Pharmaceutical Pricing, Reimbursement, and Prescribing News in the Second Quarter of 2007

Published by: Decision Resources

Published: Sep. 10, 2007 - 31 Pages

Table of Contents

Executive Summary

Strategic Considerations

Stakeholder Implications

Introduction

United States

Medicare Prescription Drug Benefi t

Growing Share of U.S. Pharmaceutical Market

Setback for Government Price Negotiations for Medicare Part D

Millions Fall into Coverage Gap

Relaxation of Formulary Requirements

New Employer-Sponsored Health Plan for Early Retirees

Employers Embrace Value-Based Health Benefi ts

Biologics Price Competition and Innovation Act

Plavix Patent Upheld

Three Drug Manufacturers Convicted of Overcharging

European Union

Slow Progress for High-Level Pharmaceutical Forum

France

Slowdown in the French Pharmaceutical Market

New Cost-Containment Drive

Germany

Health Economic Evaluation of New Drugs

Increasing Demand for Copayment-Exempt Medicines

Growth of Manufacturer Rebates

Physician Concerns About Cost-Containment

Undertreatment of Key Disorders

Italy

Price Cuts Hit Sales

Spain

Rapid Increase in Market Share of Reference-Priced Drugs

Sustained Growth of the Generics Market

Faster Reimbursement Decision Making

United Kingdom

Parliamentary Review of NICE

Review of Primary Care Prescribing Costs

Janssen-Cilag “Money-Back Guarantee” Earns Backing of NICE

Japan

Proposals for Reform of the Pricing and Reimbursement System

Growth Potential in the Generics Market

Outlook and Implications for the Pharmaceutical Industry

Tables and Figures

Tables:

1. Percentage of Large U.S. Employers That Offered Health Insurance to Retirees in Select Years, 1993-2006

2. Frequency of Generics Dispensing for 30 Commonly Prescribed Off-Patent Compounds in France: Actual and Target Rates for Select Months in 2005, 2006, and 2007

Figures:

1. Main Sources of Funding for Prescriptions Dispensed in the United States, 2005-2007

2. Percentage of Stand-Alone Prescription Drug Plans Offering Various Levels of Drug Coverage in the Coverage Gap, 2006 and 2007

3. Percentage of Medicare Advantage Plans Offering Various Levels of Drug Coverage in the Coverage Gap, 2006 and 2007

4. Percentage of German Physicians Who View Select Cost-Containment Measures as Restrictions on Clinical Freedom

5. Effect of Changes in Prescription Volume, Price, and Product Mix on Spending on Reimbursed Outpatient Drugs in Italy, 2000-2006

6. Evolution of Generic Drugs’ Share of the Spanish Pharmaceutical Market, 2000-2006

Abstract

• According to Wolters Kluwer Health, 4.2 million U.S. Medicare benefi ciaries—32% of all benefi ciaries who • had standard eligibility for coverage—fell into the Medicare coverage “gap” in 2006. What is the current trend in the number of health care plans offering coverage of drugs in the gap?
• In June 2007, the U.S. Senate passed the Biologics Price Competition and Innovation Act. This act would • afford manufacturers of innovative biologics 12 years of market exclusivity from the time of licensing and would create a procedure for the FDA to approve biosimilar agents that are interchangeable with marketed products. What is the likelihood that the U.S. Congress will pass the bill, and what concerns about the bill has the Bush administration expressed?
• The first rebate contracts between statutory health insurance funds and generics manufacturers in • Germany took effect on April 1, 2007. By the beginning of June, 244 statutory health insurance funds had signed such contracts for almost 16,000 different product presentations of off-patent compounds. What challenges has the new system introduced for physicians, pharmacists, and patients? Why are small generics companies being particularly hurt by the new contracts?
• Far from being content with the recent vigorous growth in the French generics market, the French • government continues to set aggressive targets for generics dispensing. What is the overall generics dispensing rate the government has targeted for December 2007? Is this target attainable?
• In May 2007, the U.K. House of Commons Select Committee on Health published written • submissions it had received from interested parties regarding its inquiry into the activities of the National Institute for Health and Clinical Excellence (NICE). What criticisms and concerns did the pharmaceutical industry express about NICE? What specifi c recommendations did Bristol- Myers Squibb offer regarding factors NICE should take into account during its drug appraisal process?
• In June 2007, Janssen-Cilag offered the U.K. National Health Service a groundbreaking “money- • back guarantee” for coverage of Velcade. Industry observers believe that the NHS and other health care systems around the world may in future exert pressure on other manufacturers to sign similar risk-sharing agreements for high-priced drugs. What are the preliminary terms of the Velcade agreement? What terms have yet to be worked out?

• United States: Medicare Part D’s growing share of prescription benefi ts; setbacks for government • price negotiations for Medicare Part D; change in PDPs’ coverage in the Medicare gap; relaxation of formulary requirements; new employer-sponsored health plans for early retirees; Congressional debate on the Biologics Price Competition and Innovation Act; the U.S. judiciary’s ruling on the Plavix patent dispute; convictions of Astra-Zeneca, Bristol-Myers Squibb, and Schering-Plough on overcharging.
• European Union: Second Progress Report from the High-Level Pharmaceutical Forum; • recommendations from the working group on the relative effectiveness of medicines.
• France: Slowdown in the French pharmaceutical market; the French government’s new cost- • containment drive.
• Germany: Introduction of health economic evaluation for some new drugs; increasing demand for • copayment-exempt medicines; implementation of a new system of rebate contracts between statutory health insurance funds and generics manufacturers; physician views on cost-containment; survey results regarding the underuse of medicines in the German health care system.
• Italy: Effect of the October 2006 price cuts on growth in the Italian pharmaceutical market. •
• Spain: Effects of Spain’s new reference pricing system; the Spanish generics market; accelerated • reimbursement decision making at the Spanish Ministry of Health.
• Great Britain: Industry submissions regarding the House of Commons’ review of NICE; the National • Audit Offi ce’s review of primary care prescribing costs; NICE’s preliminary support of Janssen- Cilag’s “money-back guarantee” for Velcade.
• Japan: Proposals for reform of the pricing and reimbursement system; the potential for growth in the Japanese • generics market.
• Outlook: Overall U.S. prescription sales in the face of rapid increase in Medicare pharmaceutical spending; • opportunities and challenges in the face of employers’ increasing use of value-based health benefi t designs; implications for pharmaceutical manufacturers and drug prices of the European Union’s High-Level Pharmaceutical Forum; intensifi cation of reference prices in Germany, Spain, and France; growth of the generics market in France, Spain, and Japan.

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