Pharmaceutical Net Price Transparency across European Markets: Insights from a Multi-Agent Simulation Model

Effects of transparent online open procurement on prices, volumes, and costs of medicines: an interrupted time series study in Ningxia, China

Objectives

To assess the effects of the transparent online open procurement arrangement on the prices, volumes, and costs of medicines in Ningxia, China.

Methods

Data were extracted from the Ningxia pharmaceutical procurement platform, covering 16 months of purchase orders (December 2019 to March 2021) prior to the implementation of the transparent online open procurement policy and 20 months of purchase orders after the implementation of the policy (April 2021 to November 2022). Interrupted time series (ITS) analysis was performed to evaluate the effects of the transparent online open procurement policy on the prices, volumes, and total costs of the purchase orders.

Results

After implementation of the transparent online open procurement policy, the average price of purchased medicines showed a declining trend by 0.012 Yuan per month, while the total volume of purchase orders declined at a rate by 1.741 million per month measured by the smallest formulation units and the total costs of the purchase orders decreased at a rate by 5.525 million Yuan per month.

Conclusion

The transparent online open procurement policy resulted in reduced prices, lowered volumes, and lowered total costs of purchased orders of medicines.

Drug pricing and transparency in Europe and the United States: what is it and how does it work?

INTRODUCTION

As drug prices are viewed to be opaque, there have been increasing societal demands on policy and decision makers to implement initiatives that promote drug price transparency.

AREAS COVERED

This Perspective discusses what drug price transparency is and how it works in theory and in practice.

EXPERT OPINION

Transparency on drug prices may target payers, patients and health care professionals; and may relate to prices at each stage in a drug's distribution system. Although proponents claim that drug price transparency will reduce prices and increase patient access, others expect the opposite effect. Nevertheless, a number of international organizations, countries and consumer groups have taken steps to enhance drug price transparency. This has occurred despite a lack of theoretical clarity and of evidence about its likely impact. Policy and decision makers need to consider how payers and pharmaceutical companies are likely to react to drug price transparency and need to be aware that transparency may produce different effects depending on the country to which it is applied. Even though we believe that full drug price transparency is elusive, various incremental measures can be taken to move toward it.

From Indication-Based Pricing to Blended Approach: Evidence on the Price and Reimbursement Negotiation in Italy

BACKGROUND

New indications for existing medicines are increasing over time. In most countries, drug pricing and reimbursement conditions are renegotiated every time a new indication is approved. There is a growing interest in the price negotiation model for new indications, specifically comparing an indication-based versus blended approach. However, little evidence currently exists regarding the complexity of these negotiations and their impact on actual prices. Italy has recently transitioned from an indication-based approach to a blended price model. This study aims to measure the impact of price and reimbursement negotiation of new indications on discounts (i.e. actual prices) and on the negotiation duration, used as a proxy of its complexity.

METHODS

We considered new indications approved through a European centralized procedure from January 2013 to March 2022 for which the price and reimbursement status was approved in Italy between January 2015 and March 2022, amounting to 52 new indications. Data on the timeframe of the Italian price and reimbursement process and its phases were obtained from publicly available sources. Discounts for the first indication and their subsequent increases for new indications were estimated by comparing ex-factory prices and tendered prices. To calculate p-values, we employed the Mann-Whitney test, and multiple regression models were utilized to examine correlations between negotiation time and the characteristics of the medicines.

RESULTS

The mean time to reimbursement was 603 days, in contrast to 583 days for the first launch. Price negotiation took longer for rare diseases, cancer drugs, and in case of therapies with minor added therapeutic value. On average, the additional discount (on top of discounts for prior indications) was 13%, significantly lower than the mean discount for the first indications approved (24.9%). The discounts increment was lower, but negotiation took longer if a Managed Entry Agreement accompanied the final agreement. Additionally, discounts have increased over the years.

CONCLUSION

The negotiation for new indications takes longer than the first one, and provides, on average, an additional discount of 13%. While our findings bear the potential for significant policy implications, they necessitate prudent interpretation due to a limited number of observations. The increasing trend in additional discounts over time applied to all indications in recent negotiations, may suggest a descending trend of value for new indications and a shift from an indication-based pricing approach to a blended model. Otherwise, budget impact considerations might have outweighed a value-based approach in the recent negotiations. If so, two potential options for restoring a value-based approach are returning to an indication-based pricing or giving explicit and higher weight to value within a blended model.

Valutazione dell’innovatività e negoziazione di prezzi e rimborso dei farmaci: raccomandazioni da un panel di esperti

This paper illustrates the recommendations of a Working Group (WG) on the assessment of drugs innovativeness and the negotiation of price and reimbursement. The WG included researchers, institutions, clinicians, patient representatives and pharmaceutical companies.

The first part of the contribution summarizes the literature on drug pricing models, which was considered in the WG, and, in particular, the pricing criteria, the evaluation and negotiation processes, the management of the uncertainty of the evidence, the use of cross-reference pricing and price negotiation for new indications of existing drugs.

The second part illustrates the results of the WG with a focus on innovativeness assessment, value framework and price negotiation. The main recommendations of the WG are: to define more specific criteria for the identification of comparators and endpoints for macro therapeutic areas/settings; to produce guidelines on the use of indirect comparisons and studies supporting this evidence; to consider the drug value as the main driver of price and reimbursement negotiation; to maintain flexibility in the negotiation process, but, at the same time, to give greater structure and predictability in the assessment of value for money, with a more qualified role of cost-effectiveness and a range of threshold values for the incremental cost-effectiveness ratio; to selectively reintroduce Managed Entry Agreements and the Indication-based pricing model; to implement an early dialogue between the Italian Medicine Agency and the pharmaceutical companies in order to optimize the negotiation process, and a structured involvement of scientific societies and patient representatives.

Prezzo e rimborso dei farmaci in caso di estensione delle indicazioni: i risultati di una survey sui soci di ISPOR Italy Rome Chapter

Multi-indication pricing models for medicines and some international impact evidence are available in the literature. Data on the Italian context are more limited. This paper illustrates the results of a study aimed at gathering the opinion on this topic of experts, members of the ISPOR Italy Rome Chapter.

The opinion was collected through a structured questionnaire, validated by two potential responders, and administered online in the period October/July 2022.

There were 45 responders (20% of the members); 67% of responders work in pharmaceutical companies and 13% in consultancy firms. The remainder belongs to regulators/payers and universities.

The survey highlighted a preference for (i) non-automatic models, as automatic approaches are mainly based on price cuts/discount increases in relation to an increase in volumes, (ii) an “indication-based-pricing” model (where prices are differentiated by indication through discounts/risk sharing agreements), since it is more consistent with a value-based approach, even if more complex to manage, (iii) a mix of discounts/agreements according to existing evidence.

The opinion collected is consistent with the opinions available in the literature, but not consistent with the Italian trend, where, compared to the past, a blended approach is prevailing. A blended pricing envisages a renegotiation of the single price for all indications, essentially based on a change in the discount. Our hope is that in the future the experts’ opinion will be taken into consideration and that a targeted indication-based-pricing will be adopted again.