Pricing & Reimbursement in Europe: Can the drive for cost effectiveness overcome cost containment?
Scope
Report Highlights
Reasons to Purchase
Table of Contents
- CHAPTER 1 EXECUTIVE SUMMARY - page 4
- Scope of the report - page 4
- Key findings - page 5
- CHAPTER 2 OVERVIEW OF THE DRUGS MARKET: IDENTIFYING WHY PRICING AND REIMBURSEMENT IS IMPORTANT AND WHERE IT FITS IN - page 17
- Introduction: why is drug pricing and reimbursement important? - page 18
- Pharma is facing a reduction in productivity - page 20
- R&D spend is rising - page 20
- The number of approvals is falling - page 20
- There are delays in P&R assessment - page 21
- Biotech is more productive and is set to have a correspondingly higher growth rate - page 22
- Blockbuster patent expiries are also damaging Big Pharma - page 24
- Pharma pipeline strategy needs to adjust to market demands - page 26
- Globally, public and private payers exert pressure on profit margins - page 27
- Pressures on drug developers rise because healthcare expenditure is set to continue to increase - page 27
- Although drugs make up a relatively small percentage of healthcare spending, they are a highly visible target - page 28
- Spending on drugs is set to rise - page 29
- The drugs industry is being squeezed on drug pricing and reimbursement - page 31
- CHAPTER 3 GLOBAL OVERVIEW OF P&R TOOL IMPLEMENTATION - page 32
- Introduction - page 32
- Price setting mechanisms are used to set the initial theoretical price - page 33
- The initial theoretical price is then modulated by a range of factors - page 34
- A key factor impacting pricing is the broad range of pricing controls used globally - page 35
- An overview of government-led price controls - page 35
- Profit controls are used in some European countries such as the UK - page 36
- Reference pricing is used extensively across Europe - page 36
- Price cutting and price freezing play a central role in European cost containment - page 38
- Linking pricing with the Consumer Price Index - page 39
- The use of pharmacoeconomics in pricing controls: using healthcare economics, outcomes research and pharmacoeconomics to justify pricing - page 39
- Discounts and rebates play a role in European drug pricing - page 42
- A single European drug price has been discussed as a possible cost containment tool - page 42
- A key factor impacting pricing is the broad range of pricing controls used globally - page 35
- A range of factors impact the drug price only once the drug has been launched - page 44
- Parallel importation can reduce profit margins for drugs companies - page 45
- Health informatics may lead to increased cost containment - page 45
- DTC marketing cannot be used in Europe to support higher drug pricing - page 46
- Generic incursion reduces profit margins for drugs - page 46
- Key global reimbursement mechanisms - page 48
- Reimbursement favours innovation-focused drug development - page 49
- Spending on sales and marketing is prioritized over seeking innovation - page 49
- The focus on sales and marketing encourages the development of me-too drugs, although healthcare providers are penalizing me-too development - page 50
- A wide range of factors influence reimbursement - page 51
- Controlling doctors' budgets is used more widely in Europe than in the US - page 52
- Volume and expenditure limitations play a role in Europe - page 52
- Although tiered co-pay and formularies play an extensive role in the US, they are not used in Europe, and most patients pay a low co-pay in a flat-fee form - page 52
- Formulary access and Positive/Negative lists play a more significant role in the US compared to Europe - page 53
- Taxes on reimbursed drugs - page 53
- Some countries require drugs to be included on reimbursement lists of a number of countries before reimbursement is granted - page 53
- Pharmacoeconomics and risk-sharing agreements are increasingly important in Europe - page 53
- Step therapy or fail first plays a key role in the US, but is not widely used explicitly in Europe - page 55
- Prior authorization - page 55
- Pharmacist substitution - page 56
- Enforcing a switch to OTC status is another reimbursement restriction tool in both the US and some European countries - page 56
- Reimbursement favours innovation-focused drug development - page 49
- CHAPTER 4 PRICING & REIMBURSEMENT IN FRANCE - page 57
- Healthcare in France: high debts increase the focus on P&R - page 58
- An overview of the French healthcare system - page 60
- Private healthcare is increasingly used to support public healthcare - page 60
- French healthcare provision can be split into PCP-dominated community healthcare and hospital-based healthcare - page 60
- The creation of the HAS has significant impacts on healthcare provision in Europe - page 62
- A range of other stakeholders impacts on healthcare provision - page 63
- Recent changes affecting the pricing and reimbursement environment in France - page 65
- The Transparency Commission determines the SMR and the ASMR - page 66
- The SMR and the ASMR are used as a basis for P&R in France - page 66
- The unification of a range of P&R functionalities under HAS is set to transform P&R in France - page 68
- P&R mechanisms used to contain costs in France - page 69
- A range of reforms have been instituted to boost cost containment - page 69
- Recent co-payment reforms help drive healthcare cost containment - page 70
- The 'Médecin Traitant' scheme drives adoption of a gatekeeper system in France - page 72
- There has been considerable consolidation across a range of healthcare stakeholders to help contain costs - page 74
- A range of P&R tools are being used to support healthcare reforms in the fight to contain costs - page 74
- Volume limitations are an important restrictor of strong sales growth - page 75
- The focus on utilizing and incorporating reference pricing is increasing - page 75
- The market profile of drugs companies and their products is limited by restricting salesforce activity and physician contact - page 76
- Taxes and levies make the environment harsher for drug developers - page 77
- Generic usage and prescription is the most important macroeconomic factor modulating pricing once the drug is on the market - page 77
- A range of reforms have been instituted to boost cost containment - page 69
- CHAPTER 5 PRICING & REIMBURSEMENT IN GERMANY - page 79
- Healthcare in Germany: the need for cost containment - page 80
- An overview of the German healthcare system - page 81
- Public healthcare insurance covers the vast majority of German patients - page 82
- Ambulatory care is highly regulated and is dominated by reimbursement controls - page 83
- A range of stakeholders impact healthcare provision in Germany - page 84
- The limited control that governmental bodies exert on healthcare provision is primarily mediated through the Federal Ministry of Health and the 16 Länder - page 86
- Sickness funds are the key healthcare provider - page 86
- Physician and pharmacist committees exert significant influence on prescription - page 87
- A range of organizations represent industry interests - page 87
- A number of reforms shape the evolution of the German healthcare market - page 88
- IQWiG is helping to introduce cost effectiveness and evidence-based healthcare - page 90
- Recent changes affecting the pricing and reimbursement environment in Germany - page 90
- Reference pricing is a key cost-containment tool but the inclusion of patented drugs in the scheme is highly contentious - page 91
- The evolution of jumbo reference pricing - page 91
- Reference price levels are calculated by the Federal Committee of Physicians and Sickness Funds - page 92
- German pharmaceutical companies are fighting jumbo reference pricing - page 92
- Jumbo reference pricing is affecting an increasing number of drugs - page 93
- The requirement for innovation is steep and many drugs are not sufficiently innovative - page 94
- Pharmacy substitution: a cost-saving idea in principle but it has yet to show significant savings - page 98
- Restrictors of aut idem substitution - page 98
- Incentives for aut idem substitution - page 99
- The impact of aut idem substitution on the German drugs market - page 99
- Pharmacy and pharmaceutical company rebates are used in cost containment - page 99
- The high number of patients exempt from co-payment is being reduced - page 100
- Historically, budgets and spending caps have restricted Germany's pharmaceutical market - page 101
- Ambulatory physician budgets have been successful at reining in drug expenditure - page 101
- Hospital budgets are being reshaped by DRGs - page 101
- Despite several initiatives over the last 15 years, there are no plans to introduce a positive list - page 102
- Germany lacks a positive list - page 102
- Payers are restricting the number of reimbursable drugs by placing them on negative lists in Germany - page 102
- Additional factors impact on drug prescription guidelines - page 103
- Discounts and rebates increasingly shape profit margins in the German hospital markets - page 104
- Parallel importation and generic competition impact on drug price following launch - page 104
- A reduction in the parallel importation quota is set to reduce the damage to pharmaceutical company profit margins - page 104
- Generic penetration in Germany is relatively high - page 105
- Healthcare informatics is playing an increasingly important role in German healthcare provision - page 106
- Reference pricing is a key cost-containment tool but the inclusion of patented drugs in the scheme is highly contentious - page 91
- CHAPTER 6 PRICING & REIMBURSEMENT IN ITALY - page 108
- The Italian healthcare system is racked by debt and it is very difficult for drugs companies to generate a profit in this market - page 109
- An overview of the Italian healthcare system - page 110
- Private healthcare is used to replace public service with better provision - page 111
- Italian healthcare provision is increasingly decentralized - page 111
- The Italian national health service - page 111
- Reimbursement is still assessed on a national level - page 112
- AIFA dictates drug reimbursement in Italy - page 114
- Although there is a formalized reimbursement structure, reimbursement is based on negotiations - page 116
- Drugs are grouped into classes to determine reimbursement levels - page 116
- Class C drugs still face cost containment pressures - page 117
- Healthcare delivery is the responsibility of regional and local healthcare bodies - page 117
- ASLs provide primary and secondary care in Italy - page 118
- Italian reforms have shaped healthcare provision significantly in the last two decades - page 119
- Recent changes affecting the pricing and reimbursement environment in Italy - page 121
- Patient co-payment is making a re-emergence on a local level - page 121
- Drugs companies help fund the Italian healthcare system through levies - page 121
- Price cuts are part of price manipulation, and are used to contain costs in Italy - page 122
- Pharmacist substitution has been introduced but has historically had slow adoption - page 123
- Reference pricing is a key cost-containment tool in Italy - page 123
- Drug monitoring and risk-sharing agreements have been introduced in Italy - page 124
- Parallel importation and generic competition impact on drug price following launch - page 125
- Generic drugs have historically made a limited impact but are now being increasingly utilized - page 125
- CHAPTER 7 PRICING & REIMBURSEMENT IN SPAIN - page 127
- An overview of the Spanish healthcare system - page 130
- Spanish healthcare has become increasingly devolved to the Autonomous Communities - page 130
- Public healthcare dominates healthcare provision - page 132
- Inpatient and outpatient healthcare is provided on a devolved regional basis - page 133
- The introduction of the Medicines Bill in July 2006 revolutionizes healthcare provision in Spain - page 134
- Recent changes affecting the pricing and reimbursement environment in Spain - page 135
- Reference pricing, price cuts, price freezes, discounts, rebates and taxes are all used in Spain to limit drug company profit margins - page 137
- Reference pricing has evolved significantly with the introduction of the new medicines bill - page 137
- Price cuts and price freezes are used in Spain to contain costs - page 139
- Despite their unpopularity, discounts, rebates and taxes are used by the Spanish government - page 139
- Positive/negative lists and prior authorization are used to limit physician prescription - page 139
- Positive/negative lists have met with limited success in Spain - page 139
- Despite issues raised by the EC, prior authorization exists in Spain - page 140
- Additional tools are used in cost containment, including pharmacist substitution and patient co-payment, although these have a limited role in P&R in Spain - page 140
- Pharmacist substitution is allowed on a relatively restricted basis - page 140
- Patient co-payment is low in Spain - page 141
- Generic competition is having an increasing role affecting drug prices following launch - page 141
- The profile of generics is being raised - page 141
- A range of strategies have been used by Big Pharma to restrict parallel importation of drugs out of Spain - page 143
- Healthcare informatics helps to promote the rational use of medicines - page 145
- Reference pricing, price cuts, price freezes, discounts, rebates and taxes are all used in Spain to limit drug company profit margins - page 137
- An overview of the Spanish healthcare system - page 130
- CHAPTER 8 PRICING & REIMBURSEMENT IN THE UK - page 146
- An overview of the UK healthcare system - page 147
- Governmental spending on healthcare in the UK has risen significantly in the last five years - page 148
- A range of trusts, authorities and NHS plans increase the complexity of healthcare provision in the UK - page 149
- A range of trusts and authorities are involved in healthcare provision in the NHS - page 149
- PCTs dominate healthcare provision in the UK - page 151
- PCTs and SHAs shape prescription in the primary care setting and beyond - page 152
- A number of plans and publications are shaping the evolution of the NHS - page 152
- Additional initiatives impact on NHS evolution - page 154
- A range of schemes and bodies impact on drug prescription in the UK - page 155
- NICE is a key P&R stakeholder in the UK - page 157
- NICE and HTAs - page 157
- HTA bodies are becoming more homogeneous, however significant differences still exist between them - page 159
- The government has thrown significant power behind the adoption of NICE recommendations - page 159
- The postguidance and preguidance effects are a significant concern - page 160
- Accelerated assessments via the STA route will help to reduce the preguidance effect, although there are also concerns over how the shortened timeframe will impact assessment and approval - page 161
- There are concerns that NICE and more specifically the new STAs are shaped by politics - page 162
- A range of schemes also impact on drug prescription - page 163
- Recent changes affecting the pricing and reimbursement environment in the UK - page 163
- Direct pricing and reimbursement mechanisms in the UK - page 163
- The PPRS is the principal method of governmental P&R regulation in the UK - page 163
- Patient co-pay, hospital discounts and pharmacist clawback are also used to contain costs, however they are not key P&R tools - page 166
- Parallel importation and generic competition impact on drug price following launch in the UK - page 166
- The UK has a strong generics market and increased switching to generics is set to make it stronger - page 167
- Parallel importation - page 168
- Direct pricing and reimbursement mechanisms in the UK - page 163
- An overview of the UK healthcare system - page 147
- CHAPTER 9 KEY P&R TRENDS AND RECOMMENDATIONS ACROSS THE FIVE MAJOR EUROPEAN COUNTRIES - page 169
- European P&R is a difficult environment to generate a strong ROI - page 169
- There is slow uptake of new drugs in the European market - page 169
- Governments need to clarify their P&R strategy, making it more transparent and remove conflicting policies - page 170
- Governments are incentivizing increased generic prescription and setting quotas for parallel trade - page 170
- The drugs industry is being pressed into helping to fund healthcare provision - page 171
- Identifying and targeting the right stakeholders is increasingly difficult in the various European markets - page 171
- The mix of P&R tools used by governments depends on other European countries and constantly fluctuates - page 172
- The regulator and the P&R bodies have different goals - page 173
- The definition of innovation is making the European P&R environment difficult - page 173
- Innovation is the key to securing strong pricing and reimbursement, however, is it being adequately rewarded? - page 173
- Do governments recognize the argument of incremental innovation? - page 174
- How to best identify innovation? It is based on whether a drug improves quality and/or quantity of life - page 175
- Me-too drugs, together with non-essential drugs are being strongly discriminated against from a reimbursement perspective - page 175
- What will happen if innovation is marginalized? - page 176
- The use of PE in Europe is evolving - page 176
- The use of PE in Europe is increasing - page 177
- The way that PE analysis is being used and analyzed is evolving - page 177
- Drugs companies need to determine which bodies want which types of analysis - page 178
- Payer HTAs are increasingly based on in-house analysis using company clinical data and peer-reviewed PE analysis - page 178
- P&R bodies want simpler PE models, although not at the expense of a confused message - page 179
- There is increased sharing of information between the main HTA bodies - page 179
- Key recommendations: ways that drugs companies can build up skills to optimize European P&R strategy - page 180
- Negotiation skills are highly important - page 180
- Drugs companies need to be better at communicating - page 180
- Internal communication is vital in ensuring a strong ROI - page 180
- External communication is vital in ensuring a strong price and adequate reimbursement - page 181
- It is vital for drugs companies to have a clear P&R strategy - page 181
- It is important to integrate P&R analysis into the clinical trial process - page 182
- The remit of PE analysis should be broadened and shifted into earlier-phase clinical trials - page 183
- Drugs companies should know which markets to launch in first - page 183
- Drugs companies should consider adopting certain US-focused P&R strategies - page 185
- Consider using political lobbying and legislation to change the P&R environment - page 185
- Carry out more effective targeting of healthcare professionals as part of the allowance for providing information - page 186
- European P&R is a difficult environment to generate a strong ROI - page 169
- CHAPTER 10 GLOSSARY - page 187
- Glossary of terms - page 187
- CHAPTER 11 BIBLIOGRAPHY - page 192
- Publications and online articles - page 192
- Datamonitor resources - page 211
- Conference literature - page 212
- Online resources - page 214
- List of Tables
- Table 1: HAS has taken over a number of healthcare P&R stakeholders - page 63
- Table 2: Examples of additional stakeholders that affect healthcare provision and P&R in France - page 64
- Table 3: The range of ASMR levels used to determine reimbursement in France - page 67
- Table 4: Key reforms shaping the German healthcare system - page 88
- Table 5: Key drug reforms in Italy, 1993-2005 - page 120
- Table 6: Examples of discounts on drug prices for high-volume drugs (statins, PPIs), 2003-05 - page 123
- Table 7: Trusts and authorities involved in UK healthcare provision - page 150
- Table 8: Key plans and publications shaping NHS evolution - page 153
- List of Figures
- Figure 1: Key pressures facing drugs developers in the US market, 2006 - page 18
- Figure 2: Key P&R cost-containment tools in EU5 - page 19
- Figure 3: NME & BLA approvals, compared to PhRMA company R&D spend, 1990-2004 - page 21
- Figure 4: Average time delay between marketing authorization and effective market access, using products from June 2000- June 2004 - page 22
- Figure 5: Biotechnology companies are set to show a stronger CAGR than pharmaceutical companies for 2004-10 - page 23
- Figure 6: The percentage of BLAs approved is falling, while the percentage of NMEs is rising, 1990-2004 - page 24
- Figure 7: Generic risk facing leading pharmaceutical and biotech companies is rising through to 2010 - page 25
- Figure 8: Average EU5 healthcare spending has risen steadily between 1990 and 2003 - page 28
- Figure 9: Spending on pharmaceuticals as a percentage of total healthcare spending is higher in the EU5 than the US, although some European markets have lower spending than Japan - page 29
- Figure 10: The UK has the highest CAGR increase in healthcare spending for 1990-2003 - page 30
- Figure 11: Factors affecting drug pricing, 2006 - page 34
- Figure 12: Key pricing controls used globally, 2006 - page 35
- Figure 13: Globally, a number of factors can affect the price of a drug following launch - page 44
- Figure 14: Examples of reimbursement controls used globally, 2006 - page 51
- Figure 15: Estimated cost-containment savings in France, 2003-05 - page 58
- Figure 16: Reimbursable drugs provided by retail pharmacies account for three-quarters of drug provision, 2003 - page 61
- Figure 17: Both the SMR and the ASMR rating are required to determine the reimbursement rate - page 66
- Figure 18: Key cost-containment P&R tools used in Germany - page 80
- Figure 19: Estimated cost-containment savings in Germany, 2003-05 - page 81
- Figure 20: There are few major differences between public and private healthcare insurance in Germany - page 83
- Figure 21: A number of governmental bodies, physician and pharmacist associations, and industry associations impact healthcare provision in Germany - page 85
- Figure 22: Pfizer's evaluation of Sortis' therapeutic benefit did not match the assessment of the drug - page 95
- Figure 23: Pfizer's atorvastatin sales in Germany fell significantly after being removed from the reference pricing list - page 96
- Figure 24: AstraZeneca's Nexium generates strong sales and volume growth, after drug prices fall to the reference level - page 97
- Figure 25: Parallel importation penetration in Germany increased from 1997-2002 before falling slightly through to 2004 - page 105
- Figure 26: Key cost-containment P&R tools used in Italy - page 109
- Figure 27: Estimated cost-containment savings in Italy, 2003-05 - page 110
- Figure 28: The Italian healthcare system is highly decentralized - page 112
- Figure 29: AIFA acts as an umbrella to a range of commissions and observatories - page 114
- Figure 30: Reimbursement depends on the level of therapeutic advantage offered by a new drug - page 115
- Figure 31: Key cost-containment P&R tools used in Spain, 2006 - page 129
- Figure 32: Estimated cost-containment savings in Spain, 2003-05 - page 129
- Figure 33: Spain's healthcare provision is largely decentralized with provision made by ACs - page 131
- Figure 34: There are a range of incentives and disincentives impacting generic prescription in Spain - page 142
- Figure 35: An overview of the UK healthcare system - page 148
- Figure 36: A range of bodies impact drug prescription in the UK - page 156
- Figure 37: There are more advantages than disadvantages to the PPRS system - page 164
- Figure 38: There are a number of incentives for generic prescription in the UK - page 167
- Figure 39: Drugs companies must overcome a range of hurdles to generate a strong ROI - page 169
- Figure 40: European markets are complex and involve a number of bodies, complicating the task of identifying key P&R stakeholders - page 172
- Figure 41: The battle between cost-containment and cost-effectiveness determines whether drugs companies stay in the European market or decide to exit - page 176
- Figure 42: Although a greater priority is being placed on PE analysis, it has a relatively low profile in Germany and France - page 177
- Figure 43: The optimal launch across Europe takes place over three waves - page 184
- Figure 44: Estimated cost-containment savings in the five major European markets, 2003-05 - page 185
Other users found this report page using the following search terms: pharmacy pharmaceutical company discount schemes pricing reimbursement conferences
If you can't find a report that meets your needs contact LeadDiscovery. We are one of the few report providers with extensive drug development experience and we frequently use this knowledge to help clients source the most appropriate reports or produce reports for them from scratch.