Implication of external price referencing and parallel trade on pharmaceutical expenditure: indirect evidence from lower-income European countries

How does external reference pricing work in developing countries: evidence from Iran

Introduction: Governments apply different pricing policies to ensure public accessibility, availability, and affordability of medicines. In this way, external reference pricing (ERP) because of its easy implementation is used widely across countries. However, ERP is completely path dependent, and it would both bring pros and cons, related to its implementing strategy which makes understanding of its impact in different countries challenging. In this study, we examine the performance of the ERP approach in Iran as a pricing tool. Method: We conducted a cross-sectional descriptive study. Although Iran officially uses a reference country basket for ERP, in this study, we use different reference countries based on socioeconomic comparability, access to their price data, medicine pricing approaches, and pharmaceutical expenditure to examine the effect of reference countries as well as the method performance. Then, an empirical study was applied to a list of selected samples of medicines in the Iranian market to compare their price with our new reference countries. Then, we discuss the performance of ERP process based on the real prices in the Iranian pharmaceutical market. Result: The prices of 57 medicines, which contain about 69.2% of the imported Iran pharma market in value, were compared with their prices in selected reference countries. It was found that 49.1% of prices were more expensive in at least one of the reference countries, and in 21% of products, the average price in Iran was higher than the average price in reference countries. Conclusion: Achieving efficient and fair pricing of pharmaceuticals between and within countries is still a complex conceptual and policy problem that ERP in short term can handle. ERP cannot be considered a perfect tool for pricing alone, although its effectiveness is acceptable. It is expected that using other pricing methods alongside the ERP will improve patients' access to medicines. In Iran, we use value base pricing as the main pricing method for every new molecule. Then, we use other methods such as ERP as a complementary method.

Assessing the Consequences of External Reference Pricing for Global Access to Medicines and Innovation: Economic Analysis and Policy Implications

Background: External reference pricing (ERP) is used to set pharmaceutical prices to improve affordability, but its application may have negative consequences on patient access—thus, equity—across countries and on global innovation. With the United States contemplating ERP, negative effects could be magnified. Our aim: identify and quantify some major consequences of ERP. Research design, methods: Besides relying on databases and ERP modelling, we developed a heart failure case study. 4-step approach: 1) review ERP policies; 2) establish worldwide “price corridor”; 3) quantify patient access and health outcomes impact by ERP; 4) estimate ERP impact on innovation.

Results: Our ERP referencing analysis highlights its perverse effects especially in lower-income countries. As counterstrategies to protect their revenues, manufacturers often implement tight list price corridors or launch avoidance/delays. Consequences include suboptimal patient access—hence, worse outcomes—illustrated by our case study: 500,000 + QALYs health loss. Additionally, the ensuing revenue reduction would likely cause innovation loss by one additional medicine that would have benefitted future patients.

Conclusion: This research provides key insights on potential unintentional consequences of medicine price setting by ERP worldwide and under a new proposal for the United States. Our results can inform stakeholder discussions to improve patient access to innovative medicines globally.

Identifying Patient Access Barriers for Tumor Necrosis Factor Alpha Inhibitor Treatments in Rheumatoid Arthritis in Five Central Eastern European Countries

Introduction

Although there is a significant utilization gap of biologic medicines in the EU, many studies estimate equity in patient access to biopharmaceuticals only based on their availability on the national list of reimbursed medicines. Hidden access barriers may facilitate financial sustainability of pharmaceuticals in less affluent EU countries; however, they have rarely been documented in scientific publications. Our objective was to explore these access barriers for tumor necrosis factor (TNF) alpha inhibitors in rheumatoid arthritis (RA) in five Central and Eastern European countries.

Methods

A detailed interview guide was developed based on multi-stakeholder workshops and a targeted literature review. In each participant country 3-3-3-3 interviews with payers, rheumatologists, patients/patient representatives, and industry representatives were conducted. Responses were aggregated at a country level and validated by primary investigators in each country.

Results

Limited number of RA centers and consequently significant travelling time and cost for patients in distant geographical areas, uneven budget allocation among centers, limited capacity of nurses, narrowed patient population in national financial protocols compared to international clinical guidelines in initiating or continuing biologics, high administrative burden in prescribing biologics and limited health literacy of patients were the most relevant barriers to timely patient access in at least three participant countries.

Conclusion

Assessing only the availability of TNF alpha inhibitors on the national list of reimbursed medicines provides limited information about real-world patient access to these medicines. Revealing hidden access barriers may contribute to initiate policy actions which could reduce inequity in patient access.

Patient Access, Unmet Medical Need, Expected Benefits, and Concerns Related to the Utilisation of Biosimilars in Eastern European Countries: A Survey of Experts

This policy research aims to map patient access barriers to biologic treatments, to explore how increased uptake of biosimilars may lower these hurdles and to identify factors limiting the increased utilisation of biosimilars. A policy survey was developed to review these questions in 10 Central and Eastern European (CEE) and Commonwealth of Independent States (CIS) countries. Two experts (one public and one private sector representative) from each country completed the survey. Questions were related to patient access, purchasing, clinical practice, and real-world data collection on both original biologics and biosimilars. Restrictions on the number of patients that can be treated and related waiting lists were reported as key patient access barriers. According to respondents, for both clinicians and payers the primary benefit of switching patients to biosimilars would be to treat more patients. However, concerns with therapeutic equivalence and fear of immunogenicity may reduce utilisation of biosimilars. Similar limitations in patient access to both original biologics and biosimilars raise concerns about the appropriateness and success of current biosimilar policies in CEE and CIS countries. The conceptual framework for additional real-world data collection exists in all countries which may provide a basis for future risk-management activities including vigorous pharmacovigilance data collection.