External Reference Pricing System for Medicines in Bulgaria

Introduction: External price referencing (EPR) is applied frequently to control pharmaceutical prices. Our objective was to analyse how EPR is used in Middle Eastern (ME) countries and to compare the price corridor for original pharmaceuticals to non-pharmaceutical services not subjected to EPR. Methods: We conducted a survey on EPR regulations and collected prices of 16 patented pharmaceuticals and 14 non-pharmaceutical services in seven Middle Eastern (ME) countries. Maximum and minimum prices of each pharmaceutical and non-pharmaceutical technology were compared to mean prices in the countries studied by using market exchange rates. Influencing factors of pharmaceutical prices were assessed by multivariate linear regression analysis. Results: The average price corridor is narrower for pharmaceuticals (−39.8%; +35.9%) than for outpatient and hospital services (−81.7%; +96.3%). Conclusion: Our analysis revealed the importance of population size and EPR implementation on drug price levels; however, EPR results in higher pharmaceutical prices in lower-income countries compared to non-pharmaceutical services.

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.

The current trend of price increases in pharmaceutical products is threatening access to healthcare. Maintaining a balance between encouraging innovation and increasing access to healthcare remains a global challenge. External reference pricing (ERP) helps control costs for healthcare services and pharmaceutical products, at least in the short term after its implementation. The magnitude of the savings largely depends on the ERP's design. Increasing the number of reference countries and more frequent price revisions will ensure a significant reduction in drug costs. Other market aspects, such as a country's income level and population health needs, can also affect prices. Although there is a general consensus that international reference pricing offers good opportunities to reduce medicine prices and avoid overpayment, ERP across Europe is sometimes only effective in the short term, and its long-term impact does not yield positive results and gradually loses effectiveness over time.

Affordable, accessible, and innovation-promoting pharmaceutical care is essential to the operation of a sustainable health system. External reference pricing (ERP), a common pharmaceutical policy in Europe, suffers today from indigenous weaknesses that may cause market distortions and barriers to care, burdening mostly the weak economies, and hence, raising ethical and political worrying. A non-randomized experiment was conducted, in order to examine the influence of flexible and adaptable to health systems' affordability ERP structures. Outcomes were assessed by measuring deviations from Greek prices' level ex ante, as well as effects on pharmaceutical markets affiliated to the European ERP system. Pharmaceutical pricing models that fit prices to income and affordability are better in all aspects, as they produce fairer results, while resulting in low external costs for the European ERP network as a whole. Small sets of reference countries are preferred to large baskets, as they produce similar results, while presenting better qualities by increasing the flexibility of the reimbursement system and the transparency of the market.

Chapter 13 - Assessment of External Price Referencing and Alternative Policies

PNS133 BEYOND INTERNATIONAL PRICING INDEX MODEL IN THE UNITED STATES - IMPACT TO GLOBAL PRICING STRATEGIES & ACCESS TO INNOVATIVE MEDICINES

External reference pricing (ERP) is widely used to regulate drug prices. Although the literature has largely focused on the impact of ERP on a number of policy endpoints and its impact from a geographical perspective, a comparative study drawing on evidence from different settings does not exist to date. A systematic literature review was conducted on pre-defined endpoints on the impact of ERP across countries, such as price stability, price convergence and launch delays. Expert consultation was undertaken to analyse whether or not the international implications of ERP are considered during its design. 46 studies were included in the analysis. Across countries, ERP may cause launch delays, price instability and lead toprice convergence. However, these effects cannot be solely attributed to ERP, as there may be other factors at play, such as the size and the GDP of a country and other regulations in place, which can trigger these effects or reduce their effect. Nevertheless, the nature of ERP facilitates these unintended consequences and directly links them to it. Despite these cross-country implications being well known to decision-makers, they are not necessarily considered during the design of ERP. As the effects of ERP as a stand alonepolicy are very difficult to isolate in the presence of other regulatory measures implemented within countries and the presence of other extrinsic factors across countries, our findings are inconclusive. Still, there is an unquestionable unmet need related to the design of ERP systems to attain a positive impact internationally.

The financial crisis which has hit Europe (and beyond) in 2008 has been described as a “health system shock” by the WHO which has urged EU Member States to ensure that the national healthcare systems would continue to promote universal access to health services by increasing efficiency in the health sector. The challenge for Member States is to ensure access to innovative medicines for unmet medical needs, while at the same time meeting cost containment objectives and rewarding innovation. The need for improving sustainability of EU health systems has led to thorough analysis of different pricing models in Europe which showed substantial support of a wide range of stakeholders (including research-based industry, patients and payers) in favour of a differential pricing system as a reimbursement policy measure for new and cost-intensive medicinal products, which is the case for most orphan medicinal products (OMPs). One way to reduce the impact of OMPs on national healthcare budgets is to differentiate prices according to different levels of Gross Domestic Products (GDPs) and introduce some sense of proportionality between a country’s ability to pay and a fair level of reward for innovation. The idea for this differential pricing system would therefore be to introduce a price differentiation not country by country but by “clusters of countries”: High, Medium and Low income countries, knowing that in Europe the GDP per capita varies from 1 to 6, with Luxembourg being the highest and Bulgaria the lowest. In a first phase, differential pricing would be limited to medicinal products responding to high unmet medical need: a price would be agreed on the basis of a value-based pricing system, with the value being assessed with the EU Transparent Value Framework delivered by the MoCA (Mechanism of coordinated Access) process. Then variations by cluster would apply within a range from minus to plus 10%. Two main obstacles to the introduction of a differential pricing system have been identified as being the External Reference Pricing and the practice of parallel imports. The reflection process is still on-going at EU level on differential pricing as a way to address the three following main policy objectives: timely and equitable access to medicinal products for all patients, control of health expenditures linked to medicines and reward for innovation. There is an overall need for political support from Member States and industry.

Rapid increasing pharmaceutical spending on the one hand and limited budgets on the other hand are problems confronting health expenditure. Policymakers have realized that without the negative effect on quality of care, they can control pharmaceutical spending. The study methodology involved a targeted review of the literature on cost containment policies, their implementation issues, advantages, and disadvantages. Then, all proposed strategies were investigated through interviewing insurance experts. Finally, these policies were prioritized with respect to their adherence to the main issues of performance. Considering implementation costs, durability, and feasibility, six policy options have been proposed as follows: stopping non-prescription medicine reimbursement, using a tiered-coinsurance mechanism, establishing prescription-guidelines, implementing cost-effectiveness-studies, employing scientific bargaining methods, and using different levels of reference pricing. Despite the possibility of some physicians' resistance, preparing prescription guidelines and their gradual enforcement is considered as the first choice. Next, it seems that reference pricing is the most feasible policy. It is in spite of some confusion and dissatisfaction, which might arise due to lack of knowledge and an increase in out-of-pocket expenses. Then, all pricing methods, including cost-effectiveness studies and internal and external reference pricing, should be used as negotiation leverage with pharmaceutical companies. Afterward, stopping non-prescription medicine reimbursement should be implemented by good media communication in view of its effects on a wide range of population. Finally, implementation of tiered-coinsurance mechanism should be considered with special attention to some inherent technical complexity.

Chapter 11 - Price Comparison as a Pricing Policy Option–Introduction into Pharmaceutical Policies

Aim. The aim of the study is retrospective review and analysis of implemented measures for improving access to patients' therapy in Bulgaria. Materials and methods. The study is based on data from officially published regulations and laws, as well as publications on cost control measures in healthcare and their impact on patients and government spending. Mechanisms of regulatory institutions introduced through laws and regulations are also mentioned in the analysis. Results and discussion. The actions adopted are divided into several groups in order to examine all aspects of medicines affordability - mechanisms for cost control affecting access to medicines, patients' co-payment, and physical availability of medicines. The external reference pricing, Health technology assessment (HTA), discounts and negotiations, regressive scale for price calculation, generics price cap, budget cap and payback mechanism, therapeutic effect monitoring are used for medicines price setting and control. It was found that despite the decrease in drug prices, there is a noticeable increase in government spending, as well as an increase in household spending. The retail pharmacies established in the country are mainly in the large cities. About 32 municipalities could not provide patients' access to medicines. The financial cost implications are substantial and the burden for patients is increasing. Conclusion. Efforts in recent years have focused on reducing costs for both patients and the population as a whole. The study found that the introduction of reference pricing (internal and external), health technology assessment, budget constraints, negotiations, and generic drug policies do not contribute to patient access to therapy. Cost control measures implemented at this stage are not as effective as expected. In addition, it was found that household spending on medicines has been increasing in recent years, and all policy measures taken do not contribute to supporting patients financially.

Global Outsourcing and Local Tendering Supply Chain Systems in the Public Healthcare Sector: A Cost Comparison Analysis, Namibia

Regulation and Pricing of Pharmaceuticals: Reference Pricing or Price Cap Regulation?

INTRODUCTION:In Bulgaria, the regulatory body sets for the first time legal requirements for Health Technology Assessment (HTA) in Law on Medicinal Products in Human Medicine (LMPHM) on 27 June 2015. The next essential step for HTA capacity building was the promulgation of Ordinance 9 / December 1, 2015 on the conditions and procedures for conducting health technology assessment by the Ministry of Health (1). In the beginning of 2016, the Main Price and Reimbursement Committee was set and launched a process for establishing the small working groups with the task of reviewing the first applicants reports of pharmaceuticals for inclusion in the Positive Drug List (PDL).METHODS:The objective of this study is to summarize the recommendations of the newly established HTA Committee in Bulgaria and to examine the characteristics of the technologies and the key considerations that led to those decisions. We systematically read all published by the Committee recommendations for 2016 and analyzed them under: type of recommendations (positive or negative for inclusion in PDL), population, specialization, type of service, type of justification and the impact on final conclusions.RESULTS:For the first year of its work the HTA Committee was able to assess fifteen technologies (pharmaceuticals) and only one received a negative recommendation (6 percent) from the working group. All the rest (n = 14; 94 percent) were recommended for funding. The final recommendation from the Main Price and Reimbursement Committee is available for four (27 percent) technologies – all positive for inclusion in PDL. All recommendations were connected with adults and in oncology (n = 4; 27 percent); heart diseases (n = 4; 27 percent); Chronic Obstructive Pulmonary Disease, COPD (n = 2; 13 percent); diabetes (n = 2; 13 percent); psoriasis (n = 2; 13 percent); Hepatitis C (n = 1; 7 percent). The only negative recommendation was justified due to lack of robust evidence, safety issues and credibility of HTA analysis (2).CONCLUSIONS:The information about the number of applications received from the Committee is not available and correct conclusions about the capability is not possible, but indirect circumstances, as the lack of well-trained HTA experts, certainly impede establishment of the small working groups and slow the assessment process (3). At this point it is clear that additional efforts are need to overcome the barriers and smooth adoption and implementation of HTA methods in Bulgaria.

Pharmaceutical policies: effects of reference pricing, other pricing, and purchasing policies.