Why are our medicines so expensive? Spoiler: Not for the reasons you are being told…

Often described as a natural economic trend, the prices that pharmaceutical companies charge for new medicines have skyrocketed in recent years. Companies claim these prices are justified because of the 'value' new treatments represent or that they reflect the high costs and risks associated with the research and development process. They also claim that the revenues generated through these high prices are required to pay for continued innovation.This paper argues that high prices are not inevitable but the result of a societal and political choice to rely on a for-profit business model for medical innovation, selling medicines at the highest price possible. Instead of focusing on therapeutic advances, it prioritises profit maximisation to benefit shareholders and investors over improving people's health outcomes or equitable access.As a result, people and health systems worldwide struggle to pay for the increasingly expensive health products, with growing inequities in access to even life-saving medicines while the biopharmaceutical industry and its financiers are the most lucrative business sectors.As the extreme COVID-19 vaccine inequities once again highlighted, we urgently need to reform the social contract between governments, the biopharmaceutical industry, and the public and restore its original health purpose. Policymakers must redesign policies and financing of the pharmaceutical research and development ecosystem such that public and private sectors work together towards the shared objective of responding to public health and patients' needs, rather than maximising financial return because medicines should not be a luxury.

Citizens' views on prices of medicines reimbursed by the National Health Service: Findings from Italian online focus groups

INTRODUCTION

Access to medicines is one of the biggest challenges to health systems, affecting society and individuals. This study aims to explore citizens' opinions, perceptions and attitudes on the model of medicines' research and development (R&D) and price setting of medicines reimbursed by the Italian National Health Service.

MATERIALS AND METHODS

We run four online focus groups, analysed through thematic analysis.

INCLUSION CRITERIA

people aged 30-70 years, who had completed at least compulsory schooling (8-10 years), with no specialised knowledge about the subject.

EXCLUSION CRITERIA

healthcare workers, pharmaceutical and device industry employees, researchers and medicine policy board members. We aimed to include a purposive sample of 20 participants, variable in terms of age, educational level and place of residence.

RESULTS

Eleven women and six men participated. The mean age was 53 years (range: 28-73). Most (n = 15) had a university degree or attended secondary schools. Eight had a job, five were not employed, and four were retired. In general, participants supported the role of the public health service. Almost all had limited knowledge of medicines' R&D and price setting. Most asked for transparency on medicine prices and negotiation criteria. Participants considered revenues of pharmaceutical companies disproportionate and most called for containment measures of profits. Most were in favour of a stronger public intervention in R&D and prices' negotiations. Few were sceptical of the public sector's ability to play this role.

DISCUSSION

Medicines' prices were discussed as a health matter. Increasing citizens' awareness of these topics is needed by providing spaces and conditions to participate in the discussion, including different perspectives and interests.

PATIENT OR PUBLIC CONTRIBUTION

Members of BEUC-the European consumer organisation-proposed the project. Altroconsumo, an independent consumer organisation and OCU, a Spanish consumer organisation, participated in developing the project and the main topics to discuss. The Mario Negri Institute and Aplica cooperative-the Spanish methodological team-were involved by BEUC and their national organisations to define the methodology, organisational aspects and contents and conducted the focus groups.

Hospital Prices for Physician-Administered Drugs for Patients with Private Insurance

BACKGROUND

Hospitals can leverage their position between the ultimate buyers and sellers of drugs to retain a substantial share of insurer pharmaceutical expenditures.

METHODS

In this study, we used 2020-2021 national Blue Cross Blue Shield claims data regarding patients in the United States who had drug-infusion visits for oncologic conditions, inflammatory conditions, or blood-cell deficiency disorders. Markups of the reimbursement prices were measured in terms of amounts paid by Blue Cross Blue Shield plans to hospitals and physician practices relative to the amounts paid by these providers to drug manufacturers. Acquisition-price reductions in hospital payments to drug manufacturers were measured in terms of discounts under the federal 340B Drug Pricing Program. We estimated the percentage of Blue Cross Blue Shield drug spending that was received by drug manufacturers and the percentage retained by provider organizations.

RESULTS

The study included 404,443 patients in the United States who had 4,727,189 drug-infusion visits. The median price markup (defined as the ratio of the reimbursement price to the acquisition price) for hospitals eligible for 340B discounts was 3.08 (interquartile range, 1.87 to 6.38). After adjustment for drug, patient, and geographic factors, price markups at hospitals eligible for 340B discounts were 6.59 times (95% confidence interval [CI], 6.02 to 7.16) as high as those in independent physician practices, and price markups at noneligible hospitals were 4.34 times (95% CI, 3.77 to 4.90) as high as those in physician practices. Hospitals eligible for 340B discounts retained 64.3% of insurer drug expenditures, whereas hospitals not eligible for 340B discounts retained 44.8% and independent physician practices retained 19.1%.

CONCLUSIONS

This study showed that hospitals imposed large price markups and retained a substantial share of total insurer spending on physician-administered drugs for patients with private insurance. The effects were especially large for hospitals eligible for discounts under the federal 340B Drug Pricing Program on acquisition costs paid to manufacturers. (Funded by Arnold Ventures and the National Institute for Health Care Management.).

Assessment of the Global Fund-supported procurement and supply chain reforms at the Ethiopian Pharmaceuticals Supply Agency: a mixed-methods study

OBJECTIVE

The Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) partnered with the Ethiopian Pharmaceutical Supply Agency (EPSA) in 2018-2019 to reform procurement and supply chain management (PSCM) procedures within the Ethiopian healthcare system. This assessment sought to determine the impact of the reforms and document the lessons learnt.

DESIGN

Mixed-methods study incorporating qualitative and quantitative analysis. Purposive and snowballing sampling techniques were applied for the qualitative methods, and the data collected was transcribed in full and subjected to thematic content analysis. Descriptive analysis was applied to quantitative data.

SETTING

The study was based in Ethiopia and focused on the EPSA operations nationally between 2017 and 2021.

PARTICIPANTS

Twenty-five Ethiopian healthcare decision-makers and health workers.

INTERVENTION

Global Fund training programme for health workers and infrastructural improvements OUTCOMES: Operational and financial measures for healthcare PSCM.

RESULTS

The availability of antiretrovirals, tuberculosis and malaria medicines, and other related commodities, remained consistently high. Line fill rate and forecast accuracy were average. Between 2018 and 2021, procurement lead times for HIV and malaria-related orders reduced by 43.0% relative to other commodities that reported an increase. Many interview respondents recognised the important role of the Global Fund support in improving the performance of EPSA and provided specific attributions to the observed successes. However, they were also clear that more needs to be done in specific critical areas such as financing, strategic reorganisation, data and information management systems.

CONCLUSION

The Global Fund-supported initiatives led to improvements in the EPSA performance, despite several persistent challenges. To sustain and secure the gains achieved so far through Global Fund support and make progress, it is important that various stakeholders, including the government and the donor community, work together to support EPSA in delivering on its core mandate within the Ethiopian health system.

Impact of China's National Centralized Drug Procurement Policy on pharmaceutical enterprises' financial performance: a quasi-natural experimental study

Introduction

In China, the interest relationship between pharmaceutical enterprises and medical institutions has harmed the healthy development of pharmaceutical enterprises. In November 2018, the National Centralized Drug Procurement (NCDP) policy was published. The NCDP policy severs the interest relationship and significantly impacts on pharmaceutical enterprises's financial performance.

Methods

Using the implementation of China's National Centralized Drug Procurement (NCDP) policy as a quasi-natural experiment, this study evaluated the impact of participation in the NCDP policy on pharmaceutical enterprises' financial performance. We developed a difference-in-difference model to estimate the change in financial performance after NCDP implementation, based on financial data on Chinese listed pharmaceutical enterprises.

Results

We found that the bid-winning enterprises' financial performance significantly improved after participating in NCDP. This may be related to lower costs, market share expansion, and increased research and development investment by the bid-winning enterprises.

Discussion

To further promote the high-quality development of pharmaceutical enterprises in China, the government should expand the variety of drugs on the NCDP list (NCDP drugs), while improving the drug patent protection system and the policies to support the bid-winning enterprises.

The Problem of Limited-Supply Agreements for Medicare Price Negotiation

This Viewpoint discusses how limited-supply agreements (introduction of generic products in reduced volumes) might thwart efforts to negotiate lower prices on prescription drugs in the US.

Patents and Regulatory Exclusivities on GLP-1 Receptor Agonists

Importance

Glucagon-like peptide 1 (GLP-1) receptor agonists were first approved for the treatment of type 2 diabetes in 2005. Demand for these drugs has increased rapidly in recent years, as indications have expanded, but they remain expensive.

Objective

To analyze how manufacturers of brand-name GLP-1 receptor agonists have used the patent and regulatory systems to extend periods of market exclusivity.

Evidence Review

The annual US Food and Drug Administration's (FDA) Approved Drug Products With Therapeutic Equivalence Evaluations was used to identify GLP-1 receptor agonists approved from 2005 to 2021 and to record patents and nonpatent statutory exclusivities listed for each product. Google Patents was used to extract additional data on patents, including whether each was obtained on the delivery device or another aspect of the product. The primary outcome was the duration of expected protection from generic competition, defined as the time elapsed from FDA approval until expiration of the last-to-expire patent or regulatory exclusivity.

Findings

On the 10 GLP-1 receptor agonists included in the cohort, drug manufacturers listed with the FDA a median of 19.5 patents (IQR, 9.0-25.8) per product, including a median of 17 patents (IQR, 8.3-22.8) filed before FDA approval and 1.5 (IQR, 0-2.8) filed after FDA approval. Fifty-four percent of all patents listed on GLP-1 receptor agonists were on the delivery devices rather than active ingredients. Manufacturers augmented patent protection with a median of 2 regulatory exclusivities (IQR, 0-3) obtained at approval and 1 (IQR, 0.3-4.3) added after approval. The median total duration of expected protection after FDA approval, when accounting for both preapproval and postapproval patents and regulatory exclusivities, was 18.3 years (IQR, 16.0-19.4). No generic firm has successfully challenged patents on GLP-1 receptor agonists to gain FDA approval.

Conclusions and Relevance

Patent and regulatory reform is needed to ensure timely generic entry of GLP-1 receptor agonists to the market.

Association Between Drug Characteristics and Manufacturer Spending on Direct-to-Consumer Advertising

Importance

Some drugs are heavily marketed through direct-to-consumer advertising.

Objective

To identify drug characteristics associated with a greater share of promotional spending on advertising directly to consumers.

Design, Setting, and Participants

Exploratory cross-sectional analysis of drug characteristics and promotional spending for the 150 top-selling branded prescription drugs in the US in 2020 as identified from IQVIA National Sales Perspectives data. Promotional spending data were provided by IQVIA ChannelDynamics.

Exposures

Drug characteristics (total 2020 sales; total 2020 promotional spending; clinical benefit ratings; number of indications, off-label use; molecule type; nature of condition treated; administration type; generic availability; US Food and Drug Administration [FDA] approval year, World Health Organization anatomical therapeutic chemical classification; Medicare annual mean spending per beneficiary; percent sales attributable to the drug; market size; market competitiveness) assessed from health technology assessment agencies (France's Haute Autorité de Santé and Canada's Patented Medicine Prices Review Board) and drug data sources (Drugs@FDA, the FDA Purple Book, Lexicomp, Merative Marketscan Research Databases, and Medicare Spending by Drug data).

Main Outcomes and Measures

Proportion of total promotional spending allocated to direct-to-consumer-advertising for each drug.

Results

The 2020 median proportion of promotional spending allocated to direct-to-consumer advertising was 13.5% (IQR, 1.96%-36.6%); median promotional spending, $20.9 million (IQR, $2.72-$131 million); and median total sales, $1.51 billion (IQR, $0.97-$2.26 billion). Of the 150 best-selling drugs, 16 were missing data and key covariates; therefore, the primary study sample comprised 134 drugs. After adjustment for multiple drug characteristics, the mean proportion of total promotional spending allocated to direct-to-consumer advertising for the remaining 134 drugs was an absolute 14.3% (95% CI, 1.43%-27.2%; P = .03) higher for those with low added clinical benefit than for those with high added clinical benefit and an absolute 1.5% (95% CI, 0.44%-2.56%; P = .005) higher for each 10% increase in total sales.

Conclusions and Relevance

Among top-selling US drugs in 2020, a rating of lower added benefit and higher total drug sales were associated with a higher proportion of manufacturer total promotional spending allocated to direct-to-consumer advertising. Further research is needed to understand the implications of these findings.

Commentary: Reconsidering Pharmaceutical Research and Development Investments

Following Lee and colleagues' (2023) article explaining how Canadians are being shortchanged by drug companies when it comes to investments in research and development (R&D), this rejoinder adds context and appends two other very problematic elements in the debate between wishful narratives over the industry's contribution in R&D and actual numbers. First, even the current stricter definition of R&D investment might simply be too large considering that elements such as seeding trials - a well-known marketing device - can be accounted for as R&D expenditures. Second, this rejoinder identifies how Statistics Canada acted in concert with Innovative Medicines Canada to reinforce the industry's preferred narratives around R&D expenditures. This situation puts into question the trustworthiness of Canada's statistical agency.

The default of 1998 and pharmaceutical market. Report I. The chronicle of disaster

The researchers, in series of articles, analyze significance of the default of 1998 for both pharmaceutical industry and participants of pharmaceutical market. The Report I presents results of investigation of corresponding economic and social aspects of issue. The article presents contradictions in tax and financial policies of then ruling authorities; regulatory drawbacks created by inefficient awareness of economic situation and social specificity of pharmaceutics; means for pharmaceutical companies to survive in these conditions.

Do Profit Margins of Pharmaceuticals Influence Reimbursement Decisions? A Discrete Choice Experiment Among Dutch Healthcare Decision Makers

OBJECTIVES

This study aimed to investigate whether the profit margins of pharmaceuticals would influence the outcome of reimbursement decisions within the Dutch policy context.

METHODS

We conducted a discrete choice experiment among 58 Dutch decision makers. In 20 choice sets, we asked respondents to indicate which of 2 pharmaceutical treatment options they would select for reimbursement. Options were described using 5 attributes (disease severity, incremental costs per quality-adjusted life-year, health gain, budget impact, and profit margin) with 3 levels each. Additionally, cognitive debriefing questions were presented, and for validation debriefing, interviews were conducted. Choice data were analyzed using mixed logit models, also to calculate marginal effects and choice probabilities.

RESULTS

Results indicated that the specified levels of profit margins significantly influenced choices made. Decision makers were less likely to reimburse a product with a higher profit margin. The relative importance of profit margins was lower than that of the included traditional health technology assessment criteria, but not negligible. When asked directly, 61% of respondents indicated that profit margin should play a role in reimbursement decision making, although concerns about feasibility and the connection to price negotiations were voiced.

CONCLUSIONS

Our results suggest that if available to decision makers the profit margin of pharmaceutical products would influence reimbursement decisions within the Dutch policy context. Higher profit margins would reduce the likelihood of reimbursement. Whether adding profit margin as an additional, explicit criterion to the health technology assessment decision framework would be feasible and desirable is open to further exploration.

Varying Willingness to Pay Based on Severity of Illness: Impact on Health Technology Assessment Outcomes of Inpatient and Outpatient Drug Therapies in The Netherlands

OBJECTIVES

Since 2015, Zorginstituut Nederland (ZIN) has linked disease severity ranges of 0.10 to 0.40, 0.41 to 0.70, and 0.71 to 1.00 with willingness-to-pay (WTP) reference values of €20 000, €50 000, and €80 000 per quality-adjusted life year gained, respectively. We sought to review whether these changes have affected ZIN health technology assessment (HTA) outcomes for specialist and outpatient drugs.

METHODS

ZIN recommendations for specialist and outpatient drugs published between January 1, 2012, and December 31, 2020, that included a pharmacoeconomic report were reviewed. Data were extracted on disease severity, proportional shortfall calculation, reported WTP reference value, outcomes related to the cost-effectiveness of the product, budget impact, and ZIN's recommendation including rationale for their advice.

RESULTS

A total of 51 HTAs were included. Of the 20 HTAs published before June 2015, a total of 9 received positive recommendations, 7 were conditionally reimbursed, and 4 received negative recommendations. None reported WTP reference values. Of the 31 evaluations published after June 2015, a total of 4 products received positive recommendations, 1 was conditionally approved, and 26 received negative recommendations initially. Most products (65%) reported disease severity to be >0.70.

CONCLUSIONS

Since 2015, most products have fallen within the highest category of disease severity. Although pre-2015 outcomes were varied, post-2015 products overwhelmingly received negative recommendations, and the proportion of products for which price negotiations were recommended has increased. These differences in outcomes may result from the introduction of an explicit WTP reference value, whether or not in combination with the severity-adjusted ranges, but may also reflect other national policy changes in 2015.

Coverage and Pricing Recommendations of the French National Health Authority for Innovative Drugs: A Retrospective Analysis From 2014 to 2020

OBJECTIVES

This study provides a retrospective analysis of the recommendations of the French National Health Authority on the reimbursement and pricing of innovative drugs.

METHODS

The analysis includes drugs subjected to both economic and clinical evaluations in France from 2014 to 2020. Ordered logistic and quantile regressions are used to estimate the factors associated with the clinical value (SMR), the clinical added value (ASMR), and the incremental cost-utility ratio (ICUR) of innovative drugs. All variables used in the regression analyses are extracted from the Clinical and Economic Opinions for the 146 observations.

RESULTS

Regression analyses indicate that 2 of the 5 official criteria, the efficacy-adverse events balance of the drug and its function, are significantly associated with the SMR rating. The ASMR is positively associated with the disease severity, the quality-adjusted life-year (QALY) gain provided by the drug, and the validation of the ICUR in the Economic Opinion. At the first quartile of the ICUR distribution (approximately €50 000/QALY), higher ICUR levels are observed for drugs with a smaller target population and for drugs claimed as more innovative. Higher ICUR levels are also observed for pediatric drugs and for drugs with no therapeutic alternative at the third quartile of the distribution (approximately €240 000/QALY).

CONCLUSIONS

Not all official criteria of the SMR are associated with actual ratings obtained. Regarding the ASMR, the results support the idea of a convergence between the 2 independent clinical and economic appraisal processes. Finally, the factors influencing the ICUR level vary across the distribution of ICUR.

Cost-Effectiveness Analysis of Branded Drugs With Market Demand and Insurance

OBJECTIVES

Cost-effectiveness analysis of branded pharmaceuticals presumes that both cost (or price) and marginal effectiveness levels are exogenous. This assumption underlies most judgments of the cost-effectiveness of specific drugs. In this study, we show the theoretical implications of letting both factors be endogenous by modeling pharmaceutical price setting with and without health insurance, along with patient response to the prices that depend on marginal effectiveness. We then explore the implications of these models for cost-effectiveness ratios.

METHODS

We used simple textbook models of patient demand and pricing behavior of drug firms to predict market equilibria in the drug and insurance markets and to generate calculations of the cost-effectiveness ratios in those settings.

RESULTS

We found that ratios in market settings can be much different from those calculated in cost-effectiveness studies based on exogenous prices and treatment of all patients at risk rather than those who would demand treatment in a market setting. We also found that there may be considerable similarity in these market cost-effectiveness ratios across different products because drug firms with market power set profit-maximizing prices.

CONCLUSIONS

We found that market cost-effectiveness ratios will always indicate an excess of benefits over cost. Insurance will lead to less favorable ratios than without insurance, but when insurers bargain with drug firms, rather than taking their prices as given, cost-effectiveness ratios will be more favorable.

Toward Better Data Dashboards for US Drug Value Assessments

OBJECTIVES

To explore the use of data dashboards to convey information about a drug's value, and reduce the need to collapse dimensions of value to a single measure.

METHODS

Review of the literature on US Drug Value Assessment Frameworks, and discussion of the value of data dashboards to improve the manner in which information on value is displayed.

RESULTS

The incremental cost per quality-adjusted life-year ratio is a useful starting point for conversation about a drug's value, but it cannot reflect all of the elements of value about which different audiences care deeply. Data dashboards for drug value assessments can draw from other contexts. Decision makers should be presented with well-designed value dashboards containing various metrics, including conventional cost per quality-adjusted life-year ratios as well as measures of a drug's impact on clinical and patient-centric outcomes, and on budgetary and distributional consequences, to convey a drug's value along different dimensions.

CONCLUSIONS

The advent of US drug value frameworks in health care has forced a concomitant effort to develop appropriate information displays. Researchers should formally test different formats and elements.

Evaluation of Drug Trials in High-, Middle-, and Low-Income Countries and Local Commercial Availability of Newly Approved Drugs

IMPORTANCE

Clinical research supporting US Food and Drug Administration (FDA) drug approvals is largely conducted outside the US.

OBJECTIVE

To characterize where drugs were tested for FDA approval and to determine how commonly and quickly these drugs received marketing approval in the countries where they were tested, both overall and by country income level and geographical region.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional analysis of trials supporting FDA approval of novel drugs in 2012 and 2014, sponsored by large drug companies, did not involve human participants. The settings were the countries hosting trials supporting US drug approval. Data sources included Drugs@FDA, ClinicalTrials.gov, PubMed, Google Scholar, EMBASE, and drug regulatory agency websites. Data analysis was completed March through September 2020.

MAIN OUTCOMES AND MEASURES

The primary outcomes were the proportion of drugs approved for marketing in the countries where they were tested for FDA approval within 1, 2, 3, 4, and 5 years of FDA approval and the proportion of countries contributing participants to trials supporting FDA approvals receiving market access to the drugs they helped test within 1, 2, 3, 4, and 5 years of FDA approval.

RESULTS

In 2012 and 2014, the FDA approved 34 novel drugs sponsored by large companies, on the basis of a total of 898 trials, 563 of which had location information available. Each drug was tested in a median (interquartile range [IQR]) of 25 (18-37) unique countries, including a median (IQR) of 20 (13-25) high-income countries, 6 (4-11) upper-middle-income countries, and 1 (0-2) low-middle-income country. One drug was approved for marketing in all testing countries within 1 year of FDA approval and 15% (5 of 34 drugs) were approved in all testing countries within 5 years of FDA approval. Of the 70 countries contributing research participants for FDA drug approvals, 7% (5 countries) received market access to drugs they helped test within 1 year of FDA approval and 31% (22 countries) did so within 5 years. Access within 1 year occurred in 13% (5 of 39) of high-income countries, 0 of 22 upper-middle-income countries (0%), and 0 of 9 lower-middle-income countries (0%), whereas at 5 years access rates were 46% (18 of 39 countries), 9% (2 of 22 countries), and 22% (2 of 9 countries), respectively. Approvals were faster in high-income countries (median [IQR], 8 [0-11] months) than in upper-middle-income countries (median [IQR], 11 [5-29] months) or lower-middle-income countries (median [IQR], 17 [11-27] months) after FDA approval. Access was lowest in African countries.

CONCLUSIONS AND RELEVANCE

These findings suggest that substantial gaps exist between where FDA-approved drugs are tested and where they ultimately become available to patients, raising concerns about the equitable distribution of research benefits at the population level.

Do companies in the pharmaceutical supply chain earn excess returns?

Rising drug spending has led to increased calls to curtail drug costs. However, it is unclear where to target policy solutions. We estimated excess returns (the extent to which a firm's profits are higher than expected given the risk associated with their investments) for manufacturers and middlemen in the pharmaceutical supply chain to determine who is making excessive profits. Excess returns were calculated as the difference between return on invested capital and the expected returns given risk, which is known as the weighted average cost of capital. We compared excess returns for manufacturers and middlemen to the average for S&P 500 companies. We find that both manufacturers and middlemen have higher excess returns in 2013-2018 compared with the S&P 500. However, if we treat research and development (R&D) as an investment rather than an expense, we find that excess returns for pharmaceutical manufacturers are lower than the S&P 500 (1.7% vs. 3.6%), but biotech manufacturers (9.6%), wholesalers (8.1%), and insurers/PBM/retailers (5.9%) continue to have significantly higher excess returns compared to the S&P 500. Our findings suggest public policies that promote competition in all areas of the pharmaceutical supply chain are important avenues for curtailing drug spending.

Time-trend analysis of medicine sales and shortages during COVID-19 outbreak: Data from community pharmacies

BACKGROUND

COVID-19 is a worldwide public health concern. Disruptions in the drug market are expected and shortages might worsen. Community pharmacies can contribute to early identification and report of medicines' supply and demand issues.

OBJECTIVE

The aim of this study is to characterize the impact of the COVID-19 outbreak on outpatient medicines' sales and shortages.

METHODS

A retrospective, time-trend analysis of medicine sales, shortages and laboratory-confirmed COVID-19 cases was performed from February 1st to April 30th, 2020, and its homologous period (regarding sales only). A detailed analysis of 6 pharmaceutical substances was performed. All data were subjected to rescaling using the min-max normalization method, in order to become comparable. Data analysis was performed using Microsoft® Excel.

RESULTS

The pandemic resulted in an increase in medicines' demand and reported shortages during the early stage of the outbreak. The maximum proportion of medicine sales was registered on March 13th, 2020, 4 days after the WHO declared COVID-19 a pandemic. By the end of March, sales have already dropped to proportions similar to those of 2019. The maximum proportion of drug shortages was reached about one week after the sales peak and by the end of the study period were below those recorded in the pre-COVID-19 period. The analyzed drugs were paracetamol, ascorbic acid, dapagliflozin plus metformin, rosuvastatin plus ezetimibe, formoterol, and hydroxychloroquine, as these pharmaceutical substances registered the highest growth rate in sales and shortages when compared to the same period in the previous year. Hydroxychloroquine showed the most different pattern trends on sales and shortages of these medicines.

CONCLUSIONS

Pharmacies can provide timely and real-world data regarding sales and shortages. The adopted measures to guarantee the continuous supply of the medicine market seem to have worked. The long-term impacts of this pandemic are unknown and should continue to be closely monitored.

One drug to treat many diseases: unlocking the economic trap of rare diseases

There are two major problems with the development of therapies for rare diseases. First, among over 7000 such diseases, the vast majority are caused by genetic defects and/or include neurodegeneration, making them very difficult to treat. Second, drugs for rare diseases, so-called orphan drugs, are extremely expensive, as only a small number of patients are interested in purchasing them. This results in the appearance of a specific economic trap of rare diseases; namely, despite high biomedical, pharmaceutical and technological potential, the development of new orphan drugs is blocked by the economic reality. The purpose of this work was to find a potential solution that might resolve this economic trap of rare diseases. A literature review was conducted, and a hypothesis was formulated assuming that the use of one drug for the treatment of many rare diseases might overcome the economic trap. We provide examples showing that finding such drugs is possible. Thus, a possible solution for the problem of developing orphan drugs is presented. Further preclinical and clinical studies, although neither easy nor inexpensive, should verify whether the hypothesis regarding the possibility of unlocking the economic trap of rare diseases is valid.

Research on green decision making of pharmaceutical logistics considering government subsidy strategy

In view of the difficulty, high cost and complex technology of pharmaceutical logistics green transformation, based on the idea of green supply chain, three different government subsidy strategies for green logistics were proposed. Firstly, by constructing a Stackelberg game model with pharmaceutical logistics provider as the leader and manufacturer as the followers, the behavior selection and optimal decisions of the participants under the anarchic subsidy strategy, the single subsidy strategy of the pharmaceutical logistics provider, the single subsidy strategy of the pharmaceutical manufacturer and the coordinated subsidy strategy are analyzed respectively. Furthermore, the effects of different subsidy strategies on the green investment and strategy selection of logistics provider and manufacturer are compared. Finally, according to the research results, the paper provides reference and suggestions for the formulation of government subsidy strategy. The results show that the three subsidy strategies have different degrees of incentive effect on the green transformation of pharmaceutical logistics, and the single logistics provider subsidy strategy is the best.

[Reducing medication waste; a challenge for care providers and society]

Annually, in the Netherlands, at least 100 million euro is wasted on unused medication. This waste not only has considerable economic implications, but is also associated with an unnecessary burden on the environment and suboptimal care due to nonadherence to therapy. The reasons for medication wastage can be found throughout the entire pharmaceutical supply and use chain, which includes manufacturers, distributors/wholesalers, prescribers, pharmacists and patients, both in the community and hospital setting. A number of strategies are needed to minimize the waste of medication, one of which should be a preventative approach. Involvement of all stakeholders in the supply chain is a prerequisite for a successful outcome. It is important that prescribers are aware of the extent and consequences of wastage, and of the possible ways to reduce it.

Pharmaceutical company payments to dermatology Clinical Practice Guideline authors in Japan

Clinical Practice Guidelines (CPGs) play significant roles in most medical fields. However, little is known about the extent of financial Conflicts of Interest (FCOIs) related to pharmaceutical companies (Pharma) selling dermatology prescription products and dermatology CPG authors in Japan. The aims of this study were to elucidate the characteristics and distribution of payments from Pharma to dermatology CPG authors in Japan, and to evaluate the extent of transparency and accuracy in their FCOI disclosures. We analyzed the records of 296 authors from 32 dermatology CPGs published by the Japanese Dermatological Association from the beginning of 2015 to the end of 2018. Using the payment data reported by 79 Pharma between 2016–2017 in Japan, we investigated the characteristics of the CPG authors and the payments from the Pharma to them. Furthermore, we evaluated the transparency and accuracy of the FCOI disclosures of the individual CPG authors. Of the 296 CPGs authors, 269 authors (90.6%) received at least one payment from the Pharma. The total monetary value of payments for the 2-year period was $7,128,762. The median and mean monetary value of payments from the Pharma reporting were $10,281 (interquartile range $2,796 -$34,962) and $26,600 (standard deviation $40,950) for the two years combined. Of the 26 CPG authors who disclosed FCOIs due to the monies received from Pharma, only the atopic dermatitis CPG authors and the acne vulgaris CPG authors published their potential FCOIs. In Japan, most dermatology CPG authors received financial payments from Pharma. The transparency of the CPGs, as reported by the CPG authors, was inadequate, and a more rigorous framework of reporting and monitoring FCOI disclosure is required to improve the accuracy and transparency with relation to possible Conflicts of Interest.

Performance-Based Risk-Sharing Arrangements (PBRSA): Is it a Solution to Increase Bang for the Buck for Pharmaceutical Reimbursement Strategy for Our Nation and Around the World?

Due to the risks involved in not achieving desired health outcomes for the dollar spent on drugs, healthcare decision makers, including payers, providers, drug manufacturers, and patients, need a mechanism to share this financial risk among the involved parties. Performance-based risk-sharing arrangements (PBRSAs) are agreements that can potentially reduce the ‘drug lag’ in which patients wait for an unknown amount of time until a particular drug is covered under their health plan. In addition, PBRSAs can mitigate the risk of investing heavily in drugs that are ineffective or do not deliver good value or “bang for the buck”. This review describes and evaluates PBRSAs for drugs in the USA and juxtaposes to other developed nations (i.e. Germany) that adopted PBRSAs in their healthcare model. There are different types of outcomes-based health schemes, namely conditional coverage, which can be further broken down into coverage with evidence development (CED), conditional treatment continuation (CTC), and performance-linked reimbursement, which includes outcomes guarantees. Both CED and CTC are ‘conditional’ on the collected evidence of the new drug’s effectiveness, offering discount only if the drug delivers desirable results. The outcomes guarantee scheme offers discount or even a full refund if the outcome is less than expected, forcing the drug to meet the expected effectiveness. The USA can follow the German reference pricing model in which the assessment of new drugs is centralized and done collectively by representatives from a group of healthcare decision makers. In any shape or form, PBRSA is a clever mechanism to cope with uncertainty if drug price is scaled appropriately based on value.

Short and long term impacts of COVID-19 on the pharmaceutical sector

Background

The novel coronavirus disease 2019 (COVID-19) was characterized as a global pandemic by the WHO on March 11th, 2020. This pandemic had major effects on the health market, the pharmaceutical sector, and was associated with considerable impacts; which may appear in short and long-term time-horizon and need identification and appropriate planning to reduce their socio-economic burden.

Objectives

Current short communication study assessed pharmaceutical market crisis during the COVID-19 era; discussing short- and long-term impacts of the pandemic on the pharmaceutical sector.

Results

Short-term impacts of COVID-19 pandemic includes demand changes, regulation revisions, research and development process changes and the shift towards tele-communication and tele-medicine. In addition, industry growth slow-down, approval delays, moving towards self-sufficiency in pharm-production supply chain and trend changes in consumption of health-market products along with ethical dilemma could be anticipated as long-term impacts of COVID-19 pandemic on pharmaceutical sector in both global and local levels.

Conclusion

The pandemic of COVID-19 poses considerable crisis on the health markets, including the pharmaceutical sector; and identification of these effects, may guide policy-makers towards more evidence-informed planning to overcome accompanying challenges.

Graphical abstract

A simulation model to evaluate pharmaceutical supply chain costs in hospitals: the case of a Colombian hospital

BACKGROUND

Healthcare costs is one of the most studied issue in our days because of increasing demand and the aging of population. Final costs of medicines is one of the most important issue in patient treatment and determine its real value is an important task within hospitals. Simulation models and in this case system dynamics allows to build representations of reality considering the interaction of the whole variables that affect the system where first a causal loop diagram allows to represent and identify the interaction between variables for develop a stock flow diagram to determine the final results.

OBJECTIVE

Develop a simulation model that allows decision makers in Hospitals and Governments to identify the variables that affect the final cost of medicines and to determine the legal reimbursement allowed by national agencies.

METHODS

This paper presents a conceptual modeling framework using a causal loop diagram and a dynamic simulation model in the real case of a hospital in Colombia to explore how different internal charges for medicines affect the behavior of the final unit-dose cost of medicines, considering the complexity of the pharmaceutical system. We developed a simulation model to represent and characterize the pharmaceutical supply chain in a hospital and by using real data we validate the results of the model and conclude about the supply chain of medicines in Colombia using the legal regulations as a main factor of analysis.

RESULTS AND CONCLUSIONS

We found that in some cases the maximum reimbursement value is less than the final cost of medicines within the hospital, which means that hospitals lose money on the administration of medicines to patients. The benefit of this model is that with the result the hospital can determine the real final monetary value of medicines, including the different processes starting from the reception of the medicines, ending with the administration to patients.

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