Having your cake and eating it: office of fair trading proposal for funding new drugs to benefit patients and innovative companies

Influence of generic reference pricing on medicine cost in Slovenia: a retrospective study

Aim

To assess the impact of the generic reference pricing (GRP) system on the prices and cost of medicines in Slovenia approximately 8 years after its introduction in 2003 and before the implementation of the therapeutic reference pricing system.

Methods

A retrospective study of all medicines (N = 789) included in the GRP system on January 31, 2012 was performed. Medicine prices and cost were analyzed between January 31, 2012 and December 31, 2013 after every update (N = 11) of the maximum reimbursable price (MRP) and were compared to the price and cost on January 31, 2012 (index date). Time trends of different types of medicine prices (maximum allowed price, MRP, and actual wholesale price) were graphically analyzed, and actual wholesale price adjustments to the MRP changes and the budget impact of the GRP were assessed.

Results

In the 2-year study period, the long-term performance of the GRP system was associated with an approximate 45% decrease in the average MRP or an approximate 20% cost reduction. For each MRP update period, the GRP reduced the cost based on the maximum allowed price for approximately 30%. The wholesale price adjustments were mostly made for medicines priced above the MRP and reduced patients’ out-of-pocket cost.

Conclusions

In the long term, the GRP system effectively reduced medicine prices and the cost of reimbursed products.

Comprehensive taxonomy and worldwide trends in pharmaceutical policies in relation to country income status

Background

Rapidly evolving socioeconomic and technological trends make it challenging to improve access, effectiveness and efficiency in the use of pharmaceuticals. This paper identifies and systematically classifies the prevailing pharmaceutical policies worldwide in relation to a country’s income status.

Methods

A literature search was undertaken to identify and taxonomize prevailing policies worldwide. Countries that apply those policies and those that do not were then grouped by income status.

Results

Pharmaceutical policies are linked to a country’s socioeconomics. Developed countries have universal coverage and control pharmaceuticals with external and internal price referencing systems, and indirect price–cost controls; they carry out health technology assessments and demand utilization controls. Price-volume and risk-sharing agreements are also evolving. Developing countries are underperforming in terms of coverage and they rely mostly on restrictive state controls to regulate prices and expenditure.

Conclusions

There are significant disparities worldwide in the access to pharmaceuticals, their use, and the reimbursement of costs. The challenge in high-income countries is to maintain access to care whilst dealing with trends in technology and aging. Essential drugs should be available to all; however, many low- and middle-income countries still provide most of their population with only poor access to medicines. As economies grow, there should be greater investment in pharmaceutical care, looking to the policies of high-income countries to increase efficiency. Pharmaceutical companies could also develop special access schemes with low prices to facilitate coverage in low-income countries.

Electronic supplementary material

The online version of this article (doi:10.1186/s12913-017-2304-2) contains supplementary material, which is available to authorized users.

Analysis of the influence of recent reforms in China: cardiovascular and cerebrovascular medicines as a case history to provide future direction

BACKGROUND

Pharmaceutical expenditure has grown by 16% per annum in China, enhanced by incentives for physicians and hospitals. Hospital pharmacies dispense 80% of medicines in China, accounting for 46% of total hospital expenditure. Principal measures to moderate drug expenditure growth include pricing initiatives as limited demand-side measures.

OBJECTIVE

Assess current utilization and expenditure including traditional Chinese medicines (TCMs) between 2006 and 2012.

METHODS

Uncontrolled retrospective study of medicines to treat cardiovascular and cerebrovascular diseases in one of the largest hospitals in southwest China.

RESULTS

Utilization increased 3.3-fold for cerebrovascular medicines, greatest for TCMs, with expenditure increasing 4.85-fold. Low prices for generics were seen, similar to Europe. However, there was variable utilization of generics at 29-31% of total product volumes in recent years. There continued to be irrationality in prescribing with high use of TCMs, and the utilization of different medicines dropping significantly once they achieved low prices.

CONCLUSION

Prices still have an appreciable impact on utilization in China. Potential measures similar to those implemented among western European countries could improve prescribing rationality and conserve resources.

Ongoing measures to enhance the efficiency of prescribing of proton pump inhibitors and statins in The Netherlands: influence and future implications

BACKGROUND

Multiple reforms have recently been introduced in The Netherlands to improve prescribing efficiency. These include preference pricing policies for multiple sourced products, guidelines, and quality and efficiency targets, as well as regular pharmacotherapy meetings.

OBJECTIVES

Assess the influence of these multiple measures on prescribing efficiency.

METHODS

Retrospective observational study of all reimbursed prescriptions for proton pump inhibitors and statins between 2000 and 2010 using the Genees-en hulpmiddelen Informatie Project (Health Insurance) database. Utilization measured in defined daily doses. Narrative review of reforms.

RESULTS

Reimbursed expenditure for the proton pump inhibitors fell by 58% in 2010 versus 2000 despite a threefold increase in utilization, helped by increasing utilization of generic omeprazole at only 2% of the prepatent loss price in 2010. Similarly, reimbursed expenditure for the statins fell by 14% in 2010 versus 2000 despite a 3.8-fold increase in utilization. Again, this was helped by increasing utilization of generic simvastatin at only 2% of the prepatent loss originator price.

CONCLUSION

Multiple supply and demand measures, including the preference pricing policy, appear to have appreciably enhanced proton pump inhibitor and statin prescribing efficiency, providing examples to other countries.

Does generic entry lower the prices paid for pharmaceuticals in Australia? A comparison before and after the introduction of the mandatory price-reduction policy

OBJECTIVE

We investigated the relationship between the number of generic medicines and pharmaceutical prices over time in Australia.

METHODS

A dataset was utilised containing 76 items for 4 years (2003-2007) on the national subsidy scheme - the Pharmaceutical Benefits Scheme (PBS) - for which a generic brand is available. The PBS price was used as the dependent variable, and the number of generics available the key explanatory variable. The ordinary least-squares estimator was adopted for estimation. In the robustness analysis, an instrumental-variables method was used to account for potential endogeneity.

RESULTS

Results suggested that the effect of increased generic medicine sellers on reducing the prices paid for generics is marginal but statistically significant.

CONCLUSIONS

It is suggested that structural changes to the way generic prices are determined needs to be reconsidered by the Australian government if the policy aim of using increased 'competition' to lower prices is to be maximised.

Impact of delisting ARBs, apart from losartan, on ARB utilisation patterns in Denmark: implications for other countries

INTRODUCTION

Renin-angiotensin inhibitor drugs have been a target for health authority initiatives across Europe with the potential for substantial savings once generic angiotensin-converting enzyme inhibitors (ACEIs) became available without compromising care. Recently, losartan was the first angiotensin receptor blocker (ARB) to lose its patent. In Denmark, the authorities removed all other ARBs from the reimbursement list, apart from losartan, as they were all seen as essentially similar for the management of hypertension or congestive heart failure at appropriate doses, but more expensive. Similarly, all other ARB fixed-dose combinations (FDCs), apart from losartan, were removed from the reimbursement list.

OBJECTIVE

The aims of the study were to (i) assess the impact of these reimbursement changes on the subsequent utilisation of losartan and other ARBs alone or as FDCs; (ii) assess changes in the prices of losartan and other ARBs post-generic losartan to calculate potential savings; and (iii) compare the impact of the policies in Denmark with other European countries to provide guidance.

METHODOLOGY

This was a retrospective segmented regression analysis of an interrupted time-series design comparing utilisation patterns before and after the changes in ARB reimbursement status. Utilisation was measured in defined daily doses (DDDs). Changes in total expenditure and expenditure/DDD were also assessed over time.

RESULTS

Losartan utilisation grew from 31 to 33 % of total single ARB utilisation before generic losartan, to 93 % by October 2011. There was a corresponding decrease in the utilisation of all other ARBs. Both changes were significant (p < 0.001). Total expenditure on single ARBs in 2011 was 77 % below 2009 levels despite a 16 % increase in utilisation. Estimated savings were 290.5 million Danish Kroner (DKK). A similar trend was seen for losartan FDCs, which was also significant (p < 0.001).

DISCUSSION

Losartan utilisation grew appreciable following the changes. The change was much greater than seen in countries that had eased prescribing restrictions for losartan but not the other ARBs. Active therapeutic switching programmes plus education and financial incentives also significantly enhanced losartan utilisation following generics in two countries and regions; however, the increase in losartan utilisation was less than that seen in Denmark.

The establishment and expansion of an innovative centre for rational pharmacotherapy--determinants and challenges

INTRODUCTION

The regional Board of Health in Stockholm, Sweden, established the Pharmacotherapy Centre (PTC) to enhance the rational use of medicines. The PTC initiated computerised decision support systems and developed a range of electronic service products to sustain rational prescribing. However, knowledge about which determinants have supported or hindered the sustainability of this type of healthcare organisation is limited.

OBJECTIVE

This study aims to identify and explore determinants that support or challenge the development and sustainability of the PTC organisation, as well as investigate the key elements of their implementation efforts.

METHODS

An in-depth interview study among key informants involved in the establishment of the PTC organisation was conducted. Data were analysed using qualitative content analysis.

RESULTS

Findings suggest that determinants enabling the development and expansion of this organisation include the presence of innovative characteristics among the PTC leadership and the ability of leaders to nurture visionary innovation in others, as well as the instigation of informal social networks and to identify end-user needs. Challenges included an ambiguous relationship to the pharmaceutical industry, an underestimation of the innovation-system fit and to undertake systematic evaluation of created impact by the organisation. Although prescriber use of electronic service products and adherence to an essential drug list increased over time, it remains difficult to identify methods required for demonstrating patient effects.

CONCLUSION

Whereas some determinants enabled the successful expansion of the PTC organisation, others served to substantially hinder it. The determinants identified can pave the way for systematic investigations into organisational change and development research in the pharmaceutical field.

Are specific initiatives required to enhance prescribing of generic atypical antipsychotics in Scotland?: International implications

BACKGROUND

National and regional authorities in Scotland have introduced multiple measures to appreciably enhance prescribing efficiency for the proton pump inhibitors (PPIs), statins and renin-angiotensin inhibitor drugs. Generic oral risperidone recently became available in Scotland; however, schizophrenia is a complex disease with advice from respected authorities suggesting that treatment should be individualised.

AIMS

To assess (i) changes in atypical antipsychotic drug (AAP) utilisation and expenditure following the availability of oral generic risperidone in Scotland; (ii) to determine (a) current INN prescribing rates for risperidone following generic availability and (b) decrease in expenditure/DDD for generic risperidone; (iii) to suggest additional measures that could possibly be introduced in Scotland to further enhance prescribing of generic AAPs; and (iv) to provide guidance to NHS Scotland as well as other European authorities on the implications.

METHODS

Retrospective observational study and an interrupted time series design.

RESULTS

No appreciable change in the utilisation patterns of risperidone pre- and postgeneric availability. Appreciable INN prescribing averaged 93-98% of total oral risperidone. Generic risperidone was 84% below prepatent loss prices by study end, reducing annual expenditure for oral risperidone in 2010 by GB£3.19mn compared with prepatent loss situation. However, overall expenditure on AAPs increased by 42% from 2005 to 2010.

DISCUSSION

As expected, there was no change in utilisation patterns for risperidone, although potential to influence prescribing patterns. Continued high INN prescribing suggests no problems with generic risperidone in practice. Costs will start to decrease as more AAPs lose their patents (olanzapine and quetiapine). There is the possibility to accelerate this reduction through educational activities.

CONCLUSION

There is potential to realise some savings with generic AAPs. However, this is limited by the complexity of the disease area. Any measures introduced must aim at increasing the prescribing of generic AAPs first line in suitable patients.

Potential to enhance the prescribing of generic drugs in patients with mental health problems in austria; implications for the future

BACKGROUND

Scrutiny over pharmaceutical expenditure is increasing leading to multiple reforms. This includes Austria with measures to lower generic prices and enhance their utilization. However the situation for newer antidepressants and atypical antipsychotic medicines (AAPs) is different to PPIs, statins, and renin-angiotensin inhibitor drugs with greater tailoring of therapy and no wish to switch products in stable patients. Authorities welcome generics though given the high costs particularly of single-sourced AAPs.

OBJECTIVE

Assess (a) changes in utilization of venlafaxine versus other newer antidepressants before and after availability of generics, (b) utilization of generic versus originator venlafaxine, (c) price reductions of venlafaxine over time and their influence on total expenditure, (d) utilization of risperidone versus other AAPs, (e) suggest potential additional reforms that could be introduced if pertinent to further enhance the use of generics.

METHODOLOGY

A quasi-experimental study design with a segmented time series and an observational study. Utilization measured in defined daily doses (DDDs) and total expenditure per DDD and over time.

RESULTS

No appreciable changes in the utilization of venlafaxine and risperidone after generics. The reduction in expenditure/DDD for venlafaxine decreased overall expenditure on newer antidepressants by 5% by the end of the study versus just before generics despite a 37% increase in utilization. Expenditure will further decrease if reduced prescribing of duloxetine.

CONCLUSION

Depression, schizophrenia, and bipolar diseases are complex diseases. As a result, specific measures are needed to encourage the prescribing of generic risperidone and venlafaxine when multiple choices are appropriate. Authorities cannot rely on a "Hawthorne" effect between classes to enhance the use of generics. Measures may include prescribing restrictions for duloxetine. No specific measures planned for AAPs with more multiple-sourced AAPs becoming available.

Initiatives to improve prescribing efficiency for drugs to treat Parkinson's disease in Croatia: influence and future directions

Parkinson's disease (PD) is the second most common neurological disease affecting older adults. Consequently, this disease should be a focus among payers, with increasing utilization of newer premium-priced patent-protected add-on therapies to stabilize or even improve motor function over time. However, expenditure can be moderated by reforms. Consequently, there is a need to assess the influence of these reforms on the prescribing efficiency for drugs to treat PD in Croatia before proposing additional measures. Prescribing efficiency is defined as increasing the use of add-on therapies for similar expenditure. An observational retrospective study of the Croatian Institute for Health Insurance database of drugs to treat patients with PD in Croatia from 2000 to 2010 was carried out, with utilization measured in defined daily doses (defined as the average maintenance dose of a drug when used in its major indication in adults). The study years were chosen to reflect recent reforms. Only reimbursed expenditure is measured from a health insurance perspective. Utilization of drugs to treat PD increased by 218% between 2000 and 2010. Reimbursed expenditure increased by 360%, principally driven by increasing utilization of premium-priced patent-protected add-on therapies, including ropinirole and pramipexole. However, following recent reforms, reducing expenditure/defined daily dose for the different drugs, as well as overall expenditure, stabilized reimbursed expenditure between 2005 and 2010. Treatment of PD is complex, and add-on therapies are needed to improve care. Reimbursed expenditure should now fall following stabilization, despite increasing volumes, as successive add-on therapies lose their patents, further increasing prescribing efficiency.

Generic olanzapine: health authority opportunity or nightmare?

Pressures to contain pharmaceutical expenditure have led to increased prescribing and dispensing of generic drugs in addition to low prices for generics. Atypical antipsychotics are prescribed for schizophrenia leading to resource pressures with their higher acquisition costs than typical antipsychotics. Drug costs can be reduced once multiple sources are available. However, this must be balanced against possible efficacy, safety and compliance concerns given the high cost of relapses for patients with schizophrenia. Generic clozapine has been launched. There was an increase in relapse rates with early formulations in the USA. However, this has not been the case with more recent formulations. Despite this, there could be patient and physician concerns when additional generic atypicals, such as olanzapine are available, reducing potential savings. A retrospective survey of patients prescribed Zyprexa((R)), generic olanzapine or both, over an extensive period was undertaken in Poland to help address these concerns given the difficulties with conducting randomized clinical trials with generics in complex situations. The survey showed similar effective doses of olanzapine in all groups. Relapse rates were similar in patients before and after switching to generic olanzapine, and no untoward side effects were seen in any patient prescribed generic olanzapine. Consequently, generic olanzapine should be welcomed with savings redirected to improving compliance or funding new premium priced drugs that can reduce relapses in refractory patients. This should give reassurance to health authorities to continue their reforms where pertinent to optimize resources by increasing availability of generics.

Insight into recent reforms and initiatives in Austria: implications for key stakeholders

Pharmaceutical expenditure continued to rise steadily in Austria during the 1990s and early 2000s despite a variety of reforms. However, recent reforms and initiatives have moderated the growth rate. These initiatives include transparent pricing of new drugs and generics, greater restrictions on the prescribing of new drugs and voluntary price reductions. Alongside this, there have also been initiatives to enhance rational and efficient prescribing. The lack of published data makes it difficult to fully analyze the impact of individual reforms. In addition, some reforms have only recently been introduced. Despite this, implications can be drawn for key stakeholder groups in the future. This includes pharmaceutical companies continuing to need to demonstrate substantially added benefit for their new drug to command average European prices. Otherwise, premiums will be restricted to a maximum 10% above the price of current standards. In addition, companies will need to continue to lower the price of their brands in interchangeable classes as standards become available as generics. The alternative will be prescribing restrictions. Further reforms will be needed in Austria to meet government growth targets for pharmaceutical expenditure of only 3-4% per annum, while continuing to fund new innovative drugs and increased volumes with greater prevalence of chronic diseases. Possible future measures and their implications for key stakeholder groups will also be discussed.

A new reimbursement system for innovative pharmaceuticals combining value-based and free market pricing

Sweden has experienced a national value-based pricing (VBP) system for innovative outpatient drugs operated by the Pharmaceutical Benefits Board - LFN (now called the Dental and Pharmaceutical Benefits agency - TLV) since 2002. VBP has the character of a monopoly system, leading to reimbursement decisions where usage of new medicines is limited to subgroups and not the population for which the drug is approved. VBP relies on a broad societal perspective, encouraging innovations by signaling to firms that value-adding treatments are demanded. However, the VBP system is operated without a drug budget responsibility. The budget responsibility lies at the regional level, not operating VBP, thus an intrinsic conflict is built into the system. The aim of this article is to suggest a modification to the current reimbursement system in Sweden where payment for pharmaceuticals is split between the regional and national levels. The system is expected to make new innovative pharmaceuticals accessible to a larger number of patients and provide more consumer surplus without reducing the producer surplus. In short, the county councils pay the marginal cost of production while the state pays for the innovation.

Imperative to consider multiple initiatives to maximize prescribing efficiency from generic availability: case history from Abu Dhabi

INTRODUCTION

Pharmaceutical expenditure has risen rapidly in Abu Dhabi, resulting in policies surrounding generics. However, various circumstances will reduce potential savings, including pharmacists still being free to dispense either originator or branded generics and be fully reimbursed.

OBJECTIVES

To research the changes in utilization patterns of proton pump inhibitors (PPIs) and lipid-lowering drugs before and after combined reforms on generics; and subsequently, calculate potential savings based on 'best practices' among Western European countries.

METHODS

An uncontrolled before-and-after observational study of utilization and expenditure of PPIs, statins and ezetimibe between 2004 and 2010, as well as up to 12 months before the first generic policy, to 1 year after the second generic policy, was carried out. Utilization was converted to defined daily doses (DDDs; 2011 DDDs) and DDDs/1000 inhabitants per day. Expenditure/DDD was calculated for omeprazole and simvastatin.

RESULTS

PPI utilization rose by 6.5-fold from 2004 to 2010, principally driven by increased utilization of patent-protected PPIs, although more recently stabilization in esomperazole utilization has occurred. Similar changes were seen for statins. Introduction of best practices would reduce PPI expenditure in 2010 by 32.8 million United Arab Emirates dirham (AED; €6.26 million) and statins by over 27 million AED (€5.15 million).

CONCLUSION

Limited demand-side measures led to increased utilization of patent-protected products in Abu Dhabi following the generic reforms. Successful measures will release considerable resources.

Multiple initiatives continue to enhance the prescribing efficiency for the proton pump inhibitors and statins in Scotland

INTRODUCTION

Multiple and intensive demand measures in Scotland have appreciably enhanced prescribing efficiency for proton pump inhibitors (PPIs) and statins in 2007 versus 2001. Statin utilization enhanced by measures to increase doses prescribed, including the Quality and Outcome Framework (QoF).

AIMS

Ascertain whether the plethora of measures continue to enhance prescribing efficiency for PPIs and statins. Second, assess whether the combined impact of the QoF targets and guidance enhances the prescribing of higher strength statins, mirroring the situation in England.

METHOD

PPI and statin utilization measured in terms of defined daily doses (DDDs) and DDDs per 1000 inhabitants per day (2010 DDDs) between 2001 and 2010, number and strength of simvastatin and atorvastatin tablets dispensed, and reimbursed expenditure per DDD and 1000 inhabitants per year.

RESULTS

Expenditure per DDD for generic omeprazole in 2010 was 91% below the 2001 originator price, leading to expenditure per 1000 inhabitants for PPIs in 2010 to be 56% below 2001 despite a threefold increase in utilization. Expenditure per DDD for generic simvastatin in 2010 was 97% below the 2002 originator price. Expenditure per 1000 inhabitants for statins in 2010 only increased by 7% compared with 2001 despite a 6.2-fold increase in utilization. Utilization of higher strength statins has increased in recent years, with higher strength simvastatin (40 and 80 mg) accounting for 85% of total statins (DDD basis) in 2010.

CONCLUSION

Reforms appear to be working to further enhance prescribing efficiency. Utilization of higher strength statins in recent years should further improve outcomes.

Combination of prescribing restrictions and policies to engineer low prices to reduce reimbursement costs

OBJECTIVES

To primarily document the influence of recent changes in the pricing policies for generics and originators in Norway, coupled with prescribing restrictions for both the proton pump inhibitors (PPIs) and statins, on subsequent prescribing efficiency, to provide possible examples to other countries. Second, to review the impact of prescribing restrictions on ezetimibe utilization in Norway compared with other European countries, again to provide guidance.

METHODS

A retrospective observational study using data from the Norwegian Drug Wholesales Statistics to evaluate changes in utilization patterns for the PPIs and statins from 2001 to 2009, and the Norwegian Prescription Database for expenditure data from January 2004 to 2009. Reforms validated with key personnel at the Norwegian Medicines Agency.

RESULTS

Atorvastatin utilization as measured by defined daily doses decreased after prescribing restrictions. This, coupled with increased utilization of generic simvastatin at only 15% of prepatent loss prices in recent years, led to a 55% decrease in statin expenditure in Norway between 2004 and 2009 despite appreciably increased utilization. Utilization of esomeprazole also fell following prescribing restrictions, but to a lesser extent. This reduction, coupled with low prices for generics as a result of recent pricing policies, resulted in PPI expenditure decreasing by 27% during the same period despite again appreciably increased utilization.

CONCLUSIONS

Policies to reduce the price of generics have been successfully introduced in Norway despite its small population size versus a number of other Western European countries. Prescribing restrictions have also been successfully introduced, mirroring the influence with multifaceted reforms in other European countries. The same applies to ezetimibe with utilization at only 1.9% of total statin and ezetimibe utilization in 2009. However, the difference in subsequent utilization patterns for atorvastatin versus esomeprazole makes it a challenge for health authorities to predict the ultimate impact of such measures. This requires further research.

Influence of patient co-payments on atypical antipsychotic choice in Poland: implications once generic atypicals are available

INTRODUCTION

Despite recent concerns over the effectiveness and safety of atypical antipsychotics compared with first-generation antipsychotics, prescribing of atypical antipsychotics continues to increase. The use of generic atypical antipsychotics is one way to address cost concerns, especially if there are no major differences in outcomes between generic and originator formulations. Market forces do appear to help lower prices if patients have to cover any difference between higher priced generics and originators and the current reference-priced products themselves, which they try to avoid, and if companies strive to gain market share. However, this approach may compromise individualizing atypical choice if reference classes consist of several atypicals between which there are significant co-payment differences.

OBJECTIVES

First, to assess whether differences in patient co-payment levels between the various atypical antipsychotic formulations alter the atypical formulation prescribed and/or dispensed in practice in Poland. Second, to assess whether market forces in Poland help drive down generic prices in reality as successive generics are launched. Third, to assess the impact of the reduction in reference prices on the overall expenditure on atypicals by the National Health Fund in Poland.

METHODS

Prescription and reimbursed expenditure data for olanzapine and risperidone were provided by the National Health Fund from 2002 to 2006, although no individual patient data were available. Reimbursement limits for the various presentations of olanzapine and risperidone were based on regulations from the Ministry of Health.

RESULTS

Analysis of the data showed that the level of patient co-payment appeared to impact on the atypical antipsychotic dispensed, with utilization of olanzapine growing once its co-payment was reduced when generic olanzapine became available. The reverse was seen with risperidone, with only limited growth in utilization when co-payment levels increased.Market forces resulted in a 40% reduction in the reimbursed reference price (based on the defined daily dose) of olanzapine and a 77% reduction for risperidone from 2002 to July 2008. These price reductions helped moderate the growth in atypical expenditure in Poland despite appreciably increased utilization, especially for olanzapine. Continued moderation (or even a reduction) in the growth of expenditure on atypicals is envisaged, despite increasing utilization, as more generic formulations are launched, with further reductions in the reference price for both olanzapine and risperidone.

CONCLUSIONS

Market forces appear to drive down the prices of generics and originators as more atypical formulations are launched. However, alternative approaches may be needed if significant co-payment differences compromise individualized care.

Policies to enhance prescribing efficiency in europe: findings and future implications

Introduction: European countries need to learn from each other to address unsustainable increases in pharmaceutical expenditures. Objective: To assess the influence of the many supply and demand-side initiatives introduced across Europe to enhance prescribing efficiency in ambulatory care. As a result provide future guidance to countries. Methods: Cross national retrospective observational study of utilization (DDDs – defined daily doses) and expenditure (Euros and local currency) of proton pump inhibitors (PPIs) and statins among 19 European countries and regions principally from 2001 to 2007. Demand-side measures categorized under the “4Es” – education engineering, economics, and enforcement. Results: Instigating supply side initiatives to lower the price of generics combined with demand-side measures to enhance their prescribing is important to maximize prescribing efficiency. Just addressing one component will limit potential efficiency gains. The influence of demand-side reforms appears additive, with multiple initiatives typically having a greater influence on increasing prescribing efficiency than single measures apart from potentially “enforcement.” There are also appreciable differences in expenditure (€/1000 inhabitants/year) between countries. Countries that have not introduced multiple demand side measures to counteract commercial pressures to enhance the prescribing of generics have seen considerably higher expenditures than those that have instigated a range of measures. Conclusions: There are considerable opportunities for European countries to enhance their prescribing efficiency, with countries already learning from each other. The 4E methodology allows European countries to concisely capture the range of current demand-side measures and plan for the future knowing that initiatives can be additive to further enhance their prescribing efficiency.

Use of Generics-A Critical Cost Containment Measure for All Healthcare Professionals in Europe?

Pharmaceutical expenditures in ambulatory care rose rapidly in Europe in the 1990s and early 2000s. This was typically faster than other components of healthcare spending, leading to reforms to moderate future growth. A number of these centered on generic medicines with measures to lower reimbursed prices as well as enhance their prescribing and dispensing. The principal objective of this paper is to review additional measures that some European countries can adopt to further reduce reimbursed prices for generics. Secondly, potential approaches to address concerns with generics when they arise to maximize savings. Measures to enhance the prescribing of generics will also briefly be discussed. A narrative review of the extensive number of publications and associated references from the co-authors was conducted supplemented with known internal or web-based articles. In addition, health authority and health insurance databases, principally from 2001 to 2007, were analyzed to assess the impact of the various measures on price reductions for generic omeprazole and generic simvastatin vs. pre-patent loss prices, as well as overall efficiency in Proton Pump Inhibitor (PPI) and statin prescribing. The various initiatives generally resulted in considerable lowering of the prices of generics as well as specifically for generic omeprazole and generic simvastatin vs. pre-patent loss prices. At one stage in the UK, generic simvastatin was just 2% of the originator price. These measures also led to increased efficiency for PPI and statin prescribing with reimbursed expenditure for the PPIs and statins either falling or increasing at appreciably lower rates than increases in utilization. A number of strategies have also been introduced to address patient and physician concerns with generics to maximize savings. In conclusion, whilst recent reforms have been successful, European countries must continue learning from each other to fund increased volumes and new innovative drugs as resource pressures grow. Policies regarding generics and their subsequent impact on reimbursement and utilization of single sourced products will continue to play a key role to release valuable resources. However, there must continue to be strategies to address concerns with generics when they exist.

Risk sharing arrangements for pharmaceuticals: potential considerations and recommendations for European payers

Background

There has been an increase in 'risk sharing' schemes for pharmaceuticals between healthcare institutions and pharmaceutical companies in Europe in recent years as an additional approach to provide continued comprehensive and equitable healthcare. There is though confusion surrounding the terminology as well as concerns with existing schemes.

Methods

Aliterature review was undertaken to identify existing schemes supplemented with additional internal documents or web-based references known to the authors. This was combined with the extensive knowledge of health authority personnel from 14 different countries and locations involved with these schemes.

Results and discussion

A large number of 'risk sharing' schemes with pharmaceuticals are in existence incorporating both financial-based models and performance-based/outcomes-based models. In view of this, a new logical definition is proposed. This is "risk sharing' schemes should be considered as agreements concluded by payers and pharmaceutical companies to diminish the impact on payers' budgets for new and existing schemes brought about by uncertainty and/or the need to work within finite budgets". There are a number of concerns with existing schemes. These include potentially high administration costs, lack of transparency, conflicts of interest, and whether health authorities will end up funding an appreciable proportion of a new drug's development costs. In addition, there is a paucity of published evaluations of existing schemes with pharmaceuticals.

Conclusion

We believe there are only a limited number of situations where 'risk sharing' schemes should be considered as well as factors that should be considered by payers in advance of implementation. This includes their objective, appropriateness, the availability of competent staff to fully evaluate proposed schemes as well as access to IT support. This also includes whether systematic evaluations have been built into proposed schemes.

Initiatives to enhance the quality and efficiency of statin and PPI prescribing in the UK: impact and implications

AIM

To assess the impact of a range of national and regional initiatives introduced in the North Lancashire Teaching Primary Care Trust (NLTPCT) since 2004 to enhance the quality and efficiency of prescribing proton pump inhibitors (PPIs), statins and ezetimibe. In addition, to suggest additional measures that could be introduced in NLTPCT to further enhance the quality and efficiency of prescribing based on initiatives in other European countries.

METHOD

A before-and-after observational study was undertaken on the utilization and expenditure of prescriptions dispensed in ambulatory care in NLTPCT from 2004 to 2007. Utilization was assessed using 'defined daily doses' (DDDs) and 'DDDs/1000 inhabitants per day' and compared over the study period. Reimbursed expenditure was assessed in terms of overall expenditure, expenditure/DDD, as well as expenditure/1000 inhabitants per year.

RESULTS

The combination of measures and initiatives enhanced the utilization of generic PPIs. International Nonproprietary Name (INN) prescribing of omeprazole reached 98% of all omeprazole by 2007. The measures also resulted in limited utilization of esomeprazole and lowered reimbursed expenditure/DDD of generic omeprazole to GB pound0.13 by 2007. This was 87% below 2004 originator prices, leading to a 41% fall in PPI expenditure during the study period despite increased utilization. Utilization of statins grew by over 130% during the study period enhanced by increased utilization of high doses of simvastatin and atorvastatin following the introduction of the quality and outcomes framework. Simvastatin dominated statin utilization by 2007, with generic simvastatin accounting for over 99.5% of total simvastatin. Reimbursed expenditure/DDD for generic simvastatin was pound0.03 in 2007, 95% below 2004 originator prices, leading to a fall in overall expenditure on statins. It proved difficult to undertake an impact analysis as, typically, a range of measures were introduced sequentially and simultaneously during the study period.

CONCLUSION

The findings are in line with expectations and do provide examples to other European countries. This includes a high rate of INN prescribing, low reimbursed prices for generic simvastatin and omeprazole and growing utilization of higher strength statins. The high rate of INN prescribing reduces the need for additional measures that have been instigated in other European countries to further enhance the prescribing and dispensing of generics to fully realize the resource benefits. Additional demand side measures are feasible and have already been instigated to conserve resources.

Ongoing pharmaceutical reforms in France: implications for key stakeholder groups

The rapid rise in pharmaceutical costs in France has been driven by new technologies and the growing prevalence of chronic diseases as well as considerable prescribing freedom and choice of physician among patients. This has led to the introduction of a number of reforms and initiatives in an attempt to moderate expenditure whilst ensuring universal coverage and rewarding innovation. These reforms include accelerating access to and granting average European prices for new innovative drugs, delisting drugs where there are concerns over their value and instigating rebates for excessive prescribing. Alongside this, ongoing initiatives to improve the quality and efficiency of prescribing include programmes to enhance generic prescribing and dispensing as well as to reduce antibacterial and anxiolytic/hypnotic prescribing. However, there have been few publications documenting the impact of specific reforms on the overall costs and quality of care, which have been exacerbated by compartmentalization of budgets. Estimates suggest savings of over 27 million euro/year by decreasing antibacterial prescribing, 450 million euro/year by not reimbursing ineffective drugs, 670 million euro/year from pharmaceutical company rebates and approximately 1 billion euro/year from increased prescribing and dispensing of generics (year 2003-7 values). Additional savings of at least 1.5 billion euro/year are seen as being possible from increased use of generics such as generic proton pump inhibitors, statins (HMG-CoA reductase inhibitors) and ACE inhibitors instead of current branded products such as angiotensin II type 1 receptor antagonists (angiotensin receptor blockers [ARBs]). Delisting drugs when there are concerns about their value provides an example to other countries with currently limited demand-side measures. Other possible examples include price : volume agreements and multifaceted campaigns to enhance generic prescribing and dispensing and reduce antibacterial prescribing. Possible future initiatives could include adopting more stringent criteria for categorizing new drugs as innovative as well as further reductions in the prices of generics. Other initiatives could include further enhancement of the quality and efficiency of prescribing, including formal auditing of physician prescribing, as well as increasing efforts to monitor the risk : benefit ratio of new drugs post-launch in real-world practice.

Impact of European pharmaceutical price regulation on generic price competition: a review

Although economic theory indicates that it should not be necessary to intervene in the generic drug market through price regulation, most EU countries intervene in this market, both by regulating the maximum sale price of generics (price cap) and by setting the maximum reimbursement rate, especially by means of reference pricing systems. We analyse current knowledge of the impact of direct price-cap regulation of generic drugs and the implementation of systems regulating the reimbursement rate, particularly through reference pricing and similar tools, on dynamic price competition between generic competitors in Europe. A literature search was carried out in the EconLit and PubMed databases, and on Google Scholar. The search included papers published in English or Spanish between January 2000 and July 2009. Inclusion criteria included that studies had to present empirical results of a quantitative nature for EU countries of the impact of price capping and/or regulation of the reimbursement rate (reference pricing or similar systems) on price dynamics, corresponding to pharmacy sales, in the generic drug market. The available evidence indicates that price-cap regulation leads to a levelling off of generic prices at a higher level than would occur in the absence of this regulation. Reference pricing systems cause an obvious and almost compulsory reduction in the consumer price of all pharmaceuticals subject to this system, to a varying degree in different countries and periods, the reduction being greater for originator-branded drugs than for generics. In several countries with a reference pricing system, it was observed that generics with a consumer price lower than the reference price do not undergo price reductions until the reference price is reduced, even when there are other lower-priced generics on the market (absence of price competition below the reference price). Beyond the price reduction forced by the price-cap and/or reference pricing regulation itself, the entry of new generic competitors is useful for lowering the real transaction price of purchases made by pharmacies (dynamic price competition at ex-factory level), although this effect is weaker or non-significant for official ex-factory prices and consumer prices in some countries. When maximum reimbursement systems such as reference pricing or similar types are applied, pharmacies are seen to receive large discounts on the price they pay for the pharmaceuticals, although these discounts are not transferred to the consumer price. The percentage discount offered to pharmacies in a country that uses a price-cap system combined with reference pricing is positively and significantly related to the number of generic competitors in the market for the pharmaceutical (dynamic price competition at ex-factory level).

Potential savings without compromising the quality of care

AIMS

This study was designed to analyse the association between adherence to guidelines for rational drug use and surrogate outcome markers for hypertension, diabetes and hypercholesterolaemia.

METHODS

The study used a cross-sectional ecological design. Data from dispensed prescriptions and medical records were analysed from 24 primary healthcare centres with a combined registered population of 330,000 patients in 2006. Guideline adherence was determined calculating the proportion of the prescribed volume of antidiabetic agents, antihypertensives and lipid-lowering agents representing the 14 different drugs included in the guidelines for these three areas. Patient outcome was assessed using surrogate marker data on HbA1C, blood pressure (BP) and s-cholesterol. The association between the guidelines adherence and outcomes measures was analysed by logistic regression.

RESULTS

The proportion of guideline antidiabetic drugs in relation to all antidiabetic drugs prescribed varied between 80% and 97% among the practices, the ratio of angiotensin converting enzyme (ACE)-inhibitors to all renin-angiotensin drugs 40-77% and the ratio of simvastatin to all statins 58-90%. The proportion of patients reaching targets for HbA1C, BP and s-cholesterol varied between 34% and 66%, 36% and 57% and 46% and 71% respectively. No significant associations were found between adherence to the guidelines and outcome. The expenditures for antihypertensives and lipid-lowering drugs could potentially be reduced by 10% and 50% respectively if all practices adhered to the guidelines as the top performing practices.

CONCLUSION

A substantial amount of money can be saved in primary care without compromising the quality of care by using recommended first-line drugs for the treatment diabetes, hypertension and hypercholesterolaemia.

Applying Programme Budgeting Marginal Analysis in the health sector: 12 years of experience

The Pharmaceutical Management Agency in New Zealand, PHARMAC, was established in 1993 at a time when growth in pharmaceutical expenditure was very high and arguably unsustainable. PHARMAC was charged with finding new and effective ways to manage expenditure growth, while also obtaining the best health outcomes for the New Zealand population. In order to help achieve this goal, PHARMAC has used Programme Budgeting Marginal Analysis. The use of Programme Budgeting Marginal Analysis, together with a capped budget and tools to generate savings, has significantly contributed to PHARMAC achieving its objective. However, there are implications of using Programme Budgeting Marginal Analysis with a capped budget. In particular, a different approach is required when undertaking and using cost-utility analysis (focused strongly on relative cost-effectiveness), and the opportunity cost of poor decisions is magnified significantly. As the demand on pharmaceutical expenditure continues to rise, the opportunity cost of not having a capped budget and tools for controlling pharmaceutical subsidies will only increase.

Soft regulations in pharmaceutical policy making: an overview of current approaches and their consequences

It is a challenge to improve public health within limited resources. Pharmaceutical policy making is a greater challenge due to conflicting interests between key stakeholder groups. This paper reviews current and future strategies to help improve the quality and efficiency of care, with special emphasis on demand-side controls for pharmaceutical prescribing. A large number of different educational, organizational, financial and regulatory strategies have been applied in pharmaceutical policy making. However, the effectiveness of most strategies has not been thoroughly evaluated and there is evidence that the behaviour of healthcare professionals is difficult to influence with traditional methods. During the last decades, new modes of governing and new governing constellations have also appeared in healthcare. However, relationships between those who regulate and those regulated are often unclear. New approaches have recently been introduced, including extensive dissemination strategies for guidelines and extensive quality assessment programmes where physicians' performances are measured against agreed standards or against each other. The main components of these 'soft regulations' are standardization, monitoring and agenda setting. However, the impact of these new modes on health provision and overall costs is often unknown, and the increased focus on monitoring may result in a higher conformity and uniformity that may not always benefit all key stakeholders. Alongside this, a substantial growth of auditing associations controlling a diminishing minority of people actually performing the tasks may be costly and counter-productive. As a result, new effective strategies are urgently needed to help maintain comprehensive healthcare without prohibitively raising taxes or insurance premiums. This is especially important where countries are faced with extreme financial problems. Healthcare researchers may benefit from researching other areas of society. However, any potential strategies initiated must be adequately researched, debated and evaluated to enhance implementation. We hope this opinion paper is the first step in the process to develop and implement new demand-side initiatives building on existing 'soft regulations'.

Recent national and regional drug reforms in Sweden: implications for pharmaceutical companies in Europe

With an aging population and increased prevalence of chronic diseases, such as obesity and diabetes mellitus, drug reforms are needed across Europe to ensure the continued provision of comprehensive healthcare. It is also a challenge, with the limited resources available, to fund new innovative drugs that significantly improve patient health. Recent national and regional reforms in Sweden have moderated the rate of increase in drug expenditure, despite increased volumes of drug use and the launch of new, expensive drugs. National reforms include the adoption of economic principles when assessing the value and subsequent reimbursement of new and existing drugs, as well as reforms to obtain low prices for generic drugs. Regional reforms aim to encourage the rational use of medicines through the establishment of drug and therapeutic committees, development of guidelines, academic detailing, continuous benchmarking of prescribing patterns, and financial incentives. Some of these reforms provide examples to other European countries, whilst others duplicate existing measures. As such, we believe other European countries can benefit from an analysis of the Swedish reforms. We believe the pharmaceutical industry can also benefit from this analysis by working with key regional payers involved with developing and implementing the reforms as they moderate and refine their future activities, including finding acceptable ways of introducing new expensive drugs.