drug price reduction and prescribing restrictions on expenditures and utilisation of antihypertensive drugs in Korea

OBJECTIVES

To evaluate the quantitative effects of the drug price reduction on pharmaceutical expenditures and the new guidelines to restrict prescribing on drug utilisation for antihypertensive drugs.

DESIGN

We used an interrupted time series design with the National patient sample data of Health Insurance Review and Assessment Service in South Korea.

METHODS

54,295 participants who were with primary hypertension from the National patient sample data of Health Insurance Review and Assessment Service were included. The study period was from March 2011 to December 2013. The dependent variables were antihypertensive drug costs, antihypertensive drug cost per prescribing day, daily drug utilisation, average number of drugs per month, percentage of original drugs per prescription, drug overutilisation and prohibited combinations. Segmented regression analysis was used.

RESULTS

The drug price reduction reduced expenditure (US$-1.51, -10.2%), and the new guidelines reduced expenditures even more (US$-2.13; -16.2%). These policies saved US$4.22 (28%) of antihypertensive drug costs per patient in December 2013 compared to March 2012. Drug price reduction policy was introduced in April 2012. We established the policy effect by comparing it before (March 2012) with after(21 months later-December 2012). The effects of the guidelines decreased expenditures, daily drug utilisation and the average number of drugs per month more than did the drug price reduction.

CONCLUSIONS

Both policies saved money. The guidelines were more effective over time and had fewer side effects such as increasing daily drug utilisation and number of drugs than the effects of drug price reduction.