Health policy versus industrial policy in the pharmaceutical sector: the case of Canada

This paper analyses the trade-off between health policy and industrial policy objectives in the field of pharmaceuticals in the Canadian policy setting. In Canada pharmaceutical regulation is organized in two tiers. The federal government is responsible for the conduct of industrial policy for the pharmaceutical sector, including the patenting of new molecular entities, the registration and approval of pharmaceutical products, and the pricing of new products. At the province level, policy-makers are responsible for the reimbursement of the cost of medicines; the methodologies implemented for this purpose may be geared towards meeting the objective of cost containment within tight health budgets rather than addressing industrial policy objectives and, thereby, supporting the pharmaceutical industry. The reimbursement methodologies implemented may also be related with the strength of pharmaceutical presence in each province. The paper provides evidence from two such provinces, British Columbia and Ontario, and contrasts pharmaceutical policy-making at the provincial level with that at the federal level.     

Australian pharmaceutical policy: price control, equity, and drug innovation in Australia

This paper outlines the increasing salience of drug "innovation" in the debate for reform of Australia's pharmaceutical policy, particularly change to Australia's price control mechanisms. The pharmaceutical industry has consistently criticised the central role of price control in Australia's pharmaceutical regulatory regime as an impediment to drug innovation and industry growth. Despite ambivalent or contrary evidence on the impact of price control on drug innovation, this criticism, and the appeals for reform it supports, appear to be increasingly influential in directing pharmaceutical policy. This is particularly evident in the implementation of the Australia/United States Free Trade Agreement, which has led to a weakening of the historical process of evidence-based reference pricing in Australia. Should drug innovation come to dominate Australian pharmaceutical policy, there is the potential to precipitate a devaluing of the current public orientation of regulation and diminish equitable access to affordable pharmaceuticals. The manner in which trade policy has effectively undermined a publicly funded pharmaceutical benefits scheme has clear implications for many countries that maintain such programmes.     

台湾地区医保药品的采购模式和支付价格

目的:分析台湾地区医保药品在采购和支付方面的做法和经验,为大陆地区推进药品采购模式和支付价格改革提供参考。方法:系统梳理台湾地区在医保药品采购和支付方面的政策文件和相关文献,并与大陆地区药品采购和支付政策进行对比分析。结果:台湾地区医疗机构根据自身用药需求,自主采购药品,采购价格由供需双方直接谈判形成。政府仅对医保药品的价格进行管理,对新药采用国际参考定价办法;原厂药、BA/BE学名药、一般学名药的支付价以国际参考价格为上限,依次降低。药品质量也在医保支付标准考虑之列。此外,药品的支付价格依据采购价格实行动态调整,当二者差值大于30%时,健保署便会调整支付价格以减小二者的差价。结论:台湾地区通过制度设计和调整,较好地统筹了药品采购和补偿两个环节,形成了合理的药品采购价格和支付价格,这些经验可为中国大陆地区完善药品采购和支付政策提供参考。     

中国药品定价和补偿政策及其效果

背景:近年来,中国药物政策存在着药品费用快速增长,以及质量、定价和提供能力等方面的问题,其解决的关键在于理清其中的定价和补偿问题。方法:本文较为系统收集了药物领域的学术文献和灰色文献,以及中国政府的官方统计数据,并结合中国国务院发展研究中心举办的研讨会信息,概述了中国的药品定价和补偿情况。结果:通过一个融合了供应方、代理方和需求方多方政策的框架,分析了定价与补偿政策。在目前药品政策的相互影响下,出现了药品价格高、质量低、不合理开药等问题。分立的监管环境也不利于药品政策的改革。结论:提高药品质量标准、市场集中度、政府补贴,以质量为导向的招标、扩大零差率政策的实施范围、建立补偿与合理开药的联动机制以及促进卫生技术评估与比较效能研究来改善定价和补偿政策。另外,整合广泛的监管分立体制、改善透明度和打击腐败等问题将有助于确保制定出具有一致性的、循证的政策。     

On international cost-sharing of pharmaceutical R&;D

Ramsey pricing has been proposed in the pharmaceutical industry as a principle to price discriminate among markets while allowing to recover the (fixed) R&D cost. However, such analyses neglect the presence of insurance or the fund raising costs for most of drug reimbursement. By incorporating these new elements, we aim at providing some building blocks towards an economic theory incorporating Ramsey pricing and insurance coverage. We show how coinsurance affects the optimal prices to pay for the R&D investment. We also show that under certain conditions, there is no strategic incentive by governments to set coinsurance rates in order to shift the financial burden of R&D. This will have important implications to the application of Ramsey pricing principles to pharmaceutical products across countries.      

The production and R&D structure of the Brazilian pharmaceutical industry: The role of public procurement and public drug production

Abstract

This article examines the use of governmental purchasing power and public laboratories to stimulate domestic production and research and development (R&D) activities in the Brazilian pharmaceutical industry. Three main areas in which public laboratories can play an important role are identified: (1) large-scale production of essential medications; (2) production of strategic drugs to reduce the trade deficit in the health sector; and (3) in-house research efforts and stimulation of R&D in the private sector through public–private partnerships (PPPs). The analysis of the production and R&D structure of the Brazilian pharmaceutical industry tends to show that the Ministry of Health (MOH) purchasing power can be used to nurture the growth of public laboratories and generate positive externalities for the private sector. Nonetheless, fieldwork data reveal that the lack of alignment between health policies and public laboratories' production are resulting in idle production capacity. In order for the current governmental strategy to promote industrial growth, there should be a division of tasks among public laboratories within a long-term framework, based on a stable set of priorities from the MOH.     

The role of economic evaluation in the pricing and reimbursement of medicines

In most countries, governments or health insurers have taken initiatives to influence the price and utilization of medicines. One stated objective of these schemes is to encourage efficiency, or cost-effectiveness. In principle, economic evaluation should to be relevant to decisions about the pricing and reimbursement of health technologies, since it offers a way of estimating the additional value to society of a new intervention (e.g. medicine) relative to current therapy. However, the application of economic evaluation in drug pricing and reimbursement schemes is variable. Therefore, this paper reviews the actual and potential role of economic evaluation in different drug pricing and reimbursement schemes, such as 'free pricing' systems (United Kingdom, United States), two-stage administered systems (France), reference pricing systems (Germany, Netherlands, Sweden) and economic evaluation systems (Australia, Canada). It is concluded that, other than in the case of Australia and Canada, the potential role of economic evaluation could be greatly developed, especially in the case of new medicines, for which there is no close substitute. Comments are also given on the practical problems of using this approach. However, it is noted that economic evaluation alone cannot set a price for a medicine, since a decision has to be made about the proportion of added value going to society and the proportion going to the pharmaceutical company as a reward for innovation.     

突发公共卫生事件下世界卫生组织推动全球医药产品创新与可及的行动

全球医药产品创新与可及是推动全球健康公平、维护全球卫生安全的重要内容,更是有效防控传染病暴发流行等突发公共卫生事件的关键手段.世界卫生组织(WHO)作为全球最大的政府间卫生组织,在多次抗击突发公共卫生事件中制定了系列政策和行动方案.本文总结了WHO在全球医药产品创新与可及领域所采取的行动,如制定研发蓝图、推动紧急使用清...     

制定并落实目标全面的国家药物政策：印度经验与教训

中国和印度同为经济崛起中的大国,在全球医药市场中起着举足轻重的作用。世界上绝大多数价格低廉的通用名药都是由这两个国家生产供应的,但这两个国家的国民却在不同程度上面临着获得有质量保证基本药物的挑战。药品的经济学和社会学属性,医药领域的健康目标和经济发展目标,如何平衡医药产业的发展对经济和社会作出的贡献等问题,在这两个国家都存在着热议。本文回顾印度国家药物政策的历史演变过程,剖析其产生的矛盾效果：培育了强大的民族医药产业,但本国多数民众基本用药仍得不到保障。文章还分析印度德里地区制定、贯彻和落实区域药物政策的成功经验,希望为中国制定目标全面的国家药物政策和建立国家基本药物制度提供有益的经验和教训。     

Report raises questions about drug companies advertising budgets

A report by AIDS Action cites that data, indicates the pharmaceutical industry is spending more resources on marketing and advertising than on research and development (R&D). The pharmaceutical industry blames the high cost of AIDS drugs on R&D information compiled from annual reports and industry publications show excessive marketing as the source. A spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA) disputes the information in the AIDS Action report as misleading. According to PhRMA, research spending has been steadily increasing, and at a greater rate than any other industry. In addition, PhRMA noted that pharmaceutical companies have already dedicated money to fund initiatives in developing countries. Solutions proposed by AIDS Action include lowering drug prices or transferring funds from marketing to research, and reestablishing the "reasonable pricing clause" between National Institutes of Health and those companies seeking tax breaks for R&D.     

Evidence-Based Decision-Making in Asia-Pacific with Rapidly Changing Health-Care Systems: Thailand, South Korea, and Taiwan

Objective:  To review the use of evidence in the market approval process, reimbursement, and price control mechanisms for medicines and medical devices in Thailand, South Korea, and Taiwan.
Methods:  Documentary reviews supplemented by interviews with senior policymakers of relevant public health authorities.
Results:  Drug regulatory authorities play a vital role in the market authorization process by considering evidence on safety, efficacy and quality for new medicines, and bio-equivalence for new generic products of previously patented medicines. For the formulation of the reimbursement list, all three cases applied evidence on cost-effectiveness, to various degrees, with clear institutional structure, capacity, and functions. Only Thailand has specified an explicit benchmark on cost-effectiveness for inclusion in the reimbursement list. For price control, all have established mechanisms and processes for price negotiation. These mechanisms apply evidence on cost structure and relative prices in other countries to ensure affordable prices, especially with the patented drug industry. Thailand's universal insurance schemes use a capitation payment model which proves effective in implicit price control. To increase access to essential medicines that have patents on and high price, Thailand applied Trade-Related Aspects of Intellectual Property flexibilities; "government use of patent," for public noncommercial purposes to seven essential drugs in 2006 to 2008.
Conclusion:  Rapidly increasing health expenditure and universal health insurance systems have created greater requirement for proof of "value for money" in the approval and funding of new medical technologies. All settings have established clear mechanisms to apply appropriate evidence in the processes of market approval, reimbursement, and pricing control.     

Financial risk of the Biotech Industry versus the Pharmaceutical Industry

The biotech industry now accounts for a substantial and growing proportion of total R&D spending on new medicines. However, compared with the pharmaceutical industry, the biotech industry is financially fragile. This article illustrates the financial fragility of the biotech and pharmaceutical industries in the US and the implications of this fragility for the effects that government regulation could have on biotech firms. Graphical analysis and statistical tests were used to show how the biotech industry differs from the pharmaceutical industry. The two industries’ characteristics were measured and compared, along with various measures of firms’ financial risk and sensitivity to government regulation. Data from firms’ financial statements provided accounting-based measures and firms’ stock returns applied to a multifactor asset pricing model provided financial market measures. The biotech industry was by far the most research-intensive industry in the US, averaging 38% R&D intensity (ratio of R&D spending to total firm assets) over the past 25 years, compared with an average of 25% for the pharmaceutical industry and 3% for all other industries. Biotech firms exhibited lower and more volatile profits and higher market-related and size-related risk, and they suffered more negative stock returns in response to threatened government price regulation. Biotech firms’ financial risks increase their costs of capital and make them more sensitive to government regulations that affect their financial prospects. As biotech products grow to represent a larger share of new medicines, general stock market conditions and government regulations could have a greater impact on the level of innovation of new medicines.     

制定和落实国家药物政策的国际进展及启示

通过参加第二届国家药物政策国际大会获得的信息及文献,回顾国际社会推行国家药物政策的发展历程及最新进展,总结欧洲、澳大利亚及相关国家和地区的典型经验,从中提炼我国可借鉴的经验如下:制定和执行国家药物政策,首先是一个政治过程,然后才是技术过程;确定执行主体,规定清晰的权利和义务,在健全的卫生体系下,制定可操作的执行策略是国家药物政策焕发活力的关键;活跃的社会团体可以帮助表达各方意愿,使国家药物政策代表更广泛的民意;国家药物政策服务的主体是消费者,以消费者为中心、让消费者的意见不被忽略,可以提高消费者对政策的认同感;国家药物政策是国家卫生政策的一部分,需要全面、细致的政策设计,平衡健康目标与医药产业发展目标。     

Varying health care provider objectives and cost-shifting: the case of retail pharmacy in the US.

In this paper we investigate the relationship between health care provider objectives, cost-shifting, and prices by exploring the relationship between state Medicaid pharmacy reimbursements and average prices paid by pharmacy retail customers for four distinct pharmaceutical products across the US in 1994. We develop a more general theory than past researchers to enable provider objectives to vary with Medicaid pharmacy reimbursement levels. We find that provider objectives and the direction of relationship between Medicaid pharmacy reimbursements and retail prices vary with Medicaid pharmacy reimbursement levels. At high Medicaid pharmacy reimbursement levels we find a consistent negative relationship across products. At low Medicaid pharmacy reimbursement levels, the direction of the relationship is product-specific. As a result, policy-makers should be aware that policies affecting reimbursements from government-sponsored health insurance will also affect retail customers that include the uninsured. Paradoxically, for certain products if a state cuts a generous Medicaid reimbursement level this could hurt uninsured patients, whereas cuts in a stingy Medicaid reimbursement rate may help uninsured patients.     

Future European health care: cost containment, health care reform and scientific progress in drug research

The cost of the development of a new pharmaceutical product from its conception and synthesis through to the regulatory approval process has more than quadrupled in the last 20 years. Both clinical and total development times have increased substantially. To amortize the costs incurred, the pharmaceutical industry has taken an international dimension. The incentives for pharmaceutical firms to discover and develop new drugs depend on the length of the development and regulatory review process plus the potential market size. Recent regulatory, economic and political changes may have significant implications for the future of new drug developments in Europe. The European Union industrial policy felt that there is a need for convergence in the area of pricing. It is recommended that the policy should aim to contain growth in pharmaceutical expenses by means specific to reimbursement rather than direct price controls. By encouraging doctors to prescribe and customers to use generics, competition is enhanced to bring down drug prices. More emphasis is being laid by government in educating customers to cost-awareness and cost-benefit ratios with regard to pharmaceuticals. Concerning clinical trials, European harmonization has been achieved by significant developments: the rights and integrity of the trial subjects are protected; the credibility of the data is established; and the ethical, scientific and technical quality of the trials has improved. Future European health care forecasts a whole change in the pharmaceutical business. Important issues in cost and outcome measurement should be carefully planned and considered in drug development. Due to important mergers and acquisitions, the pharmaceutical sector will consist mainly of important multinational corporations. In this way, valuable new products may be brought to the market.     

Pricing and reimbursement of pharmaceuticals in Portugal

The pricing and reimbursement systems in Portugal are quite complex. This is due not only to the general characteristics of the Portuguese NHS but also to the past evolution of these systems. In this article we explain the main features of pharmaceutical policy in Portugal regarding pricing and reimbursement of medicines. Causes of government concern with expenditure and policies aiming at controlling it are pointed out. Policies are described through presentation of the most recent legislation approved on the issues analysed. C.G. Pinto R.Miguel Lúpi 20, 1200-725 Lisbon,Portugal, e-mail: gpinto@iseg.utl.pt     

Incentives and pharmaceutical reimbursement reforms in Spain

The aim of this paper is to assess whether cost containment has been affected by recent pharmaceutical reimbursement reforms that have been introduced in the Spanish health care system over the period 1996-2002, under the conservative Popular Party Government. Four main reimbursement policies can be observed in the Spanish pharmaceutical market after 1996, each of them largely unintegrated with the other three. First, a second supplementary negative list of excluded pharmaceutical products was introduced in 1998. Second, a reference pricing (RP) system was introduced in December 2000, with annual updating and enlargement. Third, the pharmacies' payment system has moved from the traditional set margin on the consumer price to a margin that varies according to the consumer price of the product, the generic status of the product, and the volume of sales by pharmacies. And fourth, general agreements between the government and the industry have been reached with cost containment objectives. In the final section of this paper, we present an overall assessment of the impact of these pharmaceutical reimbursement policies on the behaviour of the agents in the pharmaceutical market.     

Do cost-sharing and entry deregulation curb pharmaceutical innovation?

This paper examines the role of both cost-sharing schemes in health insurance systems and the regulation of entry into the pharmaceutical sector for pharmaceutical R&D expenditure and drug prices. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to higher R&D spending of pharmaceutical companies. The relationship between R&D spending per firm and the number of firms may be hump-shaped. In this case, the number of rivals which maximizes R&D expenditure per firm is decreasing in the coinsurance rate and increasing in labor productivity.