Country specific reimbursement information are vital to creating the perfect pricing strategy.Pharmaceutical reimbursement varies from county to country, and now more than ever, it is essential for pharmaceutical companies to secure reimbursement to their medicines as the health authorities are being pressured to offer the best possible care with limited budgets.
For example, UK pharmaceutical pricing and reimbursement basic principles can be divided into two categories:
- Voluntary scheme regulated by Pharmaceutical Price Regulation Scheme (PPRS)
- Statutory scheme established by a several regulations
Both schemes appeared under the National Health Service Act 2006, which allows the UK government to regulate (limit) the prices of medicine sold to the NHS.
Branded Drug Price Control
In the UK, PPRS scheme, which is effective from 1st January 2014 until 1st January 2019, regulates the prices of branded drugs pharmaceutical companies sell to the NHS for the following indications:
- Applicable to licensed and branded medications
- Applicable to medications supplied by tender
- Incorporates value-based assessment of pharmaceutical products
- Overall expenditure to the NHS is held to set levels
- Availability of flexible medication pricing and patient access schemes
- Exemption for companies that show sales less than £5 Million
Members have the right to apply for changes in the price list in case there are some changes regarding the drug’s capabilities or if there is a new indication. The ability to vary prices is limited and is subject to NICE (National Institute For Health And Care Excellence) appraisal.
Patient access schemes allow the patient to buy medications even if NICE’s value appraisal doesn’t allow the manufacturer to use the list price.
EU Pharmaceutical Reimbursement Lists
The reimbursement lists in EU27 countries vary. In fact, some of them can be virtually the opposite to other member states. For example, in the UK, a drug which can improve life quality but doesn’t increase life expectancy can’t be reimbursed. The UK government issues a lists the medications, which are not subject to reimbursement.
Reference pricing is the mechanism by which the health authorities are shielding themselves from over-paying for new medicinal products. It consists of a set of country specific indications by which the final drug price is calculated.
Germany, Norway, Sweden and the UK are the only European countries not to use the Reference Pricing. All the other EU countries use reference pricing as a tactic to lower or control the price of new medical products. These “tactics” range from; taking the average of the price in all the countries the product has been launched in (Belgium) to the average of the three lowest prices for that medicinal product (Romania).
As you can tell this could cause great amount of work and confusion, due to the sheer amount of new medicinal products that appear on the market. Before 2015, the communication was slow and laborious. To speed this up, the health authorities created a unified central database accessible only by themselves called “Euripid”.
Due to improvement in communication by using a centralised database, reference pricing plays a fundamental role in product pricing, and pharmaceutical companies need to pay increasing attention to the products’ “country launch order” to maximise revenue. The birth of Euripid and the more efficient communication by the health authorities has increased the need for a unified European pricing database.
About Pharmaceutical Pricing & Reimbursement Information (PPRI) Project
Pharmaceutical Pricing & Reimbursement Information (PPRI) was initially a research project funded by DG SANCO between 2005 and 2007. Eventually, it evolved into flexible and dynamic information-sharing initiative to offer information of pricing and reimbursement in a variety of countries for further comparative analysis. Taking advantage of this information can help pharmaceutical companies make predictions about their business development at home and abroad and develop pricing models.
Currently, the PPRI network includes over 60 members. Most of them are competent authorities from 38 countries. These authorities come from the EU members (including the UK), plus Albania, Canada, Iceland, Croatia, Norway, Korea, Serbia, South Africa, Macedonia, Turkey, and Switzerland. A number of European and international institutions also participate in this information-sharing project.
PPRI network works with policy makers responsible for international policies. The organisation members contribute by sharing data and experiences. Cooperation is completely trust-based. All the policy makers make a commitment to PPRI since they see obvious benefits from such cooperation.
Experience with policies in other countries is highly valuable for each PPRI network member. They can use this information to find the right approach to pricing and reimbursements in their countries in order to provide access to medicine even for the limited budget population segments. PPRI network members have a right to ask about policy details and situations in other countries.
Find Out More
To find out more about our unified European pricing database (RX Price Index™) please download our brochure or should you be interested in the range of data gathering and analysis services we offer at Black Swan, please get in touch today through our online contact form.