The Impact of Reimbursement Practices on the Pharmaceutical Market for Off-Patent Medicines in Slovakia

The role of insurance policies in the drug pricing landscape

INTRODUCTION

This overview paper aims at summarizing and analyzing the available literature on healthcare system organization and pricing policies of 11 European countries, comparing them to the Bulgarian pharmaceutical system. The countries were selected based on the reference basket for the pricing of pharmaceuticals in Bulgaria - Belgium, Greece, Spain, Italy, Latvia, Lithuania, Romania, Slovakia, Slovenia, and France.

AREAS COVERED

In the first part, we explore the health system models in the above-mentioned countries. In the second part we explore the pricing and reimbursement policies, and in the third part we analyze healthcare and pharmaceutical economic indicators, as well as life expectancy. The major focus of the review is the outpatient care.

EXPERT OPINION

In this work, we attempted to outline differences and similarities between the countries of interest. Despite the differences in their healthcare system organization, health and pharmaceutical expenditures constantly increased during the observed 2 decades. This increase in expenditures, however, has not had a significant impact on life-expectancy. Minor increases were observed - from 2 to 4 years total. No country had an expectancy above 85 years of age. It might be said that other factors are influencing the life expectancy to a greater extent.

New pricing models for generic medicines to ensure long-term sustainable competition in Europe

Background: Price erosion of generic medicines over time as a result of existing pricing policies in combination with increasing operational costs of these products due to high inflation, undermine long-term sustainable competition in European off-patent medicines markets. Therefore, the aim of this study is to identify new potential pricing models for retail generic medicines in Europe, examine their pros and cons, and illustrate them with examples inside or outside the pharmaceutical sector. Methods: A targeted literature review, one-to-one interviews and a joint advisory board meeting with experts from five European countries were carried out to assess potential pricing models for generic medicines. Results: We identified ten pricing models that can be applied to generic medicines. The tiered pricing model is viewed as a sustainable solution ensuring competitiveness, but requires market monitoring using a supportive IT infrastructure. De-linking the price of generic medicines from that of the off-patent originator medicine prevents the originator from forcing generic medicines' prices to unsustainable levels. Higher costs due to inflation can be compensated in the automatic indexation model. Other pricing models that have less implementation potential include the one-in-one/multiple-out model, tax credits, value-based pricing, volume for savings and guaranteed margin/fee models. The hypothecated tax and cost allocation models, which add a patient fee to generic medicines prices, are not likely to be socially acceptable. Conclusion: When considering a new pricing model for generic medicines, the impact on innovative medicines and the characteristics of the healthcare system in a given country need to be taken into account. Also, there is a need to continuously follow up the level of competition in off-patent medicines markets and to identify sustainability risks.

How Managed Entry Agreements Influence the Patients' Affordability to Biological Medicines-Bulgarian Example

Managed entry agreements are applied in almost all European countries in order to improve patients' access to therapy. The current study aims to evaluate the changes in the affordability of biological medicines for patients in Bulgaria during 2019-2022. The study is a top-down macroeconomic analysis of the key economic indicators and reimbursed costs of biologic therapies. Affordability was determined as the number of working hours needed to pay for monthly therapy. The average NHIF budget for pharmaceuticals increased significantly along with inflation in the healthcare sector. Bulgarian patients had to devote a large part of their income to buying medicines if a co-payment existed. The percentage of the monthly income of pensioners needed for therapy co-payment varied between 10% and 280%. The hours of work required to purchase a package of biologicals varied between 7 and 137 working hours. The global economic crisis has affected Bulgaria and led to worsening economic parameters. There are still no well-established practices to control public spending, as the measures taken to reduce the final cost of medicines mainly affect the pharmaceutical companies. This type of cost-containment policy provides an opportunity for innovative treatment with biologicals for patients with inflammatory diseases. Most of the therapies cost more than the patients' monthly income.

The long-term effect of generic price competition on the Hungarian statin market

BACKGROUND

Generic competition is a vital health policy tool used in regulating the pharmaceutical market. Drug group HMG-CoA reductase (3-hydroxy-3-methyl-glutaryl-coenzyme-A reductase) inhibitors, widely known as "statins," was the first drug group in Hungary in which generic prescriptions became mandatory. Our aim is to analyze the changes in the retail and wholesale margins through the generic competition regarding "statins".

METHODS

Data was derived from the nationwide pharmaceutical database of the Hungarian National Health Insurance Fund Administration, the only health care financing agency in Hungary. We observed the turnover data regarding the HMG-CoA-reductase inhibitor "statins" from 2010 through 2019. As the drugs under review have a fixed price point in Hungary, we effectively calculated the margins.

RESULTS

In 2010, the consumer expenditure of statins was 30.7 billion HUF ($148 million), which decreased by 59%, to 12.5 billion HUF ($42.9 million) in 2019. In 2010, the annual health insurance reimbursement of statins was 23.7 billion HUF ($114 million), which underwent a 63% decrease to 8.6 billion HUF ($29.7 million) in 2019. In 2010, the DOT turnover was 287 million days, and it increased to above 346 million days for 2019, which reflects a 20% increase over the past nine years. The monthly retail margins decreased from 334 million HUF ($1.6 million), (January, 2010) to 176 million HUF ($0.61 million), (December, 2019). The monthly wholesale margins decreased from 96.3 million HUF ($0.46 million), (January, 2010) to 41.4 million HUF ($0.14 million), (December, 2019). The most significant downturn in margins was due to the introduction of the first two blind bids. The combined DOT turnover in reference to the examined 43 products consistently increased.

CONCLUSIONS

The decline in retail and wholesale margin and in health insurance expenditures was largely due to a reduction in the consumer price of generic medicines. DOT turnover of statins also increased significantly.

Market Diffusion of Biosimilars in Off-Patent Biologic Drug Markets across Europe

Biologics are among the most expensive pharmaceuticals but have begun to lose their exclusivity rights over the past 15 years, offering the possibility for biosimilar competition. Therefore, we examine the market diffusion of biosimilars across Europe. Using revenues and sales data from IQVIA, we identified 12 biologic substances facing first biosimilar competition between 2014 and 2020 in 25 European countries. We investigated biosimilar market share depending on product and market characteristics with beta regression. Moreover, we compared market diffusion across countries using multilevel modelling. The average market share of biosimilars at first biosimilar entry was about seven percent in the retail and hospital market and grew to 34.69% and 38.29% after 16 quarters, respectively. Quarters since first biosimilar entry had a positive but decreasing effect on biosimilar market share (p<.001 for both markets). Quarterly growth ranged from 0.006 (Netherlands) to 0.026 (Slovakia) in the retail market and from 0.007 (Hungary) to 0.040 (United Kingdom) in the hospital market. The diffusion increased over time across all European markets, although at different rates. Biosimilar market share was higher in the hospital market. Compared to generics, diffusion of biosimilars is much slower. If policymakers desire to increase biosimilar diffusion, they should aim at policies that increase competition and use countries with the highest diffusion rates as benchmarks.