A systematic review of policies regulating or removing mark-ups in the pharmaceutical supply and distribution chain

The regulation of mark-ups throughout the pharmaceutical supply and distribution chain may be a valuable approach to control prices of medicines and to achieve broader access to medicines. As part of a wider review, we aimed to systematically determine whether policies regulating mark-ups are effective in managing the prices of pharmaceutical products. We searched for studies published between January 1, 2004 and October 10, 2019, comparing policies on regulating mark-ups against other interventions or a counterfactual. Eligible study designs included randomized trials, and non-randomized or quasi-experimental studies such as interrupted time-series (ITS), repeated measures (RM), and controlled before-after studies. Studies were eligible if they included at least one of the following outcomes: price (or expenditure as a proxy for price and volume), volume, availability or affordability of pharmaceutical products. The quality of the evidence was assessed using the GRADE methodology. A total of 32,011 records were retrieved, seven of which were eligible for inclusion for this review. The limited body of evidence cautiously suggests that policies regulating mark-ups may be effective in reducing medicine prices and pharmaceutical expenditures. However, the design of mark-up regulations is a critical factor for their potential success. Additional research is required to confirm the effects of these policies on the availability, affordability or usage patterns of medicines and in low- and middle-income countries.

Evidence on the effectiveness of policies promoting price transparency - A systematic review

Policies promoting price transparency may be an important approach to control medicine prices and achieve better access to medicines. As part of a wider review, we aimed to systematically determine whether policies promoting price transparency are effective in managing the prices of pharmaceutical products. We searched for studies published between January 1, 2004 and October 10, 2019, comparing policies promoting price transparency against other interventions or a counterfactual. Eligible study designs included randomized trials, and non-randomized or quasi-experimental studies such as interrupted time-series (ITS), repeated measures (RM), and controlled before-after studies. Studies were eligible if they included at least one of the following outcomes: price (or expenditure as a proxy for price and volume), volume, availability or affordability of pharmaceutical products. The quality of the evidence was assessed using the GRADE methodology. A total of 32011 records were retrieved, two of which were eligible for inclusion. Although based on evidence from a single study, public disclosure of medicine prices may be effective in reducing prices of medicines short-term, with benefits possibly sustained long-term. Evidence on the impact of a cost-feedback approach to prescribers was inconclusive. No evidence was found for impact on the outcomes volume, availability or affordability. The overall lack of evidence on policies promoting price transparency is a clear call for further research.

Scarcity and panic buying: the effect of regulation by subsidizing the supply and customer purchases during a crisis

During the first wave of the COVID-19 pandemic, in France, people cleared the shelves of butter; in Italy, it was pasta; in Great Britain, it was chicken. While there may be cultural disagreement on what is essential, clearly, in times of crisis, consumers stockpile the 'essentials'. We address the problem of "panic buying", which is characterized by increasing demand in the face of diminishing inventory. In such cases, prices may hike and firms (retailers) selling the high-demand product are quantity takers, in terms of supply, and price setters. We consider a manufacturer who sells a scarce product to a single retailer. The retailer seeks to maximize her profit, while in contrast, the manufacturer pursues a social objective of regulating and lowering the amount that the end customer (consumer) pays (including the cost of traveling to obtain the scarce product). By analyzing the competition between the two parties, retailer and manufacturer, we find that even when the regulator (manufacturer) makes a significant social commitment, neither subsidizing the retailer nor subsidizing the consumers necessarily curbs price hikes. Furthermore, there is a threshold ratio (i.e., proportion of the end price subsidized by the regulator) that determines the minimal budget that the regulator would need to allocate in order for subsidization to make a difference to consumers.

Impact of changes in the methodology of external price referencing on medicine prices: discrete-event simulation

BACKGROUND

Several governments apply the policy of external price referencing (EPR), which considers the prices of a medicine in one or more other countries for the purpose of setting the price in the own country. Different methodological choices can be taken to design EPR. The study aimed to analyse whether, or not, and how changes in the methodology of EPR can impact medicine prices.

METHODS

The real-life EPR methodology as of Q1/2015 was surveyed in all European Union Member States (where applicable), Iceland, Norway and Switzerland through a questionnaire responded by national pricing authorities. Different scenarios were developed related to the parameters of the EPR methodology. Discrete-event simulations of fictitious prices in the 28 countries of the study that had EPR were run over 10 years. The continuation of the real-life EPR methodology in the countries as surveyed in 2015, without any change, served as base case.

RESULTS

In most scenarios, after 10 years, medicine prices in all or most surveyed countries were-sometimes considerably-lower than in the base case scenario. But in a few scenarios medicine prices increased in some countries. Consideration of discounts (an assumed 20% discount in five large economies and the mandatory discount in Germany, Greece and Ireland) and determining the reference price based on the lowest price in the country basket would result in higher price reductions (on average - 47.2% and - 34.2% compared to the base case). An adjustment of medicine price data of the reference countries by purchasing power parities would lead to higher prices in some more affluent countries (e.g. Switzerland, Norway) and lower prices in lower-income economies (Bulgaria, Romania, Hungary, Poland). Regular price revisions and changes in the basket of reference countries would also impact medicine prices, however to a lesser extent.

CONCLUSIONS

EPR has some potential for cost-containment. Medicine prices could be decreased if certain parameters of the EPR methodology were changed. If public payers aim to apply EPR to keep medicine prices at more affordable levels, they are encouraged to explore the cost-containment potential of this policy by taking appropriate methodological choices in the EPR design.

The effects of pricing policy on the prices and supply of low-cost medicines in Shandong, China: evidence from an interrupted time series analysis

Background

In China, some medicines had a supply problem. In 2015, to address this problem, the Chinese government issued a policy to raise the price cap for some shorted low-cost medicines (LCMs). The objective was to assess the effects on medicine prices and supply of medicines from a medicine pricing policy reform point of view.

Methods

This study was conducted in Shandong, an eastern province of China with a population of 99.4 million. We collected procurement data of all (n = 1494) LCM medicines available between April 2014 and February 2017 from the web-based Provincial Drug Centralized Bidding Procurement System. This study used the Drug Price index and the average price to reveal the price change of LCMs and used the interrupted time series to evaluate the effects of LCM policy on medicine supply by measuring the change of monthly procurement volume, the number of products, and the average delivery time of LCMs.

Results

After the policy implementation in October 2015, the quarterly average price of all LCM products, especially traditional Chinese medicines, showed a sudden growth trend. Then after two-quarter implementation of policy, the price recovered to the same trend before policy intervention, which is consistent with the trend of the Drug price index. There were 466 of LCM products available in October 2015. After the policy intervention, the number of products available increased by 109.87% (n = 978) in February 2017, at a growth rate of 6.44% per month (Value = 30.02, P < 0.001). Besides after the intervention in October 2015, the monthly procurement volumes of LCMs increased rapidly, on average, at a rate of 28.93% per month (Value = 474,000, P < 0.001) for all LCMs. The average delivery time of LCMs kept on decreasing from 33.37 days to 10.69 days at a reduced rate of 3.63% (Value = − 1.21, P < 0.001) per month before the policy, while no significant changes were noted. Also, average monthly delivery time was stable at 9 days after the intervention.

Conclusions

The policy promoted the supply of low-cost medicines, which is beneficial for the Universal Health Coverage. However, future policies should focus on monitoring price change and reducing the delivery time of generic medicines.

Evaluating the centralized purchasing policy for the treatment of hepatitis C: The Colombian CASE

The high cost of drugs for hepatitis C limits access and adherence to treatment. In 2017, the Colombian health care system decided to design a strategy. It consisted of centralized purchasing, regulations, clinical practice guidelines, and direct observation of the treatment and follow-up of patients. The main objective of this study was to assess the centralized purchasing strategy in Colombia. The study design was a policy implementation assessment. We analyzed the change in prices, the clinical outcomes, and the opinions of stakeholders using data from the Ministry of Health. Additional information about effectiveness came from the Colombian Fund for High-Cost Diseases and semi-structured interviews of the stakeholders. The follow-up was from October, 2017 to October, 2018. The total number of patients reported in the cohort period was 1069. The number that finished 12 weeks of treatment, completed the follow-up for the case closure, and were considered cured through the end of October, 2018 was 563 (53%). The remainder, 506 patients (47%), are currently in treatment. A total of 543 of these treated patients (96%) were cured. After implementing this strategy, the drug prices decreased by more than 90% overall. Before implementation, the total direct cost was $100 102 171.75 dollars. Afterward, the cost was $8 378 747 dollars.