Pharmaceutical Pricing and Reimbursement - Reference Pricing and Economic Evaluations Will Dominate Future Pricing and Reimbursement Strategies

Pharmaceutical Pricing and Reimbursement - Reference Pricing and Economic Evaluations Will Dominate Future Pricing and Reimbursement Strategies Summary GBI Research, the leading business intelligence provider, has released its latest research, “Pharmaceutical Pricing and Reimbursement - Reference Pricing and Economic Evaluations Will Dominate Future Pricing and Reimbursement Strategies”. It provides key data, information and analysis of the major issues affecting the pricing and reimbursement decisions across the globe. It discusses the major changes that have been observed in the pharmaceutical and healthcare industry at the global level. The report also covers issues specific to particular geographies. The geographies covered include the US and countries within Western Europe, Asia-Pacific, Central and Eastern Europe, and Scandinavia. It covers pricing and reimbursement mechanisms in different countries as well as the impact of issues on the key stakeholders. The report puts a special emphasis on orphan drugs since the pricing and reimbursement patterns for orphan drugs are different from the traditional mechanisms. This report is built using data and information sourced from proprietary databases, primary and secondary research and in house analysis by GBI Research’s team of industry experts. Scope The scope of this report includes: Identification and analysis of major issues that are affecting the pricing and reimbursement decisions across five different geographies. These include North America, Western Europe, Asia-Pacific, Central and Eastern Europe and Scandinavia Analysis of the issues and potential impact of pricing and reimbursement decisions on the key stakeholders Study of the pricing and reimbursement mechanisms in different countries and the identification of trends in the context of a particular geography as a whole Qualitative analysis of the forces that are driving and restraining the prices and reimbursements within a particular geography Future outlook of the pricing and reimbursement patterns for geographies under consideration Reasons to buy The report will enhance your decision making and will enable you to: Build understanding of the major issues in the pricing and reimbursement landscape Identify the impact of each issue on your business and develop solutions for adverse impacts Negotiate better with the government agencies to maximize the reimbursement on the drugs by understanding the pricing and reimbursement mechanism Develop effective business strategies for pricing a drug which is to be launched in any of the markets considered in this report Identify and exploit the factors that could help to maximize returns on the drugs for a particular geography in future

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Pharmaceutical Pricing and Reimbursement - Reference Pricing and Economic Evaluations Will Dominate Future Pricing and Reimbursement Strategies

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GBI Research, the leading business intelligence provider, has released its latest research, “Pharmaceutical Pricing and Reimbursement - Reference Pricing and Economic Evaluations Will Dominate Future Pricing and Reimbursement Strategies” that provides key data, information and analysis of the major issues affecting the Pricing and Reimbursement decisions across the globe. It discusses the major changes that have been observed at the global level. The report also covers the issues specific to particular geographies as well. The geographies covered include the US and countries within Western Europe (the UK, France, Germany, Spain, Italy), Asia-Pacific (Japan, Australia, China), Central & Eastern Europe (Czech Republic, Poland, Austria, Hungary, Romania) and Scandinavia (Norway, Sweden, Denmark). It provides a comprehensive view of the best practices followed by the governments in these countries with respect to pricing and reimbursement of the prescription as well as generic drugs. The report also provides the impact analysis of each of the issue on the four key stakeholders concerned with the pricing and reimbursement practices that is pharmaceutical companies, payers, regulatory agencies and patients/doctors. The report puts a special emphasis on the orphan drugs since the pricing and reimbursement patterns for orphan drugs are different from the traditional mechanisms.

This report is built using data and information sourced from proprietary databases, primary and secondary research and in house analysis by GBI Research’s team of industry experts.Innovative Pricing and Reimbursement Mechanisms Due to Financial Pressures Will Continue to Exert Downward Pricing Pressures in Future

Major Pricing and Reimbursement Strategies Employed Across the Globe

Source: GBI Research

Twin pressures of global economic meltdown and spiraling healthcare costs have forced several countries to adopt a conservative approach towards pricing and reimbursement of the cost of drugs. The rising cost of medicines, along with an unhealthy lifestyle of people in a number of countries, particularly developed countries, the burden on the healthcare systems to provide quality healthcare to each citizen is increasing. This increase directly impacts the governments’ ability to provide quality healthcare to its citizens, especially in countries where the healthcare system is largely government funded.

Different mechanisms, including reference pricing, cost-benefit analysis, health technology assessments and many others are being employed to bring down the price of prescription, as well as generic drugs. In addition, innovative pricing mechanisms, such as the Step Price System will continue to exert downward pricing pressure on pharmaceutical companies in the future.

Reimbursement Agencies have Increased Sensitivity for High Price Drugs

Governments, across the world, are moving towards economic evaluations as a tool to measure the economic impact of the drug. In the last few years, the pressure from various reimbursement groups, such as managed care organizations, pharmacy benefit managers, payers and government reimbursement agencies have increased due to rising costs and evidence of few medicines charging premium pricing despite the absence of equivalent therapeutic benefits.

Economic evaluation helps the government agencies to examine the price of drugs with respect to the therapeutic benefits they provide and reimburse the cost of the drug accordingly. These evaluations also help the pharmaceutical companies to get their innovative drugs listed in the formularies, justify the premium pricing and also provide substantial data to help their sales force influence the physicians. While such evaluations prove to be beneficial for the innovative drugs that can receive favorable reimbursements, it could prove economically unfavorable for the drugs that do not provide substantial benefits compared to its costs. However, economic evaluations have enabled significant cost rationalization for the developed, as well as developing countries.

Excessive Pricing of Orphan Drugs by the Pharma Companies Demands Measures for Greater Price Control

Pharmaceutical companies that manufacture orphan drugs have been leveraging the government benefits provided to them under the Orphan Drug Act 1983, which mainly revolve around greater pricing freedom and lenient reimbursements for the drugs. While orphan drug companies argue that due to small patient population they charge high prices, it has been observed that some drugs have blockbuster status and have been generating substantial revenues for their companies. In addition, some companies such as Ovation Pharmaceuticals (now Lundbeck) and Questcor Pharmaceuticals have increased the price of their drugs exponentially to reap maximum revenues. All these examples suggest that pricing for orphan drugs are extraordinarily high compared to conventional pharmaceutical pricing.

Some of the possible solutions to reduce the price of orphan drugs include developing a global agency for orphan drug development, introducing sales ceiling and flexible market exclusivity period and periodic price revisions. These measures can not only save government funds but also reduce the co-payment for patients.

Innovation will be the Key for Premium Pricing in Major Markets including the Emerging Markets

Impact Analysis: Pricing and Reimbursement Issues Across the Globe

Source: GBI Research

In future, negative pricing pressures from various payers would force companies to justify the premium pricing for their products. While the new processes such as ICD-10 and HTA will help the pharmaceutical companies to provide better evidence to prove the therapeutic superiority of their drugs, “me-too” and generic drugs will experience significant challenges to obtain better pricing and reimbursements. With increased scrutiny from payers to ensure cost-effectiveness of the drugs, only truly innovative products would be in a position to charge premium price for the drugs.

There has been an increase in the amount of supporting evidence required to prove a drug’s novelty to the reimbursement agencies. Besides the developed markets, in the emerging markets, such as China, the requirements for proving innovativeness of the medicine is becoming more and more stringent. This poses a great challenge to the companies that might incur extra costs in gathering evidence to prove their drug’s therapeutic superiority. However, innovation is sure to remain the key for premium pricing in future, even in the emerging markets.