Pricing and reimbursement of drugs in Denmark

The Danish health care system is decentralized and tax financed.Reimbursable drugs are financed by the national health insurance, which despite its official name, is a taxfunded system for paying for drugs,practicing physicians outside hospitals, dentists, etc. Most issues related to pricing and reimbursement of drugs are placed centrally, however, with the Danish Medicines Agency, and in contrast to most of the health care system reimbursement is thoroughly grounded in legislation.Pricing in principle is free. In the 1990s a number of agreements between industry and government in practice introduced regulated price competition. Generic substitution at the pharmacy level and the agreements between government and industry have led to a decline in the overall price level for drugs from 1995 and onwards.The still increasing drug expenditures hence must be attributed to increasing volume and the introduction of new drugs. Reimbursement is divided into two: general reimbursement meaning unconditional reimbursement for a given drug or single reimbursement based on an application from the patient's physician on behalf of individual patients.The criteria for granting general reimbursement are relatively clear.Economic evaluations on a voluntary basis can be used to support documentation of a reasonable relationship between price and therapeutic effects.Reimbursement is calculated on the basis of an average European price level.     

Pricing and reimbursement of drugs in Sweden

The Swedish public health care system is financed mainly by taxes. The major part of drug costs is paid by the drug reimbursement system. Sweden has, as most other countries, seen a large increase in the expenditures on drugs in recent years. The responsibility for the cost of drugs in Sweden has recently been decentralized to the county council level. The reimbursement system of drugs currently covers all drugs with a price approved by the National Social Insurance Board, unless the government specifically decides against such coverage. Two groups of drugs were recently excluded from coverage: drugs for obesity and impotence. The price level of drugs in Sweden is close to the average of the European countries. Economic evaluations are currently not mandatory in Swedish price and reimbursement negotiations but are nonetheless important, particularly in negotiations for drugs expected to command large price premiums. The Swedish pricing and reimbursement system has recently been under investigation, and new reforms are expected in the near future.     

Pricing of drugs with heterogeneous health insurance coverage

In this paper, we examine the role of insurance coverage in explaining the generic competition paradox in a two-stage game involving a single producer of brand-name drugs and n quantity-competing producers of generic drugs. Independently of brand loyalty, which some studies rely upon to explain the paradox, we show that heterogeneity in insurance coverage may result in higher prices of brand-name drugs following generic entry. With market segmentation based on insurance coverage present in both the pre- and post-entry stages, the paradox can arise when the two types of drugs are highly substitutable and the market is quite profitable but does not have to arise when the two types of drugs are highly differentiated. However, with market segmentation occurring only after generic entry, the paradox can arise when the two types of drugs are weakly substitutable, provided, however, that the industry is not very profitable. In both cases, that is, when market segmentation is present in the pre-entry stage and when it is not, the paradox becomes more likely to arise as the market expands and/or insurance companies decrease deductibles applied on the purchase of generic drugs.     

Pricing and reimbursement of drugs and medical devices in Hungary

Similarly to other countries of Central and Eastern Europe, Hungary has witnessed massive diffusion of healthcare technology such as drugs and medical devices since 1990. While substantial new pharmaceuticals, medical devices, and procedures have been liberalized, there has been no proper evaluation or training in their use. Healthcare providers have come to find themselves as entrepreneurs in private practice, while patients are acquiring an increasing awareness as customers of healthcare,demanding services in return for their taxes and contributions. This has led to extremely irrational patterns of investment in technology, with most an obvious waste of resources, while leaving basic needs unmet. Both the National Health Insurance Fund and the Ministry of Finance believe that the current pharmaceutical and medical device bill is too high. However, introducing a more transparent and flexible pricing and reimbursement framework may enable a more efficient allocation of the limited resources to be achieved. Laszlo Gulacsi Head,Unit of Health Economics and Technology, Assessment in Health Care,Department of Public Policy and Management, Budapest University of Economic Sciences and Public Administration, Fovam ter 8, 1125 Budapest,Hungary, e-mail: lgulacsi@mail.datanet.hu     

Pricing and reimbursement of in-patent drugs in seven European countries: a comparative analysis

The main objective of this comparative analysis was to assess regulations applied by EU governments to reward potentially innovative drugs. We focused on the pharmaceutical policy for in-patent drugs in seven EU countries: Belgium, France, Germany, Italy, the Netherlands, Spain, and the UK. A common scheme was applied to all seven countries: first, pricing and reimbursement procedures for new and innovative drugs were investigated; secondly, we focused on the use in the regulatory process of economic evaluations. The analysis involved reviewing the literature and interviewing a selected panel of local experts in each country. According to our comparative analysis, a first sensible step might be to classify active ingredients as those addressing neglected pathologies and those for diseases that are already successfully treated, thus offering more limited therapeutic gains by definition. A reasonable solution to reward real innovation could be to admit a premium price for very innovative drugs according to their estimated cost-effectiveness. New drugs with modest improvement could be grouped in therapeutic clusters and submitted to a common reference price, despite patent expiration. Such a "dual approach" could be a sensible compromise to restrict pharmaceutical expenditure while at the same time rewarding companies that invest in high-risk basic research.     

Pricing behaviour of pharmacies after market deregulation for OTC drugs: the case of Germany

OBJECTIVE: To examine the price reactions of German pharmacies to changes made to OTC drug regulations in 2004. Prior to these changes, regulations guaranteed identical prices in all German pharmacies. METHODS: Two years after market deregulation, 256 pharmacies were surveyed to determine the retail prices of five selected OTC drugs. A probit regression model was used to identify factors that increased the likelihood of price changes. In addition, 409 pharmacy consumers were interviewed to gather information on their knowledge of the regulatory changes and to better explain consumer behaviour. RESULTS: Data was collected on a total of 1215 prices. Two years after deregulation, 23.1% of the participating pharmacies had modified the price of at least one of the five OTCs included in our study. However, in total, only 7.5% of the prices differed from their pre-deregulation level. The probit model showed that population density and the geographic concentration of pharmacies were significantly associated with price changes. Interestingly, the association with the geographic concentration of pharmacies was negative. The consumer survey revealed that 47.1% of those interviewed were aware of the deregulation. CONCLUSIONS: Our findings indicate that, two years after deregulation, very few pharmacies had made use of individual pricing strategies; price competition between pharmacies in Germany is thus taking place only a very small scale.     

Pricing and reimbursement of generic pharmaceuticals in Turkey: Evaluation of hypertension drugs from 2007 to 2013

Purpose

This study was designed to examine the effects of drug pricing and reimbursement politics on drug expenditures from January 2007 to September 2013, with a focus on internal reference pricing in Turkey.

药品定价方法及定价模型研究

文章根据价格决定规律,分析了现有药品定价方法及其优缺点,包括成本导向定价法、需求导向定价法和竞争导向定价法.在此基础上提出要采用综合的药品定价方法,并建立了制定药品价格的数学模型,以期为合理地制定药品价格提供新的思路.     

Pricing of pharmaceuticals

Pricing and reimbursement of new pharmaceuticals have been based until recently on the traditional clinical trial outcomes (efficacy, safety, and quality parameters) used for registration. Now we can distinguish various additional data requirements which relate to the use of the drug in real daily practice. The most important new data requirements are effectiveness, cost-effectiveness, and budgetary impact. A main question is how much the impact is of the various types of data in the pricing and reimbursement process. The objective of this contribution is to present a method for quantifying this type of uncertainty in order to develop a more solid pricing and reimbursement strategy for a new innovative drug. The concepts are illustrated for a new hypothetical antidepressant drug in The Netherlands. This method is based on the analytic hierarchy process (AHP) concept which measures decision makers' preferences for the critical success factors. This study shows that the AHP concept may be applied to the pricing and reimbursement environment. The method may be used to assess the pricing potential of a new drug, considering the various data requirements in the reimbursement process.     

Health Services Pricing in Turkey

Abstract

One of the most important and complex decisions that public services managers have to make is pricing. This is especially difficult within public health care because pricing decisions are influenced by a myriad of ideological, political, economic and professional arguments. In Turkey the majority of health care services are provided under public auspice; however, recent changes in governmental policy have led to increased competition among hospitals in both the public and private sector. Therefore, all institutions are being watched and remain open to government scrutiny and regulation. The aim of the study is to analyze how the private and governmental hospitals determine pricing or the actual cost of services in Turkey. Also, comparisons are made between health services expenditures and the Consumer Price Index with suggestions provided for public and private hospital managers in regard to the general cost of health services.     

Pricing effects on food choices

Individual dietary choices are primarily influenced by such considerations as taste, cost, convenience and nutritional value of foods. The current obesity epidemic has been linked to excessive consumption of added sugars and fat, as well as to sedentary lifestyles. Fat and sugar provide dietary energy at very low cost. Food pricing and marketing practices are therefore an essential component of the eating environment. Recent studies have applied economic theories to changing dietary behavior. Price reduction strategies promote the choice of targeted foods by lowering their cost relative to alternative food choices. Two community-based intervention studies used price reductions to promote the increased purchase of targeted foods. The first study examined lower prices and point-of-purchase promotion on sales of lower fat vending machine snacks in 12 work sites and 12 secondary schools. Price reductions of 10%, 25% and 50% on lower fat snacks resulted in an increase in sales of 9%, 39% and 93%, respectively, compared with usual price conditions. The second study examined the impact of a 50% price reduction on fresh fruit and baby carrots in two secondary school cafeterias. Compared with usual price conditions, price reductions resulted in a four-fold increase in fresh fruit sales and a two-fold increase in baby carrot sales. Both studies demonstrate that price reductions are an effective strategy to increase the purchase of more healthful foods in community-based settings such as work sites and schools. Results were generalizable across various food types and populations. Reducing prices on healthful foods is a public health strategy that should be implemented through policy initiatives and industry collaborations.     

Pricing policy in nonprofit hospitals

The increasing complexity of reimbursement systems and other financial issues forces hospitals to obtain maximum reimbursement from third-party payers. What effect does this have on price-setting decisions? This article presents the results of a survey that sought to identify the key players in setting prices in nonprofit hospitals and the objectives pursued in setting those prices.     

Pricing in vitro fertilization procedures

This paper examines the economics of pricing practices at artificial reproductive clinics, which have introduced money‐back guarantees (MBGs) for in vitro fertilization. We identify incentives for clinics to offer MBGs and evaluate the impact on couples' choices and on social welfare. Introducing MBGs allows a clinic to (i) segment couples simultaneously on their relative fertility and on risk preferences; (ii) offer quantity discounts to relatively infertile couples; and (iii) offer some risk‐sharing to couples for this costly procedure, whose outcome is uncertain. Our results also show how the addition of MBGs can affect the overall social welfare. Copyright © 2009 John Wiley & Sons, Ltd.     

The Role of Indication-Based Pricing in Future Pricing and Reimbursement Policies: A Systematic Review

ObjectivesIndication-based pricing (IBP) has received growing attention because of the expected increase in the number of new medicines with multiple indications. In our systematic review, we assess the potential benefits, barriers, current experiences, and future perspectives of different IBP mechanisms.MethodsWe searched publications in English, Spanish, or French assessing the impact, international experience, and future context of IBP systems on PubMed, Scopus, Cochrane, EconLit, American Society of Clinical Oncology, and National Institute for Health Research Health Technology Assessment from 2000 to 2020. This was complemented by a gray literature search in Google Scholar.ResultsA total of 29 publications that specifically addressed the topic of IBP were retained. The most commonly reported benefits of IBP were a better alignment of medicines’ value and price, optimization of research and development incentives and increase of competition, and improvement of patients’ access to treatments. Data collection and proper infrastructures, and the risk of high administrative burden and associated costs, were seen as the main barriers for proper IBP implementation. International experience lacks concrete examples of IBP. A single weighted average price according to volume, value, or a combination of both, appears to be the most used methodology, followed by different confidential net prices per indication. Different brands with distinct price per indication are less common, although it is considered a pure IBP system.ConclusionsEvidence of IBP impact is still scarce, and there is a need for pilot projects and experiences to monitor its real consequences. An appropriate price and reimbursement model for multi-indication medicines should be a priority, but political will and proper data collection systems remain crucial.     

Pricing and costs of drugs in the United States and Sweden: a comparison based on drug acquisition costs at the patient outcome level

Cost consequences of antihypertensive drug pricing were compared in the United States and Sweden. Because of price differences, US drug acquisition costs to prevent one cardiovascular event were 339%, 127%, and 22% higher using the most prescribed calcium channel blocker, angiotensin-converting enzyme inhibitor, and beta blocker, but 65% lower with hydrochlorothiazide. As thiazides are as effective as, but cheaper than, the alternatives, the costs of effective antihypertensive drug treatment may be pronouncedly reduced in both countries. This emphasizes not only the importance of drug pricing but also the cost-increasing influence of commercial marketing. More producer-independent and evidence-based drug information to prescribers is necessary.