Drug Price/Cost Debate: Coping with Escalating Pricing Pressures
Decision Resources
November 9, 2009 35 Pages - SKU: DECR2497063
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Countries covered: United Kingdom
Introduction
Insinuations of profi teering were made against an H1N1 swine flu vaccine manufacturer in the summer of 2009.
As the swine flu epidemic began to take on serious proportions, public scrutiny in the United Kingdom focused
on manufacturers developing vaccines for the prevention of this disease and on what constitutes a fair price
for a drug. The U.K. public's suspicion of pharmaceutical profi teering in the H1N1 vaccine arena is just the tip
of the iceberg in the ongoing and acrimonious battle over the prices that pharmaceutical companies charge for
drugs and the costs that payers must cover to meet the increasing demands for healthcare. With global economies
in the tank owing to the ongoing worldwide recession, the pitch of the battle increased in 2009. Some
companies are developing new strategies to combat increased price/cost pressures. Who has been successful,
and who has not? What strategies are in play, and which ones are working? What duck-and-cover strategies are
skittish manufacturers attempting? In this report, we discuss elements of the escalating drug price/cost battle,
the cost-containment measures that governments are implementing, and the new strategies that companies are
devising to cope with increasing pricing pressures.
Questions Answered in This Report
- The inescapable fact is that governments have to make decisions about how limited healthcare budgets will be
spent. What cost-containment measures have European countries adopted? What new pricing strategies
are companies inventing to make their drugs acceptable to reimbursement authorities such as NICE
and IQWiG? Which pharma companies will be the winners in the drug price/cost debate?
- After a tortuous process that involved both judicial review and a court appeal, NICE published
amended guidance on four medicines for the treatment of Alzheimer's disease. Why are NICE's
decisions so controversial? What recommendations did NICE make in its technology appraisals
for new drugs in 2009? What recent decisions did IQWiG make that will impact drug manufacturers
in Germany? What lessons can drug manufacturers learn?
- Companies are developing new approaches to cope with increasing pricing pressures and changing
market dynamics. What ten tactics are companies using? Why are companies entering generics
markets? How are companies spreading risk?
Scope
- Drug pricing: Swine flu vaccine, profi teering, comparison of drug prices in different countries, free
pricing markets, generic pricing.
- Cost-containment measures: Cost-effectiveness, value-for-money, reference prices, arbitrary price
cuts, generics, biosimilars, claw-back systems, technology appraisals, price caps, China, European
countries, Japan, Sweden, the Philippines, revocation of operating licenses, suspension of marketing
permits, value-based pricing, biennial price cuts, price cuts on generics, Taiwan, United Kingdom,
Pharmaceutical Price Regulation Scheme, controlling drug company profi ts, controlling pharmacy
profi ts, generic prescribing, generic substitution, generic promotion, European Generic Association,
generic penetration rates across Europe, Pharmaceutical Pricing and Reimbursement Information
Project, ten measures to promote the use of generic medicines.
- NICE: National Institute for Health and Clinical Excellence, guidance documents published in
2009, Alzheimer's disease, renal cell carcinoma, Eisai/Pfi zer's Aricept, Shire's Reminyl, Novartis's
Exelon, Lundbeck's Ebixa, judicial decision, Court of Appeal, Roche's Avastin, Bayer's Nexavar,
Wyeth's Torisel, Pfi zer's Sutent, life-extending, end-of-life treatments, incremental cost-effectiveness
ratio (ICER), quality-adjusted life year (QALY), locally proven effi cacy, Roche's Pegasys, Gilead
Sciences' Adefovir, Sanofi -Aventis's Plavix, Pfi zer's Macugen, Abbott's Humira, Wyeth's Enbrel,
Schering-Plough's Remicade, Servier's Protelos.
- IQWiG: Institute for Quality and Effi ciency in Health Care, Gemeinsame Bundesausschuss (GBA),
Federal Joint Committee, evidence-based decisions, Novo Nordisk's Novorapid, Eli Lilly's Humalog/
Liprolog, Sanofi -Aventis's Apidra, insulin analogues, value added, Pfi zer's Exubera, Sanofi -Aventis's
Lantus, Novo Nordisk's Levemir, cancer risk, Pfi zer's Edronax, GlaxoSmithKline's bupropion, Essex
Pharma's mirtazapine.
- Price-coping strategies: Ten tactics that companies are using to cope with increasing pricing pressures,
Center for Responsible Politics, Pfi zer's Sutent, Celgene's Revlimid, Novartis's Lucentis,
Pfi zer's Macugen, GlaxoSmithKline's Tyverb, Bayer's Nexavar.
Please note, the PDF e-mail from publisher version of this report is for a global site license.
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- Executive Summary
- Strategic Considerations
- Stakeholder Implications
- What Constitutes a Fair Price for a Drug?
- Cost-Containment Measures
- Value-for-Money Criteria
- The United Kingdom’s National Institute for Health and Clinical Excellence
- Drugs for Alzheimer’s Disease
- Drugs for Kidney Cancer
- Germany’s Institute for Quality and Efficiency in Health Care
- Short-Acting Insulin Analogues
- Duck-and-Cover Strategy
- Arbitrary Price Cuts
- Measures to Promote Generic Prescribing and Dispensing
- Lobbying to Stem the Tide
- Results from New Pricing Strategies
- Pfizer’s Sutent for Advanced and/or Metastatic Renal Cell Carcinoma
- Celgene’s Revlimid for Multiple Myeloma
- Novartis’s Lucentis for Wet Age-Related Macular Degeneration
- GlaxoSmithKline’s Tyverb for Breast Cancer
- Bayer’s Nexavar for Liver Cancer
- Entering Generics Markets
- Looking Elsewhere
- Will Obama Be NICE to the U.S. Pharmaceutical Industry?
- Winners of the Drug Price/Cost Debate
- Tables
- 1. Comparative Drug Prices in Different Pharmaceutical Markets as a Percentage of U.S. Prices
- 2. Drug Price Control Measures in Select Countries
- 3. National Institute for Health and Clinical Excellence: Technology Appraisal Guidance, 2009
- 4. National Institute for Health and Clinical Excellence: Results of Select Health Technology Assessments
- 5. Institute for Quality and Efficiency in Health Care: findings from Select Publications, 2008 and 2009
- 6. Pharmaceutical Pricing and Reimbursement Information Project: Promotion of Generics in European Countries, 2006-2007
- 7. National Institute for Health and Clinical Excellence: Technology Appraisal for Avastin, Nexavar, Sutent, and Torisel for Renal Cell Carcinoma, 2009
- figures
- 1. National Institute for Health and Clinical Excellence: Three Areas of Guidance
- 2. National Institute for Health and Clinical Excellence: Convoluted Process to Arrive at a Technology Appraisal for Four Alzheimer’s Drugs
- 3. Generic Market Shares in Europe, 2006
- 4. Lobbying Spend by Different Industries to Influence the U.S. Congress and Federal Agencies, first Half of 2009
- 5. Top Health-Related Spenders Lobbying the U.S. Congress and Federal Agencies, first Half of 2009
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