Pharmaceutical Innovation: Is It Really Rewarded?

Published by: Decision Resources

Published: Jun. 15, 2007

Table of Contents

Executive Summary

Strategic Considerations

Stakeholder Implications

Innovation: Balancing Benefi ts and Costs

European Union

High-Level Group on Innovation and the Provision of Medicines (G10 Medicines Group)

High-Level Pharmaceutical Forum

France

Standard Price-Setting Procedure

Price Setting for Innovative Drugs

Renewal of Pricing and Reimbursement

Germany

Reference Pricing

Prescribing Budgets

Health Technology Assessment

New Restrictions on the Use of Costly Drugs

Italy

Spain

Price Setting

Prior Authorization

More Selective Funding of Medicines

United Kingdom

Proposal to Replace the Pharmaceutical Price Regulation Scheme

National Institute for Clinical Excellence

Review of Variations in the Use of NICE-Approved Cancer Drugs

Patient Action Against Lack of Access to Certain Drugs

Accelerated NICE Appraisal Process

Japan

Initial Pricing of Branded Prescription Drugs

Similar-Effi cacy Comparison Methods

Cost Calculation Method

Price Premiums

United States

Formulary Decision Making in the Private Sector

Medicare Sponsorship of Health Economic Research

Outlook and Implications for the Pharmaceutical Industry

Tables:

1. Methods Used for Pricing New Drugs in Japan, June 2002-March 2007

2. Hierarchy of National Health Insurance Price Premiums in Japan

3. Number of New Drugs Awarded Price Premiums for Therapeutic Advances, June 2002-March 2007

4. U.S. Employers’ Views on Strategies to Increase Prescription Drug Benefi t Value

5. U.S. Employers’ Views on Strategies to Increase Prescription Drug Benefi t Value

Figures:

1. New Drugs’ Share of Total Pharmaceutical Expenditures in Major Markets, 2001-2004

2. Percentage of Drugs Awarded Various SMR Ratings in France

3. Percentage of Drugs Awarded Various ASMR Ratings in France

4. Criteria for Determining the Pricing Method Used for New Prescription Drugs in Japan

Abstract

• The European Commission wants to balance strict price controls and free market pricing. What initiatives • has the EU undertaken to achieve this balance? Which EU markets have the strictest constraints on pharmaceutical pricing? Are new policies likely to improve or worsen the climate for pharmaceutical companies?
• Recently, the Japanese government has taken action intended to make premiums for innovation more generous • and more attainable. What price reforms has the government made? Are they likely to in fact encourage innovation? Will the new price premiums be achievable?
• In the United States, the increasing focus on drug prices will prompt more payers to adopt evidence-based • formularies. How is formulary decision making evolving in the private sector? How is Medicare now encouraging health economic research?

• EU innovation initiatives: • a review of recent initiatives by the EU in support of innovative medicines in Europe.
• Outlook and implications for the pharmaceutical industry: • the future of reimbursement for innovative drugs in the EU, Japan, and the United States.
• Detailed analysis of pricing and reimbursement in the major markets: • an examination of how health care payers in seven leading pharmaceutical markets (France, Germany, Italy, Spain, United Kingdom, Japan, and United States) approach the pricing and reimbursement of innovative drugs.

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