Examining confidential wholesale margin estimates in European countries for the price negotiation of patented drugs in Germany: a statistical model

BACKGROUND

Based on the legal framework laid down in section 130b (9) of Book V of the German Social Code, various criteria are relevant for the negotiated price for new patented drugs in Germany. European reference prices (ERPs) are one criterion. The ERP is based on the ex-factory prices (EFPs) of the countries included in the European country basket. However, in some of these countries, the EFP is not published due to confidential wholesale margins. Wholesale margins must therefore be estimated and deducted from purchase prices. In this context literature-based estimates to date do not assume regressive margins with higher pharmaceutical prices. This assumption is questionable and can lead to systematically underestimated country prices, especially for high-priced drugs. Percentage wholesale margins in the majority of European countries develop to a comparable extent regressively with increasing prices. It should therefore be examined (1) whether statistical models can predict the margins of individual countries, in principle and especially for countries where margins are unknown and regressive trends are likely, and (2) to what extent the estimation of margins improves when regressive statistical models are used to estimate margins instead of cross-price averages published in the literature.

METHODS

Qualitative preliminary research explores the basic wholesale pricing mechanisms in countries with confidential wholesale margins. Wholesale margins for reimbursable drugs were then modeled for regulated European countries. Estimation quality and impact of the model was compared to estimations based on average margins.

RESULTS

In both regulated countries and in countries with confidential wholesale margins, percentage margins of wholesalers develop regressively as drug prices rise. Regressive courses of margins can be resiliently modeled for the regulated countries using a power distribution with significantly lower mean squared errors in a linear mixed model in comparison to literature-based estimations with country-specific cross-price averages.

CONCLUSION

If there is reason to believe that margins are regressive, confidential wholesale margins are expected to be better estimated by the power function based on margins of regulated countries than by the published country-specific average margins, reducing significantly inaccurate effects on margin estimations of high-price drugs.

Were economic evaluations well reported for the newly listed oncology drugs in China's national reimbursement drug list

PURPOSE

To assess the reporting quality of published economic evaluations of the negotiated oncology drugs listed for China's 2020 National Reimbursement Drug List (NRDL).

METHODS

A comprehensive search was conducted to identify economic evaluation studies of negotiated oncology drugs listed in China's 2020 NRDL using the PubMed/MEDLINE, Embase, Web of Science, CNKI, SinoMed, and WanFang Database up to March 31, 2021. The Consolidated Health Economic Evaluation Reporting Standards (CHEERS) checklist scored the reporting quality between 0 and 100. A linear regression analysis was employed to examine the influence of various characteristics on the reporting quality scores.

RESULTS

Eighty papers were included in the study, with the majority published during the past decade. Furthermore, more than half of the articles (57.5%, or 46 out of 80) were written in English. The average CHEERS score was 74.63 ± 12.75 and ranged from 43.48 to 93.75. The most inadequately reported items included choice of model, characterization of heterogeneity, and discussion, as well as currency, price date and conversion. Higher scores were associated with articles published from 2019 to 2021 and English publications.

CONCLUSION

The economic evaluation studies of negotiated oncology drugs listed in 2020 NRDL had moderate reporting quality. The Chinese economic evaluation publications could improve the reporting quality if the CHEERS checklist is consistently implemented. Also, the Chinese journals maybe explore introducing a reporting standard for economic evaluations.

Market access of Chinese patent medicine products to healthcare security system in China: implications for international integration of traditional medicine into health systems

BACKGROUND

China has introduced a series of polices and practice to manage the market access of Chinese patent medicine (CPM) products into its healthcare security system, which is less analyzed and reported in current literature. Therefore, this paper aimed to investigate the mechanisms managing market access of CPM products into healthcare security system in China, expecting to provide implications for international integration of traditional medicine products into health systems.

METHOD

This paper used a documentary analysis approach as a qualitative research method. Data were collected from four sources and analyzed in a thematic way.

RESULTS

Four mechanisms to manage entry, price adjustment, and exit of innovative brand and generic CPM products are identified, including: (1) price negotiation, mechanism of new entry of innovative brand CPM products into the national reimbursement list; (2) price re-negotiation, mechanism of price adjustment of innovative brand CPM products within the national reimbursement list; (3) mass procurement, mechanism of generic CPM products to healthcare security system; and (4) direct removal, mechanism of removal from the national reimbursement list.

CONCLUSIONS

China has established market access framework of CPM products by focusing on price negotiation for innovative brand CPM products and mass procurement for generic CPM products. Further studies of CPM products based real-world data are needed to provide clinical and pharmacoeconomic evidence to support market access of CPM products into healthcare security systems.

Consistency of new drug pricing in Korea: Bridging variations among personnel in price negotiations

OBJECTIVES

This study aims to explore the performance of price negotiations, over a period of 10 years, and identify individual variations in pricing that directly affect the consistency of pricing decisions.

METHODS

Existing literature and relative regulations were reviewed, and data provided by the National Health Insurance Service (NHIS) was analysed to evaluate the performance of price negotiations. To examine individual variations in pricing, hypothetical scenarios of four types of drugs were developed. These were subsequently given to the reviewers who have been actually conducting price negotiations at the NHIS.

RESULTS

Over the last decade, negotiations succeeded at a rate of 85.5 %, with a higher agreement rate in the more recent years. The reduction rate, via price negotiations, from the price approved for reimbursement by the Health Insurance Review and Assessment Service (HIRA), was 12.2 %. The survey results confirmed a significant individual variation in pricing. Especially, in the case of Drug N1, the higher-grade personnel and non-pharmacists tended to give higher prices with a significant difference.

CONCLUSIONS

The individual variations that would greatly affect the financial results were confirmed when making decisions on price of new drugs.For the consistency of drug pricing, some measures to minimise the variation of reviewers' judgement are needed.

Accessibility of cancer drugs in Switzerland: Time from approval to pricing decision between 2009 and 2018

BACKGROUND

Approved drugs must be included on the so-called "special list" (SL) by the Federal Office for Public Health (FOPH) to be reimbursed by the social health insurance in Switzerland. The FOPH decides whether a drug may be included on SL and if so, negotiates the maximum price with the manufacturer. Time period between approval and inclusion on SL is important to evaluate accessibility of patients to drugs.

METHODS

We identified all approved cancer drugs for first indication between 2009-2018 in Switzerland and determined whether they have been included on SL, and if so, how many days passed between approval and reimbursement, i.e., inclusion on SL. Descriptive statistical analysis was performed by using R.

RESULTS

70 cancer drugs have been approved between 2009 and 2018. Among this sample, 56 (80 %) are on SL. Average time from drug approval to inclusion date on SL increased from 234 days in 2009 to 463 days in 2018, with an average time of 352 days over the full analysis period.

CONCLUSION

Time period between approval and inclusion on SL has prolonged over the past years. This impedes patients' access to cancer drugs. Prioritizing HTA and price negotiation of cancer drugs with high clinical benefit or implement a regulation that sets a maximum time period for HTA and price negotiation are possible policy implications.

Access to critical medicines: When are compulsory licenses effective in price negotiations?

Governments of developing countries can be in a vulnerable position with respect to patent protected drugs supplied by foreign firms, if the technology cannot be licensed or independently developed by local firms. In such instances, one possible solution is to negotiate for a price-drop with the patent holder in lieu of issuing a compulsory license. The present paper develops a game theoretic model of such bargaining and shows that while compulsory licenses do not occur under complete information, they can be issued under incomplete information. The model is tested against real episodes of compulsory licenses to derive policy insight.