Pharmaceutical Pricing and Reimbursement in Italy, 2008

Published by: Decision Resources

Published: May. 7, 2008 - 30 Pages

Table of Contents

Executive Summary

Strategic Considerations

Stakeholder Implications

Overview

Organization and Funding of the Italian Healthcare System

Pharmaceutical Prices in Italy

Price Setting

Reimbursement of Outpatient Medicines

Cost-Containment Measures

Pharmaceutical Budget

Price Controls

Reference Pricing

Price Ceilings for Patent-Protected Drugs

21

Prescribing Restrictions

Promoting Greater Use of Generics

Regional Patient Copayments

Promoting Good Prescribing Practice

Reimbursement of Hospital Medicines

Health Technology Assessment

Outlook for the Italian Pharmaceutical Market

Tables

1. Multilateral Comparison of Average Ex-Manufacturer Prices of Branded Medicines in Select Markets as a Percentage of U.K. Average Ex-Manufacturer Prices, 1992-2004

2. Italian Prices of Best-Selling Drugs as a Percentage of U.S. and European Average Prices, 2006

3. Prices of Leading Biologics in the Major Markets as a Percentage of U.S. Prices

4. Pharmaceutical Reimbursement Categories in Italy

5. Targets of Key Pharmaceutical Cost-Containment Measures in Italy

6. Key Trends in the Italian Prescription Drug Market: Implications for the Pharmaceutical Industry

Figures

1. Average Prices of Leading Biologics, Small-Molecule Drugs, and Pharmaceuticals

Overall in the Major Markets as a Percentage of U.S. Prices, 2006

2. Retail Prices of 300 Best-Selling Italian Prescription Medicines in Leading Markets as a Percentage of Italian Prices, 2006

3. Comparative Timetables for Pricing and Reimbursement Before and After 2004

4. Average Duration for Pricing and Reimbursement of Select Drug Categories, 2006

5. Annual Sales of Drugs Facing Patent Expiration in Italy in 2008

Abstract

• The Italian government has repeatedly used mandatory price freezes or cuts to reduce pharmaceutical spending. How do the Italian prices compare with prices in other major pharmaceutical markets? How has the industry reacted to these rigid policies? What can pharmaceutical companies do to avoid pricing restrictions?
• In addition to establishing a reference pricing system for off-patent drugs, the Italian government has assigned patent-protected medicines to homogeneous therapeutic categories that are subject to price ceilings. How extensive are these cost-containment systems? What are the consequences of exceeding reimbursement limits?
• The recently enacted Finance Act 2008 will introduce company-specific annual pharmaceutical budgets and other reforms. How will the budgets be calculated? How will they benefit innovative drugs? What will be the consequences of exceeding the budget? What is the early reaction of the pharmaceutical industry to these reforms?
• The generics market in Italy is considerably smaller than in other countries. What steps have been taken to promote greater use of generics? What branded drugs will lose patent protection in Italy in 2008?

• The national healthcare system (SSN) is a relatively recent innovation in Italy: the government has made radical changes to the system over the past 30 years and more cost-containment measures are expected; the majority of cost restrictions are aimed at the pharmaceutical industry; regional authorities have increased responsibility for enforcing the national pharmaceutical budget.
• Italy’s policy on pharmaceutical prices is not encouraging for manufacturers of branded drugs: constant price cuts have eroded pharmaceutical sales; manufacturers are legally obligated to reduce their prices to hospitals; Italy’s diagnosis-related group system is a great concern to physicians; reference pricing is another pharmaceutical restriction.

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