A computer program for calculation of doses and prices of injectable medications based on body weight or body surface area

PubMed Central

2004-01-01

Abstract A computer program (CalcAnesth) was developed with Visual Basic for the purpose of calculating the doses and prices of injectable medications on the basis of body weight or body surface area. The drug names, concentrations, and prices are loaded from a drug database. This database is a simple text file, that the user can easily create or modify. The animal names and body weights can be loaded from a similar database. After typing the dose and the units into the user interface, the results will be automatically displayed. The program is able to open and save anesthetic protocols, and export or print the results. This CalcAnesth program can be useful in clinical veterinary anesthesiology and research. The rationale for dosing on the basis of body surface area is also discussed in this article. PMID:14979437

Development of a metrics dashboard for monitoring involvement in the 340B Drug Pricing Program.

PubMed

Karralli, Rusol; Tipton, Joyce; Dumitru, Doina; Scholz, Lisa; Masilamani, Santhi

2015-09-01

An electronic tool to support hospital organizations in monitoring and addressing financial and compliance challenges related to participation in the 340B Drug Pricing Program is described. In recent years there has been heightened congressional and regulatory scrutiny of the federal 340B program, which provides discounted drug prices on Medicaid-covered drugs to safety net hospitals and other 340B-eligible healthcare organizations, or "covered entities." Historically, the 340B program has lacked a metrics-driven reporting framework to help covered entities capture the value of 340B program involvement, community benefits provided to underserved populations, and costs associated with compliance with 340B eligibility requirements. As part of an initiative by a large health system to optimize its 340B program utilization and regulatory compliance efforts, a team of pharmacists led the development of an electronic dashboard tool to help monitor 340B program activities at the system's 340B-eligible facilities. After soliciting input from an array of internal and external 340B program stakeholders, the team designed the dashboard and associated data-entry tools to facilitate the capture and analysis of 340B program-related data in four domains: cost savings and revenue, program maintenance costs, community benefits, and compliance. A large health system enhanced its ability to evaluate and monitor 340B program-related activities through the use of a dashboard tool capturing key metrics on cost savings achieved, maintenance costs, and other aspects of program involvement. Copyright © 2015 by the American Society of Health-System Pharmacists, Inc. All rights reserved.

75 FR 76472 - Biologics Price Competition and Innovation Act of 2009; Meetings on User Fee Program for...

Federal Register 2010, 2011, 2012, 2013, 2014

2010-12-08

... DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration [Docket No. FDA-2010-N-0602] Biologics Price Competition and Innovation Act of 2009; Meetings on User Fee Program for Biosimilar and Interchangeable Biological Product Applications; Request for Notification of Stakeholder Intention To Participate...

Outcomes-based Pricing Program Puts Money in Beneficiaries' Pockets.

PubMed

Silverman, Ed

2017-08-01

Harvard Pilgrim's program gives rebates to beneficiaries if Repatha doesn't help them avoid a heart attack or stroke. It's just the latest in a growing number of outcomes-based pricing agreements in which an insurer can get a discount from a drugmaker if a drug doesn't help patients as much as expected.

Impact of reference-based pricing of nitrates on the use and costs of anti-anginal drugs.

PubMed

Grootendorst, P V; Dolovich, L R; O'Brien, B J; Holbrook, A M; Levy, A R

2001-10-16

Reference-based pricing limits reimbursement for a group of drugs that are deemed therapeutically equivalent to the cost of the lowest-priced product within that group. We estimated the effect of reference-based pricing of nitrate drugs used for long-term prophylaxis on prescribing of and expenditures on nitrates and other anti-anginal drugs dispensed to senior citizens in British Columbia. We assessed trends in the monthly volume of prescriptions of anti-anginal drugs and the associated drug ingredient cost paid by the province's publicly funded drug subsidy program, Pharmacare, and by the patients themselves for the period April 1994 to May 1999. Trends in monthly rates of nitrate expenditures per 100,000 senior citizens before the introduction of reference-based pricing were extrapolated to infer what expenditures would have been without the policy. During the 3 1/2 years after reference-based pricing was introduced, Pharmacare expenditures on nitrates prescribed to senior citizens declined by $14.9 million (95% confidence interval $10.7 to $19.1 million). Most of these savings were due to the lower prices that Pharmacare paid for sustained-release nitroglycerin tablets and the nitroglycerin patch, which were the 2 most frequently prescribed nitrates before the introduction of reference-based pricing; $1.2 million (8%) of the savings represented expenditures by senior citizens who purchased drugs that were only partially reimbursed. There were no compensatory increases in expenditures for other anti-anginal drugs. Use of sublingual nitroglycerin--a marker for deteriorating health in patients with angina--did not increase after the introduction of reference-based pricing. The nitroglycerin patch is now the most frequently prescribed nitrate, owing to the fact that Pharmacare resumed the provision of full subsidies for the drug after its manufacturers voluntarily reduced retail prices. Evidence to date suggests that reference-based pricing of nitrates has achieved its primary goal of reducing drug expenditures. The effects of this policy on patient health, associated health care costs and administrative costs remain to be investigated.

Proposed 'grant-and-access' program with price caps could stimulate development of drugs for very rare diseases.

PubMed

Valverde, Ana M; Reed, Shelby D; Schulman, Kevin A

2012-11-01

The 1983 Orphan Drug Act created incentives for the development of orphan drugs. Despite its successes, including a substantial increase in new drugs, approved orphan drugs still treat fewer than 5 percent of registered rare diseases. In addition, concerns have arisen about the high prices of many of these therapies, which can cost hundreds of thousands of dollars per patient each year. In this article, we propose a new "grant-and-access pathway," in which drug developers could opt to compete for federal grants to subsidize the costs of clinical testing. In return for the grant funding, companies would no longer claim orphan drug tax credits and would agree to price caps for marketed products based on the duration and costs associated with drug development, expected market size, and target rate of return. We identify scenarios in which such a policy could provide a net benefit to society.

High medicine prices and poor affordability.

PubMed

Suh, Guk-Hee

2011-07-01

In developing countries, most people who need medicines have to pay for them out of their own pockets. This review focuses on publications to explore the affordability gap of medicines and ways to close it. Cardiovascular medicines were unaffordable in low-income to middle-income countries, whereas dementia medicines were only affordable in regions of wealth. In urban Mozambique, local mark-ups are up to two-thirds of final price in private pharmacies, whereas some governments consistently paid higher prices above the international reference prices to procure a number of medicines. Generics competition from India made an originator brand manufacturer of a AIDS drug willing to supply the drug at a cheaper rate to poorer countries, whereas a Brazilian national program to produce nonprofit generics against protected patent of originator brand products to provide free AIDS drugs had cut the number of people dying by half and hospitalization by 80%, which saved about half a billion US dollars, making the program almost fund itself. Although lowering the manufacturer's price has a greater effect on the cost, policies to eliminate duties and taxes on medicines and regulate mark-ups are practical strategies to avoid excessive add-on costs.

Managing prescription drug costs: a case study.

PubMed

DuBois, R W; Feinberg, P E

1994-06-01

Pharmacy costs in most private insurance companies and public concerns have risen over the past several years. To address the problem of increased expenditures in its government employee pharmacy program, the State of New York sought bids from outside vendors to help it control pharmaceutical costs. The following is a case study of the tools the state employed in that effort. Over time, both prescription drug coverage and mental health and substance abuse benefits were carved out of the medical plan and are now provided under free-standing programs. In order to participate, an independent pharmacy must accept a discount of 10% off the average wholesale price of brand name drugs and 25% off the average generic price of generic drugs.

Deeply discounted medications: Implications of generic prescription drug wars.

PubMed

Czechowski, Jessica L; Tjia, Jennifer; Triller, Darren M

2010-01-01

To describe the history of generic prescription pricing programs at major pharmacy chains and their potential implications on prescribing, quality of care, and patient safety. Publicly available generic prescription discount program drug lists as of May 1, 2009. Fierce competition among major pharmacy chains such as Walgreens, CVS, and Walmart has led to a generic prescription pricing war with unclear public health implications. Introduced in 2006, currently 7 of the 10 largest pharmacy chains advertise a version of a deeply discounted medication (DDM) program, accounting for more than 25,000 locations nationally. By early 2008, almost 70 million Americans had used these programs. Although DDM programs lower drug costs for many patients, DDM formularies include potentially ineffective or harmful medications, have the potential to influence physician prescribing behavior, and may impair pharmacists' ability to review complete drug-dispensing records. DDMs are widespread but have the potential for unintended consequences on patients, providers, and the health care system. A systematic review of DDMs needs to evaluate the clinical, economic, and system-level implications of such programs.

Needle Exchange Programs and Drug Injection Behavior

ERIC Educational Resources Information Center

DeSimone, Jeff

2005-01-01

This study examines how drug injection and needle sharing propensities respond when a needle exchange program (NEP) is introduced into a city. I analyze 1989-1995 Drug Use Forecasting data on adult male arrestees from 24 large U.S. cities, in nine of which NEPs opened during the sample period. After controlling for cocaine and heroin prices, AIDS…

The impact of reference pricing of nonsteroidal anti-inflammatory agents on the use and costs of analgesic drugs.

PubMed

Grootendorst, Paul V; Marshall, John K; Holbrook, Anne M; Dolovich, Lisa R; O'Brien, Bernie J; Levy, Adrian R

2005-10-01

To estimate the effect of reference pricing (RP) of nonsteroidal anti-inflammatory drugs (NSAIDs) on drug subsidy program and beneficiary expenditures on analgesic drugs. Monthly claims data from Pharmacare, the public drug subsidy program for seniors in British Columbia, Canada, over the period of February 1993 to June 2001. RP limits drug plan reimbursement of interchangeable medicines to a reference price, which is typically equal to the price of the lowest cost interchangeable drug; any cost above that is borne by the patient. Pharmacare introduced two different forms of RP to the NSAIDs, Type 1 in April 1994 and Type 2 in November 1995. Under Type 1 RP, generic and brand versions of the same NSAID are considered interchangeable, whereas under Type 2 RP different NSAIDs are considered interchangeable. We extrapolated average reimbursement per day of NSAID therapy over the months before RP to estimate what expenditures would have been without the policies. These counterfactual predictions were compared with actual values to estimate the impact of the policies; the estimated impacts on reimbursement rates were multiplied by the postpolicy volume of NSAIDS dispensed, which appeared unaffected by the policies, to estimate expenditure changes. After Type 2 RP, program expenditures declined by $22.7 million (CAN), or $4 million (CAN), annually cutting expenditure by about half. Most savings accrued from the substitution of low-cost NSAIDs for more costly alternatives. About 20 percent of savings represented expenditures by seniors who elected to pay for partially reimbursed drugs. Type 1 RP produced one-quarter the savings of type 2 RP. Type 2 RP of NSAIDs achieved its goal of reducing drug expenditures and was more effective than Type 1 RP. The effects of RP on patient health and associated health care costs remain to be investigated.

Estimating the price elasticity of expenditure for prescription drugs in the presence of non-linear price schedules: an illustration from Quebec, Canada.

PubMed

Contoyannis, Paul; Hurley, Jeremiah; Grootendorst, Paul; Jeon, Sung-Hee; Tamblyn, Robyn

2005-09-01

The price elasticity of demand for prescription drugs is a crucial parameter of interest in designing pharmaceutical benefit plans. Estimating the elasticity using micro-data, however, is challenging because insurance coverage that includes deductibles, co-insurance provisions and maximum expenditure limits create a non-linear price schedule, making price endogenous (a function of drug consumption). In this paper we exploit an exogenous change in cost-sharing within the Quebec (Canada) public Pharmacare program to estimate the price elasticity of expenditure for drugs using IV methods. This approach corrects for the endogeneity of price and incorporates the concept of a 'rational' consumer who factors into consumption decisions the price they expect to face at the margin given their expected needs. The IV method is adapted from an approach developed in the public finance literature used to estimate income responses to changes in tax schedules. The instrument is based on the price an individual would face under the new cost-sharing policy if their consumption remained at the pre-policy level. Our preferred specification leads to expenditure elasticities that are in the low range of previous estimates (between -0.12 and -0.16). Naïve OLS estimates are between 1 and 4 times these magnitudes. (c) 2005 John Wiley & Sons, Ltd.

AMCP Guide to Pharmaceutical Payment Methods, 2009 Update (Version 2.0).

PubMed

2009-08-01

The methods by which the U.S. health care system pays for prescription drugs have faced increasing scrutiny in recent years. Two key developments have emerged: (a) congressional enactment of important changes in the basis for payments for prescription drugs in the Medicare and Medicaid programs; and (b) a March 2009 decision in a federal class action lawsuit that alleged fraudulent manipulation of the dominant pricing benchmark (average wholesale price, AWP), used primarily as the basis for payment for brand-name prescription drugs. The debate about prescription drug payment methods centers on determining the most appropriate basis for calculating how payers, including patients, government agencies, employers, and health plans, should pay pharmacies and other providers for drugs. Historically, payment for prescription drugs has been based on published prices that do not necessarily reflect the actual acquisition costs paid by providers, primarily pharmacies, physicians, and hospitals. This has led policymakers to believe that Medicare and Medicaid programs have paid more than is necessary for prescription drugs. Thus, in an effort to reform the payment system and reduce drug expenditures, policymakers have made significant changes to the benchmarks used by public programs to pay for drugs, and in some instances have created new benchmarks. Private payers have followed the government's lead and begun to change their own payment methods and benchmarks. They can be expected to accelerate the change as a result of the settlement agreement approved in the March 2009 federal court decision. The settlement will result in the lowering of the AWP for more than 400 generic and brand-name drugs. In addition - and technically unrelated to the litigation and any appeals that may be taken - 2 major price data reporting companies, First DataBank and Medi-Span, announced their intent to discontinue publication of AWP within 2 years of September 26, 2009. (At the time this report was prepared, there have been no similar announcements from Thomson Healthcare for Redbook or from Elsevier for Gold Standard [ProspectoRx], who are 2 other publishers of prescription drug prices). Furthermore, several manufacturers have announced that they will no longer provide either an AWP or a markup percentage on certain pharmaceuticals.3 Thus, by 2011, the AWP benchmark as we know it will no longer be widely available for use by public or commercial payers for payment of pharmaceutical products.

Pharmaceuticals in Australia: priorities in a teaching hospital.

PubMed

Kearney, B J

1993-01-01

In spite of rigorous government programs for control of the pricing and dissemination of pharmaceutical products in Australia, the list of new drugs continues to grow and prices to increase. To regain control over drug usage at Royal Adelaide Hospital, the Hospital Drug Committee developed a rating method that judged drugs on the basis of their cost-benefit to patients. The ratio of a total quality score to a total cost score becomes the determinant of additions to the hospital formulary. The background for the Australian approach to pharmaceuticals and the new evaluation technique at the teaching hospital are described in this report.

The Impact of Price-cap Regulations on Exit by Generic Pharmaceutical Firms.

PubMed

Zhang, Wei; Guh, Daphne; Sun, Huiying; Marra, Carlo A; Lynd, Larry D; Anis, Aslam H

2016-09-01

In 1998, the Province of Ontario in Canada adopted price-cap "70/90" regulations whereby the first generic entrant was required to be priced at ≤70% of the associated brand-name product and subsequent generics were priced at ≤90% of the first generic price. The price-caps were further lowered to 50% in 2006 and 25% in 2010. This study assessed the impact of such price-cap regulations on exit by generic drug firms. Formulary (2003-2012) listings of prescription drugs covered under the Ontario Drug Benefit program were used. The formulary tracks the "status" (on formulary, discontinued by manufacturer, and delisted for other reasons) for each drug. Markets were defined based on unique active ingredient and form within Ontario. Firm exit occurred when a manufacturer discontinued all its generic drugs within a market. The exit rate was defined as the number of generic firm-market exits divided by total generic firm-market follow-up years. Poisson regression was used to compare the exit rates during the 3 policy periods ("25," "50," and "70/90"). A total of 1126 generic manufacturers paired with 290 markets were identified. The exit rate ratio during the 25% price-cap period compared with the 70%/90% period was 2.42 (95% confidence interval, 1.56-3.77). A small manufacturer or a manufacturer in a market with ≥3 competitors or in an older market was more likely to exit. Lowering the price-cap level is associated with a higher incidence of generic firm exit from markets. Continuously reducing price-caps may have the unintended consequence of forcing generic firms to exit.

The upward spiral of drug costs: a time series analysis of drugs used in the treatment of hemophilia.

PubMed

Rogoff, Edward G; Guirguis, Hany S; Lipton, Richard A; Seremetis, Stephanie V; DiMichele, Donna M; Agnew, George M; Karpatkin, Margaret; Barish, Robert J; Jones, Robert L; Bianco, Celso; Knothe, Barbara D; Lee, Myung-Soo

2002-10-01

Hemophilia is an expensive disease because its treatment is heavily dependent on costly clotting factor drugs. Over the last nine years,a consortium of three Comprehensive Hemophilia Treatment Centers and other hospitals, which purchased clotting factors for their patients, has seen treatment costs escalate on average 17% annually. Currently, new, even more expensive drugs are entering the market. This study analyzes 3,244 purchases that were made over a nine-year period totaling nearly 500 million units of clotting factor, representing every product on the market. Purchases were made both apart from and under the Federal Public Health Service (PHS)discount pricing rules. The main cause of the increases was the move to newer, more expensive products. The average price of existing products increased less than 2%per year, but new products were priced, on average, 47% higher than existing products. Overall consumption increased by an average of 5% per year, likely reflecting prophylactic treatment modalities that require greater amounts of clotting factor. Government pricing programs, such as the PHS program, were ineffective or counterproductive at reducing costs. There is a notable absence of competition in this market, with a few dominant companies having a functional monopoly in the largest segments of the market. Prices of older products are not lowered, even when new products are brought to market. A few products that serve small patient groups have had their prices increased substantially. This escalation is likely to continue as new, more expensive clotting factor drugs are developed. Since these new products are not proven to be any safer or more effective than the current products, this situation creates a risk of intervention by government and insurers to address both treatment costs and exhaustion of patients' insurance caps. Drug companies are not serving the patients by pricing new, but often very similar, products so aggressively. The trends seen in this patient group will likely be seen in other patient groups in the future. Ultimately, doctors and patients will lose treatment options and health care availability unless collaborative strategies are developed to reduce costs.

One fish, two fish, red fish, blue fish: effects of price frames, brand names, and choice set size on Medicare Part D insurance plan decisions.

PubMed

Barnes, Andrew J; Hanoch, Yaniv; Wood, Stacey; Liu, Pi-Ju; Rice, Thomas

2012-08-01

Because many seniors choose Medicare Part D plans offering poorer coverage at greater cost, the authors examined the effect of price frames, brand names, and choice set size on participants' ability to choose the lowest cost plan. A 2×2×2 within-subjects design was used with 126 participants aged 18 to 91 years old. Mouselab, a web-based program, allowed participants to choose drug plans across eight trials that varied using numeric or symbolic prices, real or fictitious drug plan names, and three or nine drug plan options. Results from the multilevel models suggest numeric versus symbolic prices decreased the likelihood of choosing the lowest cost plan (-8.0 percentage points, 95% confidence interval=-14.7 to -0.9). The likelihood of choosing the lowest cost plan decreased as the amount of information increased suggesting that decision cues operated independently and collectively when selecting a drug plan. Redesigning the current Medicare Part D plan decision environment could improve seniors' drug plan choices.

Patents, Innovation, and the Welfare Effects of Medicare Part D*

PubMed Central

Gailey, Adam; Lakdawalla, Darius; Sood, Neeraj

2013-01-01

Purpose To evaluate the efficiency consequences of the Medicare Part D program. Methods We develop and empirically calibrate a simple theoretical model to examine the static and dynamic welfare effects of Medicare Part D. Findings We show that Medicare Part D can simultaneously reduce static deadweight loss from monopoly pricing of drugs and improve incentives for innovation. We estimate that even after excluding the insurance value of the program, the welfare gain of Medicare Part D roughly equals its social costs. The program generates $5.11 billion of annual static deadweight loss reduction, and at least $3.0 billion of annual value from extra innovation. Implications Medicare Part D and other public prescription drug programs can be welfare-improving, even for risk-neutral and purely self-interested consumers. Furthermore, negotiation for lower branded drug prices may further increase the social return to the program. Originality This study demonstrates that pure efficiency motives, which do not even surface in the policy debate over Medicare Part D, can nearly justify the program on their own merits. PMID:20575239

Controlling and policing substance use(rs).

PubMed

White, Tony

2002-01-01

Controlling drug use--a dynamic, global, politicalized process--is reviewed in terms of selected types of drugs, "natural levels" of drug demand and use, drug markets and the drug market environment, types of traffickers, illicit drug trade profits, approaches to drug control ("War on Drugs", "Zero Tolerance" programs and policies, "normalizing" and legalizing selected drugs), including UN's then relatively recent "Balanced Approach" and facets of drug law enforcement (drug prices and purity levels and values of drug seizures), including various rarely noted benefits to intervention programs and control agents. Unresolved issues and needed "tools" are noted while considering the implications of the first UN's World Drug Report data.

75 FR 69591 - Medicaid Program; Withdrawal of Determination of Average Manufacturer Price, Multiple Source Drug...

Federal Register 2010, 2011, 2012, 2013, 2014

2010-11-15

... issue a proposed regulation addressing the Affordable Care Act provisions. Inhalation, Infusion..., infusion, instilled, implanted and injectable drugs that are not generally dispensed through retail... publish a list of drugs that meet the statutory definition of inhalation, infusion, instilled, implanted...

Generic drugs: international trends and policy developments in Australia.

PubMed

Lofgren, Hans

2004-01-01

Public and private third-party payers in many countries encourage or mandate the use of generic drugs. This article examines the development of generics policy in Australia, against the background of a description of international trends in this area, and related experiences of reference pricing programs. The Australian generics market remains underdeveloped due to a historical legacy of small Pharmaceutical Benefits Scheme price differentials between originator brands and generics. It is argued that policy measures open to the Australian government can be conceived as clustering around two different approaches: incremental changes within the existing regulatory framework, or a shift towards a high volume/low price role of generics which would speed up the delivery of substantial cost savings, and could provide enhanced scope for the financing of new, patented drugs.

Innovation and The Welfare Effects of Public Drug Insurance*

PubMed Central

Lakdawalla, Darius; Sood, Neeraj

2010-01-01

Rewarding inventors with inefficient monopoly power has long been regarded as the price of encouraging innovation. Prescription drug insurance escapes that trade-off and achieves an elusive goal: lowering static deadweight loss, without reducing incentives for innovation. As a result of this feature, the public provision of drug insurance can be welfare-improving, even for risk-neutral and purely self-interested consumers. The design of insurers’ cost-sharing schedules can either reinforce or mitigate this result. Schedules that impose higher consumer cost-sharing requirements on more expensive drugs help ensure that insurance subsidies translate into higher utilization, rather than pure increases in manufacturer profits. Moreover, some degree of price-negotiation with manufacturers is likely to be welfare-improving, but the optimal degree depends on the size of such transactions costs, as well as the social cost of weakening innovation incentives by lowering innovator profits. These results have practical implications for the evaluation of public drug insurance programs like the US Medicaid and Medicare Part D programs, along with European insurance schemes. PMID:20454467

Equitable Prices of Single-Source Drugs in Thailand.

PubMed

Ngorsuraches, Surachat; Chaiyakan, Kanokkan

2015-08-01

In Thailand, total drug expenditure has grown rapidly. Recently, the Thai government has addressed the issue of drug pricing, but the prices of single-source drugs remain a major challenge. To examine equitable prices of single-source drugs in Thailand. A total of 98 single-source and high-expenditure drugs were examined. Unit prices from the Drug and Medical Supplies Information Center (DMSIC) and National Average Drug Acquisition Cost (NADAC) were used to represent drug prices at the provider level in Thailand and the U.S., respectively. Data for measuring drug affordability, e.g., dose and poverty line, were obtained from Micromedex online and the National Statistical Office (NSO). The U.S. drug prices were adjusted by the Human Development Index (HDI) to be equitable prices for Thailand. Purchasing Power Parity (PPP) was used to convert US currency into Thai baht. All prices in this study were based on the year 2012. Catastrophic, Impoverishment, and WHO/Health Action International (HAI) approaches were used to determine Thai citizens' ability to afford the study drugs. Finally, uncertainty analyses were conducted. From all study drugs, 55 single-source drugs were priced higher than their equitable prices, ranging from 0.38 to 422.36% higher. Among these, 28 items were antineoplastic drugs. The prices of drugs outside the National List of Essential Medicines (NLEM), as well as the country's newer drugs, tended to be higher than their calculated equitable prices. The majority of drugs in Thailand priced higher than equitable prices were unaffordable for most Thai citizens. The uncertainty analyses revealed that almost all results were relatively robust. Most single-source drug prices in Thailand were higher than their equitable prices, and were likely to be unaffordable to Thai citizens.

The Effect of Pharmaceutical Patent Term Length on Research and Development and Drug Expenditures in Canada

PubMed Central

Grootendorst, Paul; Matteo, Livio Di

2007-01-01

While pharmaceutical patent terms have increased in Canada, increases in patented drug spending have been mitigated by price controls and retrenchment of public prescription drug subsidy programs. We estimate the net effects of these offsetting policies on domestic pharmaceutical R&D expenditures and also provide an upper-bound estimate on the effects of these policies on Canadian pharmaceutical spending over the period 1988–2002. We estimate that R&D spending increased by $4.4 billion (1997 dollars). Drug spending increased by $3.9 billion at most and, quite likely, by much less. Cutbacks to public drug subsidies and the introduction of price controls likely mitigated drug spending growth. In cost–benefit terms, we suspect that the patent extension policies have been beneficial to Canada. PMID:19305720

Effect of privatization of the drug distribution system on drug prices in Malaysia.

PubMed

Babar, Z D; Izham, M I M

2009-08-01

Previous studies on anti-infective and cardiovascular drugs have shown extraordinary price increases following privatization of the Malaysian drug distribution system. Therefore, it was felt that there was a need to undertake a full-scale study to evaluate the effect of privatization of the Malaysian drug distribution system on drug prices. To compare pre-privatization drug prices with post-privatization drug prices, and to compare the prices with international reference prices (IRPs). Five hundred and sixty-four drugs were listed in price lists for 1994, 1995-1996, 1997-2000 and 2001-2003. The 1994 data were taken as the pre-privatization prices, and all other lists were considered to be post-privatization prices. The pre-privatization prices (1994) were compared with those in 1995-1996. The prices in 1995-1996 were compared with those in 1997-2000, and the 1997-2000 prices were compared with those in 2001-2003. Furthermore, the 2001-2003 prices were compared with the median IRPs taken from Management Sciences for Health. The prices increased by 10.42% in 1995-1996, decreased by 3.37% in 1997-2000, and increased by 64.04% in 2001-2003. The increase in prices does not follow any pricing formula but is influenced by free market principles. The commonly used generic drugs showed enormously higher prices compared with the IRPs. Some of the prices increased several hundred-fold compared with the previous year, showing that no pricing formula has been followed. Increasing prices over the years may lead to higher expenditures and a hurdle to drug accessibility. A rational pricing structure is needed for transparent pricing, and government involvement and the formation of a medicine pricing policy seems vital.

Hopping on the methadone bus.

PubMed

Lippert, Steffen; Schumacher, Christoph

2009-05-01

This paper investigates the impact of a 'free drug program' on the market equilibrium of drugs. We introduce a screening model of the hard drug market in which dealers use payment and punishment options to screen between high and low risk users. We show that, if a free drug program selects sufficiently many high-risk drug users, the pure-strategy separating market equilibrium ceases to exist and a symmetric mixed-strategy equilibrium results, in which drug users derive a higher expected utility. This encourages new drug users to enter the market. The novelty of the paper is the transmission mechanism for this effect, which is via the influence on market price.

Demand for a Medicare prescription drug benefit: exploring consumer preferences under a managed competition framework.

PubMed

Cline, Richard R; Mott, David A

2003-01-01

Several proposals for adding a prescription drug benefit to the Medicare program rely on consumer choice and market forces to promote efficiency. However, little information exists regarding: 1) the extent of price sensitivity for such plans among Medicare beneficiaries, or 2) the extent to which drug-only insurance plans using various cost-control mechanisms might experience adverse selection. Using data from a survey of elderly Wisconsin residents regarding their likely choices from a menu of hypothetical drug plans, we show that respondents are likely to be price sensitive with respect to both premiums and out-of-pocket costs but that selection problems may arise in these markets. Outside intervention may be necessary to ensure the feasibility of a market-based approach to a Medicare drug benefit.

Antiretroviral drug expenditure, pricing and judicial demand: an analysis of federal procurement data in Brazil from 2004–2011

PubMed Central

2014-01-01

Background Previous studies have described expenditures for antiretroviral (ARV) medicines in Brazil through 2005. While prior studies examined overall expenditures, they have not have analyzed drug procurement data in order to describe the role of court litigation on access and pricing. Methods ARV drug procurement from private sector sources for the years 2004–2011 was obtained through the general procurement database of the Brazilian Federal Government (SIASG). Procurement was measured in Defined Daily Doses (DDD) per 1000 persons-under-treatment per day. Expenditures and price per DDD were calculated and expressed in U.S. Dollars. Justifications for ARV purchases were examined in order to determine the relationship between health litigation and incorporation into Brazil’s national treatment guidelines. Results Drug procurement of ARVs from private sources underwent marked expansion in 2005, peaked in 2009, and stabilized to 2008 levels by 2011. Expenditures followed procurement curves. Medications which were procured for the first time after 2007 cost more than medicines which were introduced before 2007. Judicial actions initially resulted in purchases of newer medications for a select number of patients in Brazil but ultimately expanded availability to a larger population through incorporation into the national treatment guidelines. Conclusions Drug procurement and expenditures for ARVs in Brazil varied between 2004–2011. The procurement of some drugs from the private sector ceased after public manufacturers started producing them locally. Judicial demand has resulted in the incorporation of newer drugs into the national treatment guidelines. In order for the AIDS treatment program to remain sustainable, efforts should be pursued to reduce prices through generic drugs, price negotiation and other public health flexibilities such as compulsory licensing. PMID:24735589

Antiretroviral drug expenditure, pricing and judicial demand: an analysis of federal procurement data in Brazil from 2004-2011.

PubMed

Luo, Jing; Oliveira, Maria A; Ramos, Mariana B C; Maia, Aurélio; Osorio-de-Castro, Claudia G S

2014-04-16

Previous studies have described expenditures for antiretroviral (ARV) medicines in Brazil through 2005. While prior studies examined overall expenditures, they have not have analyzed drug procurement data in order to describe the role of court litigation on access and pricing. ARV drug procurement from private sector sources for the years 2004-2011 was obtained through the general procurement database of the Brazilian Federal Government (SIASG). Procurement was measured in Defined Daily Doses (DDD) per 1000 persons-under-treatment per day. Expenditures and price per DDD were calculated and expressed in U.S. Dollars. Justifications for ARV purchases were examined in order to determine the relationship between health litigation and incorporation into Brazil's national treatment guidelines. Drug procurement of ARVs from private sources underwent marked expansion in 2005, peaked in 2009, and stabilized to 2008 levels by 2011. Expenditures followed procurement curves. Medications which were procured for the first time after 2007 cost more than medicines which were introduced before 2007. Judicial actions initially resulted in purchases of newer medications for a select number of patients in Brazil but ultimately expanded availability to a larger population through incorporation into the national treatment guidelines. Drug procurement and expenditures for ARVs in Brazil varied between 2004-2011. The procurement of some drugs from the private sector ceased after public manufacturers started producing them locally. Judicial demand has resulted in the incorporation of newer drugs into the national treatment guidelines. In order for the AIDS treatment program to remain sustainable, efforts should be pursued to reduce prices through generic drugs, price negotiation and other public health flexibilities such as compulsory licensing.

Tiered co-payments, pricing, and demand in reference price markets for pharmaceuticals.

PubMed

Herr, Annika; Suppliet, Moritz

2017-12-01

Health insurance companies curb price-insensitive behavior and the moral hazard of insureds by means of cost-sharing, such as tiered co-payments or reference pricing in drug markets. This paper evaluates the effect of price limits - below which drugs are exempt from co-payments - on prices and on demand. First, using a difference-in-differences estimation strategy, we find that the new policy decreases prices by 5 percent for generics and increases prices by 4 percent for brand-name drugs in the German reference price market. Second, estimating a nested-logit demand model, we show that consumers appreciate co-payment exempt drugs and calculate lower price elasticities for brand-name drugs than for generics. This explains the different price responses of brand-name and generic drugs and shows that price-related co-payment tiers are an effective tool to steer demand to low-priced drugs. Copyright © 2017 Elsevier B.V. All rights reserved.

International drug price comparisons: quality assessment.

PubMed

Machado, Márcio; O'Brodovich, Ryan; Krahn, Murray; Einarson, Thomas R

2011-01-01

To quantitatively summarize results (i.e., prices and affordability) reported from international drug price comparison studies and assess their methodological quality. A systematic search of the most relevant databases-Medline, Embase, International Pharmaceutical Abstracts (IPA), and Scopus, from their inception to May 2009-was conducted to identify original research comparing international drug prices. International drug price information was extracted and recorded from accepted papers. Affordability was reported as drug prices adjusted for income. Study quality was assessed using six criteria: use of similar countries, use of a representative sample of drugs, selection of specific types of prices, identification of drug packaging, different weights on price indices, and the type of currency conversion used. Of the 1 828 studies identified, 21 were included. Only one study adequately addressed all quality issues. A large variation in study quality was observed due to the many methods used to conduct the drug price comparisons, such as different indices, economic parameters, price types, basket of drugs, and more. Thus, the quality of published studies was considered poor. Results varied across studies, but generally, higher income countries had higher drug prices. However, after adjusting drug prices for affordability, higher income countries had more affordable prices than lower income countries. Differences between drug prices and affordability in different countries were found. Low income countries reported less affordability of drugs, leaving room for potential problems with drug access, and consequently, a negative impact on health. The quality of the literature on this topic needs improvement.

Drug Information Units Project: A Resource Directory of Available Drug Education Information at Ashland Community College.

ERIC Educational Resources Information Center

Ashland Community Coll., KY.

This bibliography provides a list of print and nonprint materials available at Ashland Community College (ACC) that deal with drug abuse education and prevention, along with information on other resources. Information on title, vendor, purchase price, and author is available for 10 books; 18 booklets; 2 audiocassette programs; 13 miscellaneous…

76 FR 54599 - Medicare Program; Medicare Advantage and Prescription Drug Benefit Programs

Federal Register 2010, 2011, 2012, 2013, 2014

2011-09-01

... pricing, coverage, and payment processes in the Part D program, and requirements governing the marketing.... Camille Brown, (410) 786-0274, Marketing issues. SUPPLEMENTARY INFORMATION: I. Background The Balanced... the Secretary to revise the marketing requirements for Part C and Part D plans in several areas. MIPPA...

77 FR 33226 - Agency Information Collection Activities: Submission for OMB Review; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2012-06-05

... Pricing Program while maintaining efficiency, transparency and integrity, the HRSA Office of Pharmacy... minimal for submitting change requests. Contract Pharmacy Self-Certification In order to ensure that drug manufacturers and drug wholesalers recognize contract pharmacy arrangements, covered entities that elect to...

77 FR 42747 - Agency Information Collection Activities: Submission for OMB Review; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2012-07-20

... Pricing Program while maintaining efficiency, transparency and integrity, the HRSA Office of Pharmacy... requests. Contract Pharmacy Self-Certification In order to ensure that drug manufacturers and drug wholesalers recognize contract pharmacy arrangements, covered entities that elect to utilize one or more...

Changes in Retail Prices of Prescription Dermatologic Drugs From 2009 to 2015.

PubMed

Rosenberg, Miranda E; Rosenberg, Steven P

2016-02-01

Physicians from many specialties as well as primary care prescribe dermatologic medications; as insurance formularies become increasingly restrictive and more patients are covered with high-deductible insurance plans, many patients are forced to pay high retail prices to obtain their medications. To determine the changes in the prices of commonly prescribed dermatologic medications since 2009 and to identify trends in price increases for different classes of drugs. Four national chain pharmacies received surveys requesting price data on commonly prescribed dermatologic drugs in 2009, 2011, 2014, and 2015. The initial survey requested information on 72 brand-name drugs. Subsequent surveys increased to eventually include 120 additional brand-name drugs and their generic alternatives when available. Owing to the frequency of prescription, diseases treated, or unusual price increases, 19 brand-name drugs surveyed in all 4 years were selected for final price trend analysis, which was conducted from August 1 to 15, 2015. Retail prices of topical and systemic drugs for the treatment of various dermatologic conditions. Prices of surveyed brand-name drugs increased rapidly between 2009 and 2015. Of the 19 brand-name drugs analyzed, the retail prices of 7 drugs more than quadrupled during the study period. Among these 19 drugs, the mean price increase was 401% during the 6-year survey period, with the majority of the price increases occurring after 2011. Prices of topical antineoplastic drugs had the greatest mean absolute and percentage increase ($10,926.58 [1240%]). Prices of drugs in the antiinfective class had the smallest mean absolute increase ($333.99); prices of psoriasis medications had the smallest mean percentage increase (180%). Prices of acne and rosacea medications increased a mean of 195%, and prices of topical corticosteroids increased a mean of 290% during the study period. Selected generic drugs surveyed in 2011 and 2014 also increased a mean of 279% during the 3-year period. The price of prescription dermatologic drugs rose considerably from 2009 to 2015, with the vast majority of price increases occurring after 2011. Percent increases for multiple, frequently prescribed medications greatly outpaced inflation, national health expenditure growth, and increases in reimbursements for physician services.

OSTEOPOROSIS DRUGS MARKETED IN THE UNITED STATES: GENERIC COMPETITION, PRICING STRUCTURE, AND DISPERSION AMONG PAYERS.

PubMed

Balkhi, Bander; Seoane-Vazquez, Enrique; Rodriguez-Monguio, Rosa

2016-01-01

Despite the cost of pharmaceuticals, studies assessing prices of osteoporosis drugs are lacking. This study examined trends in prices of osteoporosis drugs in the United States in the period 1988-2014, assessed pricing structure of osteoporosis drugs, and evaluated price trends before and after generic drugs market entry. Data were derived from the U.S. Food and Drug Administration, the RedBook, the Centers for Medicare & Medicaid Services, and the Federal Supply Schedule (FSS). Descriptive statistics and segmented linear regression analyses were performed. In the period 1988-2014, osteoporosis drug prices increased faster than the inflation. The average wholesale price (AWP) of generic products at market entry represented 90 percent of the AWP for the corresponding brand. Prices of brand products continued to increase after generic entry. Drug prices showed a significant variation when compared with the brand AWP. The brand wholesale acquisition cost (WAC) was typically set at 83.3 percent of the AWP. Community pharmacies acquired osteoporosis brand drugs at a median of 80.5 percent of the brand AWP. Significant reductions in brand AWP were observed for Medicare Part B (78.5 percent of the brand AWP), generic National Average Drug Acquisition Cost (33.7 percent), and FSS (22.5 percent). There are significant differences in the manufacturer prices, pharmacy acquisition costs and reimbursement rates of osteoporosis drugs. Pharmaceutical companies listed prices are higher than the pharmacy actual estimated acquisitions costs, and the prices used for reimbursement to providers. Generic drugs entry significantly drives down prices; still, prices of branded drugs facing generic competition continued to increase after generic market entry.

Effects of regulation on drug launch and pricing in interdependent markets.

PubMed

Danzon, Patricia M; Epstein, Andrew J

2012-01-01

This study examines the effect of price regulation and competition on launch timing and pricing of new drugs. Our data cover launch experience in 15 countries from 1992 to 2003 for drugs in 12 major therapeutic classes. We estimate a two-equation model of launch hazard and launch price of new drugs. We find that launch timing and prices of new drugs are related to a country's average prices of established products in a class. Thus to the extent that price regulation reduces price levels, such regulation directly contributes to launch delay in the regulating country. Regulation by external referencing, whereby high-price countries reference low-price countries, also has indirect or spillover effects, contributing to launch delay and higher launch prices in low-price referenced countries. Referencing policies adopted in high-price countries indirectly impose welfare loss on low-price countries. These findings have implications for US proposals to constrain pharmaceutical prices through external referencing and drug importation.

The Commercial Market For Priority Review Vouchers.

PubMed

Ridley, David B; Régnier, Stephane A

2016-05-01

In 2007 the US Congress created the priority review voucher program to encourage the development of drugs for neglected diseases. Under the program, the developer of a drug that treats a neglected disease receives both a faster review of the drug by the Food and Drug Administration and a voucher for a faster review of a different drug. The developer can sell the voucher. We estimated the commercial value of the voucher using US sales of new treatments approved in the period 2007-09. A third of the commercial value of a voucher comes from capturing market share from competitors, nearly half from the value of earlier sales because of the expedited review, and less than a quarter from lengthening the time between approval and the launch of a generic competitor. We estimate that if only one priority review voucher is available in a year, it will be worth more than $200 million, but if four vouchers are available, the value could fall below $100 million. Congress should be cautious about expanding the voucher program, because increasing the number of vouchers sharply decreases the expected price. Lower voucher prices could undermine the incentive to develop new medicines for neglected diseases. Project HOPE—The People-to-People Health Foundation, Inc.

Factors influencing the difference between forecasted and actual drug sales volumes under the price-volume agreement in South Korea.

PubMed

Park, Sun-Young; Han, Euna; Kim, Jini; Lee, Eui-Kyung

2016-08-01

This study analyzed factors contributing to increases in the actual sales volumes relative to forecasted volumes of drugs under price-volume agreement (PVA) policy in South Korea. Sales volumes of newly listed drugs on the national formulary are monitored under PVA policy. When actual sales volume exceeds the pre-agreed forecasted volume by 30% or more, the drug is subject to price-reduction. Logistic regression assessed the factors related to whether drugs were the PVA price-reduction drugs. A generalized linear model with gamma distribution and log-link assessed the factors influencing the increase in actual volumes compared to forecasted volume in the PVA price-reduction drugs. Of 186 PVA monitored drugs, 34.9% were price-reduction drugs. Drugs marketed by pharmaceutical companies with previous-occupation in the therapeutic markets were more likely to be PVA price-reduction drugs than drugs marketed by firms with no previous-occupation. Drugs of multinational pharmaceutical companies were more likely to be PVA price-reduction drugs than those of domestic companies. Having more alternative existing drugs was significantly associated with higher odds of being PVA price-reduction drugs. Among the PVA price-reduction drugs, the increasing rate of actual volume compared to forecasted volume was significantly higher in drugs with clinical usefulness. By focusing the negotiation efforts on those target drugs, PVA policy can be administered more efficiently with the improved predictability of the drug sales volumes. Copyright © 2016 Elsevier Ireland Ltd. All rights reserved.

42 CFR 423.871 - Contract terms and conditions.

Code of Federal Regulations, 2012 CFR

2012-10-01

... following: (i) Costs. The entity contains costs to the Medicare Prescription Drug Account and to Part D... such as generic substitution and price discounts. (ii) Quality programs. The entity provides the... a fallback entity includes terms for payment for— (1) The actual costs of covered Part D drugs...

42 CFR 423.871 - Contract terms and conditions.

Code of Federal Regulations, 2013 CFR

2013-10-01

... following: (i) Costs. The entity contains costs to the Medicare Prescription Drug Account and to Part D... such as generic substitution and price discounts. (ii) Quality programs. The entity provides the... a fallback entity includes terms for payment for— (1) The actual costs of covered Part D drugs...

The Medicaid Rebate: Changes in Oncology Drug Prices After the Affordable Care Act.

PubMed

Bonakdar Tehrani, Ali; Carroll, Norman V

2017-08-01

Prescription drug spending is a significant component of Medicaid total expenditures. The Affordable Care Act (ACA) includes a provision that increases the Medicaid rebate for both brand-name and generic drugs. This study examines the extent to which oncology drug prices changed after the increase in the Medicaid rebate in 2010. A pre-post study design was used to evaluate the correlation between the Medicaid rebate increase and oncology drug prices after 2010 using 2006-2013 State Drug Utilization Data. The results show that the average annual price of top-selling cancer drugs in 2006, adjusted for inflation and secular changes in drug prices, have increased by US$154 and US$235 for branded and competitive brand drugs, respectively, following the 2010 ACA; however, generic oncology drug prices showed no significant changes. The findings from this study indicate that oncology drug prices have increased after the 2010 ACA, and suggest that pharmaceutical companies may have increased their drug prices to offset increases in Medicaid rebates.

Effective policy initiatives to constrain lipid-lowering drug expenditure growth in South Korea.

PubMed

Bae, Green; Park, Chanmi; Lee, Hyejin; Han, Euna; Kim, Dong-Sook; Jang, Sunmee

2014-03-03

The rapid growth of prescription drug expenditures is a major problem in South Korea. Accordingly, the South Korean government introduced a positive listing system in 2006. They also adopted various price reduction policies. Nevertheless, the total expenditure for lipid-lowering drugs have steadily increased throughout South Korea. The present study explores the factors that have influenced the increased expenditures of lipid-lowering drugs with a particular focus on the effects of statins in this process. This paper investigates the National Health Insurance claims data for prescribed lipid-lowering drugs collected between January 1, 2005 and December 31, 2009. We specifically focused on statins and assessed the yearly variation of statin expenditure by calculating the increased rate of paired pharmaceutical expenditures over a 2 year period. Our study classified statins into three categories: new entrants, core medicines and exiting medicines. For core medicines, we further examined influencing factors such as price, amount of drugs consumed by volume, and prescription changes (substitutes for other drug). Statin expenditure showed an average annual increase of 25.7% between 2005 and 2009. Among the different statins, the expenditure of atorvastatin showed a 36.6% annual increase rate, which was the most dramatic among all statins. Also we divided expenditure for core medicines by the price factor, volume factor, and prescription change. The result showed that annual weighted average prices of individual drug decreased each year, which clearly showed that price influenced statin expenditure in a negative direction. The use of generic drugs containing the same active ingredient as name-brand drugs increased and negatively affected statin expenditure (Generic Mix effect). However, the use of relatively expensive ingredients within statin increase, Ingredient Mix effect contributed to increased statin expenditure (Ingredient Mix effect). In particular, the volume effect was found to be critical for increasing statin expenditure as the amount of statin consumed increased steadily throughout the study period. The recent rapid increase in statin expenditure can largely be attributed to an increase in consumption volume. In order to check drug expenditures effectively in our current situation, in which chronic diseases remain steadily on the rise, it is necessary to not only have supply-side initiatives such as price reduction, but also demand-side initiatives that could control drug consumption volume, for example: educational programs for rational prescription, generic drug promotional policies, and policies providing prescription targets.

Nontraditional Career Opportunities for Pharmacists

PubMed Central

Bai, Sandra; Hertig, John B.; Weber, Robert J.

2016-01-01

The changing landscape of health care mirrors that of health-system pharmacy, with pharmacists' scope of practice and provider status being the most significant changes. This creates new roles and opportunities; many of these roles are considered to be nontraditional in today's practice. This article reviews some new roles for pharmacy leaders that provide different career options and pathways. Nontraditional career opportunities discussed include expanded consulting roles in pricing analytics and drug pricing programs (contracting, 340B programs), pharmacogenomics patient consult services and clinics, specialty drug pharmacies, and compounding pharmacy services. To continue to develop high-performing pharmacy departments, pharmacy directors should recognize these roles and ensure they are clearly defined and managed. With the advent of these nontraditional opportunities, pharmacy departments can further expand their ability to provide advanced patient-centered pharmacy services. PMID:28057956

The effect of methamphetamine and heroin price on polydrug use: A behavioural economics analysis in Sydney, Australia.

PubMed

Chalmers, Jenny; Bradford, Deborah; Jones, Craig

2010-09-01

A key aim of supply-side drug law enforcement is to reduce drug use by increasing the retail price of drugs. Since most illicit drug users are polydrug users the effectiveness of this strategy depends on the extent to which drug users reduce their overall consumption of drugs. The literature shows that drug users do reduce their consumption of a drug when its price increases. However the extent of that decrease and the implications for the use of other drugs vary across studies. A sample of 101 Australian methamphetamine users was surveyed using a behavioural economics approach. Participants were given a hypothetical fixed drug budget, presented with a range of drug price lists and asked how many units of each drug they would purchase. Methamphetamine and heroin prices were varied independently across trials. While demand for both methamphetamine and heroin was found to be price elastic, elasticity estimates were influenced by the nature of participants' drug dependence. The group least responsive to changes in methamphetamine price were those dependent only on methamphetamine, while the group most responsive were dependent only on heroin. Similar findings emerged in relation to changes in heroin price. Cross-price elasticity analysis showed limited substitution into other drugs as the price of methamphetamine increased. In contrast, for heroin, there was significant substitution into pharmaceutical opioids and to a lesser extent, benzodiazepines and methamphetamine. However, for the most part, the decreases in methamphetamine or heroin consumption outweighed any substitution into other drugs. The reduction in overall drug consumption and expenditure in response to price increases in heroin and methamphetamine observed in this sample lend support to supply-side enforcement strategies that aim to increase retail drug price. Notably, this analysis highlights the importance of accounting for the nature of users' drug dependence in estimating price responsiveness. Copyright 2010 Elsevier B.V. All rights reserved.

Using 340B drug discounts to provide a financially sustainable medication discharge service.

PubMed

Wu, Timothy; Williams, Carla; Vranek, Kathryn; Mattingly, T Joseph

2018-03-27

The 340B Drug Pricing Program was intended to stretch federal resources by providing significant discounts to covered entities providing care to underserved populations. Program implementation and evidence of expanding services to higher income patients has brought more scrutiny and calls for elimination of the program. While additional review and reform may be warranted, profitability from 340B discounts enables covered entities to provide additional services that may not be feasible in absence of the program. This case report demonstrates one institution's use of 340B discounts to financially justify providing bedside medication delivery services for patients at the time of discharge from an inpatient admission. A simple financial model was developed using hospital data and inputs from available literature to estimate gross profit and earnings before interest, taxes, depreciation, and amortization (EBITDA) with and without 340B discounts. Without the 340B drug price discounts, the service would operate at a financial loss, and further investigation must be done to determine whether other clinical or economic benefits would warrant discharge medication delivery at the institution. Copyright © 2018 The Authors. Published by Elsevier Inc. All rights reserved.

Price regulation and generic competition in the pharmaceutical market.

PubMed

Dalen, Dag Morten; Strøm, Steinar; Haabeth, Tonje

2006-09-01

In March 2003 the Norwegian government implemented yardstick-based price regulation schemes on a selection of drugs subjected to generic competition. The retail price cap, termed the "index price," on a drug (chemical substance) was set equal to the average of the three lowest producer prices on that drug, plus a fixed wholesale and retail margin. This is supposed to lower barriers of entry for generic drugs and to trigger price competition. Using monthly data over the period 1998-2004 for the six drugs (chemical entities) included in the index price system, we estimate a structural model enabling us to examine the impact of the reform on both demand and market power. Our results suggest that the index price helped to increase the market shares of generic drugs and succeeded in triggering price competition.

Do drug prices reflect development time and government investment?

PubMed

Keyhani, Salomeh; Diener-West, Marie; Powe, Neil

2005-08-01

Lengthy development times are cited by the pharmaceutical industry as one reason for high drug prices. We compared the prices of different groups of drugs after accounting for development time, government support, market size, and other drug characteristics. We conducted a retrospective study of 180 human therapeutic drugs categorized into 8 drug groups by assembling data on drug development times, government support, drug characteristics, and prices. First, we compared the development time and level of government support across the 8 drug groups. Second, we assessed the independent effect of drug group on median price per day in a multivariable analysis, controlling for development time and all other variables. Thirty percent of antiretroviral drugs had government patents compared with 16% of other infectious disease drugs, 6% of cancer drugs, and less than 6% of any other drug group (P < 0.002). Fifty percent of antiretrovirals had NIH trials listed in the new drug application for approval by the Food and Drug Administration compared with less than 6% of any other drug group (P < 0.001). More antiretroviral and cancer drugs received fast track status and accelerated review during regulatory review by the Food and Drug Administration (P < 0.001). The median price of antiretrovirals was 8 US dollars per day more, cancer drugs 11 US dollars per day more, than the reference group after adjustment for other variables (P < 0.001). Development time was not associated with drug price. Antiretroviral and cancer drugs, even after accounting for development time, are among the most highly priced medications. Notably, drugs with rapid development and more government support did not have lower drug prices.

The Daniel K. Inouye College of Pharmacy Scripts: Prescription Drug Pricing.

PubMed

Sumida, Wesley K; Taniguchi, Ronald; Juarez, Deborah Taira

2016-01-01

Prescription drugs have reduced morbidity and mortality and improved the quality of life of millions of Americans. Yet, concerns over drug price increases loom. Drug spending has risen relatively slowly over the past decade because many of the most popular brand-name medicines lost patent protection. In the near future, there will be fewer low-cost generics coming into the market to offset the rising prices of brand-name drugs. Drug expenditures are influenced by both volume and price. This article focuses on how drug prices are set in the United States and current trends. Drug prices are determined through an extremely complicated set of interactions between pharmaceutical manufacturers, wholesalers, retailers, insurers, pharmacy benefit managers (PBMs), managed care organizations, hospitals, chain stores, and consumers. The process differs depending on the type of drug and place of delivery. Rising drug prices have come under increased scrutiny due to increased cost inflation and because many price increases come as a result of mergers and acquisitions of generic drug companies or changes in ownership of brand name drug manufacturers. Other countries have reigned in drug prices by negotiating with or regulating pharmaceutical manufacturers. The best long-term solution to rising drug prices is yet to be determined but the United States will continue to debate this issue and the discussions will get more heated if drug expenditures continue to rise at a rapid rate (ie, increasing 13% in 2014 from the previous year).

75 FR 10272 - Notice Regarding 340B Drug Pricing Program-Contract Pharmacy Services

Federal Register 2010, 2011, 2012, 2013, 2014

2010-03-05

... a number of issues: Audits; protecting against diversion; network models; limits on the number or...; however, we do not find a blanket restriction on all covered entities to be justified. (2) Audits Many commenters presented varying perspectives on the topic of audits. Multiple comments from drug manufacturers...

Shining a light in the black box of orphan drug pricing

PubMed Central

2014-01-01

Background The pricing mechanism of orphan drugs appears arbitrary and has been referred to as a “black box”. Therefore, the aim of this study is to investigate how drug- and disease-specific variables relate to orphan drug prices. Additionally, we aim to explore if certain country-specific pricing and reimbursement policies affect the price level of orphan drugs. Methods Annual treatment costs per indication per patient were calculated for 59 orphan drugs with a publicly available price in Belgium, the Netherlands, Czech Republic, France, Italy and the United Kingdom. A multiple linear regression model was built with 14 drug- and disease-specific variables. A Mann-Whitney U test was used to explore whether there is a correlation between annual treatment costs of orphan drugs across countries with different pricing and reimbursement policies. Results Repurposed orphan drugs, orally administered orphan drugs or orphan drugs for which an alternative treatment is available are associated with lower annual treatment costs. Orphan drugs with multiple orphan indications, for chronic treatments or for which an improvement in overall survival or quality-of-life has been demonstrated, are associated with higher annual treatment costs. No association was found between annual treatments cost of orphan drugs across countries and the different pricing and reimbursement systems. Conclusions This study has shown that prices of orphan drugs are influenced by factors such as the availability of an alternative drug treatment, repurposing, etc. Current debate about the affordability of orphan drugs highlights the need for more transparency in orphan drug price setting. PMID:24767472

Pharmaceutical cost containment and innovation in the United States.

PubMed

Kane, N M

1997-09-01

In the United States, government has played a limited role in containing the costs of pharmaceuticals. There are no price controls, no national drug formularies, no universal cost-sharing policies, and perhaps most important, no national coverage of prescription drugs. Rather, pharmaceutical cost containment was historically left to private insurers and managed care companies, while consumers paid out of pocket for close to 62% of all drug expenditures. US utilization has historically been relatively low and prices by far the highest of the four industrialized countries. The major change in pharmaceutical cost containment in the 1990s has been the consolidation of purchaser power at the level of the insurer and managed care companies. These 'whole sale' purchasers now represent 70% of direct manufacturer sales, and they are demanding and receiving deeper price discounts. Meanwhile these same players are implementing formulary policies, utilization controls, and disease management programs, the outcomes of which have not yet been systematically evaluated. Failure to pass on savings to consumers, cost shifting by manufacturers to vulnerable consumer groups, and potential under-utilization of cost-effective drugs remain of concern.

Endogenous versus exogenous generic reference pricing for pharmaceuticals.

PubMed

Antoñanzas, F; Juárez-Castelló, C A; Rodríguez-Ibeas, R

2017-12-01

In this paper we carry out a vertical differentiation duopoly model applied to pharmaceutical markets to analyze how endogenous and exogenous generic reference pricing influence competition between generic and branded drugs producers. Unlike the literature, we characterize for the exogenous case the equilibrium prices for all feasible relevant reference prices. Competition is enhanced after the introduction of a reference pricing system. We also compare both reference pricing systems on welfare grounds, assuming two different objective functions for health authorities: (i) standard social welfare and (ii) gross consumer surplus net of total pharmaceutical expenditures. We show that regardless of the objective function, health authorities will never choose endogenous reference pricing. When health authorities are paternalistic, the exogenous reference price that maximizes standard social welfare is such that the price of the generic drug is the reference price while the price of the branded drug is higher than the reference price. When health authorities are not paternalistic, the optimal exogenous reference price is such that the price of the branded drug is the reference price while the price of the generic drug is lower than the reference price.

Improving access to malaria medicine through private-sector subsidies in seven African countries.

PubMed

Tougher, Sarah; Mann, Andrea G; Ye, Yazoume; Kourgueni, Idrissa A; Thomson, Rebecca; Amuasi, John H; Ren, Ruilin; Willey, Barbara A; Ansong, Daniel; Bruxvoort, Katia; Diap, Graciela; Festo, Charles; Johanes, Boniface; Kalolella, Admirabilis; Mallam, Oumarou; Mberu, Blessing; Ndiaye, Salif; Nguah, Samual Blay; Seydou, Moctar; Taylor, Mark; Wamukoya, Marilyn; Arnold, Fred; Hanson, Kara; Goodman, Catherine

2014-09-01

Improving access to quality-assured artemisinin combination therapies (ACTs) is an important component of malaria control in low- and middle-income countries. In 2010 the Global Fund to Fight AIDS, Tuberculosis, and Malaria launched the Affordable Medicines Facility--malaria (AMFm) program in seven African countries. The goal of the program was to decrease malaria morbidity and delay drug resistance by increasing the use of ACTs, primarily through subsidies intended to reduce costs. We collected data on price and retail markups on antimalarial medicines from 19,625 private for-profit retail outlets before and 6-15 months after the program's implementation. We found that in six of the AMFm pilot programs, prices for quality-assured ACTs decreased by US$1.28-$4.34, and absolute retail markups on these therapies decreased by US$0.31-$1.03. Prices and markups on other classes of antimalarials also changed during the evaluation period, but not to the same extent. In all but two of the pilot programs, we found evidence that prices could fall further without suppliers' losing money. Thus, concerns may be warranted that wholesalers and retailers are capturing subsidies instead of passing them on to consumers. These findings demonstrate that supranational subsidies can dramatically reduce retail prices of health commodities and that recommended retail prices communicated to a wide audience may be an effective mechanism for controlling the market power of private-sector antimalarial retailers and wholesalers. Project HOPE—The People-to-People Health Foundation, Inc.

Patents for critical pharmaceuticals: the AZT case.

PubMed

Ackiron, E

1991-01-01

Patents and other statutory types of market protections are used in the United States to promote scientific research and innovation. This incentive is especially important in research intensive fields such as the pharmaceutical industry. Unfortunately, these same protections often result in higher monopoly pricing once a successful product is brought to market. Usually this consequence is viewed as the necessary evil of an incentive system that encourages costly research and development by promising large rewards to the successful inventor. However, in the case of the AIDS drug Zidovudine (AZT), the high prices charged by the pharmaceutical company owning the drug have led to public outcry and a re-examination of government incentive systems. This Note traces the evolution of these incentive programs--the patent system, and, to a lesser extent, the orphan drug program--and details the conflicting interests involved in their development. It then demonstrates how the AZT problem brings the interest of providing inventors with incentives for risky innovative efforts into a sharp collision with the ultimate goal of such systems: ensuring that the public has access to the resulting products at a reasonable price. Finally, the Note describes how Congress and the courts have attempted to resolve these problems in the past, and how they might best try to solve the AZT problem in the near future.

Cancer Drugs: An International Comparison of Postlicensing Price Inflation.

PubMed

Savage, Philip; Mahmoud, Sarah; Patel, Yogin; Kantarjian, Hagop

2017-06-01

The cost of cancer drugs forms a rising proportion of health care budgets worldwide. A number of studies have examined international comparisons of initial cost, but there is little work on postlicensing price increases. To examine this, we compared cancer drug prices at initial sale and subsequent price inflation in the United States and United Kingdom and also reviewed relevant price control mechanisms. The 10 top-selling cancer drugs were selected, and their prices at initial launch and in 2015 were compared. Standard nondiscounted prices were obtained from the relevant annual copies of the RED BOOK and the British National Formulary. At initial marketing, prices were on average 42% higher in the United States than in the United Kingdom. After licensing in the United States, all 10 drugs had price rises averaging an overall annual 8.8% (range, 1.4% to 24.1%) increase. In comparison, in the United Kingdom, six drugs had unchanged prices, two had decreased prices, and two had modest price increases. The overall annual increase in the United Kingdom was 0.24%. Cancer drug prices are rising substantially, both at their initial marketing price and, in the United States, at postlicensing prices. In the United Kingdom, the Pharmaceutical Price Regulation Scheme, an agreement between the government and the pharmaceutical industry, controls health care costs while allowing a return on investment and funds for research. The increasing costs of cancer drugs are approaching the limits of sustainability, and a similar government-industry agreement may allow stability for both health care provision and the pharmaceutical industry in the United States.

Exploration of approaches to adjusting brand-name drug prices in Mainland of China: based on comparison and analysis of some brand-name drug prices of Mainland and Taiwan, China.

PubMed

Weng, Geng; Han, Sheng; Pu, Run; Pan, Wynn H T; Shi, Luwen

2014-01-01

Under the circumstance of the New Medical Reform in Mainland of China, lowering drug prices has become an approach to relieving increase of medical expenses, and lowering brand-name medication price is a key strategy. This study, by comparing and analyzing brand-name medication prices between Mainland of China and Taiwan, explores how to adjust brand-name medication prices in Mainland of China in the consideration of the drug administrative strategies in Taiwan. By selecting brand-name drug with generic name and dose types matched in Mainland and Taiwan, calculate the average unit price and standard deviation and test it with the paired t-test. In the mean time, drug administrative strategies between Mainland and Taiwan are also compared systematically. Among the 70 brand-name medications with generic names and matched dose types, 54 are at higher prices in Mainland of China than Taiwan, which is statistically significant in t-test. Also, among the 47 medications with all of matched generic names, dose types, and manufacturing enterprises, 38 are at higher prices in Mainland than Taiwan, and the gap is also statistically significant in t-test. In Mainland of China, brand-name medication took cost-plus pricing and price-based price adjustment, while in Taiwan, brand-name medication took internal and external reference pricing and market-based price adjustment. Brand-name drug prices were higher in Mainland of China than in Taiwan. The adjustment strategies of drug prices are scientific in Taiwan and are worth reference by Mainland of China.

The impact of alternative pricing methods for drugs in California Workers’ Compensation System: Fee-schedule pricing

PubMed Central

Wilson, Leslie; Turkistani, Fatema A.; Huang, Wei; Tran, Dang M.; Lin, Tracy Kuo

2018-01-01

Introduction California’s Workers’ Compensation System (CAWCS) Department of Industrial Relations questioned the adequacy of the current Medi-Cal fee-schedule pricing and requested analysis of alternatives that maximize price availability and maintain budget neutrality. Objectives To compare CAWCS pharmacy-dispensed (PD) drug prices under alternative fee schedules, and identify combinations of alternative benchmarks that have prices available for the largest percentage of PD drugs and that best reach budget neutrality. Methods Claims transaction-level data (2011–2013) from CAWCS were used to estimate total annual PD pharmaceutical payments. Medi-Cal pricing data was from the Workman’s Compensation Insurance System (WCIS). Average Wholesale Prices (AWP), Wholesale Acquisition Costs (WAC), Direct Prices (DP), Federal Upper Limit (FUL) prices, and National Average Drug Acquisition Costs (NADAC) were from Medi-Span. We matched National Drug Codes (NDCs), pricing dates, and drug quantity for comparisons. We report pharmacy-dispensed (PD) claims frequency, reimbursement matching rate, and paid costs by CAWCS as the reference price against all alternative price benchmarks. Results Of 12,529,977 CAWCS claims for pharmaceutical products 11.6% (1,462,814) were for PD drugs. Prescription drug cost for CAWCS was over $152M; $63.9M, $47.9M, and $40.6M in 2011–2013. Ninety seven percent of these CAWCS PD claims had a Medi-Cal price. Alternative mechanisms provided a price for fewer claims; NADAC 94.23%, AWP 90.94%, FUL 73.11%, WAC 66.98%, and DP 14.33%. Among CAWCS drugs with no Medi-Cal price in PD claims, AWP, WAC, NADAC, DP, and FUL provided prices for 96.7%, 63.14%, 24.82%, 20.83%, and 15.08% of claims. Overall CAWCS paid 100.52% of Medi-Cal, 60% of AWP, 97% of WAC, 309.53% of FUL, 103.83% of DP, and 136.27% of NADAC. Conclusions CAWCS current Medi-Cal fee-schedule price list for PD drugs is more complete than all alternative fee-schedules. However, all reimbursement approaches would require combinations of pricing benchmarks. We suggest keeping primary reimbursement at 100% of Medi-Cal and for drugs without a primary Medi-Cal price calculating the maximum fee as 60% of AWP and then 97% of WAC. Alternatively, we suggest using NADAC as a primary fee-schedule followed by either 60% AWP and 97% WAC or AWP-40% for drugs with no NADAC price. Fee-schedules may not offer the best price and a formulary approach may provide more flexibility. PMID:29799850

The impact of alternative pricing methods for drugs in California Workers' Compensation System: Fee-schedule pricing.

PubMed

Wilson, Leslie; Turkistani, Fatema A; Huang, Wei; Tran, Dang M; Lin, Tracy Kuo

2018-01-01

California's Workers' Compensation System (CAWCS) Department of Industrial Relations questioned the adequacy of the current Medi-Cal fee-schedule pricing and requested analysis of alternatives that maximize price availability and maintain budget neutrality. To compare CAWCS pharmacy-dispensed (PD) drug prices under alternative fee schedules, and identify combinations of alternative benchmarks that have prices available for the largest percentage of PD drugs and that best reach budget neutrality. Claims transaction-level data (2011-2013) from CAWCS were used to estimate total annual PD pharmaceutical payments. Medi-Cal pricing data was from the Workman's Compensation Insurance System (WCIS). Average Wholesale Prices (AWP), Wholesale Acquisition Costs (WAC), Direct Prices (DP), Federal Upper Limit (FUL) prices, and National Average Drug Acquisition Costs (NADAC) were from Medi-Span. We matched National Drug Codes (NDCs), pricing dates, and drug quantity for comparisons. We report pharmacy-dispensed (PD) claims frequency, reimbursement matching rate, and paid costs by CAWCS as the reference price against all alternative price benchmarks. Of 12,529,977 CAWCS claims for pharmaceutical products 11.6% (1,462,814) were for PD drugs. Prescription drug cost for CAWCS was over $152M; $63.9M, $47.9M, and $40.6M in 2011-2013. Ninety seven percent of these CAWCS PD claims had a Medi-Cal price. Alternative mechanisms provided a price for fewer claims; NADAC 94.23%, AWP 90.94%, FUL 73.11%, WAC 66.98%, and DP 14.33%. Among CAWCS drugs with no Medi-Cal price in PD claims, AWP, WAC, NADAC, DP, and FUL provided prices for 96.7%, 63.14%, 24.82%, 20.83%, and 15.08% of claims. Overall CAWCS paid 100.52% of Medi-Cal, 60% of AWP, 97% of WAC, 309.53% of FUL, 103.83% of DP, and 136.27% of NADAC. CAWCS current Medi-Cal fee-schedule price list for PD drugs is more complete than all alternative fee-schedules. However, all reimbursement approaches would require combinations of pricing benchmarks. We suggest keeping primary reimbursement at 100% of Medi-Cal and for drugs without a primary Medi-Cal price calculating the maximum fee as 60% of AWP and then 97% of WAC. Alternatively, we suggest using NADAC as a primary fee-schedule followed by either 60% AWP and 97% WAC or AWP-40% for drugs with no NADAC price. Fee-schedules may not offer the best price and a formulary approach may provide more flexibility.

A comparison of generic drug prices in seven European countries: a methodological analysis.

PubMed

Wouters, Olivier J; Kanavos, Panos G

2017-03-31

Policymakers and researchers frequently compare the prices of medicines between countries. Such comparisons often serve as barometers of how pricing and reimbursement policies are performing. The aim of this study was to examine methodological challenges to comparing generic drug prices. We calculated all commonly used price indices based on 2013 IMS Health data on sales of 3156 generic drugs in seven European countries. There were large differences in generic drug prices between countries. However, the results varied depending on the choice of index, base country, unit of volume, method of currency conversion, and therapeutic category. The results also differed depending on whether one looked at the prices charged by manufacturers or those charged by pharmacists. Price indices are a useful statistical approach for comparing drug prices across countries, but researchers and policymakers should interpret price indices with caution given their limitations. Price-index results are highly sensitive to the choice of method and sample. More research is needed to determine the drivers of price differences between countries. The data suggest that some governments should aim to reduce distribution costs for generic drugs.

Pricing of prescription drugs and its impact on physicians' choice behavior.

PubMed

Miao-Sheng, Chen; Yu-Ti, Shih

2008-09-01

This research presents an analysis of Taiwan's health care market with the focus on the pricing of prescription drugs and its impact on physicians' choice behavior. Since the advent of Taiwan's national health insurance, with the competent authority being Bureau of National Health Insurance (BNHI), hospitals are allowed to sell prescription drugs to patients at prices above the purchasing prices, so each prescription drug has two prices: one at which drugs are sold to hospitals; the other which BNHI reimbursement to hospitals. The margin between the different prices is the sales discount that pharmaceutical companies offer to the hospitals. We find that sales discount has a great impact on physicians' choice behavior: i.e., physicians are price-sensitive to prescription drugs. In addition, it is found that too high a sales discount of a prescription drug would result in a too low weighted average price of that drug sold; thus BNHI would be more likely to adjust downward the rate it reimbursement to the hospital. This presents a sales strategy problem to pharmaceutical companies. To solve this, we use the distribution of physicians' evaluations of prescription drugs to establish a profit maximization model in hopes of helping companies to price drugs and find the optimal promotion expending. Ten popular prescription drugs are used in this research as examples.

Risks, prices, and positions: A social network analysis of illegal drug trafficking in the world-economy.

PubMed

Boivin, Rémi

2014-03-01

Illegal drug prices are extremely high, compared to similar goods. There is, however, considerable variation in value depending on place, market level and type of drugs. A prominent framework for the study of illegal drugs is the "risks and prices" model (Reuter & Kleiman, 1986). Enforcement is seen as a "tax" added to the regular price. In this paper, it is argued that such economic models are not sufficient to explain price variations at country-level. Drug markets are analysed as global trade networks in which a country's position has an impact on various features, including illegal drug prices. This paper uses social network analysis (SNA) to explain price markups between pairs of countries involved in the trafficking of illegal drugs between 1998 and 2007. It aims to explore a simple question: why do prices increase between two countries? Using relational data from various international organizations, separate trade networks were built for cocaine, heroin and cannabis. Wholesale price markups are predicted with measures of supply, demand, risks of seizures, geographic distance and global positioning within the networks. Reported prices (in $US) and purchasing power parity-adjusted values are analysed. Drug prices increase more sharply when drugs are headed to countries where law enforcement imposes higher costs on traffickers. The position and role of a country in global drug markets are also closely associated with the value of drugs. Price markups are lower if the destination country is a transit to large potential markets. Furthermore, price markups for cocaine and heroin are more pronounced when drugs are exported to countries that are better positioned in the legitimate world-economy, suggesting that relations in legal and illegal markets are directed in opposite directions. Consistent with the world-system perspective, evidence is found of coherent world drug markets driven by both local realities and international relations. Copyright © 2013 Elsevier B.V. All rights reserved.

Identifying Demand Responses to Illegal Drug Supply Interdictions.

PubMed

Cunningham, Scott; Finlay, Keith

2016-10-01

Successful supply-side interdictions into illegal drug markets are predicated on the responsiveness of drug prices to enforcement and the price elasticity of demand for addictive drugs. We present causal estimates that targeted interventions aimed at methamphetamine input markets ('precursor control') can temporarily increase retail street prices, but methamphetamine consumption is weakly responsive to higher drug prices. After the supply interventions, purity-adjusted prices increased then quickly returned to pre-treatment levels within 6-12 months, demonstrating the short-term effects of precursor control. The price elasticity of methamphetamine demand is -0.13 to -0.21 for self-admitted drug treatment admissions and between -0.24 and -0.28 for hospital inpatient admissions. We find some evidence of a positive cross-price effect for cocaine, but we do not find robust evidence that increases in methamphetamine prices increased heroin, alcohol, or marijuana drug use. This study can inform policy discussions regarding other synthesized drugs, including illicit use of pharmaceuticals. Copyright © 2015 John Wiley & Sons, Ltd. Copyright © 2015 John Wiley & Sons, Ltd.

Consequences of the 340B Drug Pricing Program.

PubMed

Desai, Sunita; McWilliams, J Michael

2018-02-08

The 340B Drug Pricing Program entitles qualifying hospitals to discounts on outpatient drugs, increasing the profitability of drug administration. By tying the program eligibility of hospitals to their Disproportionate Share Hospital (DSH) adjustment percentage, which reflects the proportion of hospitalized patients who are low-income, the program is intended to expand resources for underserved populations but provides no direct incentives for hospitals to use financial gains to enhance care for low-income patients. We used Medicare claims and a regression-discontinuity design, taking advantage of the threshold for program eligibility among general acute care hospitals (DSH percentage, >11.75%), to isolate the effects of the program on hospital-physician consolidation (i.e., acquisition of physician practices or employment of physicians by hospitals) and on the outpatient administration of parenteral drugs by hospital-owned facilities in three specialties in which parenteral drugs are frequently used. For low-income patients, we also assessed the effects of the program on the provision of care by hospitals and on mortality. Hospital eligibility for the 340B Program was associated with 2.3 more hematologist-oncologists practicing in facilities owned by the hospital, or 230% more hematologist-oncologists than expected in the absence of the program (P=0.02), and with 0.9 (or 900%) more ophthalmologists per hospital (P=0.08) and 0.1 (or 33%) more rheumatologists per hospital (P=0.84). Program eligibility was associated with significantly higher numbers of parenteral drug claims billed by hospitals for Medicare patients in hematology-oncology (90% higher, P=0.001) and ophthalmology (177% higher, P=0.03) but not rheumatology (77% higher, P=0.12). Program eligibility was associated with lower proportions of low-income patients in hematology-oncology and ophthalmology and with no significant differences in hospital provision of safety-net or inpatient care for low-income groups or in mortality among low-income residents of the hospitals' local service areas. The 340B Program has been associated with hospital-physician consolidation in hematology-oncology and with more hospital-based administration of parenteral drugs in hematology-oncology and ophthalmology. Financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients. (Funded by the Agency for Healthcare Research and Quality and others.).

Pricing and reimbursement of orphan drugs: the need for more transparency

PubMed Central

2011-01-01

Pricing and reimbursement of orphan drugs are an issue of high priority for policy makers, legislators, health care professionals, industry leaders, academics and patients. This study aims to conduct a literature review to provide insight into the drivers of orphan drug pricing and reimbursement. Although orphan drug pricing follows the same economic logic as drug pricing in general, the monopolistic power of orphan drugs results in high prices: a) orphan drugs benefit from a period of marketing exclusivity; b) few alternative health technologies are available; c) third-party payers and patients have limited negotiating power; d) manufacturers attempt to maximise orphan drug prices within the constraints of domestic pricing and reimbursement policies; and e) substantial R&D costs need to be recouped from a small number of patients. Although these conditions apply to some orphan drugs, they do not apply to all orphan drugs. Indeed, the small number of patients treated with an orphan drug and the limited economic viability of orphan drugs can be questioned in a number of cases. Additionally, manufacturers have an incentive to game the system by artificially creating monopolistic market conditions. Given their high price for an often modest effectiveness, orphan drugs are unlikely to provide value for money. However, additional criteria are used to inform reimbursement decisions in some countries. These criteria may include: the seriousness of the disease; the availability of other therapies to treat the disease; and the cost to the patient if the medicine is not reimbursed. Therefore, the maximum cost per unit of outcome that a health care payer is willing to pay for a drug could be set higher for orphan drugs to which society attaches a high social value. There is a need for a transparent and evidence-based approach towards orphan drug pricing and reimbursement. Such an approach should be targeted at demonstrating the relative effectiveness, cost-effectiveness and economic viability of orphan drugs with a view to informing pricing and reimbursement decisions. PMID:21682893

Pricing and reimbursement of orphan drugs: the need for more transparency.

PubMed

Simoens, Steven

2011-06-17

Pricing and reimbursement of orphan drugs are an issue of high priority for policy makers, legislators, health care professionals, industry leaders, academics and patients. This study aims to conduct a literature review to provide insight into the drivers of orphan drug pricing and reimbursement. Although orphan drug pricing follows the same economic logic as drug pricing in general, the monopolistic power of orphan drugs results in high prices: a) orphan drugs benefit from a period of marketing exclusivity; b) few alternative health technologies are available; c) third-party payers and patients have limited negotiating power; d) manufacturers attempt to maximise orphan drug prices within the constraints of domestic pricing and reimbursement policies; and e) substantial R&D costs need to be recouped from a small number of patients. Although these conditions apply to some orphan drugs, they do not apply to all orphan drugs. Indeed, the small number of patients treated with an orphan drug and the limited economic viability of orphan drugs can be questioned in a number of cases. Additionally, manufacturers have an incentive to game the system by artificially creating monopolistic market conditions. Given their high price for an often modest effectiveness, orphan drugs are unlikely to provide value for money. However, additional criteria are used to inform reimbursement decisions in some countries. These criteria may include: the seriousness of the disease; the availability of other therapies to treat the disease; and the cost to the patient if the medicine is not reimbursed. Therefore, the maximum cost per unit of outcome that a health care payer is willing to pay for a drug could be set higher for orphan drugs to which society attaches a high social value. There is a need for a transparent and evidence-based approach towards orphan drug pricing and reimbursement. Such an approach should be targeted at demonstrating the relative effectiveness, cost-effectiveness and economic viability of orphan drugs with a view to informing pricing and reimbursement decisions.

Incorporating economic evaluations into decision-making: the Ontario experience.

PubMed

Laupacis, Andreas

2005-07-01

The Drug Quality and Therapeutics Committee (DQTC) and the Canadian Expert Drug Assessment Committee (CEDAC) make reimbursement recommendations to publicly funded outpatient drug plans in Ontario and Canada respectively. In this article, the organization and decision-making processes of these committees are described. Issues associated with these committees such as potential biases associated with pharmaceutical company submissions, transparency, restricted access programs, conditional listing, and price negotiation are discussed.

The Daniel K. Inouye College of Pharmacy Scripts

PubMed Central

Sumida, Wesley K; Taniguchi, Ronald; Juarez, Deborah Taira

2016-01-01

Prescription drugs have reduced morbidity and mortality and improved the quality of life of millions of Americans. Yet, concerns over drug price increases loom. Drug spending has risen relatively slowly over the past decade because many of the most popular brand-name medicines lost patent protection. In the near future, there will be fewer low-cost generics coming into the market to offset the rising prices of brand-name drugs. Drug expenditures are influenced by both volume and price. This article focuses on how drug prices are set in the United States and current trends. Drug prices are determined through an extremely complicated set of interactions between pharmaceutical manufacturers, wholesalers, retailers, insurers, pharmacy benefit managers (PBMs), managed care organizations, hospitals, chain stores, and consumers. The process differs depending on the type of drug and place of delivery. Rising drug prices have come under increased scrutiny due to increased cost inflation and because many price increases come as a result of mergers and acquisitions of generic drug companies or changes in ownership of brand name drug manufacturers. Other countries have reigned in drug prices by negotiating with or regulating pharmaceutical manufacturers. The best long-term solution to rising drug prices is yet to be determined but the United States will continue to debate this issue and the discussions will get more heated if drug expenditures continue to rise at a rapid rate (ie, increasing 13% in 2014 from the previous year). PMID:26870605

The Price Elasticity of Specialty Drug Use: Evidence from Cancer Patients in Medicare Part D.

PubMed

Jung, Jeah Kyoungrae; Feldman, Roger; McBean, A Marshall

2017-12-01

Specialty drugs can bring substantial benefits to patients with debilitating conditions, such as cancer, but their costs are very high. Insurers/payers have increased patient cost-sharing for specialty drugs to manage specialty drug spending. We utilized Medicare Part D plan formulary data to create the initial price (cost-sharing in the initial coverage phase in Part D), and estimated the total demand (both on- and off-label uses) for specialty cancer drugs among elderly Medicare Part D enrollees with no low-income subsidies (non-LIS) as a function of the initial price. We corrected for potential endogeneity associated with plan choice by instrumenting the initial price of specialty cancer drugs with the initial prices of specialty drugs in unrelated classes. We report three findings. First, we found that elderly non-LIS beneficiaries with cancer were less likely to use a Part D specialty cancer drug when the initial price was high: the overall price elasticity of specialty cancer drug spending ranged between -0.72 and -0.75. Second, the price effect in Part D specialty cancer drug use was not significant among newly diagnosed patients. Finally, we found that use of Part B-covered cancer drugs was not responsive to the Part D specialty cancer drug price. As the demand for costly specialty drugs grows, it will be important to identify clinical circumstances where specialty drugs can be valuable and ensure access to high-value treatments.

Assessing potential prescription reimbursement changes: estimated acquisition costs in Wisconsin.

PubMed

Kreling, D H

1989-01-01

Potential impacts from two methods of changing prescription drug ingredient reimbursement in the Wisconsin Medicaid program were estimated. Current reimbursement amounts were compared with those resulting from either direct prices for eight manufacturers' products and average wholesale price less 10.5 percent for other products or wholesaler cost plus 5.01 percent for all products. The resulting overall average ingredient cost reimbursement reductions were 6.64 percent ($0.56 per prescription) and 6.94 percent ($0.59 per prescription) for the two methods, respectively. The results should be viewed from the perspective of both program savings and reduced pharmacists' revenues.

Examining the production costs of antiretroviral drugs.

PubMed

Pinheiro, Eloan; Vasan, Ashwin; Kim, Jim Yong; Lee, Evan; Guimier, Jean Marc; Perriens, Joseph

2006-08-22

To present direct manufacturing costs and price calculations of individual antiretroviral drugs, enabling those responsible for their procurement to have a better understanding of the cost structure of their production, and to indicate the prices at which these antiretroviral drugs could be offered in developing country markets. Direct manufacturing costs and factory prices for selected first and second-line antiretroviral drugs were calculated based on cost structure data from a state-owned company in Brazil. Prices for the active pharmaceutical ingredients (API) were taken from a recent survey by the World Health Organization (WHO). The calculated prices for antiretroviral drugs are compared with quoted prices offered by privately-owned, for-profit manufacturers. The API represents the largest component of direct manufacturing costs (55-99%), while other inputs, such as salaries, equipment costs, and scale of production, have a minimal impact. The calculated prices for most of the antiretroviral drugs studied fall within the lower quartile of the range of quoted prices in developing country markets. The exceptions are those drugs, primarily for second-line therapy, for which the API is either under patent, in short supply, or in limited use in developing countries (e.g. abacavir, lopinavir/ritonavir, nelfinavir, saquinavir). The availability of data on the cost of antiretroviral drug production and calculation of factory prices under a sustainable business model provide benchmarks that bulk purchasers of antiretroviral drugs could use to negotiate lower prices. While truly significant price decreases for antiretroviral drugs will depend largely on the future evolution of API prices, the present study demonstrates that for several antiretroviral drugs price reduction is currently possible. Whether or not these reductions materialize will depend on the magnitude of indirect cost and profit added by each supplier over the direct production costs. The ability to achieve price reductions in line with production costs will have critical implications for sustainable treatment for HIV/AIDS in the developing world.

Variation in Prices of Cardiovascular Drugs in Public and Private Pharmacies in Nepal

PubMed Central

Kandel, Nirajan; Subedi, Narayan; Khanal, Vishnu

2015-01-01

Introduction: Higher price of cardiovascular drugs is one of the reasons for high out-of-pocket expenditure in cardiovascular care. The objective of the study was to determine the price variation in commonly available cardiovascular drugs between public and private hospital pharmacies in Nepal. Methods: A cross-sectional survey was conducted in 3 public and 3 private pharmacies in tertiary-level hospitals in Nepal. The price was recorded for the list of drugs commonly available in those pharmacies. A total of 23 drugs were selected for data collection. The price was recorded based on the payment receipt and price reported by surrogate customers. We defined the price variation as the difference between price of cardiovascular drugs between public hospital and private pharmacy. The price variation was expressed as percentage. Results: Price of Amlodipine 5 mg was higher by 667% in private pharmacy nearby Tribhuvan University Teaching Hospital (TUTH) compared to that of TUTH pharmacy. Price of Enalapril 5 mg was higher by 14.47% in Manmohan Cardio Thoracic and Vascular Transplant Centre (MCVTC) compared to nearby private pharmacy. We observed that the price of cardiovascular drugs varied significantly between hospital and private retail pharmacies in TUTH (P < .001) and MCVTC (P < .001). Conclusion: For most of the cardiovascular drugs, the price in private retail pharmacies were significantly higher than in hospital pharmacies. Future steps should be taken to establish and run own pharmacies in hospitals which would reduce the cost of medicine and thereby, increase access to medicine. PMID:28462249

Effective policy initiatives to constrain lipid-lowering drug expenditure growth in South Korea

PubMed Central

2014-01-01

Background The rapid growth of prescription drug expenditures is a major problem in South Korea. Accordingly, the South Korean government introduced a positive listing system in 2006. They also adopted various price reduction policies. Nevertheless, the total expenditure for lipid-lowering drugs have steadily increased throughout South Korea. The present study explores the factors that have influenced the increased expenditures of lipid-lowering drugs with a particular focus on the effects of statins in this process. Methods This paper investigates the National Health Insurance claims data for prescribed lipid-lowering drugs collected between January 1, 2005 and December 31, 2009. We specifically focused on statins and assessed the yearly variation of statin expenditure by calculating the increased rate of paired pharmaceutical expenditures over a 2 year period. Our study classified statins into three categories: new entrants, core medicines and exiting medicines. For core medicines, we further examined influencing factors such as price, amount of drugs consumed by volume, and prescription changes (substitutes for other drug). Results Statin expenditure showed an average annual increase of 25.7% between 2005 and 2009. Among the different statins, the expenditure of atorvastatin showed a 36.6% annual increase rate, which was the most dramatic among all statins. Also we divided expenditure for core medicines by the price factor, volume factor, and prescription change. The result showed that annual weighted average prices of individual drug decreased each year, which clearly showed that price influenced statin expenditure in a negative direction. The use of generic drugs containing the same active ingredient as name-brand drugs increased and negatively affected statin expenditure (Generic Mix effect). However, the use of relatively expensive ingredients within statin increase, Ingredient Mix effect contributed to increased statin expenditure (Ingredient Mix effect). In particular, the volume effect was found to be critical for increasing statin expenditure as the amount of statin consumed increased steadily throughout the study period. Conclusions The recent rapid increase in statin expenditure can largely be attributed to an increase in consumption volume. In order to check drug expenditures effectively in our current situation, in which chronic diseases remain steadily on the rise, it is necessary to not only have supply-side initiatives such as price reduction, but also demand-side initiatives that could control drug consumption volume, for example: educational programs for rational prescription, generic drug promotional policies, and policies providing prescription targets. PMID:24589172

The price may not be right: the value of comparison shopping for prescription drugs.

PubMed

Arora, Sanjay; Sood, Neeraj; Terp, Sophie; Joyce, Geoffrey

2017-07-01

To measure variations in drug prices across and within zip codes that may reveal simple strategies to improve patients' access to prescribed medications. We compared drug prices at different types of pharmacies across and within local markets. In-store prices were compared with a Web-based service providing discount coupons for prescription medications. Prices were collected for 2 generic antibiotics because most patients have limited experience with them and are less likely to know the price ranges for them. Drug prices were obtained via telephone from 528 pharmacies in Los Angeles (LA) County, California, from July to August 2014. Online prices were collected from GoodRx, a popular Web-based service that aggregates available discounts and directly negotiates with retail outlets. Drug prices found at independent pharmacies and by using discount coupons available online were lower on average than at grocery, big-box, or chain drug stores for 2 widely prescribed antibiotics. The lowest-price prescription was offered at a grocery, big-box, or chain drug store in 6% of zip codes within the LA County area. Drug prices varied dramatically within a zip code, however, and were less expensive in lower-income areas. The average price difference within a zip code was $52 for levofloxacin and $17 for azithromycin. Price shopping for medications within a small geographic area can yield considerable cost savings for the uninsured and consumers in high-deductible health plans with high negotiated prices. Clinicians and patient advocates have an incentive to convey this information to patients to improve adherence to prescribed medicines and lower the financial burden of purchasing prescription drugs.

The High Cost of Prescription Drugs in the United States: Origins and Prospects for Reform.

PubMed

Kesselheim, Aaron S; Avorn, Jerry; Sarpatwari, Ameet

The increasing cost of prescription drugs in the United States has become a source of concern for patients, prescribers, payers, and policy makers. To review the origins and effects of high drug prices in the US market and to consider policy options that could contain the cost of prescription drugs. We reviewed the peer-reviewed medical and health policy literature from January 2005 to July 2016 for articles addressing the sources of drug prices in the United States, the justifications and consequences of high prices, and possible solutions. Per capita prescription drug spending in the United States exceeds that in all other countries, largely driven by brand-name drug prices that have been increasing in recent years at rates far beyond the consumer price index. In 2013, per capita spending on prescription drugs was $858 compared with an average of $400 for 19 other industrialized nations. In the United States, prescription medications now comprise an estimated 17% of overall personal health care services. The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents. The availability of generic drugs after this exclusivity period is the main means of reducing prices in the United States, but access to them may be delayed by numerous business and legal strategies. The primary counterweight against excessive pricing during market exclusivity is the negotiating power of the payer, which is currently constrained by several factors, including the requirement that most government drug payment plans cover nearly all products. Another key contributor to drug spending is physician prescribing choices when comparable alternatives are available at different costs. Although prices are often justified by the high cost of drug development, there is no evidence of an association between research and development costs and prices; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear. High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers, combined with coverage requirements imposed on government-funded drug benefits. The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability; providing greater opportunities for meaningful price negotiation by governmental payers; generating more evidence about comparative cost-effectiveness of therapeutic alternatives; and more effectively educating patients, prescribers, payers, and policy makers about these choices.

Evidence-based decision on medical technologies in Asia Pacific: experiences from India, Malaysia, Philippines, and Pakistan.

PubMed

Thatte, Urmila; Hussain, Samsinah; de Rosas-Valera, Madeleine; Malik, Muhammad Ashar

2009-01-01

This paper discusses national programs implemented in India, Pakistan, Malaysia, and Philippines to generate and apply evidence in making informed policy decisions on the approval, pricing, reimbursement and financing of medicines, diagnostics, and medical devices. In all countries, the Ministries of Health are generally responsible for approval of health technologies through various agencies like the Central Drugs Standard Control Organisation in India, Bureau of Food and Drugs for medicines and Bureau of Health Devices and Technology for medical devices in the Philippines, the National Pharmaceutical Control Bureau, Health Technology Assessment Unit and Medical Device Bureau in Malaysia, and the Drug Control Organization in Pakistan. Product dossiers are evaluated while taking decisions. India has a strong price control mechanism through the National Pharmaceutical Pricing Authority. In the Philippines, the Essential Drug Price Monitoring System monitors prices of 37 essential drugs monthly from all drugstore outlets nationwide. In Malaysia and Pakistan registration pricing of new drugs is negotiated/fixed by the government with the vendor. A mix of social, voluntary private and community-based health insurance plans are available in India while the Philippine Health Insurance Corporation is responsible for reimbursement of drugs and medical devices in the Philippines. In Malaysia no formal reimbursement system is being practiced, and in Pakistan the government reimburses medical claims of its employees. In both India and the Philippines the bulk of health expenditure is out of pocket while the government pays for 20% and 28% respectively in both countries. The public health care services in Malaysia are heavily subsidized by the government with minimum fee being charged to the public. The government of Pakistan gives free medicines to its citizens at the public health facilities. In the region under discussion, one of the priority areas that the different regulatory agencies would benefit from is human resource development to facilitate the process of evidence based assessment of health technologies. Higher budgetary allocation and stronger legislation is also needed along with interagency and international coordination and cooperation to harmonize.

Progesterone for Prevention of Preterm Birth: Shortcomings and Unintended Consequences of the Orphan Drug Act.

PubMed

Gee, Rebekah E; Kuy, SreyRam; Karas, Laura O

2017-12-01

Preterm birth is a problem of major public health significance that continues to plague our country despite the existence of a therapy, 17α-hydroxyprogesterone caproate, with known efficacy in reducing the risk of spontaneous preterm birth among high-risk women. Over the past several years, the Louisiana Department of Health has undertaken a robust, multifaceted initiative to improve access to 17α-hydroxyprogesterone caproate, which resulted in a 3.5-fold increase in the percentage of eligible high-risk pregnant women in the Medicaid program who received the therapy between 2013 and 2016. Yet despite Louisiana's progress, the vast majority of the eligible population still fails to receive 17α-hydroxyprogesterone caproate. In this Current Commentary, we argue that the high price of progesterone since U.S. Food and Drug Administration approval has unnecessarily complicated access, and our nation has potentially suffered nearly 60,000 avoidable premature births as a consequence. We present the history of the orphan drug approval and manufacturer-imposed price increase for injectable progesterone, the interplay between the drug's high price and the persistence of racial and ethnic disparities in preterm birth, which are particularly germane in Louisiana, and Louisiana's broad-reaching efforts to improve progesterone coverage. The story of 17α-hydroxyprogesterone caproate highlights the durable barriers that high prices place in the way of access and helps illuminate the shortcomings and unintended consequences of the Orphan Drug Act. This case, however, is not an outlier; it is the far-too-common product of monopoly pricing in the U.S. pharmaceutical market, inadvertently bolstered by existing law, at the expense of affordability and patient access.

Differential pricing of drugs: a role for cost-effectiveness analysis?

PubMed

Lopert, Ruth; Lang, Danielle L; Hill, Suzanne R; Henry, David A

2002-06-15

Internationally, the high costs of pharmaceutical products limit access to treatment. The principle of differential pricing is that drug prices should vary according to some measure of affordability. How differential prices should be determined is, however, unclear. Here we describe a method whereby differential prices for essential drugs could be derived in countries of variable national wealth, and, using angiotensin-converting enzyme inhibitors provide an example of how the process might work. Indicative prices for drugs can be derived by cost-effectiveness analysis that incorporates a measure of national wealth. Such prices could be used internationally as a basis of differential price negotiations.

Competitive pricing within pharmaceutical classes: evidence on "follow-on" drugs in Germany 1993-2008.

PubMed

Mueller, Michael T; Frenzel, Alexander

2015-01-01

Competition from "follow-on" drugs has been a highly controversial issue. Manufacturers launching new molecules in existing drug classes have often been criticized for inflating health systems' expenses, but it has been argued that such drugs increase therapeutic options. Economic theory suggests that follow-on drugs induce price competition. We contribute to this discussion by addressing the topic of pricing at market entry and price development in the German market. We measure determinants of price strategies of follow-on drugs using regression analyses, considering all new molecules launched in the German market from 1993 to 2008. Prices of products are standardized on defined daily dosages controlling for sales volumes based on data from the IMS Health DPM database and for the therapeutic quality of a new product using ratings by Fricke/Klaus as a proxy for innovation. We identify prices correlating with therapeutic value at market entry. While the first two molecules engage in quality competition, price discounts below the market price can be observed from the third entrant on. Price discounts are even more distinct in development races with several drugs entering the market within 2 years and in classes with a low degree of therapeutic differentiation. Prices remain relatively constant over time. This study contributes to assessments of competition in pharmaceutical markets focusing on price strategies of new market entrants. After an initial phase of market building, further follow-on products induce price competition. Largely unchanged prices after 4 years may be interpreted as quality competition and can be attributed to prices in Germany being anchor points for international price referencing.

The short-term impact of Ontario's generic pricing reforms.

PubMed

Law, Michael R; Ystma, Alison; Morgan, Steven G

2011-01-01

Canadians pay amongst the highest generic drug prices in the world. In July 2010, the province of Ontario enacted a policy that halved reimbursement for generic drugs from the public drug plan, and substantially lowered prices for private purchases. We quantified the impact of this policy on overall generic drug expenditures in the province, and projected the impact in other provinces had they mimicked this pricing change. We used quarterly prescription generic drug dispensing data from the IMS-Brogan CompuScript Audit. We used the price per unit in both the pre- and post-policy period and two economics price indexes to estimate the expenditure reduction in Ontario. Further, we used the post-policy Ontario prices to estimate the potential reduction in other provinces. We estimate that total expenditure on generic drugs in Ontario during the second half of 2010 was between $181 and $194 million below what would be expected if prices had remained at pre-policy level. Over half of the reduction in spending was due to savings on just 10 generic ingredients. If other provinces had matched Ontario's prices, their expenditures over during the latter half of 2010 would have been $445 million lower. We found that if Ontario's pricing scheme were adopted nationally, overall spending on generic drugs in Canada would drop at least $1.28 billion annually--a 5% decrease in total prescription drug expenditure. Other provinces should seriously consider both changes to their generic drug prices and the use of more competitive bulk purchasing policies.

Problems in the regulatory policy of the drug market

PubMed Central

Miziara, Nathália Molleis; Coutinho, Diogo Rosenthal

2015-01-01

OBJECTIVE Analyze the implementation of drug price regulation policy by the Drug Market Regulation Chamber. METHODS This is an interview-based study, which was undertaken in 2012, using semi-structured questionnaires with social actors from the pharmaceutical market, the pharmaceuticals industry, consumers and the regulatory agency. In addition, drug prices were compiled based on surveys conducted in the state of Sao Paulo, at the point of sale, between February 2009 and May 2012. RESULTS The mean drug prices charged at the point of sale (pharmacies) were well below the maximum price to the consumer, compared with many drugs sold in Brazil. Between 2009 and 2012, 44 of the 129 prices, corresponding to 99 drugs listed in the database of compiled prices, showed a variation of more than 20.0% in the mean prices at the point of sale and the maximum price to the consumer. In addition, many laboratories have refused to apply the price adequacy coefficient in their sales to government agencies. CONCLUSIONS The regulation implemented by the pharmaceutical market regulator was unable to significantly control prices of marketed drugs, without succeeding to push them to levels lower than those determined by the pharmaceutical industry and failing, therefore, in its objective to promote pharmaceutical support for the public. It is necessary reconstruct the regulatory law to allow market prices to be reduced by the regulator as well as institutional strengthen this government body. PMID:26083945

Pharmaceutical policies: effects of reference pricing, other pricing, and purchasing policies.

PubMed

Acosta, Angela; Ciapponi, Agustín; Aaserud, Morten; Vietto, Valeria; Austvoll-Dahlgren, Astrid; Kösters, Jan Peter; Vacca, Claudia; Machado, Manuel; Diaz Ayala, Diana Hazbeydy; Oxman, Andrew D

2014-10-16

Pharmaceuticals are important interventions that could improve people's health. Pharmaceutical pricing and purchasing policies are used as cost-containment measures to determine or affect the prices that are paid for drugs. Internal reference pricing establishes a benchmark or reference price within a country which is the maximum level of reimbursement for a group of drugs. Other policies include price controls, maximum prices, index pricing, price negotiations and volume-based pricing. To determine the effects of pharmaceutical pricing and purchasing policies on health outcomes, healthcare utilisation, drug expenditures and drug use. We searched the Cochrane Central Register of Controlled Trials (CENTRAL), part of The Cochrane Library (including the Effective Practice and Organisation of Care Group Register) (searched 22/10/2012); MEDLINE In-Process & Other Non-Indexed Citations and MEDLINE, Ovid (searched 22/10/2012); EconLit, ProQuest (searched 22/10/2012); PAIS International, ProQuest (searched 22/10/2012); World Wide Political Science Abstracts, ProQuest (searched 22/10/2012); INRUD Bibliography (searched 22/10/2012); Embase, Ovid (searched 14/12/2010); NHSEED, part of The Cochrane Library (searched 08/12/2010); LILACS, VHL (searched 14/12/2010); International Political Science Abstracts (IPSA), Ebsco (searched (17/12/2010); OpenSIGLE (searched 21/12/10); WHOLIS, WHO (searched 17/12/2010); World Bank (Documents and Reports) (searched 21/12/2010); Jolis (searched 09/10/2011); Global Jolis (searched 09/10/2011) ; OECD (searched 30/08/2005); OECD iLibrary (searched 30/08/2005); World Bank eLibrary (searched 21/12/2010); WHO - The Essential Drugs and Medicines web site (browsed 21/12/2010). Policies in this review were defined as laws; rules; financial and administrative orders made by governments, non-government organisations or private insurers. To be included a study had to include an objective measure of at least one of the following outcomes: drug use, healthcare utilisation and health outcomes or costs (expenditures); the study had to be a randomised trial, non-randomised trial, interrupted time series (ITS), repeated measures (RM) study or a controlled before-after study of a pharmaceutical pricing or purchasing policy for a large jurisdiction or system of care. Two review authors independently extracted data and assessed the risk of bias. Results were summarised in tables. There were too few comparisons with similar outcomes across studies to allow for meta-analysis or meaningful exploration of heterogeneity. We included 18 studies (seven identified in the update): 17 of reference pricing, one of which also assessed maximum prices, and one of index pricing. None of the studies were trials. All included studies used ITS or RM analyses. The quality of the evidence was low or very low for all outcomes. Three reference pricing studies reported cumulative drug expenditures at one year after the transition period. Two studies reported the median relative insurer's cumulative expenditures, on both reference drugs and cost share drugs, of -18%, ranging from -36% to 3%. The third study reported relative insurer's cumulative expenditures on total market of -1.5%. Four reference pricing studies reported median relative insurer's expenditures on both reference drugs and cost share drugs of -10%, ranging from -53% to 4% at one year after the transition period. Four reference pricing studies reported a median relative change of 15% in reference drugs prescriptions at one year (range -14% to 166%). Three reference pricing studies reported a median relative change of -39% in cost share drugs prescriptions at one year (range -87% to -17%). One study of index pricing reported a relative change of 55% (95% CI 11% to 98%) in the use of generic drugs and -43% relative change (95% CI -67% to -18%) in brand drugs at six months after the transition period. The same study reported a price change of -5.3% and -1.1% for generic and brand drugs respectively six months after the start of the policy. One study of maximum prices reported a relative change in monthly sales volume of all statins of 21% (95% CI 19% to 24%) after one year of the introduction of this policy. Four studies reported effects on mortality and healthcare utilisation, however they were excluded because of study design limitations. The majority of the studies of pricing and purchasing policies that met our inclusion criteria evaluated reference pricing. We found that internal reference pricing may reduce expenditures in the short term by shifting drug use from cost share drugs to reference drugs. Reference pricing may reduce related expenditures with effects on reference drugs but the effect on expenditures of cost share drugs is uncertain. Reference pricing may increase the use of reference drugs and may reduce the use of cost share drugs. The analysis and reporting of the effects on patients' drug expenditures were limited in the included studies and administration costs were not reported. Reference pricing effects on health are uncertain due to lack of evidence. The effects of other purchasing and pricing policies are until now uncertain due to sparse evidence. However, index pricing may reduce the use of brand drugs, increase the use of generic drugs, and may also slightly reduce the price of the generic drug when compared with no intervention.

Retail price as an outcome measure for the effectiveness of drug law enforcement.

PubMed

Bright, David A; Ritter, Alison

2010-09-01

One outcome measure of law enforcement effectiveness is the reduction in drug consumption which occurs as a result of law enforcement interventions. A theoretical relationship between drug consumption and retail price has promoted the use of retail price as a surrogate measure for consumption. In the current article, retail price is examined as a potential outcome measure for the effectiveness of law enforcement. The predictions regarding the relationship between law enforcement intensity and price are only partially supported by research. Explanations for the disconnect between the drug law enforcement activity and retail price include: rapid adaptation by market players, enforcement swamping, assumptions of rational actors, short-run versus long-run effects, structure of the illicit market, simultaneous changes that affect price in perverse ways, the role of violence in markets, and data limitations. Researchers who use retail price as an outcome measure need to take into account the complex relationship between drug law enforcement interventions and the retail price of illicit drugs. Viable outcome measures which can be used as complements to retail price are worth investigation. Copyright 2009 Elsevier B.V. All rights reserved.

The economics of prescription drug prices, government intervention, and the importation of drugs from Canada.

PubMed

Openshaw, Matthew S

2005-01-01

Popular attention has focused on the skyrocketing health care costs in the United States and specifically on increasing insurance and prescription drug prices. Individuals and some local governments have advocated importing price-controlled prescription drugs from Canada to help ease the financial burden. What effects would this have on consumer prices, drug companies' incentives, and the development of new medications?

Willingness to Pay for Drug Rehabilitation: Implications for Cost Recovery October 14, 2007

PubMed Central

Bishai, D.; Sindelar, J.; Ricketts, E. P.; Huettner, S.; Cornelius, L.; Lloyd, J. J.; Havens, J. R.; Latkin, C. A.; Strathdee, S. A.

2008-01-01

Objectives This study estimates the value that clients place on methadone maintenance and how this value varies with the effectiveness of treatment and availability of case management. We provide the first estimate of the price elasticity of the demand for drug treatment. Methods We interviewed 241 heroin users who had been referred to, but had not yet entered, methadone maintenance treatment in Baltimore, Maryland. We asked each subject to state a preference among three hypothetical treatment programs that varied across 3 domains: weekly fee paid by the client out-of-pocket ($5 to $100), presence/absence of case management, and time spent heroin-free (3 to 24 months). Each subject was asked to complete 18 orthogonal comparisons. Subsequently each subject was asked if they likely would enroll in their preferred choice among the set of three. We computed the expected willingness to pay (WTP) as the probability of enrollment times the fee considered in each choice considered from a multivariate logistic model that controlled for product attributes. We also estimated the price elasticity of demand. Results The median expected fee subjects were willing to pay for a program that offered 3 months of heroin-free time was $7.30 per week, rising to $17.11 per week for programs that offered 24 months of heroin-free time. The availability of case management increased median WTP by $5.64 per week. The price elasticity was −0.39 (SE 0.042). Conclusions Clients will pay more for higher rates of treatment success and for the presence of case management. Clients are willing to pay for drug treatment but the median willingness to pay falls short of the estimated program costs of $82 per week. Thus a combined approach of user fees and subsidization may be the optimal financing strategy for the drug treatment system. PMID:18207264

Effect of multiple-source entry on price competition after patent expiration in the pharmaceutical industry.

PubMed Central

Suh, D C; Manning, W G; Schondelmeyer, S; Hadsall, R S

2000-01-01

OBJECTIVE: To analyze the effect of multiple-source drug entry on price competition after patent expiration in the pharmaceutical industry. DATA SOURCES: Originators and their multiple-source drugs selected from the 35 chemical entities whose patents expired from 1984 through 1987. Data were obtained from various primary and secondary sources for the patents' expiration dates, sales volume and units sold, and characteristics of drugs in the sample markets. STUDY DESIGN: The study was designed to determine significant factors using the study model developed under the assumption that the off-patented market is an imperfectly segmented market. PRINCIPAL FINDINGS: After patent expiration, the originators' prices continued to increase, while the price of multiple-source drugs decreased significantly over time. By the fourth year after patent expiration, originators' sales had decreased 12 percent in dollars and 30 percent in quantity. Multiple-source drugs increased their sales twofold in dollars and threefold in quantity, and possessed about one-fourth (in dollars) and half (in quantity) of the total market three years after entry. CONCLUSION: After patent expiration, multiple-source drugs compete largely with other multiple-source drugs in the price-sensitive sector, but indirectly with the originator in the price-insensitive sector. Originators have first-mover advantages, and therefore have a market that is less price sensitive after multiple-source drugs enter. On the other hand, multiple-source drugs target the price-sensitive sector, using their lower-priced drugs. This trend may indicate that the off-patented market is imperfectly segmented between the price-sensitive and insensitive sector. Consumers as a whole can gain from the entry of multiple-source drugs because the average price of the market continually declines after patent expiration. PMID:10857475

State prescription drug price Web sites: how useful to consumers?

PubMed

Tu, Ha T; Corey, Catherine G

2008-02-01

To aid consumers in comparing prescription drug costs, many states have launched Web sites to publish drug prices offered by local retail pharmacies. The current push to make retail pharmacy prices accessible to consumers is part of a much broader movement to increase price transparency throughout the health-care sector. Efforts to encourage price-based shopping for hospital and physician services have encountered widespread concerns, both on grounds that prices for complex services are difficult to measure and compare accurately and that quality varies substantially across providers. Experts agree, however, that prescription drugs are much easier to shop for than other, more complex health services. However, extensive gaps in available price information--the result of relying on Medicaid data--seriously hamper the effectiveness of state drug price-comparison Web sites, according to a new study by the Center for Studying Health System Change (HSC). An alternative approach--requiring pharmacies to submit price lists to the states--would improve the usefulness of price information, but pharmacies typically oppose such a mandate. Another limitation of most state Web sites is that price information is restricted to local pharmacies, when online pharmacies, both U.S. and foreign, often sell prescription drugs at substantially lower prices. To further enhance consumer shopping tools, states might consider expanding the types of information provided, including online pharmacy comparison tools, lists of deeply discounted generic drugs offered by discount retailers, and lists of local pharmacies offering price matches.

A global comparison of the cost of patented cancer drugs in relation to global differences in wealth.

PubMed

Goldstein, Daniel A; Clark, Jonathon; Tu, Yifan; Zhang, Jie; Fang, Fenqi; Goldstein, Robert; Stemmer, Salomon M; Rosenbaum, Eli

2017-09-22

There are major differences in cancer drug prices around the world. However, the patterns of affordability of these drugs are poorly understood. The objective of this study was to compare patterns of affordability of cancer drugs in Australia, China, India, Israel, South Africa, the United Kingdom, and the United States. Cancer drug prices are highest in the United States. Cancer drugs are the least affordable in India by a large margin. Despite lower prices than in the USA, cancer drugs are less affordable in middle-income countries than in high-income countries. We obtained the prices of a basket of cancer drugs in all 7 countries, and converted the prices to US$ using both foreign exchange rates and purchasing power parity. We assessed international differences in wealth by collecting values for gross domestic product (GDP) per capita in addition to average salaries. We compared patterns of affordability of cancer drugs by dividing the drug prices by the markers of wealth. Cancer drugs are less affordable in middle-income countries than in high-income countries. Differential pricing may be an acceptable policy to ensure global affordability and access to highly active anti-cancer therapies.

Hipoglicemiantes Orais Para Diabetes Mellitus Tipo 2: Comparação de Preços no Brasil e em Outros Sistemas Universais de Saúde.

PubMed

de Oliveira, Gustavo L A; Izidoro, Jans B; Ferré, Felipe; E Sousa, Samuel R A; Acurcio, Francisco A

2018-06-20

To estimate the average price of oral hypoglycemic agents provided by the Brazilian health system (SUS) and to compare them to other public health systems. Cross-sectional study about drug prices purchased by Belo Horizonte (municipal level), Minas Gerais (state level) and federal institutions in January and February of 2014. Average prices were calculated by defined daily dosage (DDD) and were compared to the management levels and the program "Aqui Tem Farmácia Popular" (ATFP). For international comparison, reimbursement values from Spain, Portugal, the United Kingdom and Canada (Province of Quebec) were used. Belo Horizonte had higher average prices than Minas Gerais. In general, essential oral hypoglycemic agents purchased by the SUS had lower prices than ATFP. For example, glibenclamide 5 mg was 1.023% more expensive. Metformin purchased by ATFP was more expensive than by SUS. Eight drugs purchased by SUS had average values above the respective Brazilian price ceiling. As an international comparison, SUS had lower average prices for glibenclamide and metformin. In ATFP, metformin was more expensive than in other countries, while glibenclamide was cheaper than Portugal only. The municipal management level had higher average prices than state level. Oral hypoglycemic agents purchased by SUS are predominantly cheaper than ATFP. Average prices paid by SUS are lower, while the prices paid by ATFP are higher than the reimbursed amounts from other countries. Copyright © 2018. Published by Elsevier Inc.

The Short-Term Impact of Ontario's Generic Pricing Reforms

PubMed Central

Law, Michael R.; Ystma, Alison; Morgan, Steven G.

2011-01-01

Background Canadians pay amongst the highest generic drug prices in the world. In July 2010, the province of Ontario enacted a policy that halved reimbursement for generic drugs from the public drug plan, and substantially lowered prices for private purchases. We quantified the impact of this policy on overall generic drug expenditures in the province, and projected the impact in other provinces had they mimicked this pricing change. Methods We used quarterly prescription generic drug dispensing data from the IMS-Brogan CompuScript Audit. We used the price per unit in both the pre- and post-policy period and two economics price indexes to estimate the expenditure reduction in Ontario. Further, we used the post-policy Ontario prices to estimate the potential reduction in other provinces. Results We estimate that total expenditure on generic drugs in Ontario during the second half of 2010 was between $181 and $194 million below what would be expected if prices had remained at pre-policy level. Over half of the reduction in spending was due to savings on just 10 generic ingredients. If other provinces had matched Ontario's prices, their expenditures over during the latter half of 2010 would have been $445 million lower. Discussion We found that if Ontario's pricing scheme were adopted nationally, overall spending on generic drugs in Canada would drop at least $1.28 billion annually—a 5% decrease in total prescription drug expenditure. Other provinces should seriously consider both changes to their generic drug prices and the use of more competitive bulk purchasing policies. PMID:21829581

Pharmacy access to sterile syringes for injection drug users: attitudes of participants in a syringe exchange program.

PubMed

Junge, B; Vlahov, D; Riley, E; Huettner, S; Brown, M; Beilenson, P

1999-01-01

To examine attitudes of participants of a van-based syringe exchange program (SEP) toward the hypothetical prospect of pharmacy-based syringe access. One-time, cross-sectional survey. Baltimore, Maryland. 206 injection drug users who participate in the Baltimore SEP. Face-to-face interviews. Location preferred for obtaining syringes, drug and syringe use, past experience with pharmacies, and willingness to pay. The sample was 67% men, 95% African American, and 95% unemployed; mean age was 39.8 years. A total of 19% of respondents had bought syringes at a pharmacy during the prior six months. Some 37% reported having been turned down when asking for syringes at a pharmacy, most commonly due to lack of identification to prove diabetic status (50%). If legal restrictions were lifted, 92% of respondents would obtain syringes from pharmacies, and would be willing to pay a mean price of $0.80 (median = $1.00) per syringe. Women were more likely than men to report the intention to switch from van-based SEP to pharmacy (57% versus 38%, p = .045). If current legal restrictions were lifted, pharmacies would be a viable syringe source appealing particularly to women, suggesting gender-specific access issues that should be addressed. The per-syringe price that study participants would be willing to pay exceeds typical retail prices, suggesting that pharmacists could charge enough per syringe to recoup operational costs.

Variation in Drug Prices at Pharmacies: Are Prices Higher in Poorer Areas?

PubMed Central

Gellad, Walid F; Choudhry, Niteesh K; Friedberg, Mark W; Brookhart, M Alan; Haas, Jennifer S; Shrank, William H

2009-01-01

Objective To determine whether retail prices for prescription drugs are higher in poorer areas. Data Sources The MyFloridarx.com website, which provides retail prescription prices at Florida pharmacies, and median ZIP code income from the 2000 Census. Study Design We compared mean pharmacy prices for each of the four study drugs across ZIP code income groups. Pharmacies were classified as either chain pharmacies or independent pharmacies. Data Collection Prices were downloaded in November 2006. Principal Findings Across the four study drugs, mean prices were highest in the poorest ZIP codes: 9 percent above the statewide average. Independent pharmacies in the poorest ZIP codes charged the highest mean prices. Conclusions Retail prescription prices appear to be higher in poorer ZIP codes of Florida. PMID:19178584

Multi-indication and Combination Pricing and Reimbursement of Pharmaceuticals: Opportunities for Improved Health Care through Faster Uptake of New Innovations.

PubMed

Persson, Ulf; Norlin, J M

2018-04-01

Many pharmaceuticals are effective in multiple indications and the degree of effectiveness may differ. A product-based pricing and reimbursement system with a single price per product is insufficient to reflect the variable values between different indications. The objective of this article is to present examples of actual pricing and reimbursement decisions using current value-based pricing in Sweden and to discuss their implications and possible solutions. The value of several cancer drugs was estimated for various indications based on a willingness-to-pay threshold of 1 million SEK (EUR 104,000) per QALY gained. For some drugs, the estimated value was higher than the drug acquisition cost in several indications, whilst in others, the estimated value was lower than the drug acquisition cost. Drugs used in combination present a special case. If a drug prolongs survival and consequently also a continued use of the anchor drug, the combination use may not be cost effective even at a zero price. In a product-based pricing and reimbursement system, patients may not get access to drugs or access may be delayed and manufacturers may be discouraged to invest in future indications. To overcome these issues, there are several approaches to link price and value. One approach is a "weighted-average" price based on an average of the value across all indications. Another is "multi-indication pricing," which enables price differentiation between indications. However, there are several barriers for applying multi-indication pricing and reimbursement schemes. One barrier is the lack of existing administrative infrastructure to track patients' indications.

Drug Prices and Emergency Department Mentions for Cocaine and Heroin

PubMed Central

Caulkins, Jonathan P.

2001-01-01

Objectives. In this report, the author illustrates the historic relation between retail drug prices and emergency department mentions for cocaine and heroin. Methods. Price series based on the Drug Enforcement Administration's System to Retrieve Information From Drug Evidence database were correlated with data on emergency department mentions from the Drug Abuse Warning Network for cocaine (1978–1996) and heroin (1981–1996). Results. A simple model in which emergency department mentions are driven by only prices explains more than 95% of the variation in emergency department mentions. Conclusions. Fluctuations in prices are an important determinant of adverse health outcomes associated with drugs. PMID:11527779

The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts

PubMed Central

Abboud, Camille; Berman, Ellin; Cohen, Adam; Cortes, Jorge; DeAngelo, Daniel; Deininger, Michael; Devine, Steven; Druker, Brian; Fathi, Amir; Jabbour, Elias; Jagasia, Madan; Kantarjian, Hagop; Khoury, Jean; Laneuville, Pierre; Larson, Richard; Lipton, Jeffrey; Moore, Joseph O.; Mughal, Tariq; O’Brien, Susan; Pinilla-Ibarz, Javier; Quintas-Cardama, Alfonso; Radich, Jerald; Reddy, Vishnu; Schiffer, Charles; Shah, Neil; Shami, Paul; Silver, Richard T.; Snyder, David; Stone, Richard; Talpaz, Moshe; Tefferi, Ayalew; Van Etten, Richard A.; Wetzler, Meir; Abruzzese, Elisabetta; Apperley, Jane; Breccia, Massimo; Byrne, Jenny; Cervantes, Francisco; Chelysheva, Ekaterina; Clark, R. E.; de Lavallade, Hugues; Dyagil, Iryna; Gambacorti-Passerini, Carlo; Goldman, John; Haznedaroglu, Ibrahim; Hjorth-Hansen, Henrik; Holyoake, Tessa; Huntly, Brian; le Coutre, Philipp; Lomaia, Elza; Mahon, Francois-Xavier; Marin-Costa, David; Martinelli, Giovanni; Mayer, Jiri; Milojkovic, Dragana; Olavarria, Eduardo; Porkka, Kimmo; Richter, Johan; Rousselot, Philippe; Saglio, Giuseppe; Saydam, Guray; Stentoft, Jesper; Turkina, Anna; Vigneri, Paolo; Zaritskey, Andrey; Aguayo, Alvaro; Ayala, Manuel; Bendit, Israel; Maria Bengio, Raquel; Best, Carlos; Bullorsky, Eduardo; Cervera, Eduardo; DeSouza, Carmino; Fanilla, Ernesto; Gomez-Almaguer, David; Hamerschlak, Nelson; Lopez, Jose; Magarinos, Alicia; Meillon, Luis; Milone, Jorge; Moiraghi, Beatriz; Pasquini, Ricardo; Pavlovsky, Carolina; Ruiz-Arguelles, Guillermo J.; Spector, Nelson; Arthur, Christopher; Browett, Peter; Grigg, Andrew; Hu, Jianda; Huang, Xiao-jun; Hughes, Tim; Jiang, Qian; Jootar, Saengsuree; Kim, Dong-Wook; Malhotra, Hemant; Malhotra, Pankaj; Matsumura, Itaru; Melo, Junia; Ohnishi, Kazunori; Ohno, Ryuzo; Saikia, Tapan; Schwarer, Anthony P.; Takahashi, Naoto; Tam, Constantine; Tauchi, Tetsuzo; Usuki, Kensuke; Wang, Jianxiang; Abdel-Rahman, Fawzi; Deeb Saeed Aljurf, Mahmoud; Bazarbachi, Ali; Ben Yehuda, Dina; Chaudhri, Naeem; Durosinmi, Muheez; Kamel, Hossam; Louw, Vernon; Francis Matti, Bassam; Nagler, Arnon; Raanani, Pia; Salem, Ziad

2013-01-01

As a group of more than 100 experts in chronic myeloid leukemia (CML), we draw attention to the high prices of cancer drugs, with the particular focus on the prices of approved tyrosine kinase inhibitors for the treatment of CML. This editorial addresses the multiple factors involved in cancer drug pricing and their impact on individual patients and health care policies, and argues for the need to (1) lower the prices of cancer drugs to allow more patients to afford them and (2) maintain sound long-term health care policies. PMID:23620577

Pricing appraisal of anti-cancer drugs in the South East Asian, Western Pacific and East Mediterranean Region.

PubMed

Salmasi, Shahrzad; Lee, Kah Seng; Ming, Long Chiau; Neoh, Chin Fen; Elrggal, Mahmoud E; Babar, Zaheer-Ud- Din; Khan, Tahir Mehmood; Hadi, Muhammad Abdul

2017-12-28

Globally, cancer is one of the leading causes of mortality. High treatment cost, partly owing to higher prices of anti-cancer drugs, presents a significant burden on patients and healthcare systems. The aim of the present study was to survey and compare retail prices of anti-cancer drugs between high, middle and low income countries in the South-East Asia, Western Pacific and Eastern Mediterranean regions. Cross-sectional survey design was used for the present study. Pricing data from ten counties including one from South-East Asia, two from Western Pacific and seven from Eastern Mediterranean regions were used in this study. Purchasing power parity (PPP)-adjusted mean unit prices for 26 anti-cancer drug presentations (similar pharmaceutical form, strength, and pack size) were used to compare prices of anti-cancer drugs across three regions. A structured form was used to extract relevant data. Data were entered and analysed using Microsoft Excel®. Overall, Taiwan had the lowest mean unit prices while Oman had the highest prices. Six (23.1%) and nine (34.6%) drug presentations had a mean unit price below US$100 and between US$100 and US$500 respectively. Eight drug presentations (30.7%) had a mean unit price of more than US$1000 including cabazitaxel with a mean unit price of $17,304.9/vial. There was a direct relationship between income category of the countries and their mean unit price; low-income countries had lower mean unit prices. The average PPP-adjusted unit prices for countries based on their income level were as follows: low middle-income countries (LMICs): US$814.07; high middle income countries (HMICs): US$1150.63; and high income countries (HICs): US$1148.19. There is a great variation in pricing of anticancer drugs in selected countires and within their respective regions. These findings will allow policy makers to compare prices of anti-cancer agents with neighbouring countries and develop policies to ensure accessibility and affordability of anti-cancer drugs.

76 FR 27062 - Biologics Price Competition and Innovation Act of 2009; Options for a User Fee Program for...

Federal Register 2010, 2011, 2012, 2013, 2014

2011-05-10

... under the Public Health Service Act (PHS Act). FDA is requesting input on the identified principles for... adhere to these principles, and performance goals for this program. FDA plans to review the comments... drug marketing applications were submitted each year for FDA review. The number of participants in the...

77 FR 1877 - Medicare Program; Medicare Advantage and Prescription Drug Benefit Programs: Negotiated Pricing...

Federal Register 2010, 2011, 2012, 2013, 2014

2012-01-12

... theories under which we might have such authority. Also in the January 12, 2009 Federal Register, we..., and our final rule with comment period set forth three theories under which we might have such authority. These legal theories are described in detail in our January 12, 2009 final rule with comment...

21 CFR 200.200 - Prescription drugs; reminder advertisements and reminder labeling to provide price information to...

Code of Federal Regulations, 2010 CFR

2010-04-01

... 21 Food and Drugs 4 2010-04-01 2010-04-01 false Prescription drugs; reminder advertisements and reminder labeling to provide price information to consumers. 200.200 Section 200.200 Food and Drugs FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES (CONTINUED) DRUGS: GENERAL GENERAL Prescription Drug Consumer Price Listing §...

Assessing potential prescription reimbursement changes: Estimated acquisition costs in Wisconsin

PubMed Central

Kreling, David H.

1989-01-01

Potential impacts from two methods of changing prescription drug ingredient reimbursement in the Wisconsin Medicaid program were estimated. Current reimbursement amounts were compared with those resulting from either direct prices for eight manufacturers' products and average wholesale price less 10.5 percent for other products or wholesaler cost plus 5.01 percent for all products. The resulting overall average ingredient cost reimbursement reductions were 6.64 percent ($0.56 per prescription) and 6.94 percent ($0.59 per prescription) for the two methods, respectively. The results should be viewed from the perspective of both program savings and reduced pharmacists' revenues. PMID:10313098

Pricing of multiple dosage prescription medications: an analysis of the Ontario Drug Benefit Formulary.

PubMed

Lexchin, Joel

2009-07-01

This paper investigates the pricing strategy (perfect flat pricing, perfect monotonic pricing, intermediate) used for multiple dosage medications listed in the Ontario Drug Benefit Formulary. All multiple dosage solid medications containing a single active ingredient newly listed in the Ontario Drug Benefit Formulary between 1996 and 2005 were identified. The relationship between price and dosage was calculated using a previously developed method. Seventy-three multiple dosage medications were introduced. Where medications were equivalent to existing ones in most cases companies followed the pricing strategy used by therapeutically equivalent drugs already in the formulary. Where there were no equivalent products companies did not adopt any particular pricing strategy. There was no difference in the way that companies priced scored tablets versus unscored tablets and capsules or in the way that they priced drugs that had objective measurements of efficacy/effectiveness, for example blood pressure, versus those that did not have these measurements. When Monotonic pricing is used it leads to higher expenditures whereas flat pricing results in lower expenditures and offers more predictability in expenditures. Provincial governments should consider requiring flat pricing in return for formulary listing.

Prediction of Change in Prescription Ingredient Costs and Co-payment Rates under a Reference Pricing System in South Korea.

PubMed

Heo, Ji Haeng; Rascati, Karen L; Lee, Eui-Kyung

2017-05-01

The reference pricing system (RPS) establishes reference prices within interchangeable reference groupings. For drugs priced higher than the reference point, patients pay the difference between the reference price and the total price. To predict potential changes in prescription ingredient costs and co-payment rates after implementation of an RPS in South Korea. Korean National Health Insurance claims data were used as a baseline to develop possible RPS models. Five components of a potential RPS policy were varied: reference groupings, reference pricing methods, co-pay reduction programs, manufacturer price reductions, and increased drug substitutions. The potential changes for prescription ingredient costs and co-payment rates were predicted for the various scenarios. It was predicted that transferring the difference (total price minus reference price) from the insurer to patients would reduce ingredient costs from 1.4% to 22.8% for the third-party payer (government), but patient co-payment rates would increase from a baseline of 20.4% to 22.0% using chemical groupings and to 25.0% using therapeutic groupings. Savings rates in prescription ingredient costs (government and patient combined) were predicted to range from 1.6% to 13.7% depending on various scenarios. Although the co-payment rate would increase, a 15% price reduction by manufacturers coupled with a substitution rate of 30% would result in a decrease in the co-payment amount (change in absolute dollars vs. change in rates). Our models predicted that the implementation of RPS in South Korea would lead to savings in ingredient costs for the third-party payer and co-payments for patients with potential scenarios. Copyright © 2017 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

A global comparison of the cost of patented cancer drugs in relation to global differences in wealth

PubMed Central

Goldstein, Daniel A.; Clark, Jonathon; Tu, Yifan; Zhang, Jie; Fang, Fenqi; Goldstein, Robert

2017-01-01

Introduction There are major differences in cancer drug prices around the world. However, the patterns of affordability of these drugs are poorly understood. The objective of this study was to compare patterns of affordability of cancer drugs in Australia, China, India, Israel, South Africa, the United Kingdom, and the United States. Results Cancer drug prices are highest in the United States. Cancer drugs are the least affordable in India by a large margin. Despite lower prices than in the USA, cancer drugs are less affordable in middle-income countries than in high-income countries. Materials and Methods We obtained the prices of a basket of cancer drugs in all 7 countries, and converted the prices to US$ using both foreign exchange rates and purchasing power parity. We assessed international differences in wealth by collecting values for gross domestic product (GDP) per capita in addition to average salaries. We compared patterns of affordability of cancer drugs by dividing the drug prices by the markers of wealth. Conclusions Cancer drugs are less affordable in middle-income countries than in high-income countries. Differential pricing may be an acceptable policy to ensure global affordability and access to highly active anti-cancer therapies. PMID:29069727

Price-cap Regulation, Uncertainty and the Price Evolution of New Pharmaceuticals.

PubMed

Shajarizadeh, Ali; Hollis, Aidan

2015-08-01

This paper examines the effect of the regulations restricting price increases on the evolution of pharmaceutical prices. A novel theoretical model shows that this policy leads firms to price new drugs with uncertain demand above the expected value initially. Price decreases after drug launch are more likely, the higher the uncertainty. We empirically test the model's predictions using data from the Canadian pharmaceutical market. The level of uncertainty is shown to play a crucial role in drug pricing strategies. © 2014 The Authors. Health Economics Published by John Wiley & Sons Ltd.

The development of a value based pricing index for new drugs in metastatic colorectal cancer.

PubMed

Dranitsaris, George; Truter, Ilse; Lubbe, Martie S

2011-06-01

Worldwide, prices for cancer drugs have been under downward pressure where several governments have mandated price cuts of branded products. A better alternative to government mandated price cuts would be to estimate a final price based on drug performance, cost effectiveness and a country's ability to pay. We developed a global pricing index for new cancer drugs in patients with metastatic colorectal cancer (mCRC) that encompasses all of these attributes. A pharmacoeconomic model was developed to simulate mCRC patients receiving chemotherapy plus a 'new drug' that improves survival by 1.4, 3 and 6months, respectively. Cost and utility data were obtained from cancer centres and oncology nurses (n=112) in Canada, Spain, India, South Africa and Malaysia. Multivariable analysis was then used to develop the pricing index, which considers survival benefit, per capita GDP and income dispersion (as measured by the Gini coefficient) as predictor variables. Higher survival benefits were associated with elevated drug prices, especially in higher income countries such as Canada. For Argentina with a per capita GDP of $15,000 and a Gini coefficient of 51, the index estimated that for a drug which provides a 4month survival benefit in mCRC, the value based price would be $US 630 per dose. In contrast, the same drug in a wealthier country like Norway (per capita GDP=$50,000) could command a price of $US 2,775 per dose. The application of this index to estimate a price based on cost effectiveness and the wealth of a nation would be important for opening dialogue between the key stakeholders and a better alternative to government mandated price cuts. Copyright © 2011 Elsevier Ltd. All rights reserved.

Prices of over-the-counter drugs used by 15-year-old adolescents in Germany and their association with socioeconomic background.

PubMed

Italia, Salvatore; Wolfenstetter, Silke B; Brüske, Irene; Heinrich, Joachim; Berdel, Dietrich; von Berg, Andrea; Lehmann, Irina; Standl, Marie; Teuner, Christina M

2017-11-25

In Germany, over-the-counter (OTC) drugs are normally reimbursed up to the age of 12 years only. The aim of this study was to analyse prices of over-the-counter drugs used by adolescents in Germany and their association with socioeconomic factors. Based on the German GINIplus and LISAplus birth cohorts, data on drug utilization among 15-year-old adolescents (n = 4677) were collected using a self-administered questionnaire. The reported drugs were subdivided into prescription drugs and OTC drugs. The drugs' prices were tracked by the pharmaceutical identification numbers. Overall, 1499 OTC drugs with clearly identifiable prices were eligible for analysis. Their mean price was €9.75 (95% confidence interval: €9.27-10.22). About 75% of the OTC drugs cost less than €10. Higher mean prices were associated with residing in Munich (€10.74; 95% confidence interval: €9.97-11.52) and with higher paternal education (e.g. highest education level: €10.17; 95% confidence interval: €9.47-10.86). Adolescents residing in Munich (in comparison with the less wealthy region of Wesel) and adolescents with higher educated fathers were also significantly more likely to use OTC drugs costing ≥ €10 or ≥ €25, respectively. The price of €10 for non-reimbursable OTC drugs may represent a (psychological) threshold. Higher prices could discourage especially adolescents from a lower socioeconomic background from taking medically advisable but non-reimbursable OTC drugs.

The effect of generic competition on the price of brand-name drugs.

PubMed

Lexchin, Joel

2004-04-01

Literature from the US has shown that brand-name manufacturers do not compete on price once generic competitors become available. This study was undertaken to investigate if this is also true in Canada. Editions of the Ontario Drug Benefit Formulary were used to identify brand-name drugs that lacked generic competition in July 1990 but had acquired one or more generic competitors by December 1998. Prices of the brand-name drugs were compared before generic competition, at the point when generic competition started and subsequent to the initiation of competition. Price changes for 81 different products in 144 separate presentations were analysed. There was no statistically significant change in brand-name prices when generic competition started. The movement of brand-name prices was not influenced by whether the generic was made by the company producing the brand-name product or price freezes imposed by the Ontario government. When generics first became available having four or more generics was associated with a rise in the price of the brand-name drugs compared to having one, two or three generic competitor(s). The lack of price competition may lead to increased costs in the private market. Private insurance companies generally do not require generic substitution and some provinces do not require generic substitution for cash-paying customers. Maintaining higher prices on brand-name drugs impacts on the prices of new patented medications coming onto the Canadian market under the current pricing guidelines of the Patented Medicine Prices Review Board.

An island apart? Risks and prices in the Australian cryptomarket drug trade.

PubMed

Cunliffe, Jack; Martin, James; Décary-Hétu, David; Aldridge, Judith

2017-12-01

Australia has a reputation as an anomaly with regard to cryptomarket drug trading, with seemingly disproportionately high levels of activity given its relatively small size, high prices and anecdotal accounts of it being a destination where many foreign-based vendors will not sell. This paper aims to investigate these claims from a risk and prices perspective. By analysing data for over 60,000 drug products available for purchase from eight cryptomarkets in January 2016 this work builds a descriptive picture of the Australian online market in comparison to the rest of the world, before moving onto analyse the prices of drugs available to Australian consumers, both online and though conventional drug supply routes. Results show that the Australian online illicit drugs market is of considerable size, internally isolated and with methamphetamine sales being particularly large by comparison to other countries. Australian cryptomarket vendors sell drugs at significantly higher prices than those listed by their foreign counterparts. Online prices are however broadly comparable to street prices, with the exception of methamphetamine where prices appear to be much lower online. These findings indicate that the perceived stringency of Australian border protection inadvertently increases the competitiveness and local market share of domestic cryptomarket vendors via a consumer side 'risk tariff', challenging the traditionally vendor-oriented drugs risk and prices framework. Copyright © 2017 Elsevier B.V. All rights reserved.

78 FR 64468 - Request for Information: Supplemental Nutrition Assistance Program (SNAP) Enhancing Retail Food...

Federal Register 2010, 2011, 2012, 2013, 2014

2013-10-29

... beneficiaries shopped at supermarkets or superstores at least once each month. According to Sections 3(k), (p... concessional prices, (5) in the case of narcotics addicts or alcoholics, and their children, served by drug...

The high price of anticancer drugs: origins, implications, barriers, solutions.

PubMed

Prasad, Vinay; De Jesús, Kevin; Mailankody, Sham

2017-06-01

Globally, annual spending on anticancer drugs is around US$100 billion, and is predicted to rise to $150 billion by 2020. In the USA, a novel anticancer drug routinely costs more than $100,000 per year of treatment. When adjusted for per capita spending power, however, drugs are most unaffordable in economically developing nations, such as India and China. Not only are launch prices high and rising, but individual drug prices are often escalated during exclusivity periods. High drug prices harm patients - often directly through increased out-of-pocket expenses, which reduce levels of patient compliance and lead to unfavourable outcomes - and harms society - by imposing cumulative price burdens that are unsustainable. Moreover, high drug prices are not readily explained by rational factors, including the extent of benefit patients are likely to derive, the novelty of the agents, or spending on research and development. Herein, we summarize the available empirical evidence on the costs of anticancer drugs, probe the origins and implications of these high costs, and discuss proposed solutions.

[Policies encouraging price competition in the generic drug market: Lessons from the European experience].

PubMed

Puig-Junoy, Jaume

2010-01-01

To describe alternative policies aimed at encouraging price competition in generic drug markets in countries with strict price regulation, and to present some case studies drawn from the European experience. Systematic literature review of articles and technical reports published after 1999. The shortcomings in consumer price competition observed in some European generic markets, including Spain, may be reduced through three types of public reimbursement or financing reforms: policies aimed at improving the design of current maximum reimbursement level policies; policies aimed at monitoring competitive prices in order to reimburse real acquisition cost to pharmacies; and, more radical and market-oriented policies such as competitive tendering of public drug purchases. The experience of recent reforms adopted in Germany, Belgium, Holland, Norway, and Sweden offers a useful guide for highly price-regulated European countries, such as Spain, currently characterized by limited consumer price competition and the high discounts offered to pharmacy purchases. Direct price regulation and/or the generic reference pricing systems used to reduce generic drug prices in many European countries can be successfully reformed by adopting measures more closely aimed at encouraging consumer price competition in generic drug markets. Copyright 2009 SESPAS. Published by Elsevier Espana. All rights reserved.

Pharmaceutical companies' variation of drug prices within and among countries can improve long-term social well-being.

PubMed

Lichtenberg, Frank R

2011-08-01

Drug prices vary considerably across and within countries. On average, pharmaceutical companies charge lower prices in low-income countries than in industrialized nations. Manufacturers' ability to price products differently for different markets--a practice known as price discrimination--increases their profits overall. But it is also likely to result in greater investment in research and development, and therefore in more new drugs on the market. Although reducing price discrimination in order to cut costs might benefit consumers in the short run, it would harm them in the long run by reducing the number of new drugs developed.

Product-line extensions and pricing strategies of brand-name drugs facing patent expiration.

PubMed

Hong, Song Hee; Shepherd, Marvin D; Scoones, David; Wan, Thomas T H

2005-01-01

This study proposed an alternative to brand loyalty as the explanation for the continued price rigidity of patent-expired brand-name prescription drugs despite the increase in market entry of generic drugs facilitated by the 1984 Drug Price Competition and Patent Term Restoration Act. Study hypotheses were to test (1) whether market entries of new-product extensions are associated with market success of original brand-name drugs before generic drug entry, and (2) whether original brand-name drugs exhibit price rigidity to generic entry only when they are extended. The design is a retrospective follow-up study for the prescription drug brands that lost their patents between 1987 and 1992. The drug brands were limited to nonantibiotic, orally administered drugs containing only 1 active pharmaceutical ingredient. Information on patent expiration, entry of a product extension, and market success were determined from the U.S. Food and Drug Administration.s Orange Book, First DataBank, and American Druggist, respectively. Market success was defined as whether an original drug brand was listed in the top 100 prescriptions most frequently dispensed before facing generic entry. Product-line extension was defined as the appearance of another product that a company introduces within the same market after its existing product. Drug prices were average wholesale prices from the Drug Topics Red Book. The relationship between product-line extension and market success was examined using a logistic regression analysis. The price rigidity to entry was tested using a panel regression analysis. A total of 27 drug brands lost their patents between 1987 and 1992. Drug brands that achieved market success were 16 times more likely to be extended than were those that did not (OR=16, 95% confidence interval, 2.12-120.65). The price rigidity to entry existed in drug brands with extensions (beta=2.65%, P <0.033), but not in those brands without extensions (beta=-2.40%, P <0.001). This study provided some support for the alternative explanation to brand loyalty that a new product-line extension introduced for an original brand helps the original price be rigid despite the entry of generic drugs facilitated by the 1984 Drug Price Competition and Patent Term Restoration Act.

The impact of South Korea's new drug-pricing policy on market competition among off-patent drugs.

PubMed

Kwon, Hye-Young; Kim, Hyungmin; Godman, Brian; Reich, Michael R

2015-01-01

A new pricing policy was introduced in Korea in April 2012 with the aim of strengthening competition among off-patent drugs by eliminating price gaps between originators and generics. Examine the effect of newly implemented pricing policy. Retrospectively examining the effects through extracting from the National Health Insurance claims data a 30-month panel dataset (January 2011-June 2013) containing consumption data in four major therapeutic classes (antihypertensives, lipid-lowering drugs, antiulcerants and antidepressants). Proxies for market competition were examined before and after the policy. The new pricing policy did not enhance competition among off-patent drugs. In fact, price dispersion significantly decreased as opposed to the expected change. Originator-to-generic utilization increased 6.12 times (p = 0.000) after the new policy. The new pricing policy made no impact on competition among off-patent drugs. Competition in the off-patent market cannot be enhanced unless both supply and demand side measures are coordinated.

Generic drug prices and policy in Australia: room for improvement? a comparative analysis with England.

PubMed

Mansfield, Sarah J

2014-02-01

To assess the degree to which reimbursement prices in Australia and England differ for a range of generic drugs, and to analyse the supply- and demand-side factors that may contribute to these differences. Australian and English reimbursement prices were compared for a range of generic drugs using pricing information obtained from government websites. Next, a literature review was conducted to identify supply- and demand-side factors that could affect generic prices in Australia and England. Various search topics were identified addressing potential supply-side (e.g. market approval, intellectual property protection of patented drugs, generic pricing policy, market size, generic supply chain and discounting practices) and demand-side (consumers, prescribers and pharmacists) factors. Related terms were searched in academic databases, official government websites, national statistical databases and internet search engines. Analysis of drug reimbursement prices for 15 generic molecules (representing 45 different drug presentations) demonstrated that Australian prices were on average over 7-fold higher than in England. Significant supply-side differences included aspects of pricing policy, the relative size of the generics markets and the use of clawback policies. Major differences in demand-side policies related to generic prescribing, pharmacist substitution and consumer incentives. Despite recent reforms, the Australian Government continues to pay higher prices than its English counterpart for many generic medications. The results suggest that particular policy areas may benefit from review in Australia, including the length of the price-setting process, the frequency of subsequent price adjustments, the extent of price competition between originators and generics, medical professionals' knowledge about generic medicines and incentives for generic prescribing. WHAT IS KNOWN ABOUT THE TOPIC? Prices of generic drugs have been the subject of much scrutiny over recent years. From 2005 to 2010 the Australian Government responded to observations that Pharmaceutical Benefits Scheme prices for many generics were higher than in numerous comparable countries by instituting several reforms aimed at reducing the prices of generics. Despite this, several studies have demonstrated that prices for generic statins (one class of cholesterol-lowering drug) are higher in Australia compared with England and many other developed countries, and prices of numerous other generics remain higher than in the USA and New Zealand. Recently there has been increasing interest in why these differences exist. WHAT DOES THIS PAPER ADD? By including a much larger range of commonly used and costly generic drugs, this paper builds significantly on the limited previous investigations of generic drug prices in Australia and England. Additionally, this is the first comprehensive investigation of multiple supply- and, in particular, demand-side factors that may explain any price differences between these countries. WHAT ARE THE IMPLICATIONS FOR PRACTITIONERS? Practitioners may contribute to the higher prices of generic medications in Australia compared with England through relatively low rates of generic prescribing. There are also significant implications for health policy makers, as this paper demonstrates that if Australia achieved the same prices as England for many generic drugs there could be substantial savings for the Pharmaceutical Benefits Scheme.

Steady Increase In Prices For Oral Anticancer Drugs After Market Launch Suggests A Lack Of Competitive Pressure.

PubMed

Bennette, Caroline S; Richards, Catherine; Sullivan, Sean D; Ramsey, Scott D

2016-05-01

The cost of treating cancer has risen to unprecedented heights, putting tremendous financial pressure on patients, payers, and society. Previous studies have documented the rising prices of cancer drugs at launch, but less critical attention has been paid to the cost of these drugs after launch. We used pharmacy claims for commercially insured individuals to examine trends in postlaunch prices over time for orally administered anticancer drugs recently approved by the Food and Drug Administration (FDA). In the period 2007-13, inflation-adjusted per patient monthly drug prices increased 5 percent each year. Certain market changes also played a role, with prices rising an additional 10 percent with each supplemental indication approved by the FDA and declining 2 percent with the FDA's approval of a competitor drug. Our findings suggest that there is currently little competitive pressure in the oral anticancer drug market. Policy makers who wish to reduce the costs of anticancer drugs should consider implementing policies that affect prices not only at launch but also later. Project HOPE—The People-to-People Health Foundation, Inc.

Availability and variation of publicly reported prescription drug prices.

PubMed

Kullgren, Jeffrey T; Segel, Joel E; Peterson, Timothy A; Fendrick, A Mark; Singh, Simone

2017-07-01

To examine how often retail prices for prescription drugs are available on state public reporting websites, the variability of these reported prices, and zip code characteristics associated with greater price variation. Searches of state government-operated websites in Michigan, Missouri, New York, and Pennsylvania for retail prices for Advair Diskus (250/50 fluticasone propionate/salmeterol), Lyrica (pregabalin 50 mg), Nasonex (mometasone 50 mcg nasal spray), Spiriva (tiotropium 18 mcg cp-handihaler), Zetia (ezetimibe 10 mg), atorvastatin 20 mg, and metoprolol 50 mg. Data were collected for a 25% random sample of 1330 zip codes. For zip codes with at least 1 pharmacy, we used χ2 tests to compare how often prices were reported. For zip codes with at least 2 reported prices, we used Kruskal-Wallis tests to compare the median difference between the highest and lowest prices and a generalized linear model to identify zip code characteristics associated with greater price variation. Price availability varied significantly (P <.001) across states and drugs, ranging from 52% for metoprolol in Michigan to 1% for atorvastatin in Michigan. Price variation also varied significantly (P <.001) across states and drugs, ranging from a median of $159 for atorvastatin in Pennsylvania to a median of $24 for Nasonex in Missouri. The mean price variation was $52 greater (P <.001) for densely populated zip codes and $60 greater (P <.001) for zip codes with mostly nonwhite residents. Publicly reported information on state prescription drug price websites is often deficient. When prices are reported, there can be significant variation in the prices of prescriptions, which could translate into substantial savings for consumers who pay out-of-pocket for prescription drugs.

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements. Final rule.

PubMed

2016-11-15

This major final rule addresses changes to the physician fee schedule and other Medicare Part B payment policies, such as changes to the Value Modifier, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes changes related to the Medicare Shared Savings Program, requirements for Medicare Advantage Provider Networks, and provides for the release of certain pricing data from Medicare Advantage bids and of data from medical loss ratio reports submitted by Medicare health and drug plans. In addition, this final rule expands the Medicare Diabetes Prevention Program model.

Drug expenditure and new drug introductions: the Swedish experience.

PubMed

Gerdtham, U G; Johannesson, M; Jönsson, B

1993-09-01

This article measures the impact of the switch to new and more expensive drugs on the aggregate drug expenditure (both prescription and nonprescription) in Sweden during the period 1974 to 1991, and also on the disaggregated expenditure for 3 medical areas: asthma, hypertension and peptic ulcer disease. During the period studied, nominal drug expenditure increased 6-fold. The retail price index of drugs and the number of prescribed drugs accounted for 51.6 and 5.8% of this increase, respectively. The remaining residual amount accounted for 42.6%. Since the price index of drugs increased more slowly than the overall net price index of goods and services, the relative price of drugs decreased dramatically by about 30%. This means that increases in prices of drugs cannot explain the increase in real inflation-adjusted drug expenditure. We also show that the residual increase can be partly explained by the introduction of new and more expensive drugs. It is therefore argued that economic evaluations which compare the extra costs induced by new drugs with the extra benefits should be undertaken to guide decisions about the prescription of new and more expensive drugs.

The FDA Unapproved Drugs Initiative: An Observational Study of the Consequences for Drug Prices and Shortages in the United States.

PubMed

Gupta, Ravi; Dhruva, Sanket S; Fox, Erin R; Ross, Joseph S

2017-10-01

Hundreds of drug products are currently marketed in the United States without approval from the FDA. The 2006 Unapproved Drugs Initiative (UDI) requires manufacturers to remove these drug products from the market or obtain FDA approval by demonstrating evidence of safety and efficacy. Once the FDA acts against an unapproved drug, fewer manufacturers remain in the market, potentially enabling drug price increases and greater susceptibility to drug shortages. There is a need for systematic study of the UDI's effect on prices and shortages of all targeted drugs. To examine the clinical evidence for approval and association with prices and shortages of previously unapproved prescription drugs after being addressed by the UDI. Previously unapproved prescription drugs that faced UDI regulatory action or with at least 1 product that received FDA approval through manufacturers' voluntary compliance with the UDI between 2006 and 2015 were identified. The clinical evidence was categorized as either newly conducted clinical trials or use of previously published literature and/or bioequivalence studies to demonstrate safety and efficacy. We determined the change in average wholesale price, presence of shortage, and duration of shortage for each drug during the 2 years before and after UDI regulatory action or approval through voluntary compliance. Between 2006 and 2015, 34 previously unapproved prescription drugs were addressed by the UDI. Nearly 90% of those with a drug product that received FDA approval were supported by literature reviews or bioequivalence studies, not new clinical trial evidence. Among the 26 drugs with available pricing data, average wholesale price during the 2 years before and after voluntary approval or UDI action increased by a median of 37% (interquartile range [IQR] = 23%-204%; P < 0.001). The number of drugs in shortage increased from 17 (50.0%) to 25 (73.5%) during the 2 years before and after, respectively (P = 0.046). The median shortage duration in the 2 years before and after voluntary approval or UDI action increased from 31 days (IQR = 0-339) to 217 days (IQR = 0-406; P = 0.053). The UDI was associated with higher drug prices and more frequent drug shortages when compared with the period before UDI action, while the approval process for these drugs did not necessarily require new clinical evidence to establish safety or efficacy. This project was not supported by any external grants or funds. Gupta was supported by the Yale University School of Medicine Office of Student Research at the time of this study. Dhruva is supported by the Department of Veterans Affairs as part of the Robert Wood Johnson Foundation Clinical Scholars program. Ross reports receiving research support through Yale University from Johnson and Johnson to develop methods of clinical trial data sharing; from Medtronic and the FDA to develop methods for postmarket surveillance of medical devices; from the FDA to establish the Yale-Mayo Clinic Center of Excellence in Regulatory Science and Innovation; from the Blue Cross Blue Shield Association to better understand medical technology evidence generation; from the Centers for Medicare & Medicaid Services to develop and maintain performance measures that are used for public reporting; and from the Laura and John Arnold Foundation to support the Collaboration on Research Integrity and Transparency at Yale. Fox reports travel support from Oklahoma Society of Health System Pharmacists, Premier Oncology Hematology Management Society, and SEHA-United Arab Emirates. Vizient provides some financial support to the University of Utah Drug Information Service to provide summaries of drug shortage information. Gupta and Ross were responsible for the conception and design of this work, drafted the manuscript, and conducted the statistical analysis. Gupta and Fox were responsible for acquisition of data. Ross provided supervision. All authors participated in the analysis and interpretation of the data and critically revised the manuscript for important intellectual content.

Evaluation of personal digital assistant drug information databases for the managed care pharmacist.

PubMed

Lowry, Colleen M; Kostka-Rokosz, Maria D; McCloskey, William W

2003-01-01

Personal digital assistants (PDAs) are becoming a necessity for practicing pharmacists. They offer a time-saving and convenient way to obtain current drug information. Several software companies now offer general drug information databases for use on hand held computers. PDAs priced less than 200 US dollars often have limited memory capacity; therefore, the user must choose from a growing list of general drug information database options in order to maximize utility without exceeding memory capacity. This paper reviews the attributes of available general drug information software databases for the PDA. It provides information on the content, advantages, limitations, pricing, memory requirements, and accessibility of drug information software databases. Ten drug information databases were subjectively analyzed and evaluated based on information from the product.s Web site, vendor Web sites, and from our experience. Some of these databases have attractive auxiliary features such as kinetics calculators, disease references, drug-drug and drug-herb interaction tools, and clinical guidelines, which may make them more useful to the PDA user. Not all drug information databases are equal with regard to content, author credentials, frequency of updates, and memory requirements. The user must therefore evaluate databases for completeness, currency, and cost effectiveness before purchase. In addition, consideration should be given to the ease of use and flexibility of individual programs.

Demand for prescription drugs under non-linear pricing in Medicare Part D.

PubMed

Jung, Kyoungrae; Feldman, Roger; McBean, A Marshall

2014-03-01

We estimate the price elasticity of prescription drug use in Medicare Part D, which features a non-linear price schedule due to a coverage gap. We analyze patterns of drug utilization prior to the coverage gap, where the "effective price" is higher than the actual copayment for drugs because consumers anticipate that more spending will make them more likely to reach the gap. We find that enrollees' total pre-gap drug spending is sensitive to their effective prices: the estimated price elasticity of drug spending ranges between [Formula: see text]0.14 and [Formula: see text]0.36. This finding suggests that filling in the coverage gap, as mandated by the health care reform legislation passed in 2010, will influence drug utilization prior to the gap. A simulation analysis indicates that closing the gap could increase Part D spending by a larger amount than projected, with additional pre-gap costs among those who do not hit the gap.

Do market components account for higher US prescription prices?

PubMed

Monaghan, M J; Monaghan, M S

1996-12-01

Although only 7-8% of US healthcare expenditures are spent on prescription drug products, the pharmaceutical industry's profitability and high cost of prescriptions to consumers make prescription drugs a visible target for reform. When compared with other products, it appears as if unfair pricing tactics are used. The pharmaceutical industry cites costs of research and development and a short patent life as justifiable grounds for high prices, but the reason why US drug prices appear to be so high has yet to be answered. To examine identified components of the pharmaceutical industry that allow US prescription drugs to appear to be highly priced and to review the apparent factors that affect pricing policies for pharmaceuticals. The literature was reviewed to identify current research regarding the pharmaceutical market. Sources included MEDLINE, Econolit, Business Periodical Index, International Pharmaceutical Abstracts, the Wall Street Journal, New York Times, and the F-D-C Pink Sheet. Key factors account for the fact that US prescription drug prices are higher and that price discrimination occurs in the pharmaceutical industry within the US and among other countries. These factors include the unique market structure of the pharmaceutical industry, asymmetry of information, research and development costs, numerous channels of distribution and the differences among them, and government laws and regulations of prescription drugs. Pricing policies of pharmaceutical companies are based on manufacturing, promotion, and distribution costs; drug characteristics; and economic goals of the parent company.

Reference pricing for drugs: is it compatible with U.S. health care?

PubMed

Kanavos, Panos; Reinhardt, Uwe

2003-01-01

To control spending on prescription drugs, health insurance systems abroad have experimented in recent years with a novel form of patient cost sharing called "reference pricing." Under this approach, the insurer covers only the prices of low-cost, benchmark drugs in therapeutic clusters that are deemed to be close substitutes for one another in treating specific illnesses. Patients who desire a higher-price substitute in a cluster must then pay the full difference between the retail price of that drug and the reference price covered by the insurer. This paper explores the difficult trade-offs that policymakers must make in designing such a system, drawing where relevant from experience abroad.

The Effects of the New Methodology Application on the Method of Pricing of Drugs-The Case of the Republic of Macedonia.

PubMed

Zareski, Rubin; Kapedanovska Nestorovska, A; Grozdanova, A; Dimitrova, B; Suturkova, L J; Sterjev, Z

2016-09-01

The introduction of a new methodology for the pricing of drugs by the Agency of Medicines of the Republic of Macedonia for the period 2012 to 2015 resulted in a price reduction of 1386 drugs. This pioneer study evaluated the effects of the price changes during this period of 4 years and the consequent effects on the sale quantities for the segmented Anatomical Therapeutic Chemical groups. The drugs were grouped by the size of the reductions, by segmenting the drugs by generic names, and by the Anatomical Therapeutic Chemical classification, in which the quantities are grouped by generic names and the prices are calculated by average values for a period of 1 year. Analysis of the relations between price changes and quantities sold showed that since the introduction of the new methodology the decrease in the prices pushed down the sales of the drugs. This article presents not only the market developments but also projects the tendencies, concluding clearly that focusing only on the price reduction of drugs and not on the implementation of the pharmacoeconomic studies is deviating the supply of drugs that are on the market and affecting their quality. The trends indicate that patients are using old-generation drugs, packaging forms that do not fully answer the market demand, and policies that significantly affect the suppliers. The presented analysis confirms that if the new methodology is only partially implemented and is not followed in full consideration of the pharmacoeconomic studies, negative consequences will also have an impact on regional pharmaceutical markets, which are benchmarking prices of drugs with the Macedonian market. Copyright © 2016. Published by Elsevier Inc.

Globalization and the price decline of illicit drugs.

PubMed

Costa Storti, Cláudia; De Grauwe, Paul

2009-01-01

This study aims at understanding the mechanisms underlying the dramatic decline of the retail prices of major drugs like cocaine and heroin during the past two decades. It also aims at analysing the implications of this decline for drug policies. We use a theoretical model to identify the possible causes of this price decline. This allows us to formulate the hypothesis that the major driving force behind the price decline is a reduction of the intermediation margin (the difference between the retail and producer prices). We also develop the hypothesis that globalization has been an important factor behind the decline of the intermediation margin. We then analyse the statistical information to test these hypotheses. We find that the decline in the retail prices of drugs is related to the strong decline in the intermediation margin in the drug business, and that globalization is the main driving force behind this phenomenon. Globalization has done so by increasing the efficiency of the distribution of drugs, by reducing the risk premium involved in dealing with drugs, and by increasing the degree of competition in the drug markets. We conclude that the cocaine and heroin price declines were due to a sharp fall in the intermediation margin, which was probably influenced by globalization. This phenomenon might have a strong impact on the effectiveness of drug policies, increasing the relative effectiveness of policies aiming at reducing the demand of drugs.

Cost-effectiveness and Pricing of Antibacterial Drugs

PubMed Central

Verhoef, Talitha I; Morris, Stephen

2015-01-01

Growing resistance to antibacterial agents has increased the need for the development of new drugs to treat bacterial infections. Given increasing pressure on limited health budgets, it is important to study the cost-effectiveness of these drugs, as well as their safety and efficacy, to find out whether or not they provide value for money and should be reimbursed. In this article, we systematically reviewed 38 cost-effectiveness analyses of new antibacterial agents. Most studies showed the new antibacterial drugs were cost-effective compared to older generation drugs. Drug pricing is a complicated process, involving different stakeholders, and has a large influence on cost-effectiveness. Value-based pricing is a method to determine the price of a drug at which it can be cost-effective. It is currently unclear what the influence of value-based pricing will be on the prices of new antibacterial agents, but an important factor will be the definition of ‘value’, which as well as the impact of the drug on patient health might also include other factors such as wider social impact and the health impact of disease. PMID:25521641

Prescription Drug Price Paradox: Cost Analysis of Canadian Online Pharmacies versus US Medicare Beneficiaries for the Top 100 Drugs.

PubMed

Kim, Sean Hyungwoo; Ryu, Young Joo; Cho, Na-Eun; Kim, Andy Eunwoo; Chang, Jongwha

2017-10-01

Despite the introduction of Medicare Part D (MPD) and 2012 Affordable Care Act (ACA), patients have a cost burden due to increases in drug prices. To overcome cost barriers, some patients purchase their medications from Canadian online pharmacies as Canadian prescription drug prices are believed to be lower than US prescription drug prices. The objective of this study was to determine which top 100 Medicare drugs can be imported to the USA legally, and to determine which type of prescription drug would be more beneficial to be purchased from Canadian online pharmacies. Moreover, we also deemed it important to compare MPD beneficiary annual expenses with expenses patients would have when obtaining their prescriptions from Canadian online pharmacies. We conducted a cost analysis from a patient perspective. A list of the top 100 Medicare drugs was compiled and information on drug prices was collected from three Canadian online pharmacies and four MPD plans in Virginia. The annual cost of each Medicare drug and percent change between Canadian online pharmacies and MPD were compared. A total of 78 drugs from the top 100 Medicare drugs were included in the final analysis. Seventy-six prescription drugs (97.4%) that could be purchased from Canadian online pharmacies showed a significantly lower average drug price percent change of -72.71% (P < 0.0001). The heart health/blood pressure subgroup had the highest number of drugs that could be purchased from Canadian online pharmacies. The majority of prescription drugs can be purchased at lower prices from Canadian online pharmacies when compared to Medicare beneficiaries' potential expenses. Purchasing medications from Canadian online pharmacies may be a viable option to address cost barriers.

The temporal relationship between drug supply indicators: an audit of international government surveillance systems.

PubMed

Werb, Dan; Kerr, Thomas; Nosyk, Bohdan; Strathdee, Steffanie; Montaner, Julio; Wood, Evan

2013-09-30

Illegal drug use continues to be a major threat to community health and safety. We used international drug surveillance databases to assess the relationship between multiple long-term estimates of illegal drug price and purity. We systematically searched for longitudinal measures of illegal drug supply indicators to assess the long-term impact of enforcement-based supply reduction interventions. Data from identified illegal drug surveillance systems were analysed using an a priori defined protocol in which we sought to present annual estimates beginning in 1990. Data were then subjected to trend analyses. Data were obtained from government surveillance systems assessing price, purity and/or seizure quantities of illegal drugs; systems with at least 10 years of longitudinal data assessing price, purity/potency or seizures were included. We identified seven regional/international metasurveillance systems with longitudinal measures of price or purity/potency that met eligibility criteria. In the USA, the average inflation-adjusted and purity-adjusted prices of heroin, cocaine and cannabis decreased by 81%, 80% and 86%, respectively, between 1990 and 2007, whereas average purity increased by 60%, 11% and 161%, respectively. Similar trends were observed in Europe, where during the same period the average inflation-adjusted price of opiates and cocaine decreased by 74% and 51%, respectively. In Australia, the average inflation-adjusted price of cocaine decreased 14%, while the inflation-adjusted price of heroin and cannabis both decreased 49% between 2000 and 2010. During this time, seizures of these drugs in major production regions and major domestic markets generally increased. With few exceptions and despite increasing investments in enforcement-based supply reduction efforts aimed at disrupting global drug supply, illegal drug prices have generally decreased while drug purity has generally increased since 1990. These findings suggest that expanding efforts at controlling the global illegal drug market through law enforcement are failing.

Patient Awareness of Local Drug Price Variation and the Factors That Influence Pharmacy Choice: A Cross-sectional Survey Study

PubMed

Brodsky, Spencer D; Awosika, Olabola D; Eleryan, Misty G; Rengifo-Pardo, Monica; Kuang, Xiangyu; Amdur, Richard L; Ehrlich, Alison

2017-12-01

BACKGROUND: High out-of-pocket drug expenditures are increasingly common in dermatology. Patients may not be aware that prices vary among pharmacies and consequently may not shop for the lowest cost. OBJECTIVE: To determine what factors influence pharmacy choice and the effect of providing local prescription prices on pharmacy selection. We hypothesized that patients do not "shop around" due to lack of knowledge of price variation and would choose a pharmacy based on costs if educated on price disparity. METHODS: Between July and August 2016, we administered a cross-sectional anonymous survey to adults visiting four outpatient clinics at an academic tertiary care center in Washington, D.C. Participants answered questions before and after viewing a list of prescription drug prices from local pharmacies. RESULTS: 287 surveys were administered to a convenience sample of adults (age ≥ 18 and literate in English). Of the 287 participants, 218 fully completed the survey; 55.1% were women and 40.5% were over age 40. When considering a cost savings of $10-25, 65% would switch pharmacies if the distance were the same, and 21.3% would switch if the distance were 45-minutes further. After price education, fewer participants felt that drug price knowledge would ultimately influence pharmacy choice (P less than 0.0001). However, respondents' intended frequency of researching price online, calling a pharmacy to ask about price, and comparing price between pharmacies before filling a prescription all increased, compared to prior self-reported frequencies (P less than 0.001). Specifically, participants with $75,000-$99,999 income were more likely to compare prices than those with income below $45,000 (odds ratio [OR], 4.62; 95% confidence interval [CI], 1.24-17.28). CONCLUSION: In this study, pharmacy choice was more influenced by convenience than cost prior to drug price education. However, price education ultimately impacted intent to research prescription drug prices before selecting a pharmacy. Thus, knowledge of drug pricing may be useful in creating cost savings for patients.

Drug decriminalization and the price of illicit drugs.

PubMed

Félix, Sónia; Portugal, Pedro

2017-01-01

This study is an empirical assessment of the impact of the drug decriminalization policy followed by Portugal in July 2001, on the price of illicit drugs. The analysis is performed using a difference-in-differences approach and the Synthetic Control Method in order to construct a synthetic control unit from a convex combination of countries. The results suggest that the prices of opiates and cocaine in the post-treatment period did not decrease in the sequence of the policy change. We conclude that the drug decriminalization policy seems to have caused no harm through lower illicit drugs prices, which would lead to higher drug usage and dependence. Copyright © 2016 Elsevier B.V. All rights reserved.

Piloting the global subsidy: the impact of subsidized artemisinin-based combination therapies distributed through private drug shops in rural Tanzania.

PubMed

Sabot, Oliver J; Mwita, Alex; Cohen, Justin M; Ipuge, Yahya; Gordon, Megumi; Bishop, David; Odhiambo, Moses; Ward, Lorrayne; Goodman, Catherine

2009-09-02

WHO estimates that only 3% of fever patients use recommended artemisinin-based combination therapies (ACTs), partly reflecting their high prices in the retail sector from where many patients seek treatment. To overcome this challenge, a global ACT subsidy has been proposed. We tested this proposal through a pilot program in rural Tanzania. Three districts were assigned to serve either as a control or to receive the subsidy plus a package of supporting interventions. From October 2007, ACTs were sold at a 90% subsidy through the normal private supply chain to intervention district drug shops. Data were collected at baseline and during intervention using interviews with drug shop customers, retail audits, mystery shoppers, and audits of public and NGO facilities. The proportion of consumers in the intervention districts purchasing ACTs rose from 1% at baseline to 44.2% one year later (p<0.001), and was significantly higher among consumers purchasing for children under 5 than for adults (p = 0.005). No change in ACT usage was observed in the control district. Consumers paid a mean price of $0.58 for ACTs, which did not differ significantly from the price paid for sulphadoxine-pyrimethamine, the most common alternative. Drug shops in population centers were significantly more likely to stock ACTs than those in more remote areas (p<0.001). A subsidy introduced at the top of the private sector supply chain can significantly increase usage of ACTs and reduce their retail price to the level of common monotherapies. Additional interventions may be needed to ensure access to ACTs in remote areas and for poorer individuals who appear to seek treatment at drug shops less frequently. Controlled-Trials.com ISRCTN39125414.

Piloting the Global Subsidy: The Impact of Subsidized Artemisinin-Based Combination Therapies Distributed through Private Drug Shops in Rural Tanzania

PubMed Central

Sabot, Oliver J.; Mwita, Alex; Cohen, Justin M.; Ipuge, Yahya; Gordon, Megumi; Bishop, David; Odhiambo, Moses; Ward, Lorrayne; Goodman, Catherine

2009-01-01

Background WHO estimates that only 3% of fever patients use recommended artemisinin-based combination therapies (ACTs), partly reflecting their high prices in the retail sector from where many patients seek treatment. To overcome this challenge, a global ACT subsidy has been proposed. We tested this proposal through a pilot program in rural Tanzania. Methods/Principal Findings Three districts were assigned to serve either as a control or to receive the subsidy plus a package of supporting interventions. From October 2007, ACTs were sold at a 90% subsidy through the normal private supply chain to intervention district drug shops. Data were collected at baseline and during intervention using interviews with drug shop customers, retail audits, mystery shoppers, and audits of public and NGO facilities. The proportion of consumers in the intervention districts purchasing ACTs rose from 1% at baseline to 44.2% one year later (p<0.001), and was significantly higher among consumers purchasing for children under 5 than for adults (p = 0.005). No change in ACT usage was observed in the control district. Consumers paid a mean price of $0.58 for ACTs, which did not differ significantly from the price paid for sulphadoxine-pyrimethamine, the most common alternative. Drug shops in population centers were significantly more likely to stock ACTs than those in more remote areas (p<0.001). Conclusions A subsidy introduced at the top of the private sector supply chain can significantly increase usage of ACTs and reduce their retail price to the level of common monotherapies. Additional interventions may be needed to ensure access to ACTs in remote areas and for poorer individuals who appear to seek treatment at drug shops less frequently. Trial Registration Controlled-Trials.com ISRCTN39125414. PMID:19724644

Effects of drug price reduction and prescribing restrictions on expenditures and utilisation of antihypertensive drugs in Korea

PubMed Central

Yoo, Ki-Bong; Lee, Sang Gyu; Park, Sohee; Kim, Tae Hyun; Ahn, Jeonghoon; Cho, Mee-Hyun; Park, Eun-Cheol

2015-01-01

Objectives To evaluate the quantitative effects of the drug price reduction on pharmaceutical expenditures and the new guidelines to restrict prescribing on drug utilisation for antihypertensive drugs. Design We used an interrupted time series design with the National patient sample data of Health Insurance Review and Assessment Service in South Korea. Methods 54 295 participants who were with primary hypertension from the National patient sample data of Health Insurance Review and Assessment Service were included. The study period was from March 2011 to December 2013. The dependent variables were antihypertensive drug costs, antihypertensive drug cost per prescribing day, daily drug utilisation, average number of drugs per month, percentage of original drugs per prescription, drug overutilisation and prohibited combinations. Segmented regression analysis was used. Results The drug price reduction reduced expenditure (US$−1.51, −10.2%), and the new guidelines reduced expenditures even more (US$−2.13; −16.2%). These policies saved US$4.22 (28%) of antihypertensive drug costs per patient in December 2013 compared to March 2012. Drug price reduction policy was introduced in April 2012. We established the policy effect by comparing it before (March 2012) with after(21 months later-December 2012). The effects of the guidelines decreased expenditures, daily drug utilisation and the average number of drugs per month more than did the drug price reduction. Conclusions Both policies saved money. The guidelines were more effective over time and had fewer side effects such as increasing daily drug utilisation and number of drugs than the effects of drug price reduction. PMID:26179644

Cost-effectiveness and pricing of antibacterial drugs.

PubMed

Verhoef, Talitha I; Morris, Stephen

2015-01-01

Growing resistance to antibacterial agents has increased the need for the development of new drugs to treat bacterial infections. Given increasing pressure on limited health budgets, it is important to study the cost-effectiveness of these drugs, as well as their safety and efficacy, to find out whether or not they provide value for money and should be reimbursed. In this article, we systematically reviewed 38 cost-effectiveness analyses of new antibacterial agents. Most studies showed the new antibacterial drugs were cost-effective compared to older generation drugs. Drug pricing is a complicated process, involving different stakeholders, and has a large influence on cost-effectiveness. Value-based pricing is a method to determine the price of a drug at which it can be cost-effective. It is currently unclear what the influence of value-based pricing will be on the prices of new antibacterial agents, but an important factor will be the definition of 'value', which as well as the impact of the drug on patient health might also include other factors such as wider social impact and the health impact of disease. © 2015 The Authors. Chemical Biology & Drug Design Published by John Wiley & Sons Ltd.

[Impact Reimbursement Act on the pharmaceutical market in Poland].

PubMed

Giermaziak, Wojciech

2014-04-01

According to 12 may 2011 Reimbursement Act, the new regulations were introduced related to changes in so far in force rules on refunds of official prices and margins for drugs, foodstuffs of special purpose and medical products. After year of functioning of this regulation, in evaluation of the government, law gave measurable financial effects for public payer, sometimes through drastic actions, connected the of reduction of existing profits of manufacturers sector and importers drugs, as well wholesale and retail, both in treatment open and closed. Parallel to research and analysis of effects introduction in life act refund, conducted by government, to target current regulation possible negative phenomena can to be after-effects to regulation, systematically there are conducted analogous study to reputable companies specialized in evaluation and updating market Polish pharmaceutical, such as IMS Health Polska, Pharma Expert, Kamsoft, WHO and European a law firm. In their opinion to reimbursement act is the most serious regulation control system to introduced into Polish order legal, and first time for many years on such a large scale. Thoroughly changed policy of drugs State have important influence for all participants Polish pharmaceutical market, both those directly related to the drug trade, as the functioning doctors and health condition and financial Polish patient. Change in the way prices of drugs is determined as flexible to price formation mechanism, combining drugs similar profile pharmacological in so group limits and dependence of the level of refunds from application drug accordingly characteristics medicinal product, adaptation solutions to new law refund to the existing law about health services, gave measurable financial effect for the public payer. Rationalization expenses to NFZ, as main premise introduction refund act, created to broader than so far possibility to use new molecules of drugs, and the latest medical technology, even if in the revised or new drug programs. Important implications for even Polish image in Europe, especially from the point of view of cohesion policy and application to directive transparency EU have introduction refund act in context to introduction clear, transparent and verifiable procedures used with creating drug pricing mechanisms, foodstuffs of special purpose and medical product.

Pricing and reimbursement of drugs in Denmark.

PubMed

Møller Pedersen, K

2003-01-01

The Danish health care system is decentralized and tax financed. Reimbursable drugs are financed by the national health insurance, which despite its official name, is a tax-funded system for paying for drugs,practicing physicians outside hospitals, dentists, etc. Most issues related to pricing and reimbursement of drugs are placed centrally, however, with the Danish Medicines Agency, and in contrast to most of the health care system reimbursement is thoroughly grounded in legislation. Pricing in principle is free. In the 1990s a number of agreements between industry and government in practice introduced regulated price competition. Generic substitution at the pharmacy level and the agreements between government and industry have led to a decline in the overall price level for drugs from 1995 and onwards. The still increasing drug expenditures hence must be attributed to increasing volume and the introduction of new drugs. Reimbursement is divided into two: general reimbursement meaning unconditional reimbursement for a given drug or single reimbursement based on an application from the patient's physician on behalf of individual patients. The criteria for granting general reimbursement are relatively clear. Economic evaluations on a voluntary basis can be used to support documentation of a reasonable relationship between price and therapeutic effects. Reimbursement is calculated on the basis of an average European price level.

Thirty Years of Media Coverage on High Drug Prices in the United States--A Never-Ending Story or a Time for Change?

PubMed

Leopold, Christine; Chambers, James D; Wagner, Anita K

2016-01-01

In recent years drug prices have increasingly become a topic of debate for patients, providers, payers and policy makers. To place the current drug price debate into historical context, we searched the New York Times and Wall Street Journal from 1985 - 2015 and found that concerns about drug prices have commonly featured in the press over the study period with recently stronger calls for change. Price levels, types of innovations, stakeholder responses, and strategies to address high prices discussed in the media suggest that concerted efforts are required to enable affordable and high-value innovations. Copyright © 2016 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

Pharmaceutical pricing in emerging markets: effects of income, competition, and procurement.

PubMed

Danzon, Patricia M; Mulcahy, Andrew W; Towse, Adrian K

2015-02-01

This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across countries. We focus on drugs to treat HIV/AIDS, TB, and malaria in middle and low-income countries (MLICs), with robustness checks to other therapeutic categories and the full income range of countries. We examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the drugs are sold to retail pharmacies versus tendered procurement by non-government organizations. The cross-national income elasticity of prices is 0.27 across the full income range of countries but is 0.0-0.10 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Although generics are priced roughly 30% lower than originators on average, the variance is large. Additional generic competitors only weakly affect prices, plausibly because generic quality uncertainty leads to competition on brand rather than price. Tendered procurement that imposes quality standards attracts multinational generic suppliers and significantly reduces prices of originator and generic drugs, compared with their respective prices to retail pharmacies. © 2013 The Authors Health Economics Published by John Wiley & Sons Ltd.

The impact of patient assistance programs and the 340B Drug Pricing Program on medication cost.

PubMed

Castellon, Yelba M; Bazargan-Hejazi, Shahrzad; Masatsugu, Miles; Contreras, Roberto

2014-02-01

Patient assistance programs and the 340B Drug Pricing Program promise to improve the financial stability, better serve vulnerable patients, and decrease the burden of cost for uninsured patients. Our objective is to examine the financial impact that PAPs and the 340B Program have on improving medication cost. Retrospective analysis of medication dispensary data. Dispensary data for uninsured patients obtaining medications at 2 community health centers were collected from February 1 to February 29, 2012. Uninsured patients were divided into 2 samples: (1) patients receiving PAP medications and (2) patients receiving 340B medications. The main outcome measured was the patient's cost savings. Cost savings were calculated based on the amount a medication would have cost had it been purchased by patients at prices found on Epocrates software (drugstore.com). A paired sample t test model using continuous variables was utilized to calculate confidence intervals. A total of 1420 PAP and 2772 340B individual medications were dispensed to uninsured patients in February 2012. For patients receiving PAP medications the mean ± standard deviation (SD) for age = 52 ± 10. Average cost was $0.11 (95% CI, $0.04-$0.17) and average savings was $617.36 (95% Cl, $581.32-$653.40). For patients receiving 340B medications the mean ±SD for age = 50 ± 14. Average cost was $11.50 (95% CI, $10.55-$12.45). Average saving was $62.31 (95% CI, $57.99-$66.63). PAPs and 340B provide significant medication savings for uninsured patient. More research is needed to establish "best practices" for the successful integration of PAPs.

Does reimportation reduce price differences for prescription drugs? Lessons from the European Union.

PubMed

Kyle, Margaret K; Allsbrook, Jennifer S; Schulman, Kevin A

2008-08-01

To examine the effect of parallel trade on patterns of price dispersion for prescription drugs in the European Union. Longitudinal data from an IMS Midas database of prices and units sold for drugs in 36 categories in 30 countries from 1993 through 2004. The main outcome measures were mean price differentials and other measures of price dispersion within European Union countries compared with within non-European Union countries. We identified drugs subject to parallel trade using information provided by IMS and by checking membership lists of parallel import trade associations and lists of approved parallel imports. Parallel trade was not associated with substantial reductions in price dispersion in European Union countries. In descriptive and regression analyses, about half of the price differentials exceeded 50 percent in both European Union and non-European Union countries over time, and price distributions among European Union countries did not show a dramatic change concurrent with the adoption of parallel trade. In regression analysis, we found that although price differentials decreased after 1995 in most countries, they decreased less in the European Union than elsewhere. Parallel trade for prescription drugs does not automatically reduce international price differences. Future research should explore how other regulatory schemes might lead to different results elsewhere.

Do follow-on therapeutic substitutes induce price competition between hospital medicines? Evidence from the Danish hospital sector.

PubMed

Hostenkamp, Gisela

2013-06-01

The pricing of follow-on drugs, that offer only limited health benefits over existing therapeutic alternatives, is a recurring health policy debate. This study investigates whether follow-on therapeutic substitutes create price competition between branded hospital medicines. New follow-on drugs and their incumbent therapeutic competitors were identified from Danish sales and product registration data on hospital pharmaceuticals using medically relevant criteria. We examined whether follow-on drugs adopt lower prices than their incumbent competitors, and whether incumbent competitors react to entry of follow-ons through price adjustments using a random intercept panel model. We found no evidence that follow-on drugs adopt lower prices than their incumbent competitors. Furthermore, potentially due to low sample size, we found no evidence that prices for incumbent pioneer products were significantly reduced as a reaction to competition from follow-on drugs. Competition between patented therapeutic substitutes did not seem to increase price competition and containment of pharmaceutical expenditures in the Danish hospital market. Strengthening hospitals' incentives to consider the price of alternative treatment options paired with a more active formulary management may increase price competition between therapeutic substitutes in the Danish hospital sector in the future. Copyright © 2013 Elsevier Ireland Ltd. All rights reserved.

Can price controls reduce pharmaceutical expenses? A case study of antibacterial expenditures in 12 Chinese hospitals from 1996 to 2005.

PubMed

Han, Sheng; Liang, Huigang; Su, Weiping; Xue, Yajiong; Shi, Luwen

2013-01-01

The objective of this article is to investigate whether the Chinese government's pricing policies have reduced pharmaceutical expenses. The purchasing records for systemic antibacterial drugs of 12 hospitals in Beijing from 1996 to 2005 were analyzed by separating the expenditure growth into three components: the price change, the volume change, and the structure change. Our results reveal that the structure change is the dominant determinant of drug expenditure growth. Despite lowered prices, the antibacterial drug expenditure was raised because more expensive drugs in the same therapeutic category were prescribed. It is insufficient to rely only on pricing policies to reduce drug expenses, given that physicians could circumvent the policy by prescribing more expensive drugs. In addition, physician behaviors need to be regulated to eliminate unnecessary overprescribing.

Drug affordability-potential tool for comparing illicit drug markets.

PubMed

Groshkova, Teodora; Cunningham, Andrew; Royuela, Luis; Singleton, Nicola; Saggers, Tony; Sedefov, Roumen

2018-06-01

The importance of illicit drug price data and making appropriate adjustments for purity has been repeatedly highlighted for understanding illicit drug markets. The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) has been collecting retail price data for a number of drug types alongside drug-specific purity information for over 15 years. While these data are useful for a number of monitoring and analytical purposes, they are not without their limitations and there are circumstances where additional adjustment needs to be considered. This paper reviews some conceptual issues and measurement challenges relevant to the interpretation of price data. It also highlights the issues with between-country comparisons of drug prices and introduces the concept of affordability of drugs, going beyond purity-adjustment to account for varying national economies. Based on a 2015 European data set of price and purity data across the heroin and cocaine retail markets, the paper demonstrates a new model for drug market comparative analysis; calculation of drug affordability is achieved by applying to purity-adjusted prices 2015 Price Level Indices (PLI, Eurostat). Available data allowed retail heroin and cocaine market comparison for 27 European countries. The lowest and highest unadjusted prices per gram were observed for heroin: in Estonia, Belgium, Greece and Bulgaria (lowest) and Finland, Ireland, Sweden and Latvia (highest); for cocaine: the Netherlands, Belgium and the United Kingdom (lowest) and Turkey, Finland, Estonia and Romania (highest). The affordability per gram of heroin and cocaine when taking into account adjustment for both purity and economy demonstrates different patterns. It is argued that purity-adjusted price alone provides an incomplete comparison of retail price across countries. The proposed new method takes account of the differing economic conditions within European countries, thus providing a more sophisticated tool for cross-national comparisons of retail drug markets in Europe. Future work will need to examine other potential uses of the drug affordability tool. The limitations of this measure reflect primarily the limitations of the constituent data; in addition to issues inherent in collecting accurate data on illicit markets, analysis that relies on data collected from multiple countries is susceptible to discrepancies in data collection practices from country to country. Copyright © 2018 Elsevier B.V. All rights reserved.

Controlling prescription drug costs: regulation and the role of interest groups in Medicare and the Veterans Health Administration.

PubMed

Frakt, Austin B; Pizer, Steven D; Hendricks, Ann M

2008-12-01

Medicare and the Veterans Health Administration (VA) both finance large outpatient prescription drug programs, though in very different ways. In the ongoing debate on how to control Medicare spending, some suggest that Medicare should negotiate directly with drug manufacturers, as the VA does. In this article we relate the role of interest groups to policy differences between Medicare and the VA and, in doing so, explain why such a large change to the Medicare drug program is unlikely. We argue that key policy differences are attributable to stable differences in interest group involvement. While this stability makes major changes in Medicare unlikely, it suggests the possibility of leveraging VA drug purchasing to achieve savings in Medicare. This could be done through a VA-administered drug-only benefit for Medicare-enrolled veterans. Such a partnership could incorporate key elements of both programs: capacity to accept large numbers of enrollees (like Medicare) and leverage to negotiate prescription drug prices (like the VA). Moreover, it could be implemented at no cost to the VA while achieving savings for Medicare and beneficiaries.

Comparing Generic Drug Markets in Europe and the United States: Prices, Volumes, and Spending.

PubMed

Wouters, Olivier J; Kanavos, Panos G; McKEE, Martin

2017-09-01

Policy Points: Our study indicates that there are opportunities for cost savings in generic drug markets in Europe and the United States. Regulators should make it easier for generic drugs to reach the market. Regulators and payers should apply measures to stimulate price competition among generic drugmakers and to increase generic drug use. To meaningfully evaluate policy options, it is important to analyze historical context and understand why similar initiatives failed previously. Rising drug prices are putting pressure on health care budgets. Policymakers are assessing how they can save money through generic drugs. We compared generic drug prices and market shares in 13 European countries, using data from 2013, to assess the amount of variation that exists between countries. To place these results in context, we reviewed evidence from recent studies on the prices and use of generics in Europe and the United States. We also surveyed peer-reviewed studies, gray literature, and books published since 2000 to (1) outline existing generic drug policies in European countries and the United States; (2) identify ways to increase generic drug use and to promote price competition among generic drug companies; and (3) explore barriers to implementing reform of generic drug policies, using a historical example from the United States as a case study. The prices and market shares of generics vary widely across Europe. For example, prices charged by manufacturers in Switzerland are, on average, more than 2.5 times those in Germany and more than 6 times those in the United Kingdom, based on the results of a commonly used price index. The proportion of prescriptions filled with generics ranges from 17% in Switzerland to 83% in the United Kingdom. By comparison, the United States has historically had low generic drug prices and high rates of generic drug use (84% in 2013), but has in recent years experienced sharp price increases for some off-patent products. There are policy solutions to address issues in Europe and the United States, such as streamlining the generic drug approval process and requiring generic prescribing and substitution where such policies are not yet in place. The history of substitution laws in the United States provides insights into the economic, political, and cultural issues influencing the adoption of generic drug policies. Governments should apply coherent supply- and demand-side policies in generic drug markets. An immediate priority is to convince more physicians, pharmacists, and patients that generic drugs are bioequivalent to branded products. Special-interest groups continue to obstruct reform in Europe and the United States. © 2017 The Authors The Milbank Quarterly published by Wiley Periodicals, Inc. on behalf of The Millbank Memorial Fund.

75 FR 57233 - 340B Drug Pricing Program Administrative Dispute Resolution Process

Federal Register 2010, 2011, 2012, 2013, 2014

2010-09-20

... Dispute Resolution Process AGENCY: Health Resources and Services Administration, HHS. ACTION: Advance...) to promulgate regulations to establish and implement an administrative dispute resolution process for... does not currently refer to HRSA's plan on how it will resolve any decision made through the new...

[Medical problems associated with the national reference pricing system in Hungary].

PubMed

Kerpel-Fronius, Sándor

2004-04-25

The author analyses the medical problems associated with the proposed reference pricing system prepared for the 2004 pharmaceutical price and reimbursement negotiations by the Hungarian National Health Insurance Fund (HNIF). In case of drugs containing identical active ingredients the author does not consider it acceptable that from the criteria of reference grouping bioequivalence was omitted, since bioequivalence is the basic clinical pharmacologic principle underlying the safe utilization of generic drugs. The proposal introduces in Hungary the therapeutic reference pricing for drugs belonging to the same ATC 5 level group, having different chemical structures but identical mechanisms of action. The products are listed according to their defined daily dose (DDD) and the arithmetic mean of the cheapest products giving together 50% market share is calculated. Each ATC 5 group has a given per cent reimbursement level and the fixed amount paid by the HNIF for all drugs in the group is defined as the given percentage of the mean price. This sum is reimbursed irrespective whether the products are patent protected or not, furthermore those drugs whose price is three times higher than the fixed mean price are excluded from the reimbursement system. As a result the patients' co-payment for the more expensive drugs will be significantly increased in the future. The basis of the therapeutic reference price is the assumption that the outcome of the treatment will be the same using drugs with the same mechanism of action. However, this assumption lacks valid scientific proof. According to the author, the proposed budget centric reference pricing system, which does not take into account the differing clinical pharmacologic profiles of the drugs, will significantly inhibit the use of new, innovative drugs, the establishment and continuous improvement of truly cost-effective patient care. Several alternative approaches are proposed for controlling drug budget. Finally the author recommends that a Committee should be established to develop a comprehensive proposal for the reorganization of the pricing and reimbursement system of the drugs available for general and/or hospital use, and for the follow-up of the health care effects of these measures.

The impact of China's retail drug price control policy on hospital expenditures: a case study in two Shandong hospitals.

PubMed

Meng, Qingyue; Cheng, Gang; Silver, Lynn; Sun, Xiaojie; Rehnberg, Clas; Tomson, Göran

2005-05-01

In China, 44.4% of total health expenditures in 2001 were for pharmaceuticals. Containment of pharmaceutical expenditures is a top priority for policy intervention. Control of drug retail prices was adopted by the Chinese government for this purpose. This study aims to examine the impact of this policy on the containment of hospital drug expenditures, and to analyze contributing factors. This is a retrospective pre/post-reform case study in two public hospitals. Financial records were reviewed to analyze changes in drug expenditures for all patients. A tracer condition, cerebral infarction, was selected for in-depth examination of changes in prices, utilization, expenditures and rationality of drugs. In the two hospitals, a total of 104 and 109 cerebral infarction cases, hospitalized respectively before and after the reform, were selected. Prescribed daily dose (PDD) was used for measuring drug utilization, and the contribution of price and utilization to changes in drug expenditures were decomposed. Rationality of drug use post-reform was reviewed based on published literature. Drug expenditures for all patients still increased rapidly in the two hospitals after implementation of the pricing policy. In the provincial hospital, drug expenditures per patient for cerebral infarction cases declined, but not significantly. This was mainly attributable to reduced utilization. In the municipal hospital, drug expenditure per patient increased by 50.1% after the reform, mainly due to greater drug utilization. Three to five fold higher drug expenditure per inpatient day in the provincial hospital was due to use of more expensive drugs. Of the top 15 drugs for treating cerebral infarction cases after the reform, 19.5% and 46.5% of the expenditures, in the provincial and municipal hospitals, respectively, were spent on drugs with prices set by the government. A large proportion of expenditures for the top 15 drugs, at least 65% and 41% in the provincial and municipal hospitals, respectively, was spent on allopathic drugs without an adequate evidence base of safety and efficacy supporting use for cerebral infarction. Control of retail prices, implemented in isolation, was not effective in containing hospital drug expenditures in these two Chinese hospitals. Utilization, more than price, determined drug expenditures. Improvement of rational use of drugs and correcting the present incentive structure for hospitals and drug prescribers may be important additional strategies for achieving containment of drug expenditures.

Association of Reference Pricing with Drug Selection and Spending

PubMed Central

Robinson, James C.; Whaley, Christopher M.; Brown, Timothy T.

2017-01-01

BACKGROUND In the United States, prices for therapeutically similar drugs vary widely, which has prompted efforts by public and private insurers to steer patients toward the lower-priced options. Under reference pricing, the insurer or employer establishes a maximum contribution it will make toward the price of a drug or procedure, and the patient pays the remainder. METHODS We used difference-in-differences multivariable regression methods to analyze changes in prescriptions and pricing for 1302 drugs in 78 therapeutic classes in the United States, before and after implementation of reference pricing by an alliance of private employers. We assessed trends for the study group relative to those for an employee group that was not subject to reference pricing. The study included 1,122,741 prescriptions that were reimbursed during the period from 2010 through 2014. RESULTS Implementation of reference pricing was associated with a higher percentage of prescriptions that were filled for the lowest-priced reference drug within its therapeutic class (difference in probability, 7.0 percentage points; 95% confidence interval [CI], 4.0 to 9.9), a lower average price paid per prescription (−13.9%; 95% CI, −23.8 to −2.7), and a higher rate of copayment by patients (5.2%; 95% CI, 0.2 to 10.4) than in the comparison group. During the first 18 months after implementation, spending for employers was $1.34 million lower and the amount of copayments for employees was $0.12 million higher than in the comparison group. CONCLUSIONS Implementation of reference pricing was associated with significant changes in drug selection and spending for a population of patients covered by employment-based insurance in the United States. (Funded by the Agency for Healthcare Research and Quality and the Genentech Foundation.) PMID:28813219

European healthcare policies for controlling drug expenditure.

PubMed

Ess, Silvia M; Schneeweiss, Sebastian; Szucs, Thomas D

2003-01-01

In the last 20 years, expenditures on pharmaceuticals - as well as total health expenditures - have grown faster than the gross national product in all European countries. The aim of this paper was to review policies that European governments apply to reduce or at least slow down public expenditure on pharmaceutical products. Such policies can target the industry, the wholesalers and retailers, prescribers, and patients. The objectives of pharmaceutical policies are multidimensional and must take into account issues relating to public health, public expenditure and industrial incentives. Both price levels and consumption patterns determine the level of total drug expenditure in a particular country, and both factors vary greatly across countries. Licensing and pricing policies intend to influence the supply side. Three types of pricing policies can be recognised: product price control, reference pricing and profit control. Profit control is mainly used in the UK. Reference pricing systems were first used in Germany and The Netherlands and are being considered in other countries. Product price control is still the most common method for establishing the price of drugs. For the aim of fiscal consolidation, price-freeze and price-cut measures have been frequently used in the 1980s and 1990s. They have affected all types of schemes. For drug wholesalers and retailers, most governments have defined profit margins. The differences in price levels as well as the introduction of a Single European Pharmaceutical Market has led to the phenomenon of parallel imports among member countries of the European Union. This may be facilitated by larger and more powerful wholesalers and the vertical integration between wholesalers and retailers. To control costs, the use of generic drugs is encouraged in most countries, but only few countries allow pharmacists to substitute generic drugs for proprietary brands. Various interventions are used to reduce the patients' demand for drugs by either denying or limiting reimbursement of products and providing an incentive for patients to reduce their consumption of drugs. These interventions include defining a list either of drugs reimbursed (positive list) or one of drugs not reimbursed (negative list), and patient co-payments, which require patients to pay a proportion of the cost of a prescribed product or a fixed charge. Policies intended to affect physicians' prescribing behaviour include guidelines, information (about price and less expensive alternatives) and feedback, and the use of budgetary restrictions.

The drug budget silo mentality: the Dutch case.

PubMed

Koopmanschap, Marc A; Rutten, Frans F H

2003-01-01

This article provides a broad outline of developments in the Dutch health-care policy related to the costs, budgeting, and reimbursement of pharmaceuticals. In-hospital drugs costs are part of hospital budgets, whereas for the main part of costs, nonhospital drugs, no strict budget exists. The government sets a goal for the annual cost increase of nonhospital drugs, but has only limited means to enforce that goal. Two measures were implemented to reduce drug prices: a reference price system and a price law. Both measures had a modest and temporary impact on drug prices during the 1990s. In limiting the utilization of drugs, the package of reimbursed drugs has been restricted. This led to a shift from public to private costs and possible substitution of cheaper not reimbursed drugs by more expensive reimbursed drugs. An electronic prescription system was implemented to encourage rational prescription. Although 70% of the Dutch general practitioners reported to use the system, the estimated savings on drug costs appear to be modest and far less than expected. The use of economic evaluation for reimbursement decisions will increase. From 2005 onward a pharmacoeconomic study and budget impact analysis is formally required for new nonclustered drugs seeking a premium price. Furthermore, in the future the health-care insurers will get a more prominent role in limiting the costs of drugs and enhancing the efficient use of drugs within their overall budgets. Health-care insurers may choose which drugs to purchase and reimburse and they can negotiate drug prices with the pharmaceutical industry, wholesalers, and local pharmacists.

The Questionable Economic Case for Value-Based Drug Pricing in Market Health Systems.

PubMed

Pauly, Mark V

2017-02-01

This article investigates the economic theory and interpretation of the concept of "value-based pricing" for new breakthrough drugs with no close substitutes in a context (such as the United States) in which a drug firm with market power sells its product to various buyers. The interpretation is different from that in a country that evaluates medicines for a single public health insurance plan or a set of heavily regulated plans. It is shown that there will not ordinarily be a single value-based price but rather a schedule of prices with different volumes of buyers at each price. Hence, it is incorrect to term a particular price the value-based price, or to argue that the profit-maximizing monopoly price is too high relative to some hypothesized value-based price. When effectiveness of treatment or value of health is heterogeneous, the profit-maximizing price can be higher than that associated with assumed values of quality-adjusted life-years. If the firm sets a price higher than the value-based price for a set of potential buyers, the optimal strategy of the buyers is to decline to purchase that drug. The profit-maximizing price will come closer to a unique value-based price if demand is less heterogeneous. Copyright © 2017 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

Can price get the monkey off our back? A meta-analysis of illicit drug demand.

PubMed

Gallet, Craig A

2014-01-01

Because of the increased availability of price data over the past 15 years, several studies have estimated the demand for illicit drugs, providing 462 estimates of the price elasticity. Results from estimating several meta-regressions reveal that these price elasticity estimates are influenced by a number of study characteristics. For instance, the price elasticity differs across drugs, with its absolute value being smallest for marijuana, compared with cocaine and heroin. Furthermore, price elasticity estimates are sensitive to whether demand is modeled in the short-run or the long-run, measures of quantity and price, whether or not alcohol and other illicit drugs are included in the specification of demand, and the location of demand. However, a number of other factors, including the functional form of demand, several specification issues, the type of data and method used to estimate demand, and the quality of the publication outlet, have less influence on the price elasticity. Copyright © 2013 John Wiley & Sons, Ltd.

What is a new drug worth? An innovative model for performance-based pricing.

PubMed

Dranitsaris, G; Dorward, K; Owens, R C; Schipper, H

2015-05-01

This article focuses on a novel method to derive prices for new pharmaceuticals by making price a function of drug performance. We briefly review current models for determining price for a new product and discuss alternatives that have historically been favoured by various funding bodies. The progressive approach to drug pricing, proposed herein, may better address the views and concerns of multiple stakeholders in a developed healthcare system by acknowledging and incorporating input from disparate parties via comprehensive and successive negotiation stages. In proposing a valid construct for performance-based pricing, the following model seeks to achieve several crucial objectives: earlier and wider access to new treatments; improved transparency in drug pricing; multi-stakeholder involvement through phased pricing negotiations; recognition of innovative product performance and latent changes in value; an earlier and more predictable return for developers without sacrificing total return on investment (ROI); more involved and informed risk sharing by the end-user. © 2014 John Wiley & Sons Ltd.

[The costs of new drugs compared to current standard treatment].

PubMed

Ujeyl, Mariam; Schlegel, Claudia; Gundert-Remy, Ursula

2013-01-01

Until AMNOG came into effect Germany had free pricing of new drugs. Our exemplary work investigates the costs of new drugs that were licensed in the two years prior to AMNOG, and compares them to the costs of standard treatment that has been used in pivotal trials. Also, the important components of pharmaceutical prices will be illustrated. We retrospectively analysed the European Public Assessment Reports of proprietary medicinal products that the European Medicinal Agency initially approved in 2009 and 2010 and that were tested against an active control in at least one pivotal trial. If the standard treatment was a generic, the average pharmacy retail price of new drugs was 7.4 times (median 7.1) higher than that of standard treatment. If the standard treatment was an originator drug the average price was 1.4 times (median 1.2) higher than that of the new drug. There was no clear correlation of an increase in costs for new drugs and their "grade of innovation" as rated according to the criteria of Fricke. Our study shows that prices of new drugs must be linked to the evidence of comparative benefit; since German drug pricing is complex, cost saving effects obtained thereby will depend on a range of other rules and decisions. Copyright © 2013. Published by Elsevier GmbH.

On the demand for prescription drugs: heterogeneity in price responses.

PubMed

Skipper, Niels

2013-07-01

This paper estimates the price elasticity of demand for prescription drugs using an exogenous shift in consumer co-payment caused by a reform in the Danish subsidy scheme for the general public. Using purchasing records for the entire Danish population, I show that the average price response for the most commonly used drug yields demand elasticities in the range of -0.36 to -0.5. The reform is shown to affect women, the elderly, and immigrants the most. Furthermore, this paper shows significant heterogeneity in the price response over different types of antibiotics, suggesting that the price elasticity of demand varies considerably even across relatively similar drugs. Copyright © 2012 John Wiley & Sons, Ltd.

International price comparisons of Alzheimer's drugs: a way to close the affordability gap.

PubMed

Suh, Guk-Hee; Wimo, Anders; Gauthier, Serge; O'Connor, Daniel; Ikeda, Manabu; Homma, Akira; Dominguez, Jacqueline; Yang, Bong-Min

2009-12-01

Alzheimer's drugs are believed to have limited availability and to be unaffordable in low- and middle-income countries compared to high-income countries. The price, availability and affordability of Alzheimer's drugs have not been reported before. During 2007 an international survey was conducted in 21 countries in six continents (Argentina, Australia, Brazil, the Dominican Republic, France, India, Japan, Macedonia, Mexico, New Zealand, Nigeria, the Philippines, Portugal, Serbia, South Korea, Switzerland, Taiwan, Thailand, Uganda, the U.K. and the U.S.A.). Prices of Alzheimer's drugs were compared using the affordability index (the total number of units purchasable with one's daily income) derived from purchasing power parity (PPP) converted prices as well as raw prices. Donepezil is available in all 21 countries, whereas the newer drugs are less available. A 5 mg tablet of branded originator donepezil costs just US$0.26 in India and US$0.31 in Mexico, whereas it costs US$6.64 in the U.S.A. Pricing conditions of rivastigmine, galantamine and memantine appear to be similar to that of donepezil. The cheapest branded originators are from India and Mexico. However, in terms of PPP, Alzheimer's drugs in other low- and middle-income countries are much more expensive than in high-income countries. Most people in low- and middle-income countries cannot afford Alzheimer's drugs. Alzheimer's drugs, albeit available, are often unaffordable for those who need them most. It is hoped that equitable differential pricing will be applied to Alzheimer's drugs.

PHARMACEUTICAL PRICING IN EMERGING MARKETS: EFFECTS OF INCOME, COMPETITION, AND PROCUREMENT

PubMed Central

Danzon, Patricia M; Mulcahy, Andrew W; Towse, Adrian K

2015-01-01

This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across countries. We focus on drugs to treat HIV/AIDS, TB, and malaria in middle and low-income countries (MLICs), with robustness checks to other therapeutic categories and the full income range of countries. We examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the drugs are sold to retail pharmacies versus tendered procurement by non-government organizations. The cross-national income elasticity of prices is 0.27 across the full income range of countries but is 0.0–0.10 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Although generics are priced roughly 30% lower than originators on average, the variance is large. Additional generic competitors only weakly affect prices, plausibly because generic quality uncertainty leads to competition on brand rather than price. Tendered procurement that imposes quality standards attracts multinational generic suppliers and significantly reduces prices of originator and generic drugs, compared with their respective prices to retail pharmacies. ©2013 The Authors. Health Economics Published by John Wiley & Sons Ltd. PMID:24293058

Does Reimportation Reduce Price Differences for Prescription Drugs? Lessons from the European Union

PubMed Central

Kyle, Margaret K; Allsbrook, Jennifer S; Schulman, Kevin A

2008-01-01

Objective To examine the effect of parallel trade on patterns of price dispersion for prescription drugs in the European Union. Data Sources Longitudinal data from an IMS Midas database of prices and units sold for drugs in 36 categories in 30 countries from 1993 through 2004. Study Design The main outcome measures were mean price differentials and other measures of price dispersion within European Union countries compared with within non-European Union countries. Data Collection/Extraction Methods We identified drugs subject to parallel trade using information provided by IMS and by checking membership lists of parallel import trade associations and lists of approved parallel imports. Principal Findings Parallel trade was not associated with substantial reductions in price dispersion in European Union countries. In descriptive and regression analyses, about half of the price differentials exceeded 50 percent in both European Union and non-European Union countries over time, and price distributions among European Union countries did not show a dramatic change concurrent with the adoption of parallel trade. In regression analysis, we found that although price differentials decreased after 1995 in most countries, they decreased less in the European Union than elsewhere. Conclusions Parallel trade for prescription drugs does not automatically reduce international price differences. Future research should explore how other regulatory schemes might lead to different results elsewhere. PMID:18355258

Variation in cash price of the generic medications most prescribed by dermatologists in pharmacies across the United States.

PubMed

Alghanem, Noor; Abokwidir, Manal; Fleischer, Alan B; Feldman, Steven R; Alghanem, Ward

2017-03-01

The United States has the highest drug costs in the world. Consumers complain about large price differences at pharmacies on generic drugs. To evaluate variation in cash prices of generic medications most prescribed in dermatology across different drugstores and states in United States. The 11 generic drugs most prescribed by dermatologists according to National Ambulatory Medical Care Survey were assessed. By using Google, the most common used pharmacies in United States were listed, which are located at a random selection of six states. By calling the first available number of each pharmacy in the six states and asking about the generic cash price of the smallest stock size and the most prescribed type, the data were collected. Drug prices varied; the median cumulative price of the 11 medications was highest at Rite Aid ($1226) and lowest at Walmart ($795.34) with 35% difference. The prices at CVS differed by 20% across different states; however, the prices at Walmart, Rite Aid and Walgreens were consistent. New York has the highest and Iowa the lowest prices, especially at CVS, ($1160.79) versus ($931.32). There are varieties in the prices for the generic medications in different pharmacies and States.

The Use of Economic Evidence to Inform Drug Pricing Decisions in Jordan.

PubMed

Hammad, Eman A

2016-01-01

Drug pricing is an example of a priority setting in a developing country with official requirements for the use of cost-effectiveness (CE) evidence. To describe the role of economic evidence in drug pricing decisions in Jordan. A prospective review of all applications submitted between November 2013 and May 2015 to the Jordan Food and Drug Association's drug pricing committee was carried out. All applications that involved requests for CE evidence were reviewed. Details on the type of study, the extent, and whether the evidence submitted was part of the formal deliberations were extracted and summarized. The committee reviewed a total of 1608 drug pricing applications over the period of the study. CE evidence was requested in only 11 applications. The submitted evidence was of limited use to the committee due to concerns about quality, relevance of studies, and lack of pharmacoeconomic expertise. There were also no clear rules describing how CE would inform pricing decisions. Limited local data and health economic experience were the main barriers to the use of economic evidence in drug pricing decisions in Jordan. In addition, there are no official rules describing the elements and process by which the CE evidence would inform drug pricing decisions. This study summarized accumulated observations for the current use of economic evaluations and evidence-based decision making in Jordan. Recommendations have been proposed to applicants and key decision makers to enhance the role of economic evidence in influencing health policies and evidence-based decision making across priority settings. Copyright © 2016 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

Vertical Integration Heats Up in Drug Industry: Will Medication Price Hikes Cool Down as a Result?

PubMed

Barlas, Stephen

2018-01-01

Is industry consolidation a response to President Donald Trump's repeated denunciation of high drug prices and congressional hearings on the issue? The author considers whether any of this corporate collaboration will get at some of the significant, underlying problems in the drug-pricing space.

Effect of generic drug competition on the price of prescription drugs in Ontario.

PubMed Central

Lexchin, J

1993-01-01

OBJECTIVE: To analyse the potential effect of generic drug competition on prices in Ontario to assess the costs and benefits associated with Bill C-22 (An Act to amend the Patent Act). DESIGN: Comparison of the cost of the least and most expensive versions of all products sold by more than one manufacturer in 1991. The number of brand-name and generic drug companies marketing each of the products was recorded. RESULTS: Of 1599 products 437 (27.3%) were made by more than one company. Almost half (44.6%) of the 437 were sold by two companies. The more companies that sold a drug the greater the difference in price between the least and most expensive versions. Similarly, as the proportion of generic drug companies in competition increased, the greater the price difference. When competition was between generic drug companies only, the price spread was smaller than when it was between brand-name drug companies only. CONCLUSIONS: Generic drug competition can result in savings to the Ontario Drug Benefit Plan. A more in-depth analysis of the potential savings is necessary to fully assess the costs and benefits associated with Bill C-22. PMID:8439888

Knowledge, perceptions and use of generic drugs: a cross sectional study

PubMed Central

de Lira, Claudio Andre Barbosa; Oliveira, Jéssica Nathalia Soares; Andrade, Marília dos Santos; Vancini-Campanharo, Cássia Regina; Vancini, Rodrigo Luiz

2014-01-01

Objective To assess the level of knowledge, perceptions and usage profile for generic drugs among laypersons. Methods A cross-sectional study was conducted with 278 volunteers (180 women and 98 men, aged 37.1±15.8 years). A questionnaire was drawn up with questions on their use, perceptions and knowledge of generic drugs. Results Most respondents (99.6%) knew that generic drugs exist, but only 48.6% were able to define them correctly, while 78.8% of the respondents had some information about generics. This information was obtained mainly through television (49.3%). In terms of generic drug characteristics, 79.1% stated that they were confident about their efficacy, 74.8% believed that generic drugs have the same effect as branded medications, 88.8% said that generics were priced lower than branded medications, and 80.2% stated that they bought generic drugs because of price. With regard to drugs prescribed by medical practitioners, 17.6% of the participants said that their doctors never prescribed generics and only 7.5% confirmed that their doctors always prescribed generics. Conclusion For the lay public, the sample in this study has sufficient knowledge of generic drugs in terms of definition, efficacy and cost. Consequently, the volunteers interviewed are very likely to use generics. Furthermore, the results of this study indicate that programs should be implemented in order to boost generic drug prescriptions by medical practitioners. PMID:25295444

A price and use comparison of generic versus originator cardiovascular medicines: a hospital study in Chongqing, China

PubMed Central

2013-01-01

Background Developed countries use generic competition to contain pharmaceutical expenditure. China, as a developing and transitional country, has not yet deemed an increase in the use of generic products as important; otherwise, much effort has been made to decrease the drug prices. This paper aims to explore dynamically the price and use comparison of generic and originator drugs in China, and estimate the potential savings of patients from switching originator drugs to generics. Methods A typical hospital in Chongqing, China, was selected to examine the price and use comparisons of 12 cardiovascular drugs from 2006 to 2011. Results The market share of the 12 generic medicines studied in this paper was 34.37% for volume and 31.33% for value in the second half of 2011. The price ratio of generic to originator drugs was between 0.34 and 0.98, and the volume price index of originators to generics was 1.63. The potential savings of patients from switching originator drugs to generics is 65%. Conclusion The market share of the generics was lowering and the weighted mean price kept increasing in face of the strict price control. Under the background of hospitals both prescribing and dispensing medicines, China’s comprehensive healthcare policy makers should take measures from supply and demand sides to promote the consumption of generic medicines. PMID:24093493

International prices and availability of pharmaceuticals in 2005.

PubMed

Danzon, Patricia M; Furukawa, Michael F

2008-01-01

This paper compares pharmaceutical spending, availability, use, and prices in twelve countries in 2005. Drug spending per capita was higher in the United States than in other countries. The United States had relatively high use of new drugs and high-strength formulations; other countries used more of older drugs and weaker formulations. Thus, whether U.S. overall volume of use is lower or higher depends on the measure of volume and type of product. Comprehensive price indexes show foreign prices to be 20-40 percent lower than U.S. manufacturer prices, but only 10-30 percent lower than U.S. public prices. Generics are cheaper in the United States than in other countries.

Pharmaceutical pricing in Japan: market evidence for rheumatoid arthritis treatment.

PubMed

Mahlich, Jörg; Kamae, Isao; Sruamsiri, Rosarin

2018-06-01

Drug price setting is one of the key challenges faced by the Japanese health care system. This study aims to identify the determinants of drug price in Japan using the example of the rheumatoid arthritis (RA) treatment market. In order to compare prices across different products, we calculated prices per defined daily dose using WHO methodology. Price determinants were calculated both at launch and over time using IMS quarterly data on medicines approved for RA treatment in Japan from 2012 to 2015. Pharmaceutical pricing was modeled as a function of clinical and economic variables using regression analysis. For prices at the launch we found that differences in efficacy are not reflected in price differentials. We also report that the number of products within a molecule class had a negative effect on prices while originator drugs maintained higher prices. Although the existing pricing rules in Japan are very comprehensive they do not necessarily capture differences in product characteristics. The findings here support the notion that competitive forces are weak in highly regulated markets such as Japan.

Prices, profits, and innovation: examining criticisms of new psychotropic drugs' value.

PubMed

Huskamp, Haiden A

2006-01-01

High profits and high drug costs have brought increased scrutiny of the pharmaceutical industry over the issue of whether the drugs they produce are worth the costs. I examine several related complaints, including the proliferation of me-too drugs and product reformulations, which some argue have little value relative to their cost; the baseless promotion of newer drug classes as more effective than existing, less expensive drugs; legal strategies to extend market exclusivity that result in high brand-name drug prices for an extended period of time; and large promotional expenditures that result in higher prices.

Colorectal cancer: complexities and challenges in managed care.

PubMed

Minkoff, Neil B

2007-08-01

Managed care weighs advances and associated costs to determine whether the combination of longer life at sometimes significantly increased cost represents value. The price of treatment is only 1 factor. To review treatment decision processes for oncologic agents in managed care environments. Price can be exceptionally high for individuals. But if the population size is low, the per-member-per-month (PMPM) impact can be almost negligible, unlike treatments that have moderate costs but are used ubiquitously. Cancer therapies have, for the most part, escaped managed care's notice. For 2007, the national Cancer Institute projects that antineoplastic agents will consume almost a quarter of the overall drug spend. The Medicare population is a unique concern with regard to cancer. Traditionally, Medicare reimbursement of chemotherapeutic agents was based on average wholesale price (AWP) discounting, not the oncologist's purchasing cost. This allowed oncologists to use reimbursement for infusions to support their medical practices. The proposed plan of the Center for Medicare & Medicaid Services (CMS) to use average sales price (ASP) plus 6% to reimburse for drugs used in the office setting leads to significant problems. Pharmacy and therapeutics committees will also face challenges: fewer data are available for some agents because they have become available through the U.S. Food and drug administration's Fast Track, Priority review, or accelerated approval processes. Oncology disease management programs must reach out to patients and not necessarily deal with oncology issues directly, but address tangential issues that impact care, especially depression and pain management.

21 CFR 200.200 - Prescription drugs; reminder advertisements and reminder labeling to provide price information to...

Code of Federal Regulations, 2011 CFR

2011-04-01

... 21 Food and Drugs 4 2011-04-01 2011-04-01 false Prescription drugs; reminder advertisements and... AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES (CONTINUED) DRUGS: GENERAL GENERAL Prescription Drug Consumer Price Listing § 200.200 Prescription drugs; reminder advertisements and reminder...

21 CFR 200.200 - Prescription drugs; reminder advertisements and reminder labeling to provide price information to...

Code of Federal Regulations, 2013 CFR

2013-04-01

... 21 Food and Drugs 4 2013-04-01 2013-04-01 false Prescription drugs; reminder advertisements and... AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES (CONTINUED) DRUGS: GENERAL GENERAL Prescription Drug Consumer Price Listing § 200.200 Prescription drugs; reminder advertisements and reminder...

21 CFR 200.200 - Prescription drugs; reminder advertisements and reminder labeling to provide price information to...

Code of Federal Regulations, 2014 CFR

2014-04-01

... 21 Food and Drugs 4 2014-04-01 2014-04-01 false Prescription drugs; reminder advertisements and... AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES (CONTINUED) DRUGS: GENERAL GENERAL Prescription Drug Consumer Price Listing § 200.200 Prescription drugs; reminder advertisements and reminder...

21 CFR 200.200 - Prescription drugs; reminder advertisements and reminder labeling to provide price information to...

Code of Federal Regulations, 2012 CFR

2012-04-01

... 21 Food and Drugs 4 2012-04-01 2012-04-01 false Prescription drugs; reminder advertisements and... AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES (CONTINUED) DRUGS: GENERAL GENERAL Prescription Drug Consumer Price Listing § 200.200 Prescription drugs; reminder advertisements and reminder...

A NEW HEALTH TECHNOLOGY ASSESSMENT SYSTEM FOR JAPAN? SIMULATING THE POTENTIAL IMPACT ON THE PRICE OF SIMEPREVIR.

PubMed

Mahlich, Jörg; Kamae, Isao; Rossi, Bruno

2017-01-01

Japanese authorities have announced a plan to introduce a health technology assessment (HTA) system in 2016. This study assessed the potential impact of such a policy on the price of the antivirologic drug simeprevir. Taking the antivirologic drug simeprevir as an example, we compared the current Japanese price with hypothetical prices that might result if a U.K. (cost-utility) or German (efficiency frontier) style HTA assessment was in place. The simeprevir unit price under the current Japanese pricing scheme is 13,122 Japanese yen (equivalent to 109.35 U.S. dollars as of April 2015). Depending on the selection of comparators and the pricing method, and assuming that HTA will be used as a basis for price setting, the estimated prices of simeprevir vary up to four times higher than under the current Japanese pricing scheme. Although the analysis is based on only one drug, it cannot be taken for granted that a new HTA system would reduce public healthcare expenditure in Japan.

The value of innovation under value-based pricing.

PubMed

Moreno, Santiago G; Ray, Joshua A

2016-01-01

The role of cost-effectiveness analysis (CEA) in incentivizing innovation is controversial. Critics of CEA argue that its use for pricing purposes disregards the 'value of innovation' reflected in new drug development, whereas supporters of CEA highlight that the value of innovation is already accounted for. Our objective in this article is to outline the limitations of the conventional CEA approach, while proposing an alternative method of evaluation that captures the value of innovation more accurately. The adoption of a new drug benefits present and future patients (with cost implications) for as long as the drug is part of clinical practice. Incidence patients and off-patent prices are identified as two key missing features preventing the conventional CEA approach from capturing 1) benefit to future patients and 2) future savings from off-patent prices. The proposed CEA approach incorporates these two features to derive the total lifetime value of an innovative drug (i.e., the value of innovation). The conventional CEA approach tends to underestimate the value of innovative drugs by disregarding the benefit to future patients and savings from off-patent prices. As a result, innovative drugs are underpriced, only allowing manufacturers to capture approximately 15% of the total value of innovation during the patent protection period. In addition to including the incidence population and off-patent price, the alternative approach proposes pricing new drugs by first negotiating the share of value of innovation to be appropriated by the manufacturer (>15%?) and payer (<85%?), in order to then identify the drug price that satisfies this condition. We argue for a modification to the conventional CEA approach that integrates the total lifetime value of innovative drugs into CEA, by taking into account off-patent pricing and future patients. The proposed approach derives a price that allows manufacturers to capture an agreed share of this value, thereby incentivizing innovation, while supporting health-care systems to pursue dynamic allocative efficiency. However, the long-term sustainability of health-care systems must be assessed before this proposal is adopted by policy makers.

The value of innovation under value-based pricing

PubMed Central

Moreno, Santiago G.; Ray, Joshua A.

2016-01-01

Objective The role of cost-effectiveness analysis (CEA) in incentivizing innovation is controversial. Critics of CEA argue that its use for pricing purposes disregards the ‘value of innovation’ reflected in new drug development, whereas supporters of CEA highlight that the value of innovation is already accounted for. Our objective in this article is to outline the limitations of the conventional CEA approach, while proposing an alternative method of evaluation that captures the value of innovation more accurately. Method The adoption of a new drug benefits present and future patients (with cost implications) for as long as the drug is part of clinical practice. Incidence patients and off-patent prices are identified as two key missing features preventing the conventional CEA approach from capturing 1) benefit to future patients and 2) future savings from off-patent prices. The proposed CEA approach incorporates these two features to derive the total lifetime value of an innovative drug (i.e., the value of innovation). Results The conventional CEA approach tends to underestimate the value of innovative drugs by disregarding the benefit to future patients and savings from off-patent prices. As a result, innovative drugs are underpriced, only allowing manufacturers to capture approximately 15% of the total value of innovation during the patent protection period. In addition to including the incidence population and off-patent price, the alternative approach proposes pricing new drugs by first negotiating the share of value of innovation to be appropriated by the manufacturer (>15%?) and payer (<85%?), in order to then identify the drug price that satisfies this condition. Conclusion We argue for a modification to the conventional CEA approach that integrates the total lifetime value of innovative drugs into CEA, by taking into account off-patent pricing and future patients. The proposed approach derives a price that allows manufacturers to capture an agreed share of this value, thereby incentivizing innovation, while supporting health-care systems to pursue dynamic allocative efficiency. However, the long-term sustainability of health-care systems must be assessed before this proposal is adopted by policy makers. PMID:27123192

Does drug price-regulation affect healthcare expenditures?

PubMed

Ben-Aharon, Omer; Shavit, Oren; Magnezi, Racheli

2017-09-01

Increasing health costs in developed countries are a major concern for decision makers. A variety of cost containment tools are used to control this trend, including maximum price regulation and reimbursement methods for health technologies. Information regarding expenditure-related outcomes of these tools is not available. To evaluate the association between different cost-regulating mechanisms and national health expenditures in selected countries. Price-regulating and reimbursement mechanisms for prescription drugs among OECD countries were reviewed. National health expenditure indices for 2008-2012 were extracted from OECD statistical sources. Possible associations between characteristics of different systems for regulation of drug prices and reimbursement and health expenditures were examined. In most countries, reimbursement mechanisms are part of publicly financed plans. Maximum price regulation is composed of reference-pricing, either of the same drug in other countries, or of therapeutic alternatives within the country, as well as value-based pricing (VBP). No association was found between price regulation or reimbursement mechanisms and healthcare costs. However, VBP may present a more effective mechanism, leading to reduced costs in the long term. Maximum price and reimbursement mechanism regulations were not found to be associated with cost containment of national health expenditures. VBP may have the potential to do so over the long term.

Information system technologies' role in augmenting dermatologists' knowledge of prescription medication costs.

PubMed

DeMarco, Sebastian S; Paul, Ravi; Kilpatrick, Russell J

2015-12-01

Despite the recent rising costs of once affordable dermatologic prescription medications, a survey measuring dermatologists' attitudes, beliefs, and knowledge of the cost of drugs they commonly prescribe has not been conducted. Awareness of drug costs is hindered by a lack of access to data about the prices of medicines. No surveys of physicians have addressed this issue by proposing new information system technologies that augment prescription medication price transparency and measuring how receptive physicians are to using these novel solutions in their daily clinical practice. Our research aims to investigate these topics with a survey of physicians in dermatology. Members of the North Carolina Dermatology Association were contacted through their electronic mailing list and asked to take an online survey. The survey asked several questions about dermatologists' attitudes and beliefs about drug costs. To measure their knowledge of prescription medications, the National Average Drug Acquisition Cost was used as an authoritative price that was compared to the survey takers' price estimates of drugs commonly used in dermatology. Physicians' willingness to use four distinct information system technologies that increase drug price transparency was also assessed. Dermatologists believe drug costs are an important factor in patient care and believe access to price information would allow them to provide a higher quality of care. Dermatologists' knowledge of the costs of medicines they commonly prescribe is poor, but they want to utilize information system technologies that increase access to drug pricing information. There is an unmet demand for information system technologies which increase price transparency of medications in dermatology. Physicians and IT professionals have the opportunity to create novel information systems that can be utilized to help guide cost conscious clinical decision making. Copyright © 2015 Elsevier Ireland Ltd. All rights reserved.

Nonlinear Pricing in Drug Benefits and Medication Use: The Case of Statin Compliance in Medicare Part D

PubMed Central

Jung, Kyoungrae; Feldman, Roger; McBean, A Marshall

2014-01-01

Objective To examine how enrollees' statin compliance responds to expected prices in Medicare Part D, which features a nonlinear price schedule due to a coverage gap. Data Sources/Study Setting Prescription Drug Event data for a 5 percent random sample of Medicare Advantage Prescription Drug Plan enrollees in 2008 who did not receive a low-income subsidy. Study Design We analyze statin compliance prior to the coverage gap, where the “effective price” is higher than the actual copayment for drugs because consumers anticipate that more spending will make them more likely to reach the gap. We construct each enrollee's effective price as her expected price at the end of the year, which is the weighted average between pre-gap and in-gap copayments with the weight being the predicted probability of hitting the gap. Compliance is defined as at least 80 percent of days covered. Principal Findings Part D enrollees' pre-gap statin compliance decreases by 3.7–4.7 percentage points for a $10 increase in the effective price. Conclusion The presence of a coverage gap decreases statin compliance prior to the gap, suggesting that incorporating expected future prices is important to assess the full impact of cost sharing on drug compliance under nonlinear price schedules. PMID:24354765

The Global Drug Facility as an intervention in the market for tuberculosis drugs

PubMed Central

Cordier-Lassalle, Thierry; Lunte, Kaspars; Dye, Christopher

2015-01-01

Abstract Objective To investigate funding for the Global Drug Facility since 2001 and to analyse the facility’s influence on the price of high-quality tuberculosis drugs. Methods Data on the price of tuberculosis drugs were obtained from the Global Drug Facility for 2001 to 2012 and, for the private sector in 15 countries, from IMS Health for 2002 to 2012. Data on funding of the facility were also collected. Findings Quality-assured tuberculosis drugs supplied by the Global Drug Facility were generally priced lower than drugs purchased in the private sector. In 2012, just three manufacturers accounted for 29.9 million United Stated dollars (US$) of US$ 44.5 million by value of first-line drugs supplied. The Global Fund to Fight AIDS, Tuberculosis and Malaria provided 73% (US$ 32.5 million of US$ 44.5 million) and 89% (US$ 57.8 million of US $65.2 million) of funds for first- and second-line drugs, respectively. Between 2010 and 2012, the facility’s market share of second-line tuberculosis drugs increased from 26.1% to 42.9%, while prices decreased by as much as 24% (from US$ 1231 to US$ 939). Conversely, the facility’s market share of first-line drugs fell from 37.2% to 19.2% during this time, while prices increased from US$ 9.53 to US$ 10.2. Conclusion The price of tuberculosis drugs supplied through the facility was generally less than that on the private market. However, to realize its full potential and meet the needs of more tuberculosis patients, the facility requires more diverse and stable public funding and greater flexibility to participate in the private market. PMID:26229188

The Global Drug Facility as an intervention in the market for tuberculosis drugs.

PubMed

Arinaminpathy, Nimalan; Cordier-Lassalle, Thierry; Lunte, Kaspars; Dye, Christopher

2015-04-01

To investigate funding for the Global Drug Facility since 2001 and to analyse the facility's influence on the price of high-quality tuberculosis drugs. Data on the price of tuberculosis drugs were obtained from the Global Drug Facility for 2001 to 2012 and, for the private sector in 15 countries, from IMS Health for 2002 to 2012. Data on funding of the facility were also collected. Quality-assured tuberculosis drugs supplied by the Global Drug Facility were generally priced lower than drugs purchased in the private sector. In 2012, just three manufacturers accounted for 29.9 million United Stated dollars (US$) of US$ 44.5 million by value of first-line drugs supplied. The Global Fund to Fight AIDS, Tuberculosis and Malaria provided 73% (US$ 32.5 million of US$ 44.5 million) and 89% (US$ 57.8 million of US $65.2 million) of funds for first- and second-line drugs, respectively. Between 2010 and 2012, the facility's market share of second-line tuberculosis drugs increased from 26.1% to 42.9%, while prices decreased by as much as 24% (from US$ 1231 to US$ 939). Conversely, the facility's market share of first-line drugs fell from 37.2% to 19.2% during this time, while prices increased from US$ 9.53 to US$ 10.2. The price of tuberculosis drugs supplied through the facility was generally less than that on the private market. However, to realize its full potential and meet the needs of more tuberculosis patients, the facility requires more diverse and stable public funding and greater flexibility to participate in the private market.

Towards a balanced value business model for personalized medicine: an outlook.

PubMed

Koelsch, Christof; Przewrocka, Joanna; Keeling, Peter

2013-01-01

Novel targeted drugs, mainly in oncology, have commanded substantial price premiums in the recent past. Consequently, the attention of pharmaceutical companies has shifted away from the traditional low-price and high-volume blockbuster business model to drugs that command high, and sometimes extremely high, prices in limited markets defined by targeted patient populations. This model may have already passed its zenith, as the impact of more and more high-priced drugs coming to market substantially increases their combined burden on payors and public health finances. This article introduces a new 'balanced value' business model for personalized medicine, leveraging the emerging opportunities to reduce drug development cost and time for targeted therapies. This model allows pharmaceutical companies to charge prices for targeted therapy below the likely future thresholds for payors' willingness to pay, at the same time preserving attractive margins for the drug developers.

Fixed-dose combination and single active ingredient drugs: a comparative cost analysis.

PubMed

Hao, Jing; Rodriguez-Monguio, Rosa; Seoane-Vazquez, Enrique

2016-01-01

Fixed-dose combination (FDC) drugs are formulations of two or more active ingredients. To assess the pricing structure and price difference of all US FDA-approved FDCs and single drugs included in the combination. Data were collected from the FDA Orange Book and Drugs@FDA. Average Wholesale Price (AWP) unit price data were derived from The Red Book. The FDA approved 117 FDC. The average AWP difference percentage between the FDC and the sum of the single drugs in the FDC is 84.9 ± 26.2%, and varied by therapeutic class (p < 0.001). The FDC AWP averaged 83.3 ± 23.4% of the single drug AWP sum when there are no generics, and 95.1 ± 42.3% (p < 0.01) when there are two generic single active ingredients in the FDC. The price difference between FDC and single active ingredients in the combination is correlated with the therapeutic class, the year of FDC approval, and the number of single ingredients in the combination that have generics.

External referencing and pharmaceutical price negotiation.

PubMed

Garcia Mariñoso, Begoña; Jelovac, Izabela; Olivella, Pau

2011-06-01

External referencing (ER) imposes a price cap for pharmaceuticals, based on prices of identical or comparable products in foreign countries. Suppose a foreign country (F) negotiates prices with a pharmaceutical firm, whereas a home country (H) can either negotiate prices independently or implement ER, based on the foreign price. We show that country H prefers ER if copayments in H are relatively high. This preference is reinforced when H's population is small. Irrespective of relative country sizes, ER by country H harms country F. Our model is inspired by the wide European experience with this cost-containment policy. Namely, in Europe, drug authorization and price negotiations are carried out by separate agencies. We confirm our main results in two extensions. The first one allows for therapeutic competition between drugs. In the second one, drug authorization and price negotiation take place in a single agency. 2010 John Wiley & Sons, Ltd.

Is the prescribing behavior of Chinese physicians driven by financial incentives?

PubMed

Chen, Chun; Dong, Weizhen; Shen, Jay J; Cochran, Christopher; Wang, Ying; Hao, Mo

2014-11-01

The prescribing behavior to prescribe high-priced drugs has been hypothesized to be related to the increasing drug expenditures in China, but little empirical evidence exists. The purpose of this study was to examine whether Chinese physicians, driven by financial incentives, tend to prescribe high-priced drugs. The 2000-2008 drug data in the Yangtze River Basin Hospitals' Drug Use Analysis System were analyzed to examine the prescription patterns of penicillins and cephalosporins in Shanghai. Among the top-100 drugs (by volume), cephalosporins cost as 1.1- 2.3 times as penicillins and their volume was 1.7-18.2 times. Revenues generated from prescribing cephalosporins were 3.4-24.2 times as those from prescribing penicillins. The tendency of prescribing relatively high-priced drugs was observed given the same chemical name, dosage, and specification but different trade names. Furthermore, high-priced drugs remained on the top-100 list with increasing volumes, while some lower-priced drugs exited from the list due to decreases in volumes. Facing the policy dilemmas, the Chinese government needs to implement a new financially rewarding system in which hospitals and physicians are able to achieve financial gains in a cost-effective way including prescribing similar drugs with lower prices. Reforming hospitals' payment methods is necessary and feasible to reshape financial incentives of healthcare providers. The combination of the global budget policy and financial incentive measures would be likely to change providers' prescribing behaviors towards a cost-effective direction. Copyright © 2014 Elsevier Ltd. All rights reserved.

Challenges for Managed Care from 340B Contract Pharmacies.

PubMed

Fein, Adam J

2016-03-01

The federal 340B Drug Pricing Program has expanded rapidly, with important yet still unmeasured impact on both managed care practice and policies. Notably, providers increasingly rely on external, contract pharmacies to extend 340B pricing to a broad set of patients. In 2014, 1 in 4 U.S. retail, mail, and specialty pharmacy locations acted as contract pharmacies for 340B-covered entities. This commentary discusses crucial ways in which 340B growth is affecting managed care pharmacy through formulary rebates, profits from managed care paid prescriptions, disruption of retail pharmacy networks, and reduced generic dispensing rates. Managed care should become more engaged in the discussion on how the 340B program should evolve and offer policy proposals to mitigate the challenges being encountered. There is also an urgent need for objective, transparent research on the 340B program's costs, benefits, and implications for managed care pharmacy and practice.

75 FR 57230 - 340B Drug Pricing Program Manufacturer Civil Monetary Penalties

Federal Register 2010, 2011, 2012, 2013, 2014

2010-09-20

... process incorporating a variety of elements to gather and consider grounds for applying the penalty..., including, but not limited to: Decision-making individual or make-up of the decision making body; ex parte... Process Elements HRSA is seeking comments on the administrative processes that would best administer civil...

75 FR 54073 - Medicaid Program; Withdrawal of Determination of Average Manufacturer Price, Multiple Source Drug...

Federal Register 2010, 2011, 2012, 2013, 2014

2010-09-03

... hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and... reserved. 4. Section 447.510 is amended by-- A. Republishing paragraph (a) introductory text. B. Revising.... Revising the introductory text of paragraph (b). C. Revising paragraph (c). The revisions read as follows...

Company stock prices before and after public announcements related to oncology drugs.

PubMed

Rothenstein, Jeffrey M; Tomlinson, George; Tannock, Ian F; Detsky, Allan S

2011-10-19

Phase III clinical trials and Food and Drug Administration (FDA) regulatory decisions are critical for success of new drugs and can influence a company's market valuation. Knowledge of trial results before they are made public (ie, "inside information") can affect the price of a drug company's stock. We examined the stock prices of companies before and after public announcements regarding experimental anticancer drugs owned by the companies. We identified drugs that were undergoing evaluation in phase III trials or for regulatory approval by the US FDA from January 2000 to January 2009. Stock prices of companies that owned such drugs were analyzed for 120 trading days before and after the first public announcement of 1) results of clinical trials with positive and negative outcomes and 2) positive and negative regulatory decisions. All statistical tests were two-sided. We identified public announcements from 23 positive trials and 36 negative trials and from 41 positive and nine negative FDA regulatory decisions. The mean stock price for the 120 trading days before a phase III clinical trial announcement increased by 13.7% (95% confidence interval = -2.2% to 29.6%) for companies that reported positive trials and decreased by 0.7% (95% confidence interval = -13.8% to 12.3%) for companies that reported negative trials (P = .09). In a post hoc analysis comparing the stock price averaged over 60 trading days before and after day -60 relative to the clinical trial announcement, the mean stock price increased by 9.4% for companies that reported positive trials and decreased by 4.5% for companies that reported negative trials (P = .03). Changes in company stock prices before FDA regulatory decisions did not differ statistically between companies with positive decision and companies with negative decisions. Trends in company stock prices before the first public announcement differ for companies that report positive vs negative trials. This finding has important legal and ethical implications for investigators, drug companies, and the investment industry.

Determinants of orphan drugs prices in France: a regression analysis.

PubMed

Korchagina, Daria; Millier, Aurelie; Vataire, Anne-Lise; Aballea, Samuel; Falissard, Bruno; Toumi, Mondher

2017-04-21

The introduction of the orphan drug legislation led to the increase in the number of available orphan drugs, but the access to them is often limited due to the high price. Social preferences regarding funding orphan drugs as well as the criteria taken into consideration while setting the price remain unclear. The study aimed at identifying the determinant of orphan drug prices in France using a regression analysis. All drugs with a valid orphan designation at the moment of launch for which the price was available in France were included in the analysis. The selection of covariates was based on a literature review and included drug characteristics (Anatomical Therapeutic Chemical (ATC) class, treatment line, age of target population), diseases characteristics (severity, prevalence, availability of alternative therapeutic options), health technology assessment (HTA) details (actual benefit (AB) and improvement in actual benefit (IAB) scores, delay between the HTA and commercialisation), and study characteristics (type of study, comparator, type of endpoint). The main data sources were European public assessment reports, HTA reports, summaries of opinion on orphan designation of the European Medicines Agency, and the French insurance database of drugs and tariffs. A generalized regression model was developed to test the association between the annual treatment cost and selected covariates. A total of 68 drugs were included. The mean annual treatment cost was €96,518. In the univariate analysis, the ATC class (p = 0.01), availability of alternative treatment options (p = 0.02) and the prevalence (p = 0.02) showed a significant correlation with the annual cost. The multivariate analysis demonstrated significant association between the annual cost and availability of alternative treatment options, ATC class, IAB score, type of comparator in the pivotal clinical trial, as well as commercialisation date and delay between the HTA and commercialisation. The orphan drug pricing is a multivariate phenomenon. The complex association between drug prices and the studied attributes and shows that payers integrate multiple variables in decision making when setting orphan drug prices. The interpretation of the study results is limited by the small sample size and the complex data structure.

A comparative study of orphan drug prices in Europe

PubMed Central

Young, Katherine Eve; Soussi, Imen; Hemels, Michiel; Toumi, Mondher

2017-01-01

ABSTRACT Background and Objective: This study assessed price differences by comparing annual treatment costs of similarly available orphan drugs in France, Germany, Italy, Norway, Spain, Sweden, and UK. Methods: Annual treatment costs per drug were calculated using ex-factory prices from IHS POLI and country price databases. The treatment cost in the comparator country was compared to the UK and ratios were analysed. Subanalyses were done on disease areas and UK cost quartiles. Results: 120 orphan drugs were included. Compared to the UK, the average costs were more expensive in France (1.13), Germany (1.11), Italy (1.08), Spain (1.07), and were cheaper in Sweden (0.99) and Norway (0.88). The average ratios offered a restrictive view as ratios were greatly heterogeneous (0.26 to 1.92) which was also seen in the different disease areas. The averaged ratios varied minimally among the cost quartiles which shows that cost differences were similar for the most expensive and least expensive orphan drugs in the UK. Conclusions: Individual orphan drug prices can vary widely across European countries, although on average these differences are relatively minor. This study suggests that in Europe, we may not be able predict which country may have higher or lower prices for orphan drugs. PMID:28473887

The impact of a national prescription drug formulary on prices, market share, and spending: lessons for Medicare?

PubMed

Huskamp, Haiden A; Epstein, Arnold M; Blumenthal, David

2003-01-01

Several recent bills in Congress to add a Medicare prescription drug benefit would allow the use of formularies to control costs. However, there is little empirical evidence of the impact of formularies among elderly and disabled populations. We assess the effect of a closed formulary implemented by the Veterans Health Administration (VHA) in 1997 on drug prices, market share, and drug spending. We find that the VHA National Formulary was effective at shifting prescribing behavior toward the selected drugs, achieving sizable price reductions from manufacturers, and greatly decreasing drug spending.

Drug Licenses: A Better Model for Pharmaceutical Pricing

PubMed Central

Goldman, Dana P.; Jena, Anupam B.; Philipson, Tomas; Sun, Eric

2013-01-01

High drug prices are a substantial barrier to patient access and compliance. Yet, low drug prices are often argued to provide inadequate incentives for innovation. We propose a “drug-licensing” model for health care which has the promise of increasing drug utilization without altering patient out-of-pocket spending, health plan costs, or pharmaceutical profits. In such a model, individuals purchase annual drug licenses which guarantee unfettered access to a clinically optimal number of prescriptions over the course of a year. For the case of statins, we illustrate how such a model may be implemented in practice. PMID:18180487

[The price of the drugs in Rome: economy and pharmacy from 1700 till 1870].

PubMed

Lederman, F

1999-01-01

Since the Middle Ages pharmacists had played an important role as producers and retailers of drugs, many of them exotic and precious. Proof is the resignation of the church of San Lorenzo by Martin V to the guild of apothecaries. 100 years later, Pope Clemens VII introduced the principle of drug taxes. The first roman tax was published in 1558. Until Garibaldi overthrew the papal state in 1870, these principles had remained the same, only to be interrupted by the French occupation at the beginning of the 19th century. An analysis of the drug prices shows the general development of drug costs between 1700 and 1854, the prices and the drug trade in particular being especially dependent on strong political tendencies. The introduction of new drugs and the omission of old ones had a remarkable effect on the costs, a fact which is represented by a study about the development of the prices comparing different drug groups. A further comparison between the wages and the cost of living explains why mainly members of the higher social classes could afford to buy drugs in pharmacies. This economical study of taxes emphasizes the fact that drugs, in regard to their development in prices, can hardly be compared to other goods.

Prices, Profits and Innovation: Examining Criticisms of the Value of New Psychotropic Drugs

PubMed Central

Huskamp, Haiden A.

2008-01-01

High profits and high drug costs have brought increased scrutiny of the pharmaceutical industry over the issue of whether the drugs they produce are worth the costs. I examine several related complaints, including the proliferation of me-too drugs and product reformulations, which some argue have little value relative to their cost; promotion of newer drug classes as more effective than existing, less expensive drugs in the absence of evidence of superior effectiveness; legal strategies to extend market exclusivity that result in high brand drug prices for an extended period of time; and large promotional expenditures that result in higher prices. PMID:16684726

Drug Pricing in South Korea.

PubMed

Kwon, Hye-Young; Godman, Brian

2017-08-01

Between 2000 and 2013, spending on medicines in Korea increased by 275.3%. In order to curb this trend, several pricing policies and measures were introduced. This study reviews these policies and their implications based on pricing regulations as well as a literature review. New medicines now undergo both a reimbursement assessment and price negotiations. The reimbursement of new medicines is based on their cost effectiveness. The prices of new medicines are subsequently fixed through negotiations between the payer, the National Health Insurance Service, and the relevant manufacturer. Generic drugs are automatically priced via a new standard methodology. Repricing mechanisms were complicated and now redundant. Simple and efficient measures rather than complex and inefficient measures are needed to maintain the value-for-money principle for new medicines as well as achieve financial efficiency through price competition among generic drugs.

Pricing and reimbursement of pharmaceuticals in the Czech Republic and Sweden.

PubMed

Davidova, Jana; Praznovcova, Lenka; Lundborg, Cecilia Stålsby

2008-01-01

To describe and compare price regulation and reimbursement in the Czech Republic and Sweden. Legal documents, government reports, statutory information, annual reports and scientific articles were searched using the keywords: pharmaceutical market regulation, drug policy, drug pricing, drug reimbursement and patients' participation in costs concerning both countries. Approaches to regulation and regulatory steps concerning prices were compared between the countries. (i) Institutional responsibilities in pricing and reimbursement of pharmaceuticals; (ii) principles of patients' participation in costs on pharmaceuticals. Substantial differences were found in terms of pricing. In the Czech Republic, the Ministry of Finance sets maximal prices for pharmaceuticals whereas in Sweden there is a process of price regulation combined with reimbursement decisions taken by the Pharmaceutical Benefits Board. Together with a system of state-owned pharmacies, this ensures that drug prices in Sweden are fixed at the same level throughout the country. In the Czech Republic, prices may differ, since only maximal price levels are set. In both countries, decisions about reimbursement are taken at the national or state level whereas insurance funds or county councils are responsible for covering costs. The private share of pharmaceutical expenditures is substantially lower in the Czech Republic, even though there is no maximal level for patient's co-payment, as there is in Sweden. Differences in price setting and some other regulations of the pharmaceutical market were found. Both systems are designed to promote rational use of pharmaceuticals; and are based on social solidarity.

Designing pediatric vaccine formularies and pricing pediatric combination vaccines using operations research models and algorithms.

PubMed

Jacobson, Sheldon H; Sewell, Edward C; Allwine, Daniel A; Medina, Enrique A; Weniger, Bruce G

2003-02-01

The National Immunization Program, housed within the Centers for Disease Control and Prevention in the USA, has identified several challenges that must be faced in childhood immunization programs to deliver and procure vaccines that immunize children from the plethora of childhood diseases. The biomedical issues cited include how drug manufacturers can combine and formulate vaccines, how such vaccines are scheduled and administered and how economically sound vaccine procurement can be achieved. This review discusses how operations research models can be used to address the economics of pediatric vaccine formulary design and pricing, as well as how such models can be used to address a new set of pediatric formulary problems that will surface with the introduction of pediatric combination vaccines into the US pediatric immunization market.

Estimating Drug Costs: How do Manufacturer Net Prices Compare with Other Common US Price References?

PubMed

Mattingly, T Joseph; Levy, Joseph F; Slejko, Julia F; Onwudiwe, Nneka C; Perfetto, Eleanor M

2018-05-12

Drug costs are frequently estimated in economic analyses using wholesale acquisition cost (WAC), but what is the best approach to develop these estimates? Pharmaceutical manufacturers recently released transparency reports disclosing net price increases after accounting for rebates and other discounts. Our objective was to determine whether manufacturer net prices (MNPs) could approximate the discounted prices observed by the U.S. Department of Veterans Affairs (VA). We compared the annual, average price discounts voluntarily reported by three pharmaceutical manufacturers with the VA price for specific products from each company. The top 10 drugs by total sales reported from company tax filings for 2016 were included. The discount observed by the VA was determined from each drug's list price, reported as WAC, in 2016. Descriptive statistics were calculated for the VA discount observed and a weighted price index was calculated using the lowest price to the VA (Weighted VA Index), which was compared with the manufacturer index. The discounted price as a percentage of the WAC ranged from 9 to 74%. All three indexes estimated by the average discount to the VA were at or below the manufacturer indexes (42 vs. 50% for Eli Lilly, 56 vs. 65% for Johnson & Johnson, and 59 vs. 59% for Merck). Manufacturer-reported average net prices may provide a close approximation of the average discounted price granted to the VA, suggesting they may be a useful proxy for the true pharmacy benefits manager (PBM) or payer cost. However, individual discounts for products have wide variation, making a standard discount adjustment across multiple products less acceptable.

High-frequency drug purity and price series as tools for explaining drug trends and harms in Victoria, Australia.

PubMed

Scott, Nick; Caulkins, Jonathan P; Ritter, Alison; Quinn, Catherine; Dietze, Paul

2015-01-01

Methamphetamine-related harms in Victoria have increased recently in the context of stable or declining use prevalence. We determine how changes in price and purity of methamphetamine compared to other drugs such as heroin may, in part, explain these divergent patterns. Detailed methamphetamine and heroin purchase price data from 2152 participant interviews from the Melbourne Injecting Drug User cohort study were used to generate drug price series for the period January 2009-June 2013. Data on drug purity from 8818 seizures made within Victoria were used to generate drug purity series during the same period. Purity-adjusted price data for methamphetamine and heroin were obtained for the period 2009-13 by combining the two data sets. While the average purity of heroin seizures remained consistent and low, the average purity of powder and of crystal methamphetamine seizures increased from 12% [95% confidence interval (CI) = 10-14%] to 37% (95% CI = 20-54%) and 21% (95% CI = 18-23%) to 64% (95% CI = 60-68%), respectively. Crystal methamphetamine purity was bimodal, with observations generally less than 20% or greater than 70%. The average unadjusted price per gram for heroin decreased from $374 (95% CI = $367-381) to $294 (95% CI = $280-308), powder methamphetamine did not change significantly from $252 (95% CI = $233-271), and crystal methamphetamine increased substantially from $464 (95% CI = $416-511) in 2009 to $795 (95% CI = $737-853) in 2011. This increase was offset by an even greater increase in purity, meaning the average purity-adjusted price per gram declined. Furthermore, pure prices of both methamphetamine forms were similar, whereas their unadjusted prices were not. The pure price of heroin fluctuated with no ongoing trends. Decreases in methamphetamine purity-adjusted price along with the bimodality of crystal methamphetamine purity may account for some of the recent increase in methamphetamine-related harm. For a given amount spent, methamphetamine purchase power has increased and the presence of extreme purity variations may challenge individuals' control of consumption. © 2014 Society for the Study of Addiction.

Effects of reference pricing in pharmaceutical markets: a review.

PubMed

Galizzi, Matteo Maria; Ghislandi, Simone; Miraldo, Marisa

2011-01-01

This work aims to provide a systematic and updated survey of original scientific studies on the effect of the introduction of reference pricing (RP) policies in Organisation for Economic Co-operation and Development (OECD) countries. We searched PubMed, EconLit and Web of Knowledge for articles on RP. We reviewed studies that met the inclusion criteria established in the search strategy. From a total of 468 references, we selected the 35 that met all of the inclusion criteria. Some common themes emerged in the literature. The first was that RP was generally associated with a decrease in the prices of the drugs subject to the policy. In particular, price drops seem to have been experienced in virtually every country that implemented a generic RP (GRP) policy. A GRP policy applies only to products with expired patents and generic competition, and clusters drugs according to chemical equivalence (same form and active compound). More significant price decreases were observed in the sub-markets in which drugs were already facing generic competition prior to RP. Price drops varied widely according to the amount of generic competition and industrial strategies: brand-named drugs originally priced above RP values decreased their prices to a greater extent. A second common theme was that both therapeutic RP (TRP) and GRP have been associated with significant and consistent savings in the first years of application. A third general result is that generic market shares significantly increased whenever the firms producing brand-named drugs did not adopt one of the following strategies: lowering prices to RP values; launching new dosages and/or formulations; or marketing substitute drugs still under patent protection. Finally, concerning TRP, although more evidence is needed, studies based on a large number of patient-level observations showed no association between the RP policy and health outcomes.

Effect of the tobacco price support program on cigarette consumption in the United States: an updated model.

PubMed Central

Zhang, P; Husten, C; Giovino, G

2000-01-01

OBJECTIVES: This study evaluated the direct effect of the tobacco price support program on domestic cigarette consumption. METHODS: We developed an economic model of demand and supply of US tobacco to estimate how much the price support program increases the price of tobacco. We calculated the resultant increase in cigarette prices from the change in the tobacco price and the quantity of domestic tobacco contained in US cigarettes. We then assessed the reduction in cigarette consumption attributable to the price support program by applying the estimated increase in the cigarette price to assumed price elasticities of demand for cigarettes. RESULTS: We estimated that the tobacco price support program increased the price of tobacco leaf by $0.36 per pound. This higher tobacco price translates to a $0.01 increase in the price of a pack of cigarettes and an estimated 0.21% reduction in cigarette consumption. CONCLUSION: Because the tobacco price support program increases the price of cigarettes minimally, its potential health benefit is likely to be small. The adverse political effect of the tobacco program might substantially outweigh the potential direct benefit of the program on cigarette consumption. PMID:10800423

Mitigating regulatory impact: the case of partial price controls on metformin in India.

PubMed

Bhaskarabhatla, Ajay; Chatterjee, Chirantan; Anurag, Priyatam; Pennings, Enrico

2017-03-01

The use of drug price controls is a contentious issue globally. Low- and middle-income countries use direct price controls to improve access to essential drugs. But such price controls have little meaning if they are not designed and implemented well, and the extent to which firms coordinate in these countries to weaken price controls has been largely overlooked. In mid-2013, India adopted partial price-cap regulation for some, but not all, formulations of several essential medicines. Using data on sales and prices of the out-of-patent oral antidiabetic drug Metformin—considered essential by WHO since 1998—and employing the differences-in-differences methodology, we examine the impact of the regulation on curbing prices. We find that firms coordinated to increase the price of the regulated formulation in the period before regulation, which led to a higher ceiling price. We also find, using triple-differences analyses, that the coordination is stronger among larger firms and for time-release formulations. We present anecdotal evidence to suggest that pharmaceutical trade associations facilitated coordination among firms, and we conclude that partial price control of Metformin in India is, at best, a modest improvement over no regulation.

Reimbursement of pharmaceuticals: reference pricing versus health technology assessment.

PubMed

Drummond, Michael; Jönsson, Bengt; Rutten, Frans; Stargardt, Tom

2011-06-01

Reference pricing and health technology assessment are policies commonly applied in order to obtain more value for money from pharmaceuticals. This study focussed on decisions about the initial price and reimbursement status of innovative drugs and discussed the consequences for market access and cost. Four countries were studied: Germany, The Netherlands, Sweden and the United Kingdom. These countries have operated one, or both, of the two policies at certain points in time, sometimes in parallel. Drugs in four groups were considered: cholesterol-lowering agents, insulin analogues, biologic drugs for rheumatoid arthritis and "atypical" drugs for schizophrenia. Compared with HTA, reference pricing is a relatively blunt instrument for obtaining value for money from pharmaceuticals. Thus, its role in making reimbursement decisions should be limited to drugs which are therapeutically equivalent. HTA is a superior strategy for obtaining value for money because it addresses not only price but also the appropriate indications for the use of the drug and the relation between additional value and additional costs. However, given the relatively higher costs of conducting HTAs, the most efficient approach might be a combination of both policies.

Funding innovation for treatment for rare diseases: adopting a cost-based yardstick approach

PubMed Central

2013-01-01

Background Manufacturers justify the high prices for orphan drugs on the basis that the associated R&D costs must be spread over few patients. The proliferation of these drugs in the last three decades, combined with high prices commonly in excess of $100,000 per patient per year are placing a substantial strain on the budgets of drug plans in many countries. Do insurers spend a growing portion of their budgets on small patient populations, or leave vulnerable patients without coverage for valuable treatments? We suggest that a third option is present in the form of a cost-based regulatory mechanism. Methods This article explores the use of a cost-based price control mechanism for orphan drugs, adapted from the standard models applied in utilities regulation. Results and conclusions A rate-of-return style model, employing yardsticked cost allocations and a modified two-stage rate of return calculation could be effective in setting a new standard for orphan drugs pricing. This type of cost-based pricing would limit the costs faced by insurers while continuing to provide an efficient incentive for new drug development. PMID:24237605

Essays on measurement and evaluation of demand side management programs in the electricity industry, and impacts of firm strategy on stock price in the biotechnology industry

NASA Astrophysics Data System (ADS)

Bandres Motola, Miguel A.

Essay one estimates changes in small business customer energy consumption (kWh) patterns resulting from a seasonally differentiated pricing structure. Econometric analysis leverages cross-sectional time series data across the entire population of affected customers, from 2007 through the present. Observations include: monthly energy usage (kWh), relevant customer segmentations, local daily temperature, energy price, and region-specific economic conditions, among other variables. The study identifies the determinants of responsiveness to seasonal price differentiation. In addition, estimated energy consumption changes occurring during the 2010 summer season are reported for the average customer and in aggregate grouped by relevant customer segments, climate zone, and total customer base. Essay two develops an econometric modeling methodology to evaluate load impacts for short duration demand response events. The study analyzes time series data from a season of direct load control program tests aimed at integrating demand response into the wholesale electricity market. I have combined "fuzzy logic" with binary variables to create "fuzzy indicator variables" that allow for measurement of short duration events while using industry standard model specifications. Typically, binary variables for every hour are applied in load impact analysis of programs dispatched in hourly intervals. As programs evolve towards integration with the wholesale market, event durations become irregular and often occur for periods of only a few minutes. This methodology is innovative in that it conserves the degrees of freedom in the model while allowing for analysis of high frequency data using fixed effects. Essay three examines the effects of strategies, intangibles, and FDA news on the stocks of young biopharmaceutical firms. An event study methodology is used to explore those effects. This study investigates 20,839 announcements from 1990 to 2005. Announcements on drug development, alliances, publications, presentations, and FDA approval have a positive effect on the short-term performance of young biopharmaceutical firms. Announcements on goals not met, FDA drug approval denied, and changes in structural organizations have a negative effect on the short-term performance of young biopharmaceutical firms.

Does price reveal poor-quality drugs? Evidence from 17 countries.

PubMed

Bate, Roger; Jin, Ginger Zhe; Mathur, Aparna

2011-12-01

Focusing on 8 drug types on the WHO-approved medicine list, we constructed an original dataset of 899 drug samples from 17 low- and median-income countries and tested them for visual appearance, disintegration, and analyzed their ingredients by chromatography and spectrometry. Fifteen percent of the samples fail at least one test and can be considered substandard. After controlling for local factors, we find that failing drugs are priced 13.6-18.7% lower than non-failing drugs but the signaling effect of price is far from complete, especially for non-innovator brands. The look of the pharmacy, as assessed by our covert shoppers, is weakly correlated with the results of quality tests. These findings suggest that consumers are likely to suspect low quality from market price, non-innovator brand and the look of the pharmacy, but none of these signals can perfectly identify substandard and counterfeit drugs. Copyright © 2011 Elsevier B.V. All rights reserved.

Reducing the price of treatment for multidrug-resistant tuberculosis through the Global Drug Facility.

PubMed

Lunte, Kaspars; Cordier-Lassalle, Thierry; Keravec, Joel

2015-04-01

Many countries have limited experience of securing the best prices for drugs and have little negotiating power. This is particularly true for the complex, lengthy and expensive regimens used to treat multidrug-resistant tuberculosis. The Stop TB Partnership's Global Drug Facility is dedicated to improving worldwide access to antituberculosis medicines and diagnostic techniques that meet international quality standards. The Global Drug Facility is able to secure price reductions through competitive tendering among prequalified drug manufacturers and by consolidating orders to achieve large purchase volumes. Consolidating the market in this way increases the incentives for suppliers of quality-assured medicines. In 2013 the Global Drug Facility reduced the price of the second-line drugs it supplies for multidrug-resistant tuberculosis: the overall cost of the longest and most expensive treatment regimen for a patient decreased by 26% - from 7890 United States dollars (US$) in 2011 to US$ 5822 in 2013. The price of treatment for multidrug-resistant tuberculosis supplied by the Global Drug Facility was reduced by consolidating orders to achieve large purchase volumes, by international, competitive bidding and by the existence of donor-funded medicine stockpiles. The rise in the number of suppliers of internationally quality-assured drugs was also important. The savings achieved from lower drug costs could be used to increase the number of patients on high-quality treatment.

Causes of drug shortages in the legal pharmaceutical framework.

PubMed

De Weerdt, Elfi; Simoens, Steven; Hombroeckx, Luc; Casteels, Minne; Huys, Isabelle

2015-03-01

Different causes of drug shortages can be linked to the pharmaceutical legal framework, such as: parallel trade, quality requirements, economic decisions to suspend or cease production, etc. However until now no in-depth study of the different regulations affecting drug shortages is available. The aim of this paper is to provide an analysis of relevant legal and regulatory measures in the European pharmaceutical framework which influence drug shortages. Different European and national legislations governing human medicinal products were analyzed (e.g. Directive 2001/83/EC and Directive 2011/62/EU), supplemented with literature studies. For patented drugs, external price referencing may encompass the largest impact on drug shortages. For generic medicines, internal or external reference pricing, tendering as well as price capping may affect drug shortages. Manufacturing/quality requirements also contribute to drug shortages, since non-compliance leads to recalls. The influence of parallel trade on drug shortages is still rather disputable. Price and quality regulations are both important causes of drug shortages or drug unavailability. It can be concluded that there is room for improvement in the pharmaceutical legal framework within the lines drawn by the EU to mitigate drug shortages. Copyright © 2015 Elsevier Inc. All rights reserved.

[Overpricing and affordability of drugs: the case of essential drugs in Mexico].

PubMed

Molina-Salazar, R E; Rivas-Vilchis, J E

1998-01-01

Accessibility and availability of drugs has been a matter of great concern for health services all over the world, especially for less developed countries. The World Health Organization has devoted considerable time to this matter, as evidenced in several documents and policies, such as model lists of essential drugs and the strategy "Health for All by the Year 2000". The WHO policy for essential drugs has been widely accepted, and the WHO List of Essential Drugs is now in the ninth revised edition. Although the essential drug policy has been well-accepted by health agencies and NGOs, the pharmaceutical industry has not proven willing to produce essential drugs at affordable prices. The purpose of this study is to examine price levels of essential drugs in Mexico. The evaluation was performed through a comparison of international and national prices for leading drugs in the respective therapeutic categories and included in the WHO model list of essential drugs. The study shows clearly that prices of essential brand-name drugs in Mexico are very high. Per capita consumption has remained stable despite a sharp decrease in the Mexican GDP since 1995. The article discusses the reasons for this and proposes measures to deal with the problem.

Eliminating drug price differentials across government programmes in the USA.

PubMed

Chalkidou, Kalipso; Anderson, Gerard F; Faden, Ruth

2011-01-01

Federal agencies in the USA pay significantly different prices for the same prescription drugs because each agency uses a different approach to derive the payment rate. Because we do not identify any economic rationale or socially accepted moral reasoning that would justify the current level of price variation, we suggest that the federal government should pay a uniform price for each drug. Laws and regulations that give certain federal agencies the ability to earn rebates, use formularies, or permit other special arrangements would need to be eliminated in order to have a single payment rate. This could make some government agencies worse off than others; however, a uniform payment rate would not need to affect beneficiaries' current financial contributions, access to drugs, benefits or overall public expenditures. At the same time, having a single rate would permit the government to adopt a more effective approach to purchasing drugs and send a consistent message to pharmaceutical companies concerning which types of drugs the government wants them to develop for government beneficiaries. How this single price would be derived and how it would compare with the lowest or highest prices currently achieved by government agencies would depend on a variety of policy issues including the government's desire to encourage pharmaceutical research and development and the need to control health care spending.

Drug pricing and reimbursement decision making systems in Mongolia.

PubMed

Dorj, Gereltuya; Sunderland, Bruce; Sanjjav, Tsetsegmaa; Dorj, Gantuya; Gendenragchaa, Byambatsogt

2017-01-01

It is essential to allocate available resources equitably in order to ensure accessibility and affordability of essential medicines, especially in less fortunate nations with limited health funding. Currently, transparent and evidence based research is required to evaluate decision making regarding drug registration, drug pricing and reimbursement processes in Mongolia. To assess the drug reimbursement system and discuss challenges faced by policy-makers and stakeholders. The study has examined Mongolian administrative documents and directives for stakeholders and analysed published statistics. Experts and decision-makers were interviewed about the drug pricing and reimbursement processes in Mongolia. Decisions regarding Mongolian drug registration were based on commonly used criteria of quality, safety, efficacy plus some economic considerations. A total of 11.32 billion Mongolian National Tugrugs (MNT) [5.6 million United States Dollars (USD)] or 12.1% of total health expenditure was spent on patient reimbursement of essential drugs. The highest reimbursed drugs with respect to cost in 2014 were the cardiovascular drug group. Health insurance is compulsory for all citizens; in addition all insured patients have access to reimbursed drugs. However, the decision making process, in particular the level of reimbursement was limited by various barriers, including lack of evidence based data regarding efficacy and comparative cost-effectiveness analysis of drugs and decisions regarding reimbursement. Drug registration, pricing and reimbursement process in Mongolia show an increasing trend of drug registration and reimbursement rates, along with lack of transparency. Limited available data indicate that more evidence-based research studies are required in Mongolia to evaluate and improve the effectiveness of drug pricing and reimbursement policies.

Price discrimination in essential medicines: evidence from International Drug Price Indicator Guide data.

PubMed

Hanlon, Michael; Zhang, Raymond

2013-03-01

Few data are available on what donors, governments and other implementing organisations pay for the medicines they procure. To partly address this shortcoming, we analyse transactions of pharmaceuticals on the WHO's essential medicines list. Our objective was to identify the determinants of prices paid for these drugs. We used data from the 2008 version of the International Drug Price Indicator Guide. We normalised transactions by representing their value as a 'price per daily dose'. We used a mixed-effects regression model to quantify the impact of observable characteristics on prices paid. We present evidence of first-degree price discrimination in the market for essential medicines. We find that as a country's per capita wealth doubles, prices paid for the same pharmaceutical increase by 33%. These data indicate that purchasing agents from wealthier countries pay more for essential medicines, all factors constant. This behaviour is not a form of development assistance for health but rather is indicative of inefficient markets in which buyers' lack of information enables suppliers to charge higher prices than they could otherwise.

The effects of perceived quality on the behavioural economics of alcohol, amphetamine, cannabis, cocaine, and ecstasy purchases.

PubMed

Cole, Jon C; Goudie, Andrew J; Field, Matt; Loverseed, Anne-Claire; Charlton, Sarah; Sumnall, Harry R

2008-04-01

Previous research has indicated that non-dependent polydrug users are willing to pay more money to buy good quality drugs as their income increased. This study sought to examine whether altering the perceived quality of controlled drugs would affect drug purchases if the monetary price remained fixed. A random sample of 80 polydrug users were recruited. All participants were administered an anonymous questionnaire consisting of the Drug Abuse Screening Test for Adolescents (DAST-A), the Severity of Dependence Scale for cannabis (SDS), the Alcohol Use Disorders Identification Test (AUDIT), the Hospital Anxiety and Depression Scale (HADS), and questions about their drug use. Participants then completed a simulation of controlled drug purchases where the price of alcohol, amphetamine, cannabis, cocaine, and ecstasy remained the same but their perceived quality changed (i.e. unit price increased as the perceived quality decreased). The demand for alcohol was quality inelastic and alcohol quality had no effects on the purchase of any other controlled drug. Demand for cannabis was quality elastic and alcohol substituted for cannabis as its unit price increased. Demand for cocaine was quality elastic and alcohol, cannabis, and ecstasy substituted for cocaine as its unit price increased. Demand for ecstasy was quality elastic and alcohol and cocaine both substituted for ecstasy as its unit price increased. These results suggest that perceived quality influences the demand for controlled drugs and that monitoring the perceived quality of controlled drugs may provide a warning of potential public health problems in the near future.

Off-patent drugs at brand-name prices: a puzzle for policymakers

PubMed Central

Tallapragada, Naren P.

2016-01-01

In August 2015, Turing Pharmaceuticals acquired the marketing rights to Daraprim (pyrimethamine), a drug used to treat parasitic infections like malaria and toxoplasmosis. Soon after, Turing caused an uproar when it announced that it would raise the price per tablet of Daraprim from \\documentclass[12pt]{minimal} \\usepackage{amsmath} \\usepackage{wasysym} \\usepackage{amsfonts} \\usepackage{amssymb} \\usepackage{amsbsy} \\usepackage{upgreek} \\usepackage{mathrsfs} \\setlength{\\oddsidemargin}{-69pt} \\begin{document} }{}$\\rm{\\$ 13.50\\ to\\ \\$ 750}$\\end{document}, a 5500% price hike for a drug that has been on the market for over 60 years and off patent since the 1970s. Old, off-patent drugs are becoming increasingly expensive; Daraprim is the archetypal example. Turing had the power to set a high price for Daraprim because the drug's limited patient population, the absence of competing manufacturers, and a lack of therapeutic alternatives all created an effective monopoly. Similar forces have driven up the prices of other off-patent drugs that treat diseases as diverse as heart failure and multi-drug-resistant tuberculosis. Thus, policymakers will have to consider how the high cost of off-patent drugs impacts public health as well as public spending. In this Note I outline the extent of the high-cost off-patent drug problem, drawing special attention to the problem's negative effects on both health outcomes and government budgets. After discussing some of the problem's underlying causes, I present several solutions to the problem that policymakers could consider, with a focus on proposals like reference pricing and expanded compounding that have received relatively little media attention. PMID:27774247

Firm- and drug-specific patterns of generic drug payments by US medicaid programs: 1991-2008.

PubMed

Kelton, Christina M L; Chang, Lenisa V; Guo, Jeff J; Yu, Yan; Berry, Edmund A; Bian, Boyang; Heaton, Pamela C

2014-04-01

The entry of generic drugs into markets previously monopolized by patented, branded drugs often represents large potential savings for healthcare payers in the USA. Our objectives were to describe and explain the trends in drug reimbursement by public Medicaid programmes post-generic entry for as many drug markets and for as long a time period as possible. The data were the Medicaid State Drug Utilization Data maintained by the Centers for Medicare and Medicaid Services. Quarterly utilization and expenditure data from 1991 to 2008 were extracted for 83 drugs, produced by 229 firms, that experienced initial generic entry between 1992 and 2004. A relative 'price' for a specific drug, firm and quarter was constructed as Medicaid reimbursement per unit (e.g. tablet, capsule or vial) divided by average reimbursement per unit for the branded drug the year before entry. Fixed-effects models controlling for time-, firm- and drug-specific differences were estimated to explain reimbursement. Twelve quarters after generic entry, 18 % of drugs had average per-unit reimbursement less than 50 % of the original branded-drug reimbursement. For each additional firm manufacturing the drug, reimbursement per unit, relative to the pre-generic-entry branded-drug reimbursement, was estimated to fall by 17 (p < 0.01) and 3 (p < 0.01) percentage points for generic and branded-drug companies, respectively. Each additional quarter post-generic entry brought a 2 (p < 0.01) percentage point drop in relative reimbursement. State Medicaid programmes generally have been able to obtain relief from high drug prices following patent expirations for many branded-drug medications by adjusting reimbursement following the expanded competition in the pharmaceutical market.

Application of the Price-Volume Approach in Cases of Innovative Drugs Where Value-Based Pricing is Inadequate: Description of Real Experiences in Italy.

PubMed

Messori, Andrea

2016-08-01

Several cases of expensive drugs designed for large patient populations (e.g. sofosbuvir) have raised a complex question in terms of drug pricing. Even assuming value-based pricing, the treatment with these drugs of all eligible patients would have an immense budgetary impact, which is unsustainable also for the richest countries. This raises the need to reduce the prices of these agents in comparison with those suggested by the value-based approach and to devise new pricing methods that can achieve this goal. The present study discusses in detail the following two methods: (i) The approach based on setting nation-wide budget thresholds for individual innovative agents in which a fixed proportion of the historical pharmaceutical expenditure represents the maximum budget attributable to an innovative treatment; (ii) The approach based on nation-wide price-volume agreements in which drug prices are progressively reduced as more patients receive the treatment. The first approach has been developed in the USA by the Institute for Clinical and Economic Review and has been applied to PCSK9 inhibitors (alirocumab and evolocumab). The second approach has been designed for the Italian market and has found a systematic application to manage the price of ranibizumab, sofosbuvir, and PCSK9 inhibitors. While, in the past, price-volume agreements have been applied only on an empirical basis (i.e. in the absence of any quantitative theoretical rule), more recently some explicit mathematical models have been described. The performance of these models is now being evaluated on the basis of the real-world experiences conducted in some European countries, especially Italy.

75 FR 41365 - Dairy Product Price Support Program and Dairy Indemnity Payment Program

Federal Register 2010, 2011, 2012, 2013, 2014

2010-07-16

...;Prices of new books are listed in the first FEDERAL REGISTER issue of each #0;week. #0; #0; #0; #0;#0... 0560-AH88 Dairy Product Price Support Program and Dairy Indemnity Payment Program AGENCY: Commodity... regulations for the Dairy Product Price Support Program (DPPSP), which has replaced the Price Support Program...

Can and should value-based pricing be applied to molecular diagnostics?

PubMed

Garau, Martina; Towse, Adrian; Garrison, Louis; Housman, Laura; Ossa, Diego

2013-01-01

Current pricing and reimbursement systems for diagnostics are not efficient. Prices for diagnostics are often driven by administrative practices and expected production cost. The purpose of the paper is to discuss how a value-based pricing framework being used to ensure efficient use and price of medicines could also be applied to diagnostics. Diagnostics not only facilitates health gain and cost savings, but also information to guide patients' decisions on interventions and their future 'behaviors'. For value assessment processes we recommend a two-part approach. Companion diagnostics introduced at the launch of the drug should be assessed through new drug assessment processes considering a broad range of value elements and a balanced analysis of diagnostic impacts. A separate diagnostic-dedicated committee using value-based pricing principles should review other diagnostics lying outside the companion diagnostics-and-drug 'at-launch' situation.

Canada's New Generic Pricing Policy: A Reasoned Approach to a Challenging Problem.

PubMed

Hollis, Aidan; Grootendorst, Paul

2015-08-01

Alberta, quickly followed by other Canadian provinces, has introduced a new pricing model for generic drugs, in which prices are inversely related to the number of generic manufacturers of the drug. This paper examines the rationale for the new policy. Copyright © 2015 Longwoods Publishing.

Generic script share and the price of brand-name drugs: the role of consumer choice.

PubMed

Rizzo, John A; Zeckhauser, Richard

2009-09-01

Pharmaceutical expenditures have grown rapidly in recent decades, and now total nearly 10% of health care costs. Generic drug utilization has risen substantially alongside, from 19% of scripts in 1984 to 47% in 2001, thus tempering expenditure growth through significant direct dollar savings. However, generic drugs may lead to indirect savings as well if their use reduces the average price of those brand-name drugs that are still purchased. Prior work indicates that brand-name producers do not lower their prices in the face of generic competition, and our study confirms that finding. However, prior work is silent on how the mix of consumer choices between generic and brand-name drugs might affect the average price of those brand-name drugs that are purchased. We use a nationally representative panel of data on drug utilization and costs for the years 1996-2001 to examine how the share of an individual's prescriptions filled by generics (generic script share) affects his average out-of-pocket cost for brand-name drugs, and the net cost paid by the insurer. Our principal finding is that a higher generic script share lowers average brand-name prices to consumers, presumably because consumers are more likely to substitute generics when brand-name drugs would cost them more. This effect is substantial: a 10% increase in the consumer's generic script share is associated with a 15.6% decline in the average price paid for brand-name drugs by consumers. This implies that the potential cost savings to consumers from generic substitution are far greater than prior work suggests. In contrast, the percentage reduction in average brand costs to health plans is far smaller, and statistically insignificant.

The effect of the implementation of low price medicine policy on medicine price in China: A retrospective study.

PubMed

Guan, Xiaodong; Yang, Mingchun; Man, Chunxia; Tian, Ye; Shi, Luwen

2018-04-30

In an effort to relieve the pressure of drug shortages, the Chinese government implemented Low-price Medicines (LPM) policy to raise the price cap in July 2014. The purpose of this study is to examine the effect of the implementation of this policy on drug price in China. Price data of 491 LPM, including 218 low-price chemical medicines (LPCM) and 273 low-price traditional Chinese medicines (LPTCM), were collected from 699 hospitals. We used interrupted time series design to identify the variation of monthly Laspeyres Indexes (LI) and Paasche Indexes (PI) for LPM, LPCM, and LPTCM. The result demonstrated that although LPM expenditures increased, the proportion of LPM expenditures accounting for all medicine expenditures fell from 3.6% to 3.2%. After the implementation of LPM policy, there was a significant increasing trend in LPM-PI, LPCM-PI, and LPTCM-PI. The trend in LPM-LI and LPCM-LI was found from descending to rising. However, for LPTCM, the trend in the LI remained to decrease after the policy implementation. Despite the LPM policy had an increasing impact on the LPM drug price, the proportion of LPM expenditures accounting for all medicine expenditures did not increase. More efforts are needed in the future to promote the rational drug use in China. Copyright © 2018 John Wiley & Sons, Ltd.

Reform of prescription drug reimbursement and pricing in the German social health insurance market: a comparison of three scenarios.

PubMed

Gress, Stefan; Niebuhr, Dea; May, Uwe; Wasem, Jürgen

2007-01-01

We review regulation of two important parameters for third-party payers and manufacturers of prescription drugs: regulation of reimbursement and pricing. We find that centralised regulation of reimbursement and pricing prevails in the 15 original EU member countries (EU-15) and in European Free Trade Association (EFTA) countries. Compared with countries such as Switzerland, The Netherlands, France and England, regulation in the German social health insurance system is rather unique. First, market approval is nearly always equivalent to reimbursement. Second, manufacturers are free to determine prices but internal reference prices restrict them from actually doing so for generics and therapeutic substitutes. In order to contain rising expenditures for prescription drugs in Germany, and to set incentives for physicians to consider the costs as well as the benefits of prescriptions, three reform scenarios are feasible. The first scenario maintains centralised reimbursement and centralised pricing; the second maintains centralised reimbursement but switches to decentralised pricing (similar to social health insurance in Israel and Medicare in the US). Third-party payers would be able to negotiate with manufacturers about discounts and market shares for genetic and therapeutic substitutes. In the third scenario, pricing and reimbursement would be decentralised (similar to private health insurance in the US). We suggest that the second scenario is a viable compromise between consumer protection and a more competitive and cost-effective market for prescription drugs in German social health insurance and other similar markets for prescription drugs.

Drugs Cheaper Than Threepenny: The Market of Extremely Low-Priced Drugs within the National Health Insurance in Taiwan

PubMed Central

Chou, Li-Fang

2014-01-01

While most drug policy researches paid attention to the financial impact of expensive drugs, the market situation of low-priced drugs in a country was seldom analyzed. We used the nationally representative claims datasets to explore the status within the National Health Insurance (NHI) in Taiwan. In 2007, a total of 12,443 distinct drug items had been prescribed 853,250,147 times with total expenditure of 105,216,950,198 new Taiwan dollars (NTD). Among them, 7,366 oral drug items accounted for 701,353,383 prescribed items and 68,133,988,960 NTD. Besides, 2,887 items (39.2% of oral drug items) belonged to cheap drugs with the unit price ≤1 NTD (about 0.03 of US dollar). While the top one item among all oral drugs had already a market share of 5.0%, 30 items 30.3% and 107 items 50.0%, the cheap drugs with aggregate 332,893,462 prescribed items (47.5% of all prescribed oral drug items) only accounted for 2,750,725,433 NTD (4.0% of expenditure for oral drugs and 2.6% of total drug expenditure). The drug market of Taiwan's NHI was abundant in cheap drugs. The unreasonably low prices of drugs might not guarantee the quality of pharmaceutical care and the sustainability of a healthy pharmaceutical industry in the long run. PMID:24719568

Drugs cheaper than threepenny: the market of extremely low-priced drugs within the National Health Insurance in Taiwan.

PubMed

Wang, Bih-Ru; Chou, Chia-Lin; Hsu, Chia-Chen; Chou, Yueh-Ching; Chen, Tzeng-Ji; Chou, Li-Fang

2014-01-01

While most drug policy researches paid attention to the financial impact of expensive drugs, the market situation of low-priced drugs in a country was seldom analyzed. We used the nationally representative claims datasets to explore the status within the National Health Insurance (NHI) in Taiwan. In 2007, a total of 12,443 distinct drug items had been prescribed 853,250,147 times with total expenditure of 105,216,950,198 new Taiwan dollars (NTD). Among them, 7,366 oral drug items accounted for 701,353,383 prescribed items and 68,133,988,960 NTD. Besides, 2,887 items (39.2% of oral drug items) belonged to cheap drugs with the unit price ≤ 1 NTD (about 0.03 of US dollar). While the top one item among all oral drugs had already a market share of 5.0%, 30 items 30.3% and 107 items 50.0%, the cheap drugs with aggregate 332,893,462 prescribed items (47.5% of all prescribed oral drug items) only accounted for 2,750,725,433 NTD (4.0% of expenditure for oral drugs and 2.6% of total drug expenditure). The drug market of Taiwan's NHI was abundant in cheap drugs. The unreasonably low prices of drugs might not guarantee the quality of pharmaceutical care and the sustainability of a healthy pharmaceutical industry in the long run.

[Competition between branded and generic drugs in Austria: evidence from the market for ACE inhibitors].

PubMed

Mahlich, J C; Stadler, I

2012-01-01

The market for pharmaceuticals in Austria is highly regulated and manufacturers cannot set prices freely after patent expiration of the pioneer drug. We wanted to examine the effect of price regulation on price competition between branded and generic drugs in Austria. We examined the Austrian market for ACE inhibitors and describe competitive dynamics by means of 6 indices. We compared our results with those of Grabowski and Vernon who studied the US market. According to our analysis the competition amongst the producers of generic drugs is not great and consequently, compared to the USA, over time the prices for generic products decrease less and their market share increases less. This is due to a market-oriented system in the USA which waives most regulatory provisions. Our conclusions are in line with the findings by Danzon und Chao (2000) who argue that in a price-regulated market competitive dynamics are less strongly developed. From a politico-economic view, the necessity of price regulations in the pharmaceutical market seems questionable, as price regulations generally also cause other negative effects, such as distorted economic incentives for research and development investments. © Georg Thieme Verlag KG Stuttgart · New York.

Impact of European pharmaceutical price regulation on generic price competition: a review.

PubMed

Puig-Junoy, Jaume

2010-01-01

Although economic theory indicates that it should not be necessary to intervene in the generic drug market through price regulation, most EU countries intervene in this market, both by regulating the maximum sale price of generics (price cap) and by setting the maximum reimbursement rate, especially by means of reference pricing systems. We analyse current knowledge of the impact of direct price-cap regulation of generic drugs and the implementation of systems regulating the reimbursement rate, particularly through reference pricing and similar tools, on dynamic price competition between generic competitors in Europe. A literature search was carried out in the EconLit and PubMed databases, and on Google Scholar. The search included papers published in English or Spanish between January 2000 and July 2009. Inclusion criteria included that studies had to present empirical results of a quantitative nature for EU countries of the impact of price capping and/or regulation of the reimbursement rate (reference pricing or similar systems) on price dynamics, corresponding to pharmacy sales, in the generic drug market. The available evidence indicates that price-cap regulation leads to a levelling off of generic prices at a higher level than would occur in the absence of this regulation. Reference pricing systems cause an obvious and almost compulsory reduction in the consumer price of all pharmaceuticals subject to this system, to a varying degree in different countries and periods, the reduction being greater for originator-branded drugs than for generics. In several countries with a reference pricing system, it was observed that generics with a consumer price lower than the reference price do not undergo price reductions until the reference price is reduced, even when there are other lower-priced generics on the market (absence of price competition below the reference price). Beyond the price reduction forced by the price-cap and/or reference pricing regulation itself, the entry of new generic competitors is useful for lowering the real transaction price of purchases made by pharmacies (dynamic price competition at ex-factory level), although this effect is weaker or non-significant for official ex-factory prices and consumer prices in some countries. When maximum reimbursement systems such as reference pricing or similar types are applied, pharmacies are seen to receive large discounts on the price they pay for the pharmaceuticals, although these discounts are not transferred to the consumer price. The percentage discount offered to pharmacies in a country that uses a price-cap system combined with reference pricing is positively and significantly related to the number of generic competitors in the market for the pharmaceutical (dynamic price competition at ex-factory level).

[Constrained competition in parallel drug importation: the case of simvastatin in Germany, the Netherlands, and the United Kingdom].

PubMed

Costa-Font, Joan; Kanavos, Panos

2007-01-01

To examine the effects of parallel simvastatin importation on drug price in three of the main parallel importing countries in the European Union, namely the United Kingdom, Germany, and the Netherlands. To estimate the market share of parallel imported simvastatin and the unit price -both locally produced and parallel imported- adjusted by defined daily dose in the importing country and in the exporting country (Spain). Ordinary least squares regression was used to examine the potential price competition resulting from parallel drug trade between 1997 and 2002. The market share of parallel imported simvastatin progressively expanded (especially in the United Kingdom and Germany) in the period examined, although the price difference between parallel imported and locally sourced simvastatin was not significant. Prices tended to rise in the United Kingdom and Germany and declined in the Netherlands. We found no evidence of pro-competitive effects resulting from the expansion of parallel trade. The development of parallel drug importation in the European Union produced unexpected effects (limited competition) on prices that differ from those expected by the introduction of a new competitor. This is partially the result of drug price regulation scant incentives to competition and of the lack of transparency in the drug reimbursement system, especially due to the effect of informal discounts (not observable to researchers). The case of simvastatin reveals that savings to the health system from parallel trade are trivial. Finally, of the three countries examined, the only country that shows a moderate downward pattern in simvastatin prices is the Netherlands. This effect can be attributed to the existence of a system that claws back informal discounts.

Medicare-approved drug discount cards and renal transplant patients: how much can these cards reduce prescription costs?

PubMed

Chisholm, Marie A; Marshall, Josh; Smith, Kimberly E; Garrett, Charlene J; Turner, Jeanie C

2005-06-01

Post-transplant prescription medications are expensive, often costing over 12,000 dollars annually. Many solid-organ transplant patients have Medicare coverage and patients enrolled in Medicare-approved drug discount card (MADDC) programs may be able to receive prescription medications at a reduced price. However, many transplant healthcare practitioners are unaware of the utility of MADDCs. The purpose of this study was to determine whether enrolling renal transplant patients (RTPs) into a MADDC produces significant savings in prescription costs. Two Medicare RTPs, with prescription medication profiles representative of an RTP within 3 months post-transplant and an RTP greater than 5 yr post-transplant, were randomly selected from the Medication Access Program's database. Cost benefit analyses were from the patients' perspective and were performed using the: (i) prescription cost from the Medicare website of MADDCs that listed the greatest and least prescription costs compared with the retail cash price of the same prescription without using the MADDCs; and (ii) MADDCs' annual enrollment fee. The potential cost difference of using MADDCs and not using MADDCs to purchase the prescription medications were calculated. RTPs' monthly out-of-pocket cost for prescription medications ranged from 162 dollars to 340 dollars, and MADDCs offered discounts of 20-37% from retail prices; thus outweighing the MADDC enrollment cost. MADDCs, when selected and used appropriately, can reduce prescription medication cost for RTPs. Card selection is of great importance as discount rates vary greatly among cards, and only under restricted circumstances is a patient allowed to switch to another card. It is imperative that practitioners are aware of these programs and utilize cost-effective prescribing practices.

Does Pharmaceutical Pricing Transparency Matter? Examining Brazil's Public Procurement System.

PubMed

Kohler, Jillian Clare; Mitsakakis, Nicholas; Saadat, Faridah; Byng, Danalyn; Martinez, Martha Gabriela

2015-08-04

We review procurement and pricing transparency practices for pharmaceutical products. We specifically focus on Brazil and examine its approach to increasing pricing transparency, with the aim of determining the level of effectiveness in lower prices using a tool (Banco de Preços em Saúde, BPS) that only reveals purchase prices as compared to other tools (in other countries) that establish a greater degree of price transparency. A general report of Preços em Saúde (BPS) and Sistema Integrado de Administração de Serviços Gerais (SIASG) pricing data was created for 25 drugs that met specific criteria. To explore the linear time trend of each of the drugs, separate regression models were fitted for each drug, resulting in a total of 19 models. Each model controlled for the state variable and the interaction between state and time, in order to accommodate expected heterogeneity in the data. Additionally, the models controlled for procurement quantities and the effect they have on the unit price. Secondary analysis using mixed effects models was also carried out to account for the impact that institutions and suppliers may have upon the unit price. Adjusting for these predictor variables (procurement quantities, supplier, purchasing institution) was important to determine the sole effect that time has had on unit prices. A total of 2 x 19 = 38 models were estimated to explore the overall effect of time on changes in unit price. All statistical analyses were performed using the R statistical software, while the linear mixed effects models were fitted using the lme4 R package. The findings from our analysis suggest that there is no pattern of consistent price decreases within the two Brazilian states during the five-year period for which the prices were analyzed. While the BPS does allow for an increase in transparency and information on drug purchase prices in Brazil, it has not shown to lead to consistent reductions in drug purchase prices for some of the most widely used medicines. This is indicative of a limited model for addressing the challenges in pharmaceutical procurement and puts into question the value of tools used globally to improve transparency in pharmaceutical pricing.

42 CFR 423.132 - Public disclosure of pharmaceutical prices for equivalent drugs.

Code of Federal Regulations, 2013 CFR

2013-10-01

..., a Part D sponsor must require a pharmacy that dispenses a covered Part D drug to inform an enrollee... that pharmacy, unless the particular covered Part D drug being purchased is the lowest-priced therapeutically equivalent and bioequivalent version of that drug available at that pharmacy. (b) Timing of notice...

42 CFR 423.132 - Public disclosure of pharmaceutical prices for equivalent drugs.

Code of Federal Regulations, 2012 CFR

2012-10-01

..., a Part D sponsor must require a pharmacy that dispenses a covered Part D drug to inform an enrollee... that pharmacy, unless the particular covered Part D drug being purchased is the lowest-priced therapeutically equivalent and bioequivalent version of that drug available at that pharmacy. (b) Timing of notice...

42 CFR 423.132 - Public disclosure of pharmaceutical prices for equivalent drugs.

Code of Federal Regulations, 2014 CFR

2014-10-01

..., a Part D sponsor must require a pharmacy that dispenses a covered Part D drug to inform an enrollee... that pharmacy, unless the particular covered Part D drug being purchased is the lowest-priced therapeutically equivalent and bioequivalent version of that drug available at that pharmacy. (b) Timing of notice...

'Government Patent Use': A Legal Approach To Reducing Drug Spending.

PubMed

Kapczynski, Amy; Kesselheim, Aaron S

2016-05-01

The high cost of patent-protected brand-name drugs can strain budgets and curb the widespread use of new medicines. An example is the case of direct-acting antiviral drugs for the treatment of hepatitis C. While prices for these drugs have come down in recent months, they still create barriers to treatment. Additionally, prescribing restrictions imposed by insurers put patients at increased risk of medical complications and contribute to transmission of the hepatitis C virus. We propose that the federal government invoke its power under an existing "government patent use" law to reduce excessive prices for important patent-protected medicines. Using this law would permit the government to procure generic versions of patented drugs and in exchange pay the patent-holding companies reasonable royalties to compensate them for research and development. This would allow patients in federal programs, and perhaps beyond, to be treated with inexpensive generic medicines according to clinical need-meaning that many more patients could be reached for no more, and perhaps far less, money than is currently spent. Another benefit would be a reduction in the opportunity for companies to extract monopoly profits that far exceed their risk-adjusted costs of research and development. Project HOPE—The People-to-People Health Foundation, Inc.

Pricing behaviour of pharmacies after market deregulation for OTC drugs: the case of Germany.

PubMed

Stargardt, Tom; Schreyögg, Jonas; Busse, Reinhard

2007-11-01

To examine the price reactions of German pharmacies to changes made to OTC drug regulations in 2004. Prior to these changes, regulations guaranteed identical prices in all German pharmacies. Two years after market deregulation, 256 pharmacies were surveyed to determine the retail prices of five selected OTC drugs. A probit regression model was used to identify factors that increased the likelihood of price changes. In addition, 409 pharmacy consumers were interviewed to gather information on their knowledge of the regulatory changes and to better explain consumer behaviour. Data was collected on a total of 1215 prices. Two years after deregulation, 23.1% of the participating pharmacies had modified the price of at least one of the five OTCs included in our study. However, in total, only 7.5% of the prices differed from their pre-deregulation level. The probit model showed that population density and the geographic concentration of pharmacies were significantly associated with price changes. Interestingly, the association with the geographic concentration of pharmacies was negative. The consumer survey revealed that 47.1% of those interviewed were aware of the deregulation. Our findings indicate that, two years after deregulation, very few pharmacies had made use of individual pricing strategies; price competition between pharmacies in Germany is thus taking place only a very small scale.

Effect of a therapeutic maximum allowable cost (MAC) program on the cost and utilization of proton pump inhibitors in an employer-sponsored drug plan in Canada.

PubMed

Mabasa, Vincent H; Ma, Johnny

2006-06-01

Therapeutic maximum allowable cost (MAC) is a managed care intervention that uses reference pricing in a therapeutic class or category of drugs or an indication (e.g., heartburn). Therapeutic MAC has not been studied in Canada or the United States. The proton pump inhibitor (PPI) rabeprazole was used as the reference drug in this therapeutic MAC program based on prices for PPIs in the province of Ontario. No PPI is available over the counter in Canada. To evaluate the utilization and anticipated drug cost savings for PPIs in an employer-sponsored drug plan in Canada that implemented a therapeutic MAC program for PPIs. An employer group with an average of 6,300 covered members, which adopted the MAC program for PPIs in June 2003, was compared with a comparison group comprising the book of business throughout Canada (approximately 5 million lives) without a PPI MAC program (non-MAC group). Pharmacy claims for PPIs were identified using the first 6 characters of the generic product identifier (GPI 492700) for a 36-month period from June 1, 2002, through May 31, 2005. The primary comparison was the year prior to the intervention (from June 1, 2002, through May 31, 2003) and the first full year following the intervention (June 1, 2004, through May 31, 2005). Drug utilization was evaluated by comparing the market share of each of the PPIs for the 2 time periods and by the days of PPI therapy per patient per year (PPPY) and days of therapy per prescription (Rx). Drug cost was defined as the cost of the drug (ingredient cost), including allowable provincial pharmacy markup but excluding pharmacy dispense fee. Cost savings were calculated from the allowed drug cost per claim, allowed cost per day, and allowed cost PPPY. (All amounts are in Canadian dollars.) The MAC intervention group experienced an 11.7% reduction in the average cost per day of PPI drug therapy, from 2.14 US dollars in the preperiod to 1.89 US dollars in the postperiod, compared with a 3.7% reduction in the comparison group (2.16 US dollars vs. 2.08 US dollars). Utilization dropped by 11.9% in the intervention group, from 166.7 days of PPI drug therapy PPPY to 146.9 days PPPY, compared with an increase of 7.9% in the comparison group, from 136.1 days to 146.8 days PPPY. The combined effect of the decrease in drug cost per day and utilization was a 22.1% reduction in allowed drug cost PPPY in the intervention (MAC) group (from 357 US dollars to 278 US dollars PPPY) versus a 4.1% increase in the comparison group (from 293 US dollars to 305 US dollars PPPY). A MAC program for PPIs for one employer in Canada was associated with savings for the drug plan sponsor of approximately 8% in actual drug cost per day of therapy compared with the comparison group. Total savings after consideration of utilization was approximately 26% for the intervention group versus the comparison group.

Lowering generic drug prices: less regulation equals more competition.

PubMed

Anis, Aslam H; Guh, Daphne P; Woolcott, John

2003-01-01

In Ontario, Canada, the 70/90 regulations were instituted in May 1993 to establish provincial government procurement prices for generic drugs. Accordingly, the first generic entrant's price could not exceed 70% of the incumbent's branded price. Subsequent entrants' prices could not exceed 90% of the first entrant's price. These regulations' impact on generic market competitiveness are evaluated. Data on 518 drugs spanning nine therapeutic classifications were collected for the period of 04/01/1987 to 12/31/1998 from Ontario Drug Benefit formulary and IMS Canada. The period 04/01/1987 to 04/30/1993 was defined as the before period (BP) and 05/01/1993 to 12/31/1998 was the after period (AP). We compared the price ratio (P = P(G)/P(B) ) between BP and AP and performed regression analysis to assess the determinants of P. in both the BP and AP decreased as the number of generic firms increased within these periods. However, this decrease in was significantly less in the AP (median: 0.75 --> 0.68 --> 0.67) than in BP (0.71 --> 0.61 --> 0.53) as the number of generics increased from 1 to 2 to 3, respectively. The regression analysis showed that the price ratio in the AP was higher than that in the BP by 0.05, 0.09, and 0.13 for first, second, and third generic entrant respectively. Our findings show that the 70/90 regulations not only failed to achieve their goal of lowering the procurement price but instead the opposite occurred. The mandated procurement price became a focal point and resulted in a clustering of prices around the maximum allowable levels with little price dispersion.

Services provided by community pharmacies in Wayne County, Michigan: a comparison by ZIP code characteristics.

PubMed

Erickson, Steven R; Workman, Paul

2014-01-01

To document the availability of selected pharmacy services and out-of-pocket cost of medication throughout a diverse county in Michigan and to assess possible associations between availability of services and price of medication and characteristics of residents of the ZIP codes in which the pharmacies were located. Cross-sectional telephone survey of pharmacies coupled with ZIP code-level census data. 503 pharmacies throughout the 63 ZIP codes of Wayne County, MI. The out-of-pocket cost for a 30 days' supply of levothyroxine 50 mcg and brand-name atorvastatin (Lipitor-Pfizer) 20 mg, availability of discount generic drug programs, home delivery of medications, hours of pharmacy operation, and availability of pharmacy-based immunization services. Census data aggregated at the ZIP code level included race, annual household income, age, and number of residents per pharmacy. The overall results per ZIP code showed that the average cost for levothyroxine was $10.01 ± $2.29 and $140.45 + $14.70 for Lipitor. Per ZIP code, the mean (± SD) percentages of pharmacies offering discount generic drug programs was 66.9% ± 15.0%; home delivery of medications was 44.5% ± 22.7%; and immunization for influenza was 46.7% ± 24.3% of pharmacies. The mean (± SD) hours of operation per pharmacy per ZIP code was 67.0 ± 25.2. ZIP codes with higher household income as well as higher percentage of residents being white had lower levothyroxine price, greater percentage of pharmacies offering discount generic drug programs, more hours of operation per week, and more pharmacy-based immunization services. The cost of Lipitor was not associated with any ZIP code characteristic. Disparities in the cost of generic levothyroxine, the availability of services such as discount generic drug programs, hours of operation, and pharmacy-based immunization services are evident based on race and household income within this diverse metropolitan county.

Medicare Part D payments for neurologist-prescribed drugs

PubMed Central

Burke, James F.; Kerber, Kevin A.; Skolarus, Lesli E.; Callaghan, Brian C.

2016-01-01

Objective: To describe neurologists' Medicare Part D prescribing patterns and the potential effect of generic substitutions and price negotiation, which is currently prohibited. Methods: The 2013 Medicare Part D Prescriber Public Use and Summary files were used. Payments for medications were aggregated by provider and drug (brand or generic). Payment, proportion of generic claims or day's supply, and median payment per monthly supply of medication were calculated by physician specialty and drug. Savings from generic substitution were estimated for brand drugs with a generic available. Medicare prices were compared to drug prices negotiated by the federal government with pharmaceutical manufacturers for the Veterans Administration (VA). Results: Neurologists comprised 13,060 (1.2%) providers with $5.0 billion (4.8%) in total payments, third highest of all specialties, with a median monthly payment of $141 (interquartile range $85–225). Multiple sclerosis drugs had the highest payments ($1.8 billion). Within neurologic disease groups ($3.4 billion in payments), 54.2%–91.8% of monthly supplies were generic, but 11.9%–71.3% of the payment was for generic medications. Generic substitution resulted in a $269 million (6.5%) payment decrease. VA pricing resulted in $1.5 billion (44.5% of $3.4 billion) in savings. Conclusions: High payment per monthly supply of medication underlies the high total neurology drug payments and is driven by multiple sclerosis drugs. Lowering drug expenditures by Medicare should focus on drug prices. PMID:27009256

[Is the price of cancer drugs related to the cost of develo-pment and production or to the economic value of their clincal efficacy?].

PubMed

Russi, Alberto; Serena, Marta; Palozzo, Angelo C

2016-04-01

In the past years, the expenditure for cancer drugs has quickly increased, especially for biologic agents. Pharmaceutical companies and national health systems have different approaches in handling the issue of drug reimbursement. Companies support a price based on research and development (R&D) expenditures including those for unsuccessful drug projects while national health systems generally argue that pricing should be based on the incremental benefit generated by the agent under examination (value-based pricing - VBP). Nevertheless, current oncologic drugs prices are too high and not really justified by their incremental benefits or innovation, nor can they demonstrate that higher thresholds in QALYs could bring wider societal benefits. In this article we discuss these two points of view in the light of the most recent national and international literature. In Italy, drug reimbursement is currently managed through a mixed approach between the recognition of R&D expenditures and VBP. Reimbursement is also integrated with post-marketing patient-based national registries, particularly in the field of anti-cancer agents, that provide rebates based on financial risk sharing, cost-sharing, payment by results and success fee methods.

Clinical benefit, price and approval characteristics of FDA-approved new drugs for treating advanced solid cancer, 2000-2015.

PubMed

Vivot, A; Jacot, J; Zeitoun, J-D; Ravaud, P; Crequit, P; Porcher, R

2017-05-01

Prices of anti-cancer drugs are skyrocking. We aimed to assess the clinical benefit of new drugs for treating advanced solid tumors at the time of their approval by the US Food and Drug Administration (FDA) and to search for a relation between price and clinical benefit of drugs. We included all new molecular entities and new biologics for treating advanced solid cancer that were approved by the FDA between 2000 and 2015. The clinical benefit of drugs was graded based on FDA medical review of pivotal clinical trials using the 2016-updated of the American Society of Clinical Oncology Value Framework (ASCO-VF) and the European Society for Medical Oncology Magnitude of Clinical Benefit Scale (ESMO-MCBS). Characteristics of drugs and approvals were obtained from publicly available FDA documents and price was evaluated according to US Medicare, US Veterans Health Administration and United Kingdom market systems. The FDA approved 51 new drugs for advanced solid cancer from 2000 to 2015; we could evaluate the value of 37 drugs (73%). By the ESMO-MCBS, five drugs (14%) were grade one (the lowest), nine (24%) grade two, 10 (27%) grade three, 11 (30%) grade four and two (5%) grade five (the highest). Thus, 13 drugs (35%) showed a meaningful clinical benefit (scale levels 4 and 5). By the ASCO-VF which had a range of 3.4-67, the median drug value was 37 (interquartile range 20-52). We found no relationship between clinical benefit and drug price (P = 0.9). No characteristic of drugs and of approval was significantly associated with clinical benefit. Many recently FDA-approved new cancer drugs did not have high clinical benefit as measured by current scales. We found no relation between the price of drugs and benefit to society and patients. © The Author 2017. Published by Oxford University Press on behalf of the European Society for Medical Oncology. All rights reserved. For Permissions, please email: journals.permissions@oup.com.

Does Knowledge of Medication Prices Predict Physicians’ Support for Cost Effective Prescribing Policies?

PubMed Central

Polinski, Jennifer M.; Maclure, Malcolm; Marshall, Blair; Cassels, Alan; Agnew-Blais, Jessica; Patrick, Amanda R.; Schneeweiss, Sebastian

2010-01-01

Background British Columbia implemented a generic substitution (GS) and Reference Drug Program (RDP) to contain drug expenditures without negatively affecting health outcomes. Years after implementation, these policies remain controversial among physicians. Objective To assess British Columbia general practitioners’ (GPs) opinions of RDP and GS stratified by knowledge of drug costs. Methods In telephone interviews, GPs ranked the economic and clinical appropriateness of drug policy options on a 5-point Likert scale. Responses to economic questions were stratified and compared according to the accuracy (±$10 of the actual cost) of GPs’ cost estimates for a 30-day supply of atorvastatin and omeprazole. Results The majority of 210 interviewed GPs rated the economic appropriateness of GS and RDP positively (79% and 65%) but fewer rated them clinically appropriate (60% and 43%). Ratings for GS were more favorable than RDP, economically (mean=4.3 v. 3.8, p=0.0005) and clinically (mean=3.7 v 3.1, p=0.006). GP’s assessment of the therapeutic equivalence among ACE inhibitors and among CCBs correlated with their ratings of the respective RDPs (ρ=0.3, p=0.03, and ρ=0.4, p=0.02). GPs underestimated the price for omeprazole by C$28 (33%) and atorvastatin by C$28 (34%). GPs with accurate cost estimates were equally as likely to favorably rank the economic appropriateness of RDP as those with inaccurate estimates (mean = 3.7 v. 4.0, p=0.0847). GS was assessed similarly (mean = 4.2 v. 4.5, p=0.0712). Conclusions In British Columbia, the majority of GPs hold favorable opinions of GS and RDP, but simply educating physicians about drug prices will not make them more supportive of cost-containment policies. PMID:18641423

A Case Study of Pharmaceutical Pricing in China: Setting the Price for Off-Patent Originators.

PubMed

Hu, Shanlian; Zhang, Yabing; He, Jiangjiang; Du, Lixia; Xu, Mingfei; Xie, Chunyan; Peng, Ying; Wang, Linan

2015-08-01

This article aims to define a value-based approach to pricing and reimbursement for off-patent originators using a multiple criteria decision analysis (MCDA) approach centered on a systematic analysis of current pricing and reimbursement policies in China. A drug price policy review was combined with a quantitative analysis of China's drug purchasing database. Policy preferences were identified through a MCDA performed by interviewing well-known academic experts and industry stakeholders. The study findings indicate that the current Chinese price policy includes cost-based pricing and the establishment of maximum retail prices and premiums for off-patent originators, whereas reference pricing may be adopted in the future. The literature review revealed significant differences in the dissolution profiles between originators and generics; therefore, dissolution profiles need to be improved. Market data analysis showed that the overall price ratio of generics and off-patent originators was around 0.54-0.59 in 2002-2011, with a 40% price difference, on average. Ten differentiating value attributes were identified and MCDA was applied to test the impact of three pricing policy scenarios. With the condition of implementing quality consistency regulations and controls, a reduction in the price gap between high-quality off-patent products (including originator and generics) seemed to be the preferred policy. Patents of many drugs will expire within the next 10 years; thus, pricing will be an issue of importance for off-patent originators and generic alternatives.

A Prescription for Drug Formulary Evaluation: An Application of Price Indexes

PubMed Central

Glazer, Jacob; Huskamp, Haiden A.; McGuire, Thomas G.

2012-01-01

Existing economic approaches to the design and evaluation of health insurance do not readily apply to coverage decisions in the multi-tiered drug formularies characterizing drug coverage in private health insurance and Medicare. This paper proposes a method for evaluating a change in the value of a formulary to covered members based on the economic theory of price indexes. A formulary is cast as a set of demand-side prices, and our measure approximates the compensation (positive or negative) that would need to be paid to consumers to accept the new set of prices. The measure also incorporates any effect of the formulary change on plan drug acquisition costs and “offset effects” on non-drug services covered by the plan. Data needed to calculate formulary value are known or can be forecast by a health plan. We illustrate the method with data from a move from a two- to a three-tier formulary. PMID:23372543

Drug pricing reform in China: analysis of piloted approaches and potential impact of the reform.

PubMed

Chen, Yixi; Hu, Shanlian; Dong, Peng; Kornfeld, Åsa; Jaros, Patrycja; Yan, Jing; Ma, Fangfang; Toumi, Mondher

2016-01-01

In 2009, the Chinese government launched a national healthcare reform programme aiming to control healthcare expenditure and increase the quality of care. As part of this programme, a new drug pricing reform was initiated on 1 June 2015. The objective of this study was to describe the changing landscape of drug pricing policy in China and analyse the potential impact of the reform. The authors conducted thorough research on the drug pricing reform using three Chinese databases (CNKI, Wanfang, and Weipu), Chinese health authority websites, relevant press releases, and pharmaceutical blogs and discussion forums. This research was complemented with qualitative research based on targeted interviews with key Chinese opinion leaders representing the authorities' and prescribers' perspectives. With the current reform, the government has attempted to replace its direct control over the prices of reimbursable drugs with indirect, incentive-driven influence. Although the exact implementation of the reform remains unclear at the moment, the changes introduced so far and the pilot project designs indicate that China is considering adaptation of some form of internal and external reference pricing policies, commonly used in the Organisation for Economic Co-operation and Development countries. Several challenges related to the potential new mechanism were identified: 1) the risk of hospital underfunding, if hospital funding reform is not prioritised; 2) the risk of promoting the use of cheap, low-quality drugs, if a reliable quality control system is not in place and discrepancy between the available drugs is present; 3) the risk of increasing disparity in access to care between poor and rich regions, in case of country-wide price convergence; and 4) the risk of industry underinvestment, resulting in reduced competition, issues with quality and sustainability of supply, and potentially negative social impact. Foreign pricing policies cannot be transferred to China without prioritising historical, cultural, and economic contextualisation. Otherwise, the new policy may be counterproductive and affect the whole healthcare chain, as well as the health outcomes of Chinese patients.

The 1996 pricing and reimbursement policy in The Netherlands.

PubMed

de Vos, C M

1996-01-01

In The Netherlands, the government operates a reference price system in which medicines are categorised into groups of interchangeable drugs. The reimbursement within groups is limited. In addition, since drug prices in The Netherlands are currently among the highest in Western Europe, a law was implemented in March 1996 to lower the prices of drugs in The Netherlands to the mean of pharmacy buying prices in 4 surrounding countries (UK, France, Belgium and Germany). Maximum prices for oral formulations will be in force from 1 June 1996, and maximum prices for other formulations will be operational soon thereafter. Reducing the price level will lead to a substantial decrease in discounts for pharmacists. Lower discounts will also mean weaker 'golden chains' between wholesalers, the industry, and pharmacists, and will therefore create business opportunities for companies wishing to compete on the basis of price. Liberalising the distribution of pharmaceuticals and creating a cost-conscious demand side will stimulate price competition in the pharmaceutical market and make it easier for new participants to enter the Dutch market. Price competition will lead to lower prices and, consequently, to lower costs. Further exemptions from the reimbursement list will be recognised. Considerable efforts are also being made to rationalise the prescribing behaviour of physicians and the dispensing behaviour of pharmacists. Through this programme, which has many components, The Netherlands hopes to restrain and effectively control its expenditures on pharmaceuticals.

Alternative strategies for Medicare payment of outpatient prescription drugs--Part B and beyond.

PubMed

Danzon, Patricia M; Wilensky, Gail R; Means, Kathleen E

2005-03-01

Reimbursement options for pharmaceuticals reimbursed under Medicare Part B (physician-dispensed drugs) are changing and the new comprehensive Part D Medicare outpatient drug benefit brings further changes. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) replaces traditional policy, of reimbursing Part B drugs at 95% of average wholesale price (AWP, a list price), with a percentage markup over the manufacturer's average selling price; in 2005 an indirect competitive procurement option will be introduced. In our view, although AWP-based reimbursement has been fraught with problems in the past, these could be fixed by constraining growth in AWP and periodically adjusting the discount off AWP. With these revisions, an AWP-based rule would preserve incentives for competitive discounting and deliver savings to Medicare. By contrast, basing Medicare reimbursement on a manufacturer's average selling price undermines incentives for discounting and, like any cost-based reimbursement rule, may result in higher prices to both public and private purchasers. Indirect competitive procurement for drugs alone, using specialty pharmacies, pharmacy benefit managers, or prescription drug plans, is unlikely to constrain costs to acceptable levels unless contractors retain flexibility to use standard benefit management tools. Folding Part B and Part D into comprehensive contracting with health plans for full health services is likely to offer the most efficient approach to managing the drug benefit.

Preserving an Incentive for Global Health R&D: The Priority Review Voucher Secondary Market.

PubMed

Robertson, Andrew S

2016-05-01

In December 2014, the United States government expanded the Priority Review Voucher ("PRV" or "voucher") program to include Ebola and other related Filoviruses. By doing so, lawmakers provided a potentially powerful incentive for drug companies to invest time and money in the development of novel medicines for terrifying diseases. This expansion is one of several additions made to the PRV programs since 2012. Many companies rely on voucher resale to recoup research and development ("R&D") costs; however, it is unclear whether the PRV program could be overextended, thereby diluting the value of the incentives. In this paper, I use historical approval data from the Food and Drug Administration ("FDA") and United States drug revenue data to better understand the secondary market value of a PRV. The data suggests that that purchase prices of a PRV could continue to climb; despite this, the market size for these vouchers is limited. The implications of these findings are discussed further.

Short-term differences in drug prices after implementation of the national essential medicines system: A case study in rural Jiangxi Province, China.

PubMed

Wang, Junyong; Liu, Xia; Wang, Suzhen; Chen, Heli; Wang, Xun; Zhou, Wei; Wang, Li; Zhu, Yanchen; Zheng, Xianping; Hao, Mo

2015-01-01

China's 2009 national essential medicine system (NEMS) was designed to reduce prices through a zero-markup policy and a centralized bidding system. To analyze NEMS's short-term impact on drug prices, we estimated the retail and wholesale prices before and after the reform at health institutions in rural Jiangxi Province. We undertook two cross-sectional surveys of prices of 39 medicines in November 2008 and May 2010, calculated inflation adjusted prices, and used the Wilcoxon signed-rank and rank-sum tests to examine price changes at different health institutions. Retail prices at pilot (P < 0.01) and nonpilot (P < 0.01) township health centers decreased significantly, whereas the declines at retail pharmacies (P = 0.57) and village clinics (P = 0.29) were insignificant. The decline at pilot township health centers was the largest, compared with other kinds of health institutions (P < 0.01). Retail prices of essential and non-essential medicines declined significantly at pilot facilities (P < 0.05); price drops for non-essential medicines occurred only at pilot facilities (P < 0.05). No significant decline of wholesale prices were found at pilot (P = 0.86) and nonpilot units (P = 0.18), retail pharmacies (P = 0.18), and village clinics (P = 0.20). The wholesale prices changes at pilot units before and after the reform were higher than at nonpilot public units (P < 0.05), retail pharmacies (P < 0.05), and village clinics (P < 0.05). While the NEMS zero-markup policy significantly reduced retail prices at pilot health institutions, the centralized bidding system was insufficient to lower wholesale prices. A drug price management system should be constructed to control medicine prices and a long-term price information system is needed to monitor price changes.

Reform of the Buy-and-Bill System for Outpatient Chemotherapy Care Is Inevitable: Perspectives from an Economist, a Realpolitik, and an Oncologist

PubMed Central

Polite, Blase; Conti, Rena M.; Ward, Jeffery C.

2015-01-01

OVERVIEW Treating patients with cancer with infused or injected oncolytics is a core component of outpatient oncology practice. Currently, practices purchase drugs and then bill insurers, colloquially called “buy and bill.” Reimbursement for these drugs is the largest source of gross revenue for oncology practices, and as the prices of cancer drugs have grown over time, these purchases have had significant impact on the financial health of practices and pose a risk that jeopardizes the ability of many practices to operate and provide patient care. Medicare Part B spending on drugs is under political scrutiny because of federal spending pressures, and the margin between buy and bill, lowered to 6% by the Medicare Modernization Act and further decreased to 4.3% by sequestration, is a convenient and popular target of budgetary discussions and proposals, scored to save billions of dollars over 10-year budget windows for each percentage-point reduction. Alternatives to the buy-and-bill system have been proposed to include invoice pricing, least costly alternative reimbursement, bundling of drugs into episode-of-care payments, shifting Part B drugs to the Medicare Part D benefit, and revision of the failed Competitive Acquisition Program. This article brings the perspectives of policy makers, health care economists, and providers together to discuss this major challenge in oncology payment reform. PMID:25993241

Reform of the Buy-and-Bill System for Outpatient Chemotherapy Care Is Inevitable: Perspectives from an Economist, a Realpolitik, and an Oncologist.

PubMed

Polite, Blase; Conti, Rena M; Ward, Jeffery C

2015-01-01

Treating patients with cancer with infused or injected oncolytics is a core component of outpatient oncology practice. Currently, practices purchase drugs and then bill insurers, colloquially called "buy and bill." Reimbursement for these drugs is the largest source of gross revenue for oncology practices, and as the prices of cancer drugs have grown over time, these purchases have had significant impact on the financial health of practices and pose a risk that jeopardizes the ability of many practices to operate and provide patient care. Medicare Part B spending on drugs is under political scrutiny because of federal spending pressures, and the margin between buy and bill, lowered to 6% by the Medicare Modernization Act and further decreased to 4.3% by sequestration, is a convenient and popular target of budgetary discussions and proposals, scored to save billions of dollars over 10-year budget windows for each percentage-point reduction. Alternatives to the buy-and-bill system have been proposed to include invoice pricing, least costly alternative reimbursement, bundling of drugs into episode-of-care payments, shifting Part B drugs to the Medicare Part D benefit, and revision of the failed Competitive Acquisition Program. This article brings the perspectives of policy makers, health care economists, and providers together to discuss this major challenge in oncology payment reform.

The patents-based pharmaceutical development process: rationale, problems, and potential reforms.

PubMed

Barton, John H; Emanuel, Ezekiel J

2005-10-26

The pharmaceutical industry is facing substantial criticism from many directions, including financial barriers to access to drugs in both developed and developing countries, high profits, spending on advertising and marketing, and other issues. Underlying these criticisms are fundamental questions about the value of the current patent-based drug development system. Six major problems with the patent system are (1) recovery of research costs by patent monopoly reduces access to drugs; (2) market demand rather than health needs determines research priorities; (3) resources between research and marketing are misallocated; (4) the market for drugs has inherent market failures; (5) overall investment in drug research and development is too low, compared with profits; and (6) the existing system discriminates against US patients. Potential solutions fall into 3 categories: change in drug pricing through either price controls or tiered pricing; change in drug industry structure through a "buy-out" pricing system or with the public sector acting as exclusive research funder; and change in development incentives through a disease burden incentive system, orphan drug approaches, or requiring new drugs to demonstrate improvement over existing products prior to US Food and Drug Administration approval. We recommend 4 complementary reforms: (1) having no requirement to test new drug products against existing products prior to approval but requiring rigorous comparative postapproval testing; (2) international tiered pricing and systematic safeguards to prevent flow-back; (3) increased government-funded research and buy-out for select conditions; and (4) targeted experiments using other approaches for health conditions in which there has been little progress and innovation over the last few decades.

After years of steady growth, winds of restraint blowing on prescription-drug industry.

PubMed

Robinson, A

1995-07-01

Tough fiscal times are forcing cutbaks in many areas of health care, and the prescription-drug industry is no exception. The Pharmaceutical Manufacturers Association of Canada says Canada's brand-name drug companies face two major hurdles: restricted market access, as drug formularies limit the number of new drugs, and restricted price increases, as allowed by the Patented Medicine Prices Review Board and provincial formularies. The Canadian Drug Manufacturers Association, which represents Canada's generic-drug industry, says its message to physicians is that generic products are important agents of cost control and that the health care community is more aware of this than it once was. "If you don't maximize your savings while you can," cautions the association's Brenda Drinkwalter, "you'll never be able to afford the high-priced drugs of tomorrow".

A systematic review of reference pricing: implications for US prescription drug spending.

PubMed

Lee, Joy Li-Yueh; Fischer, Micahel A; Shrank, William H; Polinski, Jennifer M; Choudhry, Niteesh K

2012-11-01

Given rising pharmaceutical expenditures and the widespread use of reference pricing as a costcontainment instrument abroad, we systematically reviewed the evidence evaluating reference pricing policies. We performed a structured electronic search of peer-reviewed journals for studies published before that reported on the effects of reference pricing policies on medication use, payer and patient spending, and resource consumption. Our search yielded 16 studies describing 9 reference-pricing policies from 6 countries. Reference-pricing policies led to decreases in drug prices and increases in utilization of targeted medications, while also reducing payer and patient expenditures. In addition, these policies did not lead to increased use of medical services, such as physician office visits and hospitalization. These results suggest that reference pricing may be an attractive policy strategy for the US healthcare system.

Toward Value-Based Pricing to Boost Cancer Research and Innovation.

PubMed

Ocana, Alberto; Amir, Eitan; Tannock, Ian F

2016-06-01

The high market price of new anticancer agents has stimulated debate about the long-term sustainability of healthcare systems and whether these new agents can continue to be supported by public healthcare or by private insurers. In addition, some drugs have been approved with limited clinical benefit, raising concerns about setting a minimum requirement for medical benefit. Options to resolve these problems include raising the bar for approval of new drugs and/or pricing of new agents based on the medical benefit that they offer to patients. In this commentary, we suggest that new agents should be marketed in a two-step process that would include first the approval of the new drug by the regulatory agencies and second the introduction of a market price based on the medical benefit that the new intervention offers to patients. Introduction of value-based pricing would maintain the sustainability of health care systems and would improve drug development, as it would pressure pharmaceutical companies to become more innovative and avoid the development of compounds with limited benefit. Value-based pricing could also stimulate the funding of research directed to development of new anticancer drugs with novel mechanisms of action. Cancer Res; 76(11); 3127-9. ©2016 AACR. ©2016 American Association for Cancer Research.

Rising Prices of Targeted Oral Anticancer Medications and Associated Financial Burden on Medicare Beneficiaries.

PubMed

Shih, Ya-Chen Tina; Xu, Ying; Liu, Lei; Smieliauskas, Fabrice

2017-08-01

Purpose The high cost of oncology drugs threatens the affordability of cancer care. Previous research identified drivers of price growth of targeted oral anticancer medications (TOAMs) in private insurance plans and projected the impact of closing the coverage gap in Medicare Part D in 2020. This study examined trends in TOAM prices and patient out-of-pocket (OOP) payments in Medicare Part D and estimated the actual effects on patient OOP payments of partial filling of the coverage gap by 2012. Methods Using SEER linked to Medicare Part D, 2007 to 2012, we identified patients who take TOAMs via National Drug Codes in Part D claims. We calculated total drug costs (prices) and OOP payments per patient per month and compared their rates of inflation with general health care prices. Results The study cohort included 42,111 patients who received TOAMs between 2007 and 2012. Although the general prescription drug consumer price index grew at 3% per year over 2007 to 2012, mean TOAM prices increased by nearly 12% per year, reaching $7,719 per patient per month in 2012. Prices increased over time for newly and previously launched TOAMs. Mean patient OOP payments dropped by 4% per year over the study period, with a 40% drop among patients with a high financial burden in 2011, when the coverage gap began to close. Conclusion Rising TOAM prices threaten the financial relief patients have begun to experience under closure of the coverage gap in Medicare Part D. Policymakers should explore methods of harnessing the surge of novel TOAMs to increase price competition for Medicare beneficiaries.

Whom do older adults trust most to provide information about prescription drugs?

PubMed

Donohue, Julie M; Huskamp, Haiden A; Wilson, Ira B; Weissman, Joel

2009-04-01

Cost-related nonadherence to medieations is common among older adults, yet physician-patient communication about medication cost concerns is infrequent. One factor affecting communication and adherence may be older adults' confidence in the information about prescription drugs provided by physicians and other sources. This study was conducted to identify which source older adults most trust to provide information on drugs and to examine the relationship between older patients' trust in physicians to provide price information and the occurrence of cost-related nonadherence. We conducted a cross-sectional national telephone survey of individuals aged > or =50 years who were taking at least 1 prescription medication. Respondents were asked how much they would trust various sources (physician, pharmacist, nurse, insurance plan, the Internet, consumer groups, friends and family) to provide helpful information on "the price of the prescription medicine compared to others like it" and on "how well the prescription medicine will work for you compared to other medicines like it." The response options were a lot, somewhat, and not at all. Other measures of interest were respondents' beliefs concerning physicians' ability to lower drug costs and patient activation. We also evaluated the potential association between trust in physicians to deliver drug price information and cost-related medication nonadherence. Compared with the other sources of information studied, doctors and pharmacists were the sources that respondents were most likely to trust "a lot" to provide information on drug prices (55.6% and 61.7%, respectively) and to provide information on drug effectiveness (79.9% and 66.4%). Less than half (42.3%) of respondents who said that they trusted their doctor to provide drug price information "somewhat" or "not at all" agreed that there are ways doctors could lower drug costs (P = 0.01 vs those who trusted their doctor "a lot"). Adults aged > or =65 years were more likely than those aged 50 to 64 years to trust their doctors "a lot" to provide information on drug prices (odds ratio [OR] = 1.44; 95% CI, 1.08-1.92); the same was true of members of minority groups compared with white respondents (OR = 1.72; 95%) CT, 1.1 3-2.61 ). Among individuals with high drug spending, those who placed "a lot" of trust in their doctors to provide price information were less likely than those who trusted their doctor "somewhat" or "not at all" to have cost-related nonadhcrence (OR = 0.40; 95% CI, 0.20-0.78). In this survey, older adults trusted physicians and pharmacists more than the other sources studied to provide information on prescription drugs. Trust in physicians to provide price information was an important moderator of the effect of high drug spending on cost-related nonadhcrence. Efforts to provide patients and their providers with comparative data on drug prices and effectiveness may reduce cost-related nonadhcrence.

Cost-effectiveness analysis of genotyping for HLA-B*5801 and an enhanced safety program in gout patients starting allopurinol in Singapore.

PubMed

Dong, Di; Tan-Koi, Wei-Chuen; Teng, Gim Gee; Finkelstein, Eric; Sung, Cynthia

2015-11-01

Allopurinol is an efficacious urate-lowering therapy (ULT), but is associated with rare serious adverse drug reactions of Stevens-Johnson syndrome (SJS) and toxic epidermal necrolysis (TEN), with higher risk among HLA-B*5801 carriers. We assessed the cost-effectiveness of HLA-B*5801 testing, an enhanced safety program or strategies with both components. The analysis adopted a health systems perspective and considered Singaporean patients with chronic gout, over a lifetime horizon, using allopurinol or probenecid. The model incorporated SJS/TEN and gout treatment outcomes, allele frequencies, drug prices and other medical costs. Based on cost-effectiveness threshold of US$50,000 per quality-adjusted life year, HLA-B*5801-guided ULT selection or enhanced safety program was not cost effective. Avoidance of ULTs was the least preferred strategy as uncontrolled gout leads to lower quality-adjusted life years and higher costs. The analysis underscores the need for biomarkers with higher positive predictive value for SJS/TEN, less expensive genetic tests or safety programs, or more effective gout drugs. .

Pharmaceutical Price Controls and Minimum Efficacy Regulation: Evidence from the United States and Italy

PubMed Central

Atella, Vincenzo; Bhattacharya, Jay; Carbonari, Lorenzo

2012-01-01

Objective This article examines the relationship between drug price and drug quality and how it varies across two of the most common regulatory regimes in the pharmaceutical market: minimum efficacy standards (MES) and a mix of MES and price control mechanisms (MES + PC). Data Sources Our primary data source is the Tufts-New England Medical Center-Cost Effectiveness Analysis Registry which have been merged with price data taken from MEPS (for the United States) and AIFA (for Italy). Study Design Through a simple model of adverse selection we model the interaction between firms, heterogeneous buyers, and the regulator. Principal Findings The theoretical analysis provides two results. First, an MES regime provides greater incentives to produce high-quality drugs. Second, an MES + PC mix reduces the difference in price between the highest and lowest quality drugs on the market. Conclusion The empirical analysis based on United States and Italian data corroborates these results. PMID:22091623

Illegal drug use and the economic recession--what can we learn from the existing research?

PubMed

Bretteville-Jensen, Anne Line

2011-09-01

Much research on the use of amphetamine, cocaine and heroin employs individual level data and analyses variations in drug use by factors like personal characteristics, socioeconomic factors, and the social environment. Less attention is given to how these individual responses inter-relate with key macroeconomic variables. From a drug policy perspective however, it is important to also understand the consequences for drug use and drug users of changes in the macroeconomic conditions. As the world is experiencing an economic recession one would like to know whether it will affect the number of drug users and/or consumption frequency and volume amongst established users. There are different channels through which a recession could influence drug consumption; here the main focus is on how an economic downturn may influence drug prices and drug users' incomes. We briefly refer to relevant economic theory before reviewing the research literature. A fall in drug prices and income seem likely. Empirical studies confirm drug users' price responsiveness. Only a few studies have dealt with income elasticity amongst this group. As the price and the income effect may pull in opposite directions, the full effect on drug use is difficult to predict. Still, it seems likely that an economic downturn of the current magnitude could increase the use of drugs. Copyright © 2011 Elsevier B.V. All rights reserved.

Impact of anticancer drugs price cut on physician's prescription choices on first-line chemotherapy regimens and health expenditure for advanced non-small cell lung cancer in China.

PubMed

Li, Bei; Li, Mei-Ying; Sun, Luan-Luan; Wang, Jian; Zheng, Yan-Qing; Hao, Jing

2016-10-01

Increases in insurance coverage and price cut of drugs are two important measures to make health care more accessible and affordable. As far as we know, this was the first study to explore the impact of anticancer drug price cut on health expenses and oncologist's prescription decisions in China. The 511 non-small cell lung cancer (NSCLC) patients were recruited from Qilu Affiliated Hospital of Shandong University from January 1, 2003 to December 31, 2010. We categorized the patients into five groups based on China's fifth population census in 2000, including administrative group, workers and services group, peasants group, professionals group and others group. All statistical analyses were performed using SPSS (version 16.0), all statistic tests were two-tailed and P value ≤0.05 was considered significant. As for the first-line chemotherapy regimens prescribed during the study, 27.6% patients received vinorelbine + cisplatin (NP), 31.5% and 30.9% patients had gemcitabine + cisplatin (GC) and docetaxel + cisplatin (DC), respectively, while only 4.3% patients received paclitaxel + cisplatin or carboplatin (TP). Before price policy implementation, NP was the most popularly used regimen (44.6%). By contrast, doctors' prescription choices changed significantly after drug price cut, GC took first place (42.0%). GC became the most expensive regimen (4,431.40 RMB per cycle, about 665.15 dollars per cycle), while NP cost the least (1,974.48 RMB per cycle, about 296.37 dollars per cycle) after price cut. No significant reduction could be seen for both the pharmaceutical spending and total expense per inpatient episode after drug price adjustment. One interesting phenomena was that doctors relied less on patient's sex, age, histology to make their decisions, by contrast, more on patient's occupation and health insurance type. And, the total drug cost was closely related to patient occupation and health insurance type. The introduction of anticancer drug price control policy was found to be ineffective on the containment of hospital drug expenditures in one cancer center in China.

A comprehensive examination of the influence of state tobacco control programs and policies on youth smoking.

PubMed

Farrelly, Matthew C; Loomis, Brett R; Han, Beth; Gfroerer, Joe; Kuiper, Nicole; Couzens, G Lance; Dube, Shanta; Caraballo, Ralph S

2013-03-01

We examined the influence of tobacco control policies (tobacco control program expenditures, smoke-free air laws, youth access law compliance, and cigarette prices) on youth smoking outcomes (smoking susceptibility, past-year initiation, current smoking, and established smoking). We combined data from the 2002 to 2008 National Surveys on Drug Use and Health with state and municipality population data from the US Census Bureau to assess the associations between state tobacco control policy variables and youth smoking outcomes, focusing on youths aged 12 to 17 years. We also examined the influence of policy variables on youth access when these variables were held at 2002 levels. Per capita funding for state tobacco control programs was negatively associated with all 4 smoking outcomes. Smoke-free air laws were negatively associated with all outcomes except past-year initiation, and cigarette prices were associated only with current smoking. We found no association between these outcomes and retailer compliance with youth access laws. Smoke-free air laws and state tobacco control programs are effective strategies for curbing youth smoking.

A Comprehensive Examination of the Influence of State Tobacco Control Programs and Policies on Youth Smoking

PubMed Central

Loomis, Brett R.; Han, Beth; Gfroerer, Joe; Kuiper, Nicole; Couzens, G. Lance; Dube, Shanta; Caraballo, Ralph S.

2013-01-01

Objectives. We examined the influence of tobacco control policies (tobacco control program expenditures, smoke-free air laws, youth access law compliance, and cigarette prices) on youth smoking outcomes (smoking susceptibility, past-year initiation, current smoking, and established smoking). Methods. We combined data from the 2002 to 2008 National Surveys on Drug Use and Health with state and municipality population data from the US Census Bureau to assess the associations between state tobacco control policy variables and youth smoking outcomes, focusing on youths aged 12 to 17 years. We also examined the influence of policy variables on youth access when these variables were held at 2002 levels. Results. Per capita funding for state tobacco control programs was negatively associated with all 4 smoking outcomes. Smoke-free air laws were negatively associated with all outcomes except past-year initiation, and cigarette prices were associated only with current smoking. We found no association between these outcomes and retailer compliance with youth access laws. Conclusions. Smoke-free air laws and state tobacco control programs are effective strategies for curbing youth smoking. PMID:23327252

ACE Inhibitor and ARB utilization and expenditures in the Medicaid fee-for-service program from 1991 to 2008.

PubMed

Bian, Boyang; Kelton, Christina M L; Guo, Jeff J; Wigle, Patricia R

2010-01-01

Angiotensin-converting enzyme (ACE) inhibitors and angiotensin receptor blockers (ARBs) are widely prescribed for the treatment of hypertension and heart failure, as well as for kidney disease prevention in patients with diabetes mellitus and the management of patients after myocardial infarction. To (a) describe ACE inhibitor and ARB utilization and spending in the Medicaid fee-for-service program from 1991 through 2008, and (b) estimate the potential cost savings for the collective Medicaid programs from a higher ratio of generic ACE inhibitor utilization. A retrospective, descriptive analysis was performed using the National Summary Files from the Medicaid State Drug Utilization Data, which are composed of pharmacy claims that are subject to federally mandated rebates from pharmaceutical manufacturers. For the years 1991-2008, quarterly claim counts and expenditures were calculated by summing data for individual ACE inhibitors and ARBs. Quarterly per-claim expenditure as a proxy for drug price was computed for all brand and generic drugs. Market shares were calculated based on the number of pharmacy claims and Medicaid expenditures. In the Medicaid fee-for-service program, ACE inhibitors accounted for 100% of the claims in the combined market for ACE inhibitors and ARBs in 1991, 80.6% in 2000, and 64.7% in 2008. The Medicaid expenditure per ACE inhibitor claim dropped from $37.24 in 1991 to $24.03 in 2008 when generics accounted for 92.5% of ACE inhibitor claims; after adjusting for inflation for the period from 1991 to 2008, the real price drop was 59.2%. Brand ACE inhibitors accounted for only 7.5% of the claims in 2008 for all ACE inhibitors but 32.1% of spending; excluding the effects of manufacturer rebates, Medicaid spending would have been reduced by $28.7 million (9%) in 2008 if all ACE inhibitor claims were generic. The average price per ACE inhibitor claim in 2008 was $24.03 ($17.64 per generic claim vs. $103.45 per brand claim) versus $81.98 per ARB claim. If the ACE inhibitor ratio had been 75% in 2008 rather than 64.7%, the Medicaid program would have saved approximately 13% or about $41.8 million, again excluding the effects of manufacturer rebates. If the ACE inhibitor ratio had been 90% in 2008, the cost savings for the combined Medicaid fee-forservice programs would have been about 33% or about $102.3 million. The total cost savings opportunity with 100% generic ACE inhibitor utilization in 2008 and an ACE inhibitor ratio of 75% was $75.1 million (24%) or $142.3M (46%) with a 90% ACE inhibitor ratio. Factors that affect Medicaid spending by contributing to increased utilization of ACE inhibitors and ARBs, such as the rising prevalence of hypertension, heart disease, and diabetes, can be offset by reduction in the average price attained through a higher proportion of ACE inhibitors and a higher percentage of generic versus brand ACE inhibitors.

Price regulation, new entry, and information shock on pharmaceutical market in Taiwan: a nationwide data-based study from 2001 to 2004

PubMed Central

2010-01-01

Background Using non-steroidal anti-inflammatory drugs (NSAIDs) as a case, we used Taiwan's National Health Insurance (NHI) database, to empirically explore the association between policy interventions (price regulation, new drug entry, and an information shock) and drug expenditures, utilization, and market structure between 2001 and 2004. Methods All NSAIDs prescribed in ambulatory visits in the NHI system during our study period were included and aggregated quarterly. Segmented regression analysis for interrupted time series was used to examine the associations between two price regulations, two new drug entries (cyclooxygennase-2 inhibitors) and the rofecoxib safety signal and expenditures and utilization of all NSAIDs. Herfindahl index (HHI) was applied to further examine the association between these interventions and market structure of NSAIDs. Results New entry was the only variable that was significantly correlated with changes of expenditures (positive change, p = 0.02) and market structure of the NSAIDs market in the NHI system. The correlation between price regulation (first price regulation, p = 0.62; second price regulation, p = 0.26) and information shock (p = 0.31) and drug expenditure were not statistically significant. There was no significant change in the prescribing volume of NSAIDs per rheumatoid arthritis (RA) or osteoarthritis (OA) ambulatory visit during the observational period. The market share of NSAIDs had also been largely substituted by these new drugs up to 50%, in a three-year period and resulted in a more concentrated market structure (HHI 0.17). Conclusions Our empirical study found that new drug entry was the main driving force behind escalating drug spending, especially by altering the market share. PMID:20653979

Country and regional variations in purchase prices for essential cancer medications.

PubMed

Cuomo, Raphael E; Seidman, Robert L; Mackey, Tim K

2017-08-24

Accessibility to essential cancer medications in low- and middle-income countries is threatened by insufficient availability and affordability. The objective of this study is to characterize variation in transactional prices for essential cancer medications across geographies, medication type, and time. Drug purchase prices for 19 national and international buyers (representing 29 total countries) between 2010 and 2014 were obtained from Management Sciences for Health. Median values for drug pricing were computed, to address outliers in the data. For comparing purchase prices across geographic units, medications, and over time; Mann-Whitney U tests were used to compare two groups, Kruskal Wallis H tests were used to compare more than two groups, and linear regression was used to compare across continuous independent variables. During the five-year data period examined, the median price paid for a package of essential cancer medication was $12.63. No significant differences in prices were found based on country-level wealth, country-level disease burden, drug formulation, or year when medication was purchased. Statistical tests found significant differences in prices paid across countries, regions, individual medications, and medication categories. Specifically, countries in the Africa region appeared to pay more for a package of essential cancer medication than countries in the Latin America region, and cancer medications tended to be more expensive than anti-infective medications and cardiovascular medications. Though preliminary, our study found evidence of variation in prices paid by health systems to acquire essential cancer medications. Primarily, variations in pricing based on geographic location and cancer medication type (including when comparing to essential medicines that treat cardiovascular and infectious diseases) indicate that these factors may impact availability, affordability and access to essential cancer drugs. These factors should be taken into consideration when countries assess formulary decisions, negotiate drug procurement terms, and when formulating health and cancer policy.

A pharmacoeconomic modeling approach to estimate a value-based price for new oncology drugs in Europe.

PubMed

Dranitsaris, George; Ortega, Ana; Lubbe, Martie S; Truter, Ilse

2012-03-01

Several European governments have recently mandated price cuts in drugs to reduce health care spending. However, such measures without supportive evidence may compromise patient care because manufacturers may withdraw current products or not launch new agents. A value-based pricing scheme may be a better approach for determining a fair drug price and may be a medium for negotiations between the key stakeholders. To demonstrate this approach, pharmacoeconomic (PE) modeling was used from the Spanish health care system perspective to estimate a value-based price for bevacizumab, a drug that provides a 1.4-month survival benefit to patients with metastatic colorectal cancer (mCRC). The threshold used for economic value was three times the Spanish per capita GDP, as recommended by the World Health Organization (WHO). A PE model was developed to simulate outcomes in mCRC patients receiving chemotherapy ± bevacizumab. Clinical data were obtained from randomized trials and costs from a Spanish hospital. Utility estimates were determined by interviewing 24 Spanish oncology nurses and pharmacists. A price per dose of bevacizumab was then estimated using a target threshold of € 78,300 per quality-adjusted life year gained, which is three times the Spanish per capita GDP. For a 1.4-month survival benefit, a price of € 342 per dose would be considered cost effective from the Spanish public health care perspective. The price may be increased to € 733 or € 843 per dose if the drug were able to improve patient quality of life or enhance survival from 1.4 to 3 months. This study demonstrated that a value-based pricing approach using PE modeling and the WHO criteria for economic value is feasible and perhaps a better alternative to government mandated price cuts. The former approach would be a good starting point for opening dialog between European government payers and the pharmaceutical industry.

78 FR 48687 - Agency Information Collection Activities: Proposed Collection; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2013-08-09

... of Drug Pricing and Network Pharmacy Data from Medicare Prescription Drug Plans (PDPs and MA-PDs) and... children, by age group and basis of Medicaid eligibility, who are provided initial and periodic child... previously approved collection; Title of Information Collection: Collection of Drug Pricing and Network...

Do higher-priced generic medicines enjoy a competitive advantage under reference pricing?

PubMed

Puig-Junoy, Jaume

2012-11-01

In many countries with generic reference pricing, generic producers and distributors compete by means of undisclosed discounts offered to pharmacies in order to reduce acquisition costs and to induce them to dispense their generic to patients in preference over others. The objective of this article is to test the hypothesis that under prevailing reference pricing systems for generic medicines, those medicines sold at a higher consumer price may enjoy a competitive advantage. Real transaction prices for 179 generic medicines acquired by pharmacies in Spain have been used to calculate the discount rate on acquisition versus reimbursed costs to pharmacies. Two empirical hypotheses are tested: the discount rate at which pharmacies acquire generic medicines is higher for those pharmaceutical presentations for which there are more generic competitors; and, the discount rate at which pharmacies acquire generic medicines is higher for those pharmaceutical forms for which the consumer price has declined less in relation to the consumer price of the brand drug before generic entry (higher-priced generic medicines). An average discount rate of 39.3% on acquisition versus reimbursed costs to pharmacies has been observed. The magnitude of the discount positively depends on the number of competitors in the market. The higher the ratio of the consumer price of the generic to that of the brand drug prior to generic entry (i.e. the smaller the price reduction of the generic in relation to the brand drug), the larger the discount rate. Under reference pricing there is intense price competition among generic firms in the form of unusually high discounts to pharmacies on official ex-factory prices reimbursed to pharmacies. However, this effect is highly distorting because it favours those medicines with a higher relative price in relation to the brand price before generic entry.

Convergence of decision rules for value-based pricing of new innovative drugs.

PubMed

Gandjour, Afschin

2015-04-01

Given the high costs of innovative new drugs, most European countries have introduced policies for price control, in particular value-based pricing (VBP) and international reference pricing. The purpose of this study is to describe how profit-maximizing manufacturers would optimally adjust their launch sequence to these policies and how VBP countries may best respond. To decide about the launching sequence, a manufacturer must consider a tradeoff between price and sales volume in any given country as well as the effect of price in a VBP country on the price in international reference pricing countries. Based on the manufacturer's rationale, it is best for VBP countries in Europe to implicitly collude in the long term and set cost-effectiveness thresholds at the level of the lowest acceptable VBP country. This way, international reference pricing countries would also converge towards the lowest acceptable threshold in Europe.

The effect of new drug pricing systems and new reimbursement guidelines on pharmaceutical expenditures and prescribing behavior among hypertensive patients in Korea.

PubMed

Cho, Mee-Hyun; Yoo, Ki-Bong; Lee, Hoo-Yeon; Lee, Kwang-Sig; Kwon, Jeoung A; Han, Kyu-Tae; Kim, Jae-Hyun; Park, Eun-Cheol

2015-05-01

The purpose of this study was to determine the effects of a new drug-pricing system (January 2012) and new prescription and reimbursement guidelines (January 2013) on hypertension-related pharmaceutical expenditures and prescribing behaviors in Korea. In all, 11,298 clinics and 2,667,132 patients with hypertension were included in our study. As dependent variables, we used the drug cost per patient, drug cost per prescribed day, number of drugs per prescription, number of prescribed days per visit, number of visits, number of original (vs. generic) drugs prescribed, and the percentage of original drug cost. Clinic characteristics and patients' age and sex were used as independent variables. Multi-level mixed-effect regression models were used. The drug cost per patient decreased by -1446 KRW$ (-7.4%; p<0.001) in Q4 2012 and by -1833 (-9.3%; p<0.001) in Q2 2013 compared with Q4 2011. Number of drugs per prescription decreased significantly. The percentage of original drug cost and the number of original drugs also declined. Reforms to the drug pricing policy and the new guidelines may reduce pharmaceutical expenditures without increasing number of drugs per prescription and the number of original drug used. Policy makers should consider the comprehensive effects of implementing new policies on both drug prices and consumption. Copyright © 2015 Elsevier Ireland Ltd. All rights reserved.

Artemisinin combination therapies price disparity between government and private health sectors and its implication on antimalarial drug consumption pattern in Morogoro Urban District, Tanzania

PubMed Central

2012-01-01

Background Universal access to effective treatments is a goal of the Roll Back Malaria Partnership. However, despite official commitments and substantial increases in financing, this objective remains elusive, as development assistance continue to be routed largely through government channels, leaving the much needed highly effective treatments inaccessible or unaffordable to those seeking services in the private sector. Methods To quantify the effect of price disparity between the government and private health systems, this study have audited 92 government and private Drug Selling Units (DSUs) in Morogoro urban district in Tanzania to determine the levels, trend and consumption pattern of antimalarial drugs in the two health systems. A combination of observation, interviews and questionnaire administered to the service providers of the randomly selected DSUs were used to collect data. Results ALU was the most selling antimalarial drug in the government health system at a subsidized price of 300 TShs (0.18 US$). By contrast, ALU that was available in the private sector (coartem) was being sold at a price of about 10,000 TShs (5.9 US$), the price that was by far unaffordable, prompting people to resort to cheap but failed drugs. As a result, metakelfin (the phased out drug) was the most selling drug in the private health system at a price ranging from 500 to 2,000 TShs (0.29–1.18 US$). Conclusions In order for the prompt diagnosis and treatment with effective drugs intervention to have big impact on malaria in mostly low socioeconomic malaria-endemic areas of Africa, inequities in affordability and access to effective treatment must be eliminated. For this to be ensued, subsidized drugs should be made available in both government and private health sectors to promote a universal access to effective safe and affordable life saving antimalarial drugs. PMID:22455367

Artemisinin combination therapies price disparity between government and private health sectors and its implication on antimalarial drug consumption pattern in Morogoro Urban District, Tanzania.

PubMed

Malisa, Allen Lewis; Kiriba, Deodatus

2012-03-28

Universal access to effective treatments is a goal of the Roll Back Malaria Partnership. However, despite official commitments and substantial increases in financing, this objective remains elusive, as development assistance continue to be routed largely through government channels, leaving the much needed highly effective treatments inaccessible or unaffordable to those seeking services in the private sector. To quantify the effect of price disparity between the government and private health systems, this study have audited 92 government and private Drug Selling Units (DSUs) in Morogoro urban district in Tanzania to determine the levels, trend and consumption pattern of antimalarial drugs in the two health systems. A combination of observation, interviews and questionnaire administered to the service providers of the randomly selected DSUs were used to collect data. ALU was the most selling antimalarial drug in the government health system at a subsidized price of 300 TShs (0.18 US$). By contrast, ALU that was available in the private sector (coartem) was being sold at a price of about 10,000 TShs (5.9 US$), the price that was by far unaffordable, prompting people to resort to cheap but failed drugs. As a result, metakelfin (the phased out drug) was the most selling drug in the private health system at a price ranging from 500 to 2,000 TShs (0.29-1.18 US$). In order for the prompt diagnosis and treatment with effective drugs intervention to have big impact on malaria in mostly low socioeconomic malaria-endemic areas of Africa, inequities in affordability and access to effective treatment must be eliminated. For this to be ensued, subsidized drugs should be made available in both government and private health sectors to promote a universal access to effective safe and affordable life saving antimalarial drugs.

After years of steady growth, winds of restraint blowing on prescription-drug industry.

PubMed Central

Robinson, A

1995-01-01

Tough fiscal times are forcing cutbaks in many areas of health care, and the prescription-drug industry is no exception. The Pharmaceutical Manufacturers Association of Canada says Canada's brand-name drug companies face two major hurdles: restricted market access, as drug formularies limit the number of new drugs, and restricted price increases, as allowed by the Patented Medicine Prices Review Board and provincial formularies. The Canadian Drug Manufacturers Association, which represents Canada's generic-drug industry, says its message to physicians is that generic products are important agents of cost control and that the health care community is more aware of this than it once was. "If you don't maximize your savings while you can," cautions the association's Brenda Drinkwalter, "you'll never be able to afford the high-priced drugs of tomorrow". Images p86-a PMID:7796380

New Drug Reimbursement and Pricing Policy in Taiwan.

PubMed

Chen, Gau-Tzu; Chang, Shu-Chen; Chang, Chee-Jen

2018-05-01

Taiwan has implemented a national health insurance system for more than 20 years now. The benefits of pharmaceutical products and new drug reimbursement scheme are determined by the Expert Advisory Meeting and the Pharmaceutical Benefit and Reimbursement Scheme (PBRS) Joint Committee in Taiwan. To depict the pharmaceutical benefits and reimbursement scheme for new drugs and the role of health technology assessment (HTA) in drug policy in Taiwan. All data were collected from the Expert Advisory Meeting and the PBRS meeting minutes; new drug applications with HTA reports were derived from the National Health Insurance Administration Web site. Descriptive statistics were used to analyze the timeline of a new drug from application submission to reimbursement effective, the distribution of approved price, and the approval rate for a new drug with/without local pharmacoeconomic study. After the second-generation national health insurance system, the timeline for a new drug from submission to reimbursement effective averages at 436 days, and that for an oncology drug reaches an average of 742 days. New drug approval rate is 67% and the effective rate (through the approval of the PBRS Joint Committee and the acceptance of the manufacturer) is 53%. The final approved price is 53.6% of the international median price and 70% of the proposed price by the manufacturer. Out of 95 HTA reports released during the period January 2011 to February 2017, 28 applications (30%) conducted an HTA with a local pharmacoeconomic study, and all (100%) received reimbursement approval. For the remaining 67 applications (70%) for which HTA was conducted without a local pharmacoeconomic analysis, 54 cases (81%) were reimbursed. New drug applications with local pharmacoeconomic studies are more likely to get reimbursement. Copyright © 2018. Published by Elsevier Inc.

[Risk sharing methods in middle income countries].

PubMed

Inotai, András; Kaló, Zoltán

2012-01-01

The pricing strategy of innovative medicines is based on the therapeutic value in the largest pharmaceutical markets. The cost-effectiveness of new medicines with value based ex-factory price is justifiable. Due to the international price referencing and parallel trade the ex-factory price corridor of new medicines has been narrowed in recent years. Middle income countries have less negotiation power to change the narrow drug pricing corridor, although their fair intention is to buy pharmaceuticals at lower price from their scarce public resources compared to higher income countries. Therefore the reimbursement of new medicines at prices of Western-European countries may not be justifiable in Central-Eastern European countries. Confidential pricing agreements (i.e. confidential price discounts, claw-back or rebate) in lower income countries of the European Union can alleviate this problem, as prices of new medicines can be adjusted to local purchasing power without influencing the published ex-factory price and so the accessibility of patients to these drugs in other countries. In order to control the drug budget payers tend to apply financial risk sharing agreements for new medicines in more and more countries to shift the consequences of potential overspending to pharmaceutical manufacturers. The major paradox of financial risk-sharing schemes is that increased mortality, poor persistence of patients, reduced access to healthcare providers, and no treatment reduce pharmaceutical spending. Consequently, payers have started to apply outcome based risk sharing agreements for new medicines recently to improve the quality of health care provision. Our paper aims to review and assess the published financial and outcome based risk sharing methods. Introduction of outcome based risk-sharing schemes can be a major advancement in the drug reimbursement strategy of payers in middle income countries. These schemes can help to reduce the medical uncertainty in coverage decisions for valuable innovative healthcare technologies. However risk-sharing schemes can also reduce the transparency of pharmaceutical pricing and reimbursement, as the payback, and consequently the actual price per patient can be calculated only retrospectively. Therefore risk-sharing agreements can be interpreted as special forms of confidential pricing agreements to facilitate the implementation of differential pricing in middle income countries.

Evidence on the cost of breast cancer drugs is required for rational decision making.

PubMed

Berghuis, Anne Margreet Sofie; Koffijberg, Hendrik; Terstappen, Leonardus Wendelinus Mathias Marie; Sleijfer, Stefan; IJzerman, Maarten Joost

2018-01-01

For rational decision making, assessing the cost-effectiveness and budget impact of new drugs and comparing the costs of drugs already on the market is required. In addition to value frameworks, such as the American Society of Clinical Oncology Value Framework and the European Society of Medical Oncology-Magnitude of Clinical benefit Scale, this also requires a transparent overview of actual drug prices. While list prices are available, evidence on treatment cost is not. This paper aims to synthesise evidence on the reimbursement and costs of high-cost breast cancer drugs in The Netherlands (NL). A literature review was performed to identify currently reimbursed breast cancer drugs in the NL. Treatment costs were determined by multiplying list prices with the average length of treatment and dosing schedule. Comparing list prices to the estimated treatment cost resulted in substantial differences in the ranking of costliness of the drugs. The average mean treatment length was unknown for 11/31 breast cancer drugs (26.2%). The differences in the 15 highest-cost drugs were largest for Bevacizumab, Lapatinib and everolimus, with list prices of €541, €158, €1,168 and estimated treatment cost of €174,400, €18,682 and €31,207, respectively. The lowest-cost (patented) targeted drug is €1,818 more expensive than the highest-cost (off-patent) generic drug according to the estimated drug treatment cost. A lack of evidence on the reimbursement and cost of high-cost breast cancer drugs complicates rapid and transparent evidence synthesis, necessary to focus strategies aiming to limit the increasing healthcare costs. Interestingly, the findings show that off-patent generics (such as paclitaxel or doxorubicin), although substantially cheaper than patented drugs, are still relatively costly. Extending standardisation and increasing European and national regulations on presenting information on costs per cancer drug is highly recommended.

The South Carolina Collaborative Undergraduate HBCU Student Summer Training Program

DTIC Science & Technology

2016-02-01

oral presentations, a poster session, roundtable discussions, and an interactive presentation by an NIH National Library of Medicine representative... Herbals & Cancer Michael Wargovich, PhD- July 18 (C) Cancer Disparities Marvella Ford, PhD July 19 (N) Addiction & Drugs Kimber Price, PhD July 20 (C...Department of Medicine , Division of Biostatistics and Epidemiology Tuesday, June 12, 2012 WEEK 3 (Academic Planning Lecture) Funding Opportunities

Report on Gang Violence in Maryland

DTIC Science & Technology

1994-07-01

possession of a firearm, and drug kingpin statutes. 14 . Consider juvenile witness protection programs for youths under eighteen years of age. Scho... 14 . SUBJECT TERMS 15. NUMBER OF PAGES 16. PRICE CODE 17. SECURITY CLASSIFICATION 18. SECURITY CLASSIFICATION 19. SECURITY CLASSIFICATION 20 IIAINOF...limitations. Cite any Block 2. Report Date. Full publication date availability to the public. Enter additional including day, month, and year , if available

The hidden cost of low prices: limited access to new drugs in India.

PubMed

Berndt, Ernst R; Cockburn, Iain M

2014-09-01

The pricing and accessibility of patent-protected drugs in low- and middle-income countries is a contentious issue in the global context. But questions about price have little meaning if a drug is not available for purchase, and the extent to which patent policy affects when (and if) new drugs become available in these countries has largely been overlooked. We examined data on the sales of 184 drugs approved by the US Food and Drug Administration between 2000 and 2009. We found that 50 percent of those 184 drugs went on sale in India only after lags of more than five years from their first worldwide introduction. More than half of the drugs that became newly available in India during the study period were produced and sold by multiple manufacturers in the country within one year of their introduction. The presence of multiple manufacturers indicates sharp competition and weak patent protection--factors that are disincentives to manufacturers to incur the costs of gaining access to the market. We conclude that modest patent and regulatory reform could bring the faster availability of a wider range of new drugs in India with limited impact on prices--a trade-off that merits greater policy attention. Project HOPE—The People-to-People Health Foundation, Inc.

Physician gender and changes in drug prescribing after the implementation of reference pricing in British Columbia.

PubMed

Duetz, Margreet S; Schneeweiss, Sebastian; Maclure, Malcolm; Abel, Thomas; Glynn, Robert J; Soumerai, Stephen B

2003-01-01

Gender-specific attitudes and communication styles are known to influence both the content and outcome of medical visits. Therefore, gender-specific differences in response to cost containment may also occur. The purpose of this study was to assess the effect of physician gender on changes in prescribing patterns of angiotensin-converting enzyme (ACE) inhibitors after the implementation of reference pricing for prescription drugs in British Columbia, Canada. Reference pricing is a cost-sharing policy by which use of high-priced medication requires out-of-pocket payment of the price difference between the cost-sharing drug and a lower-cost drug within the same class. In British Columbia, reference pricing for ACE inhibitors was introduced on January 1, 1997. Analysis was carried out on linked pharmacy and medical service claims data on 927 female and 2922 male physicians treating 47,680 Pharmacare Plan A enrollees who were aged >-65 years and were prescribed a high-priced ACE inhibitors before the implementation of reference pricing. Female physicians (24.1% of all physicians) were younger, treated more female patients, had patients with fewer chronic illnesses, and worked more often as general practitioners than did male physicians. The patients of female physicians were more likely to receive a written physician-requested exemption from copayment, according to a multivariate logistic regression analysis (odds ratio [OR], 1.25; 95% CI, 1.04-1.50). Data suggested that patients of female physicians were more likely to stop antihypertensive drug therapy (OR, 1.43; 95% CI, 0.96-2.13); however, this was independent of the new copayment policy. The results provide empirical evidence that physician gender is associated with slightly different patient management strategies regarding physician-requested exemptions after the start of a new drug cost-sharing policy. However, these differences are unlikely to have meaningful clinical or economic consequences.

Do generic firms and the Spanish public purchaser respond to consumer price differences of generics under reference pricing?

PubMed

Puig-Junoy, Jaume; Moreno-Torres, Iván

2010-12-01

To assess the impact of competition on the consumer price and the average price paid by the National Health System (NHS) under reference pricing in the Spanish generic market. Descriptive analysis of the time trend in consumer prices before and after the application of reference pricing for the eight most sold active ingredients from 1997 to 2009. The entry of a generic at a lower consumer price than that of the brand-name pharmaceutical or the first generic does not cause a voluntary reduction in the consumer price of either the brand drug or the first generic, either before or after the application of RP. Generic entry at a lower consumer price than previously existing pharmaceuticals always causes a slight reduction in the average price paid by the NHS; however, the average price paid by the NHS is always notably higher than the lowest, the difference being greater in relative terms under reference pricing. The Spanish RP system results in very little consumer price competition between generic firms, price reduction thus being limited to regulatory measures. NHS purchases show little sensitivity to price differences between equivalent drugs priced at or below the reference price. Copyright © 2010 Elsevier Ireland Ltd. All rights reserved.

42 CFR 414.904 - Average sales price as the basis for payment.

Code of Federal Regulations, 2010 CFR

2010-10-01

... for Drugs and Biologicals Under Part B § 414.904 Average sales price as the basis for payment. (a... end-stage renal disease patient. (i) Effective for drugs and biologicals furnished in 2005, the payment for such drugs and biologicals, including erythropoietin, furnished to an end-stage renal disease...

42 CFR 414.904 - Average sales price as the basis for payment.

Code of Federal Regulations, 2011 CFR

2011-10-01

... for Drugs and Biologicals Under Part B § 414.904 Average sales price as the basis for payment. (a... biologicals furnished in 2005, the payment for such drugs and biologicals, including erythropoietin, furnished...) of this section, the payment for drugs and biologicals, furnished to an end-stage renal disease...

The Prescription Drug Pricing Moment: Using Public Health Analysis to Clarify the Fair Competition Debate on Prescription Drug Pricing and Consumer Welfare.

PubMed

Marciarille, Ann Marie

2017-03-01

Fair competition law and public health law talk past each other when discussing pharmaceutical pricing and distribution. The former cannot agree on the relevant definition of consumer welfare. The latter does not fully comprehend the highly complex but inherently collective nature of pharmaceutical drug acquisition in the United States. This essay proposes to inject public health discourse into this debate to enrich it, focus it, and render it more accessible to those who must live by its outcome.

Do generics offer significant savings to the UK National Health Service?

PubMed

Kanavos, Panos

2007-01-01

The UK has traditionally had strong proxy demand-side measures favouring generic drug use, including prescribing guidance, financial incentives and encouraging generic prescribing. At distribution level, pharmacies are paid a salary for their dispensing work, based on volume dispensed, and procure generic products on the basis of discounts given to them by manufacturers or wholesalers. The supply-side has been subject to price regulation, and the recent requirement for manufacturers/wholesalers to report prices net of discounts to the DoH, indicate that reimbursed prices for generics may be higher than commodity level. To investigate the level of discounts off the Drug Tariff Price made available to pharmacies and, determine whether the NHS could have a better deal than currently from generic drug purchasing. Data on net prices were acquired for different presentations of 12 generic molecules selected across different therapeutic categories and included in the 50 most selling generic prescription only products in the UK in the first quarter of 2005. For these products, 31 out of a possible 34 presentations (90%) were surveyed. The data sources were price lists of three leading full-line wholesalers (one national, two regional), out of a possible 11 full-line wholesalers (27.2%), and three leading generic drug manufacturers, out of a possible 15 manufacturers (20%). Generic prescribing in the selected molecules was 94.6%, above the national average of 80%, and the total net ingredient cost (NIC) was 675 million pounds, of which 607.5 million pounds (90%) was generic. In 20 of the product presentations reviewed (64.5%), maximum discounts exceeded 60%, whereas in seven (22.6%) maximum discounts ranged between 50 and 60% off the Drug Tariff Price. Reimbursed prices for leading generic molecules are significantly higher than their pharmacy acquisition cost. The NHS is reimbursing generics at too high prices and a significant proportion of the reimbursed price accrues to the distribution chain in a fashion that resembles an indirect subsidy. The NHS can improve efficiency as well as increase savings, by purchasing generics closer to their market price. This would require changes in the way pharmacies are reimbursed, for instance, by changing the way the clawback is calculated, or altogether abolishing discounts and introducing a fixed dispensing fee; it could also mean introducing transparency in the determination of Drug Tariff prices by the relevant stakeholders. As the cost per generic script is, in the majority of cases, below the dispensing fee, the current reimbursement system for generics results in a re-distribution from patients and the NHS to the retail distribution chain.

Drug pricing reform in China: analysis of piloted approaches and potential impact of the reform

PubMed Central

Chen, Yixi; Hu, Shanlian; Dong, Peng; Kornfeld, Åsa; Jaros, Patrycja; Yan, Jing; Ma, Fangfang; Toumi, Mondher

2016-01-01

Objectives In 2009, the Chinese government launched a national healthcare reform programme aiming to control healthcare expenditure and increase the quality of care. As part of this programme, a new drug pricing reform was initiated on 1 June 2015. The objective of this study was to describe the changing landscape of drug pricing policy in China and analyse the potential impact of the reform. Methods The authors conducted thorough research on the drug pricing reform using three Chinese databases (CNKI, Wanfang, and Weipu), Chinese health authority websites, relevant press releases, and pharmaceutical blogs and discussion forums. This research was complemented with qualitative research based on targeted interviews with key Chinese opinion leaders representing the authorities’ and prescribers’ perspectives. Results With the current reform, the government has attempted to replace its direct control over the prices of reimbursable drugs with indirect, incentive-driven influence. Although the exact implementation of the reform remains unclear at the moment, the changes introduced so far and the pilot project designs indicate that China is considering adaptation of some form of internal and external reference pricing policies, commonly used in the Organisation for Economic Co-operation and Development countries. Several challenges related to the potential new mechanism were identified: 1) the risk of hospital underfunding, if hospital funding reform is not prioritised; 2) the risk of promoting the use of cheap, low-quality drugs, if a reliable quality control system is not in place and discrepancy between the available drugs is present; 3) the risk of increasing disparity in access to care between poor and rich regions, in case of country-wide price convergence; and 4) the risk of industry underinvestment, resulting in reduced competition, issues with quality and sustainability of supply, and potentially negative social impact. Conclusions Foreign pricing policies cannot be transferred to China without prioritising historical, cultural, and economic contextualisation. Otherwise, the new policy may be counterproductive and affect the whole healthcare chain, as well as the health outcomes of Chinese patients. PMID:27123191

Brands, costs and registration status of antimalarial drugs in the Kenyan retail sector

PubMed Central

Amin, Abdinasir A; Snow, Robert W

2005-01-01

Background Although an important source of treatment for fevers, little is known about the structure of the retail sector in Africa with regard to antimalarial drugs. This study aimed to assess the range, costs, sources and registration of antimalarial drugs in the Kenyan retail sector. Methods In 2002, antimalarial drug registration and trade prices were established by triangulating national registration lists, government gazettes and trade price indices. Data on registration status and trade prices were compared with similar data generated through a retail audit undertaken among 880 randomly sampled retailers in four districts of Kenya. Results Two hundred and eighteen antimalarial drugs were in circulation in Kenya in 2002. These included 65 "sulfur"-pyrimethamine (sulfadoxine-pyrimethamine and sulfalene-pyrimethamine (SP), the first-line recommended drug in 2002) and 33 amodiaquine (AQ, the second-line recommended drug) preparations. Only half of SP and AQ products were registered with the Pharmacy and Poisons Board. Of SP and AQ brands at district level, 40% and 44% were officially within legal registration requirements. 29% of retailers at district level stocked SP and 95% stocked AQ. The retail price of adult doses of SP and AQ were on average 0.38 and 0.76 US dollars, 100% and 347% higher than trade prices from manufacturers and importers. Artemether-lumefantrine, the newly announced first-line recommended antimalarial drug in 2004, was found in less than 1% of all retail outlets at a median cost of 7.6 US dollars. Conclusion There is a need to ensure that all antimalarial drugs are registered with the Pharmacy and Poisons Board to facilitate a more stringent post-marketing surveillance system to ensure drugs are safe and of good quality post-registration. PMID:16042815

Crowdsourcing black market prices for prescription opioids.

PubMed

Dasgupta, Nabarun; Freifeld, Clark; Brownstein, John S; Menone, Christopher Mark; Surratt, Hilary L; Poppish, Luke; Green, Jody L; Lavonas, Eric J; Dart, Richard C

2013-08-16

Prescription opioid diversion and abuse are major public health issues in the United States and internationally. Street prices of diverted prescription opioids can provide an indicator of drug availability, demand, and abuse potential, but these data can be difficult to collect. Crowdsourcing is a rapid and cost-effective way to gather information about sales transactions. We sought to determine whether crowdsourcing can provide accurate measurements of the street price of diverted prescription opioid medications. To assess the possibility of crowdsourcing black market drug price data by cross-validation with law enforcement officer reports. Using a crowdsourcing research website (StreetRx), we solicited data about the price that site visitors paid for diverted prescription opioid analgesics during the first half of 2012. These results were compared with a survey of law enforcement officers in the Researched Abuse, Diversion, and Addiction-Related Surveillance (RADARS) System, and actual transaction prices on a "dark Internet" marketplace (Silk Road). Geometric means and 95% confidence intervals were calculated for comparing prices per milligram of drug in US dollars. In a secondary analysis, we compared prices per milligram of morphine equivalent using standard equianalgesic dosing conversions. A total of 954 price reports were obtained from crowdsourcing, 737 from law enforcement, and 147 from the online marketplace. Correlations between the 3 data sources were highly linear, with Spearman rho of 0.93 (P<.001) between crowdsourced and law enforcement, and 0.98 (P<.001) between crowdsourced and online marketplace. On StreetRx, the mean prices per milligram were US$3.29 hydromorphone, US$2.13 buprenorphine, US$1.57 oxymorphone, US$0.97 oxycodone, US$0.96 methadone, US$0.81 hydrocodone, US$0.52 morphine, and US$0.05 tramadol. The only significant difference between data sources was morphine, with a Drug Diversion price of US$0.67/mg (95% CI 0.59-0.75) and a Silk Road price of US$0.42/mg (95% CI 0.37-0.48). Street prices generally followed clinical equianalgesic potency. Crowdsourced data provide a valid estimate of the street price of diverted prescription opioids. The (ostensibly free) black market was able to accurately predict the relative pharmacologic potency of opioid molecules.

78 FR 69512 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate...

Federal Register 2010, 2011, 2012, 2013, 2014

2013-11-19

... (``QMM'') and NBBO Setter Incentive pricing incentive programs under Rule 7014 and the pricing for its... persistent low trading volumes. Retail Price Improvement Program Pricing Under the RPI Program, a member (or... remain unchanged. The change is designed to eliminate ``inverted'' pricing that was introduced at the...

Funding pharmaceutical innovation through direct tax credits.

PubMed

Lybecker, Kristina M; Freeman, Robert A

2007-07-01

Rising pharmaceutical prices, increasing demand for more effective innovative drugs and growing public outrage have heightened criticism of the pharmaceutical industry. The public debate has focused on drug prices and access. As a consequence, the patent system is being reexamined as an efficient mechanism for encouraging pharmaceutical innovation and drug development. We propose an alternative to the existing patent system, instead rewarding the innovating firm with direct tax credits in exchange for marginal cost pricing. This concept is based on the fundamental assumption that innovation that benefits society at large may be financed publicly. As an industry which produces a social good characterized by high fixed costs, high information and regulatory costs, and relatively low marginal costs of production, pharmaceuticals are well-suited to such a mechanism. Under this proposal, drug prices fall, consumer surplus increases, access is enhanced, and the incentives to innovate are preserved.

Value-based differential pricing: efficient prices for drugs in a global context.

PubMed

Danzon, Patricia; Towse, Adrian; Mestre-Ferrandiz, Jorge

2015-03-01

This paper analyzes pharmaceutical pricing between and within countries to achieve second-best static and dynamic efficiency. We distinguish countries with and without universal insurance, because insurance undermines patients' price sensitivity, potentially leading to prices above second-best efficient levels. In countries with universal insurance, if each payer unilaterally sets an incremental cost-effectiveness ratio (ICER) threshold based on its citizens' willingness-to-pay for health; manufacturers price to that ICER threshold; and payers limit reimbursement to patients for whom a drug is cost-effective at that price and ICER, then the resulting price levels and use within each country and price differentials across countries are roughly consistent with second-best static and dynamic efficiency. These value-based prices are expected to differ cross-nationally with per capita income and be broadly consistent with Ramsey optimal prices. Countries without comprehensive insurance avoid its distorting effects on prices but also lack financial protection and affordability for the poor. Improving pricing efficiency in these self-pay countries includes improving regulation and consumer information about product quality and enabling firms to price discriminate within and between countries. © 2013 The Authors. Health Economics published by John Wiley & Sons Ltd.

Estimated generic prices for novel treatments for drug-resistant tuberculosis.

PubMed

Gotham, Dzintars; Fortunak, Joseph; Pozniak, Anton; Khoo, Saye; Cooke, Graham; Nytko, Frederick E; Hill, Andrew

2017-04-01

The estimated worldwide annual incidence of MDR-TB is 480 000, representing 5% of TB incidence, but 20% of mortality. Multiple drugs have recently been developed or repurposed for the treatment of MDR-TB. Currently, treatment for MDR-TB costs thousands of dollars per course. To estimate generic prices for novel TB drugs that would be achievable given large-scale competitive manufacture. Prices for linezolid, moxifloxacin and clofazimine were estimated based on per-kilogram prices of the active pharmaceutical ingredient (API). Other costs were added, including formulation, packaging and a profit margin. The projected costs for sutezolid were estimated to be equivalent to those for linezolid, based on chemical similarity. Generic prices for bedaquiline, delamanid and pretomanid were estimated by assessing routes of synthesis, costs/kg of chemical reagents, routes of synthesis and per-step yields. Costing algorithms reflected variable regulatory requirements and efficiency of scale based on demand, and were validated by testing predictive ability against widely available TB medicines. Estimated generic prices were US$8-$17/month for bedaquiline, $5-$16/month for delamanid, $11-$34/month for pretomanid, $4-$9/month for linezolid, $4-$9/month for sutezolid, $4-$11/month for clofazimine and $4-$8/month for moxifloxacin. The estimated generic prices were 87%-94% lower than the current lowest available prices for bedaquiline, 95%-98% for delamanid and 94%-97% for linezolid. Estimated generic prices were $168-$395 per course for the STREAM trial modified Bangladesh regimens (current costs $734-$1799), $53-$276 for pretomanid-based three-drug regimens and $238-$507 for a delamanid-based four-drug regimen. Competitive large-scale generic manufacture could allow supplies of treatment for 5-10 times more MDR-TB cases within current procurement budgets. © The Author 2017. Published by Oxford University Press on behalf of the British Society for Antimicrobial Chemotherapy. All rights reserved. For Permissions, please email: journals.permissions@oup.com.

Association of authorized generic marketing with prescription drug spending on antidepressants from 2000 to 2011.

PubMed

Cheng, Ning; Banerjee, Tannista; Qian, Jingjing; Hansen, Richard A

Prior research suggests that authorized generic drugs increase competition and decrease prices, but little empirical evidence supports this conclusion. This study evaluated the impact of authorized generic marketing on brand and generic prices. Longitudinal analysis of the household component of the Medical Expenditure Panel Survey. Interview panels over 12 years, with a new panel each year. For each panel, 5 rounds of household interviews were conducted over 30 months. Nationally representative sample of the U.S. civilian noninstitutionalized population, focusing on people using 1 of 5 antidepressant drugs that became generically available between 2000 to 2011. Drugs and dose/formulations with versus without an authorized generic drug marketed. Multiple linear regression models with lagged variables evaluated the effect of an authorized generic on average inflation-adjusted brand and generic price, adjusting for payment sources, generic entry time, competitor price, and year. During 2000-2011, annual brand antidepressant utilization decreased from 51.47 to 7.52 million prescriptions, and generic antidepressant utilization increased from 0 to 88.83 million prescriptions. Over time, payment per prescription for brand prescriptions increased 25% overall, and generic payments decreased 70% for all payer types. With unadjusted data, after generic entry the average brand price decreased $0.59 per year with and $3.62 per year without an authorized generic in the market. Average generic prices decreased $10.30 per year with and $8.47 per year without an authorized generic in the market. In multiple regression models with lagged variables adjusted for heteroscedasticity, payer source, time since generic entry, competitor price, and year, authorized generics significantly reduced average payment for generic (-$3.03) and brand (-$60.64) prescriptions, and over time this price change slowly diminished. Availability of an authorized generic was associated with reduced average generic and brand price in the antidepressant market, supporting prior evidences. Copyright © 2017 American Pharmacists Association®. Published by Elsevier Inc. All rights reserved.

Drug innovation, price controls, and parallel trade.

PubMed

Matteucci, Giorgio; Reverberi, Pierfrancesco

2016-12-21

We study the long-run welfare effects of parallel trade (PT) in pharmaceuticals. We develop a two-country model of PT with endogenous quality, where the pharmaceutical firm negotiates the price of the drug with the government in the foreign country. We show that, even though the foreign government does not consider global R&D costs, (the threat of) PT improves the quality of the drug as long as the foreign consumers' valuation of quality is high enough. We find that the firm's short-run profit may be higher when PT is allowed. Nonetheless, this is neither necessary nor sufficient for improving drug quality in the long run. We also show that improving drug quality is a sufficient condition for PT to increase global welfare. Finally, we show that, when PT is allowed, drug quality may be higher with than without price controls.

The effects of price and perceived quality on the behavioural economics of alcohol, amphetamine, cannabis, cocaine, and ecstasy purchases.

PubMed

Goudie, Andrew J; Sumnall, Harry R; Field, Matt; Clayton, Hannah; Cole, Jon C

2007-07-10

Behavioural economic models of substance use describe the relationship between changes in unit price and consumption. However, these models rarely take account of the perceived quality (i.e. potency) of controlled drugs. Therefore we investigated the effects of both price and quality on the decision to purchase controlled drugs by polysubstance misusers. Forty current polysubstance misusers (29 males, 11 females; mean age 23.8) were recruited into the study. Participants were asked to hypothetically purchase drugs from a price list of alcohol, amphetamine, cannabis, cocaine and ecstasy at different levels of quality and price (i.e. better quality drugs cost more money). The disposable income available for those purchases was systematically varied in order to determine the impact of income on the decision to purchase drugs. Demand for both normal and strong alcohol was income inelastic. Demand for both poor and average quality cannabis and ecstasy was income inelastic, but demand for good quality cannabis and ecstasy was income elastic. The demand for poor quality cocaine was income inelastic, with the demand for both average and good quality cocaine being income elastic. Participants reported too few purchases of amphetamine, which precluded behavioural economic analysis. These results suggest that, like other goods, controlled drugs are purchased based upon the consumer's interpretations of their relative value. Therefore, it is probable that the purchase and subsequent use of controlled drugs by polysubstance misusers will be heavily influenced by the economic environment.

Improving the Dissemination of United States Government Information: The Report of the Public Printer's Sales Publications Pricing Panel.

ERIC Educational Resources Information Center

Foss, Stuart M.

1991-01-01

Eleven issues were considered in study of Government Printing Office's Sales of Publications Program in areas such as pricing, marketing, program administration, and appeals of disputed prices. Sales Program study of documents pricing and government information dissemination proposes testing of alternative approaches to current pricing, increasing…

European perspective on the costs and cost-effectiveness of cancer therapies.

PubMed

Drummond, Michael F; Mason, Anne R

2007-01-10

In Europe, the vast majority of the costs of cancer therapy fall on third-party payers, normally the government, or sickness funds. Therefore, the main focus of cost-effectiveness studies is to assist payers in deciding whether new therapies are worthwhile, despite their high cost. Drug budgets are regulated in most European countries. The main form of central control is price setting, with some form of reference pricing being the most common approach. This sets the price of drugs, either to an international standard, or to a common price for drugs in the same group or cluster. At the hospital level, the main control over cancer drugs is the hospital formulary. Studies have shown a wide variation among European countries in access to cancer drugs. Explanations for these variations include differences in research funding, the drug approval process, the role of health economics in decision making, and budgetary issues. Several countries in Europe now require economic data in making decisions about the reimbursement of new drugs. An examination of decisions made by the National Institute for Health and Clinical Excellence in the United Kingdom suggests that cancer drugs have fared quite well, with most recommendations being positive. This could be because of the seriousness of the health condition and the lack of alternative therapies for some cancer patients. If the policy of requesting cost-effectiveness evidence for pricing and reimbursement decisions becomes more popular, a major implication for the pharmaceutical industry is that studies should be conducted during phase III of clinical development to generate the required data.

Reference drug programs: effectiveness and policy implications.

PubMed

Schneeweiss, Sebastian

2007-04-01

In the current economic environment, health care systems are constantly struggling to contain rapidly rising costs. Drug costs are targeted by a wide variety of measures. Many jurisdictions have implemented reference drug programs (RDPs) or similar therapeutic substitution programs. This paper summarizes the mechanism and rationale of RDPs and presents evidence of their economic effectiveness and clinical safety. RDPs for pharmaceutical reimbursement are based on the assumption that drugs within specified medication groups are therapeutically equivalent and clinically interchangeable and that a common reimbursement level can thus be established. If the evidence documents that a higher price for a given drug does not buy greater effectiveness or reduced toxicity, then under RDP such extra costs are not covered. RDPs or therapeutic substitutions based on therapeutic equivalence are seen as logical extensions of generic substitution that is based on bioequivalence of drugs. If the goal is to achieve full drug coverage for as many patients as possible in the most efficient manner, then RDPs in combination with prior authorization programs are safer and more effective than simplistic fiscal drug policies, including fixed co-payments, co-insurances, or deductibles. RDPs will reduce spending in the less innovative but largest market, while fully covering all patients. Prior authorization will ensure that patients with a specified indication will benefit from the most innovative therapies with full coverage. In practice, however, not all patients and drugs will fit exactly into one of the two categories. Therefore, a process of medically indicated exemptions that will consider full coverage should accompany an RDP. In the current economic environment, health care systems are constantly struggling to contain rapidly rising costs. Drug costs are targeted by a wide variety of measures. Many jurisdictions have implemented reference drug programs, and others are considering them. This paper summarizes the mechanism and rationale of RDPs, presents evidence of their economic effectiveness and clinical safety, and concludes with some practical implications of implementing RDP policies.

Reference drug programs: Effectiveness and policy implications☆

PubMed Central

Schneeweiss, Sebastian

2010-01-01

In the current economic environment, health care systems are constantly struggling to contain rapidly rising costs. Drug costs are targeted by a wide variety of measures. Many jurisdictions have implemented reference drug programs (RDPs) or similar therapeutic substitution programs. This paper summarizes the mechanism and rationale of RDPs and presents evidence of their economic effectiveness and clinical safety. RDPs for pharmaceutical reimbursement are based on the assumption that drugs within specified medication groups are therapeutically equivalent and clinically interchangeable and that a common reimbursement level can thus be established. If the evidence documents that a higher price for a given drug does not buy greater effectiveness or reduced toxicity, then under RDP such extra costs are not covered. RDPs or therapeutic substitutions based on therapeutic equivalence are seen as logical extensions of generic substitution that is based on bioequivalence of drugs. If the goal is to achieve full drug coverage for as many patients as possible in the most efficient manner, then RDPs in combination with prior authorization programs are safer and more effective than simplistic fiscal drug policies, including fixed co-payments, co-insurances, or deductibles. RDPs will reduce spending in the less innovative but largest market, while fully covering all patients. Prior authorization will ensure that patients with a specified indication will benefit from the most innovative therapies with full coverage. In practice, however, not all patients and drugs will fit exactly into one of the two categories. Therefore, a process of medically indicated exemptions that will consider full coverage should accompany an RDP. In the current economic environment, health care systems are constantly struggling to contain rapidly rising costs. Drug costs are targeted by a wide variety of measures. Many jurisdictions have implemented reference drug programs, and others are considering them. This paper summarizes the mechanism and rationale of RDPs, presents evidence of their economic effectiveness and clinical safety, and concludes with some practical implications of implementing RDP policies. PMID:16777256

Higher pharmaceutical public expenditure after direct price control: improved access or induced demand? The Colombian case.

PubMed

Prada, Sergio I; Soto, Victoria E; Andia, Tatiana S; Vaca, Claudia P; Morales, Álvaro A; Márquez, Sergio R; Gaviria, Alejandro

2018-01-01

High pharmaceutical expenditure is one of the main concerns for policymakers worldwide. In Colombia, a middle-income country, outpatient prescription represents over 10% of total health expenditure in the mandatory benefits package (POS), and close to 90% in the complementary government fund (No POS). In order to control expenditure, since 2011, the Ministry of Health introduced price caps on inpatient drugs reimbursements by active ingredient. By 2013, more than 400 different products, covering 80% of public pharmaceutical expenditure were controlled. This paper investigates the effects of the Colombian policy efforts to control expenditure by controlling prices. Using SISMED data, the official database for prices and quantities sold in the domestic market, we estimate a Laspeyres price index for 90 relevant markets in the period 2011-2015, and, then, we estimate real pharmaceutical expenditure. Results show that, after direct price controls were enacted, price inflation decreased almost - 43%, but real pharmaceutical expenditure almost doubled due mainly to an increase in units sold. Such disproportionate increase in units sold maybe attributable to better access to drugs due to lower prices, and/or to an increase in marketing efforts by the pharmaceutical industry to maintain profits. We conclude that pricing interventions should be implemented along with a strong market monitoring to prevent market distortions such as inappropriate and unnecessary drug use.

Estimated effects of adding universal public coverage of an essential medicines list to existing public drug plans in Canada.

PubMed

Morgan, Steven G; Li, Winny; Yau, Brandon; Persaud, Nav

2017-02-27

Canada's universal health care system does not include universal coverage of prescription drugs. We sought to estimate the effects of adding universal public coverage of an essential medicines list to existing public drug plans in Canada. We used administrative and market research data to estimate the 2015 shares of the volume and cost of prescriptions filled in the community setting that were for 117 drugs on a model list of essential medicines for Canada. We compared prices of these essential medicines in Canada with prices in the United States, Sweden and New Zealand. We estimated the cost of adding universal public drug coverage of these essential medicines based on anticipated effects on medication use and pricing. The 117 essential medicines on the model list accounted for 44% of all prescriptions and 30% of total prescription drug expenditures in 2015. Average prices of generic essential medicines were 47% lower in the US, 60% lower in Sweden and 84% lower in New Zealand; brand-name drugs were priced 43% lower in the US. Estimated savings from universal public coverage of these essential medicines was $4.27 billion per year (range $2.72 billion to $5.83 billion; 28% reduction) for patients and private drug plan sponsors, at an incremental government cost of $1.23 billion per year (range $373 million to $1.98 billion; 11% reduction). Our analysis showed that adding universal public coverage of essential medicines to the existing public drug plans in Canada could address most of Canadians' pharmaceutical needs and save billions of dollars annually. Doing so may be a pragmatic step forward while more comprehensive pharmacare reforms are planned. © 2017 Canadian Medical Association or its licensors.

Utility Green-Pricing Programs: What Defines Success? (Topical Issues Brief)

DOE Office of Scientific and Technical Information (OSTI.GOV)

Swezey, B.; Bird, L.

2001-09-13

''Green pricing'' is an optional service through which customers can support a greater level of investment by their electric utility in renewable energy technologies. Electric utilities in 29 states are now implementing green-pricing programs. This report examines important elements of green-pricing programs, including the different types of programs offered, the premiums charged, customer response, and additional factors that experience indicates are key to the development of successful programs. The best-performing programs tend to share a number of common attributes related to product design, value creation, product pricing, and program implementation. The report ends with a list of ''best practices'' formore » utilities to follow when developing and implementing programs.« less

Canadian policy makers' views on pharmaceutical reimbursement contracts involving confidential discounts from drug manufacturers.

PubMed

Morgan, Steven G; Thomson, Paige A; Daw, Jamie R; Friesen, Melissa K

2013-10-01

Pharmaceutical policy makers are increasingly negotiating reimbursement contracts that include confidential price terms that may be affected by drug utilization volumes, patterns, or outcomes. Though such contracts may offer a variety of benefits, including the ability to tie payment to the actual performance of a product, they may also create potential policy challenges. Through telephone interviews about this type of contract, we studied the views of officials in nine of ten Canadian provinces. Use of reimbursement contracts involving confidential discounts is new in Canada and ideas about power and equity emerged as cross-cutting themes in our interviews. Though confidential rebates can lower prices and thereby increase coverage of new medicines, several policy makers felt they had little power in the decision to negotiate rebates. Study participants explained that the recent rise in the use of rebates had been driven by manufacturers' pricing tactics and precedent set by other jurisdictions. Several policy makers expressed concerns that confidential rebates could result in inter-jurisdictional inequities in drug pricing and coverage. Policy makers also noted un-insured and under-insured patients must pay inflated "list prices" even if rebates are negotiated by drug plans. The establishment of policies for disciplined negotiations, inter-jurisdictional cooperation, and provision of drug coverage for all citizens are potential solutions to the challenges created by this new pharmaceutical pricing paradigm. Copyright © 2013 The Authors. Published by Elsevier Ireland Ltd.. All rights reserved.

48 CFR 19.202-6 - Determination of fair market price.

Code of Federal Regulations, 2010 CFR

2010-10-01

... market price. 19.202-6 Section 19.202-6 Federal Acquisition Regulations System FEDERAL ACQUISITION REGULATION SOCIOECONOMIC PROGRAMS SMALL BUSINESS PROGRAMS Policies 19.202-6 Determination of fair market price. (a) The fair market price shall be the price achieved in accordance with the reasonable price...

Paying for On-Patent Pharmaceuticals: Limit Prices and the Emerging Role of a Pay for Outcomes Approach.

PubMed

Fuller, Richard L; Goldfield, Norbert

2016-01-01

In this article we propose a new approach to pricing for patent-protected (on-patent) pharmaceuticals. We describe and define limit pricing as a method for drug companies to maximize revenue for their investment by offering budget-neutral pricing to encourage early adoption by payers. Under this approach, payers are incentivized to adopt innovative but expensive drugs more quickly if drug companies provide detailed analyses of the net impact of the new pharmaceutical upon total health budgets. For payers to adopt use of a new pharmaceutical, they would require objective third-party evaluation and pharmaceutical manufacturer accountability for projected outcomes efficacy of their treatments on population health. The pay for outcomes underpinning of this approach falls within the wider aspirations of health reform.

Accounting for the drug life cycle and future drug prices in cost-effectiveness analysis.

PubMed

Hoyle, Martin

2011-01-01

Economic evaluations of health technologies typically assume constant real drug prices and model only the cohort of patients currently eligible for treatment. It has recently been suggested that, in the UK, we should assume that real drug prices decrease at 4% per annum and, in New Zealand, that real drug prices decrease at 2% per annum and at patent expiry the drug price falls. It has also recently been suggested that we should model multiple future incident cohorts. In this article, the cost effectiveness of drugs is modelled based on these ideas. Algebraic expressions are developed to capture all costs and benefits over the entire life cycle of a new drug. The lifetime of a new drug in the UK, a key model parameter, is estimated as 33 years, based on the historical lifetime of drugs in England over the last 27 years. Under the proposed methodology, cost effectiveness is calculated for seven new drugs recently appraised in the UK. Cost effectiveness as assessed in the future is also estimated. Whilst the article is framed in mathematics, the findings and recommendations are also explained in non-mathematical language. The 'life-cycle correction factor' is introduced, which is used to convert estimates of cost effectiveness as traditionally calculated into estimates under the proposed methodology. Under the proposed methodology, all seven drugs appear far more cost effective in the UK than published. For example, the incremental cost-effectiveness ratio decreases by 46%, from £61, 900 to £33, 500 per QALY, for cinacalcet versus best supportive care for end-stage renal disease, and by 45%, from £31,100 to £17,000 per QALY, for imatinib versus interferon-α for chronic myeloid leukaemia. Assuming real drug prices decrease over time, the chance that a drug is publicly funded increases over time, and is greater when modelling multiple cohorts than with a single cohort. Using the methodology (compared with traditional methodology) all drugs in the UK and New Zealand are predicted to be more cost effective. It is suggested that the willingness-to-pay threshold should be reduced in the UK and New Zealand. The ranking of cost effectiveness will change with drugs assessed as relatively more cost effective and medical devices and surgical procedures relatively less cost effective than previously thought. The methodology is very simple to implement. It is suggested that the model should be parameterized for other countries.

Purity, adulteration and price of drugs bought on-line versus off-line in the Netherlands.

PubMed

van der Gouwe, Daan; Brunt, Tibor M; van Laar, Margriet; van der Pol, Peggy

2017-04-01

On-line drug markets flourish and consumers have high expectations of on-line quality and drug value. The aim of this study was to (i) describe on-line drug purchases and (ii) compare on-line with off-line purchased drugs regarding purity, adulteration and price. Comparison of laboratory analyses of 32 663 drug consumer samples (stimulants and hallucinogens) purchased between January 2013 and January 2016, 928 of which were bought on-line. The Netherlands. Primary outcome measures were (i) the percentage of samples purchased on-line and (ii) the chemical purity of powders (or dosage per tablet); adulteration; and the price per gram, blotter or tablet of drugs bought on-line compared with drugs bought off-line. The proportion of drug samples purchased on-line increased from 1.4% in 2013 to 4.1% in 2015. The frequency varied widely, from a maximum of 6% for controlled, traditional substances [ecstasy tablets, 3,4-methylenedioxy-methamphetamine (MDMA) powder, amphetamine powder, cocaine powder, 4-bromo-2,5-dimethoxyphenethylamine (2C-B) and lysergic acid diethylamide (LSD)] to more than a third for new psychoactive substances (NPS) [4-fluoroamphetamine (4-FA), 5/6-(2-aminopropyl)benzofuran (5/6-APB) and methoxetamine (MXE)]. There were no large differences in drug purity, yet small but statistically significant differences were found for 4-FA (on-line 59% versus off-line 52% purity for 4-FA on average, P = 0.001), MDMA powders (45 versus 61% purity for MDMA, P = 0.02), 2C-B tablets (21 versus 10 mg 2C-B/tablet dosage, P = 0.49) and ecstasy tablets (131 versus 121 mg MDMA/tablet dosage, P = 0.05). The proportion of adulterated samples purchased on-line and off-line did not differ, except for 4-FA powder, being less adulterated on-line (χ 2  = 8.3; P < 0.02). Drug prices were mainly higher on-line, ranging for various drugs from 10 to 23% higher than that of drugs purchased off-line (six of 10 substances: P < 0.05). Dutch drug users increasingly purchase drugs on-line: new psychoactive substances in particular. Purity and adulteration do not vary considerably between drugs purchased on-line and off-line for most substances, while on-line prices are mostly higher than off-line prices. © 2016 Society for the Study of Addiction.

Five-year trends in antiretroviral usage and drug costs in HIV-infected children in Thailand.

PubMed

Collins, Intira; Cairns, John; Le Coeur, Sophie; Pagdi, Karin; Ngampiyaskul, Chaiwat; Layangool, Prapaisri; Borkird, Thitiporn; Na-Rajsima, Sathaporn; Wanchaitanawong, Vanichaya; Jourdain, Gonzague; Lallemant, Marc

2013-09-01

As antiretroviral treatment (ART) programs mature, data on drug utilization and costs are needed to assess durability of treatments and inform program planning. Children initiating ART were followed up in an observational cohort in Thailand. Treatment histories from 1999 to 2009 were reviewed. Treatment changes were categorized as: drug substitution (within class), switch across drug class (non nucleoside reverse-transcriptase inhibitors (NNRTI) to/from protease inhibitor (PI)), and to salvage therapy (dual PI or PI and NNRTI). Antiretroviral drug costs were calculated in 6-month cycles (US$ 2009 prices). Predictors of high drug cost including characteristics at start of ART (baseline), initial regimen, treatment change, and duration on ART were assessed using mixed-effects regression models. Five hundred seven children initiated ART with a median 54 (interquartile range, 36-72) months of follow-up. Fifty-two percent had a drug substitution, 21% switched across class, and 2% to salvage therapy. When allowing for drug substitution, 78% remained on their initial regimen. Mean drug cost increased from $251 to $428 per child per year in the first and fifth year of therapy, respectively. PI-based and salvage regimens accounted for 16% and 2% of treatments prescribed and 33% and 5% of total costs, respectively. Predictors of high cost include baseline age ≥ 8 years, non nevirapine-based initial regimen, switch across drug class, and to salvage regimen (P < 0.005). At 5 years, 21% of children switched across drug class and 2% received salvage therapy. The mean drug cost increased by 70%. Access to affordable second- and third-line drugs is essential for the sustainability of treatment programs.

Using pharmacoeconomic modelling to determine value-based pricing for new pharmaceuticals in malaysia.

PubMed

Dranitsaris, George; Truter, Ilse; Lubbe, Martie S; Sriramanakoppa, Nitin N; Mendonca, Vivian M; Mahagaonkar, Sangameshwar B

2011-10-01

Decision analysis (DA) is commonly used to perform economic evaluations of new pharmaceuticals. Using multiples of Malaysia's per capita 2010 gross domestic product (GDP) as the threshold for economic value as suggested by the World Health Organization (WHO), DA was used to estimate a price per dose for bevacizumab, a drug that provides a 1.4-month survival benefit in patients with metastatic colorectal cancer (mCRC). A decision model was developed to simulate progression-free and overall survival in mCRC patients receiving chemotherapy with and without bevacizumab. Costs for chemotherapy and management of side effects were obtained from public and private hospitals in Malaysia. Utility estimates, measured as quality-adjusted life years (QALYs), were determined by interviewing 24 oncology nurses using the time trade-off technique. The price per dose was then estimated using a target threshold of US$44 400 per QALY gained, which is 3 times the Malaysian per capita GDP. A cost-effective price for bevacizumab could not be determined because the survival benefit provided was insufficient According to the WHO criteria, if the drug was able to improve survival from 1.4 to 3 or 6 months, the price per dose would be $567 and $1258, respectively. The use of decision modelling for estimating drug pricing is a powerful technique to ensure value for money. Such information is of value to drug manufacturers and formulary committees because it facilitates negotiations for value-based pricing in a given jurisdiction.

Current national initiatives about drug policies and cost control in Europe: the Italy example.

PubMed

Rocchi, Francesca; Addis, Antonio; Martini, Nello

2004-01-01

Pharmaceutical expenditure is a challenge to the financial compatibility of health systems because it is growing faster (+11% per year in the last 5 years in Italy) than any other health sector. In order to curb public pharmaceutical expenditure 2 interventions are commonly used: delisting (de-reimbursement) and reference price, with the difference being paid by patients. The Italian Ministry of Health implemented a set of interventions with the general aim of pharmaceutical governance based on the following criteria: (a) to assure a complete coverage of all clinically and epidemiologically relevant diseases; (b) to provide health professionals with a range of different active drugs with the same therapeutic indications within the same therapeutic class; and (c) to identify a reimbursement threshold in order to save public money by narrowing the (wide) price differentials among drugs with comparable efficacy and safety. In this context, interventions have been undertaken at several levels including drug price reduction, generic drug promotion, delisting of drugs reimbursed, and direct distribution of medicines (by hospital services). Furthermore, a new National Pharmaceutical Formulary has been implemented. Medicines have been classified into homogeneous categories (ie, medicines with the same main indication(s) and with similar clinical efficacy and safety profile). Within each homogeneous category, a reimbursement level (cutoff) was then identified and, accordingly, pharmaceutical companies were asked to adjust their price. This adjustment was based on price per daily drug dose (DDD), cumulative expenditure (at least 50%), and cumulative utilization (at least 60%). This readjustment, at no cost for patients, is expected to save more than Euro 280 million of public money. Seventy-seven percent of this saving will be due to price readjustment of antiulcers, calcium channel blockers, angiotensin-converting enzyme (ACE) inhibitors, and some antibiotics (mainly cephalosporins). The Italian system was able to cover all relevant diseases and ensured citizens and health professionals a choice among a wide range of valid pharmacological therapies. At the same time it was able to save public money by narrowing wide price differentials among drugs with comparable clinical properties. The set of interventions yielded a new national formulary that was able to have a significant influence on the trend of drug expenditure in Italy. This experience can be a useful reference for other European and non-European states.

[Why are some drugs so expensive? The price policy of pharmaceutical companies--"digging the grave of our health insurance-system"?].

PubMed

Glaeske, Gerd

2008-01-01

A decisive influence on the attractiveness of the German drug market is exerted by the institutions responsible for the prescribability of a drug in the framework of the Statutory Health Insurance (SHI). In this most lucrative segment of the German market, a host of reforms in recent years has led to declining transparency, where the short-lived regulatory interventions aimed - with limited success - at containing the increase in expenditure on drugs. From 1997 to 2003, however, new and patented drugs were largely protected against regulatory measures, such as fixed reimbursement rates (reference prices). However, only little use was made of this additional promotion of research activities. The majority of the new drugs in this period were me-too products, which only rarely had therapeutic advantages or advantages in the price competition with established medicines. In addition, the pharmaceutical companies widely use the privilege to set a price for drugs being prescribed in the SHI without undertaking any negotiations or presenting cost-effectiveness studies, which is unique in the European comparison. In future, the decision regarding the reimbursability of, or the reimbursable amount for, a preparation should thus be geared to lasting, transparent and unequivocal criteria guided by efficiency optimization and therapeutic progress.

Oncogenic targets, magnitude of benefit, and market pricing of antineoplastic drugs.

PubMed

Amir, Eitan; Seruga, Bostjan; Martinez-Lopez, Joaquin; Kwong, Ryan; Pandiella, Atanasio; Tannock, Ian F; Ocaña, Alberto

2011-06-20

The relationship between market pricing of new anticancer drugs and the magnitude of clinical benefit caused by them has not been reported. Randomized clinical trials (RCTs) that evaluated approved new agents for solid tumors by the U.S. Food and Drug administration since the year 2000 were assessed. Hazard ratios (HRs) and 95% CIs were extracted for time-to-event end points described for each RCT. HRs were pooled for three groups: agents directed against a specific molecular target, for which the target population is selected by a biomarker (group A); less specific biologic targeted agents (group B); and chemotherapeutic agents (group C). Monthly market prices of these different drugs were compared. For overall survival (OS), the pooled HR was 0.69 (95% CI, 0.59 to 0.81) for group A (six drugs, six trials); it was 0.78 (95% CI, 0.74 to 0.83) for group B (seven drugs, 14 trials); and it was 0.84 (95% CI, 0.79 to 0.90) for group C (eight drugs, 12 trials). For progression-free survival (PFS), the pooled HR was 0.42 (95% CI, 0.36 to 0.49) for group A (six drugs, seven trials); it was 0.57 (95% CI, 0.51 to 0.64) for group B (seven drugs, 14 trials); and it was 0.75 (95% CI, 0.66 to 0.85) for group C (six drugs, 10 trials). Tests for heterogeneity between subgroups were highly significant for PFS (P < .001) and OS (P = .02). The median monthly prices for standard doses of drugs were $5375 for group A, $5644 for group B, and $6584 for group C (P = .87). New agents with specific molecular targets are clinically the most beneficial, but their monthly market prices are not significantly different from those of other anticancer agents.

Authorized generic drugs, price competition, and consumers' welfare.

PubMed

Berndt, Ernst R; Mortimer, Richard; Bhattacharjya, Ashoke; Parece, Andrew; Tuttle, Edward

2007-01-01

The growing frequency of authorized generics has important implications for the welfare of prescription drug consumers. Authorized generic entry could affect the timing of generic entry, brand-name and generic prices, and generic penetration. We reviewed 1999-2003 data and found that generic entry in the absence of short-run exclusivity restrictions benefits consumers through lower short-run prices. We suggest that these benefits likely also result from authorized generics. We posit that long-run prices and shares are likely essentially unaffected by authorized generics and that potential costs to consumers from any delayed generic entry are likely small.

Efficacy, safety, tolerability and price of newly approved drugs in solid tumors.

PubMed

Barnes, Tristan A; Amir, Eitan; Templeton, Arnoud J; Gomez-Garcia, Susana; Navarro, Beatriz; Seruga, Bostjan; Ocana, Alberto

2017-05-01

New anti-cancer drugs utilize diverse mechanisms of action. Here we evaluate their differential efficacy, safety, tolerability and price. Drugs approved for solid tumor treatment between 2000 and 2015 were identified and analyzed in subgroups: agents targeting oncogenes (group 1), anti-angiogenics (group 2), immunotherapy (group 3), and chemotherapy (group 4). Hazard ratios (HRs) were extracted from the registration trials and pooled in a meta-analysis. Odds ratios for toxic death, treatment discontinuation and grade 3-4 toxicity were compared to control groups. The Micromedex Red Book was used to calculate the monthly price. Analysis included 74 studies comprising 48,527 patients. Progression-free survival (PFS) was improved to a greater degree with groups 1 and 2 than with groups 3 and 4, (pooled HR: 0.54, 0.56, 0.63, and 0.76 for groups 1-4 respectively, p for difference <0.001). Compared to PFS, there was a lower magnitude of improvement overall survival in all groups and the degree of benefit was less for group 4 than for other groups (pooled HR: 0.77, 0.78, 0.68, and 0.83 for groups 1-4 respectively, p for difference=0.007). Compared to control groups in individual trials, immunotherapy was associated with better safety and tolerability than other groups. Drug prices have increased over time with no significant difference between groups. There was no meaningful correlation between pricing and efficacy. Compared to control groups, immunotherapeutics and drugs targeting oncogenes or angiogenesis improve efficacy to a greater degree than chemotherapy. Immunotherapy appears to have better safety and tolerability profile compared to other cancer therapies. Market price of drugs is not related to efficacy. Copyright © 2017 Elsevier Ltd. All rights reserved.

48 CFR 552.216-71 - Economic Price Adjustment-Special Order Program Contracts.

Code of Federal Regulations, 2010 CFR

2010-10-01

... 48 Federal Acquisition Regulations System 4 2010-10-01 2010-10-01 false Economic Price Adjustment... Provisions and Clauses 552.216-71 Economic Price Adjustment—Special Order Program Contracts. As prescribed in 516.203-4(a), insert the following clause: Economic Price Adjustment—Special Order Program Contracts...

76 FR 3192 - Value Pricing Pilot Program Participation, Fiscal Years 2010 and 2011

Federal Register 2010, 2011, 2012, 2013, 2014

2011-01-19

... DEPARTMENT OF TRANSPORTATION Federal Highway Administration Value Pricing Pilot Program... Value Pricing Pilot (VPP) program, which was published on October 19, 2010, at 75 FR 64397. The original... interest at the following Web site: http://ops.fhwa.dot.gov/tolling_pricing/participation.htm . FOR FURTHER...

48 CFR 552.216-71 - Economic Price Adjustment-Special Order Program Contracts.

Code of Federal Regulations, 2011 CFR

2011-10-01

... 48 Federal Acquisition Regulations System 4 2011-10-01 2011-10-01 false Economic Price Adjustment... Provisions and Clauses 552.216-71 Economic Price Adjustment—Special Order Program Contracts. As prescribed in 516.203-4(a), insert the following clause: Economic Price Adjustment—Special Order Program Contracts...

48 CFR 552.216-71 - Economic Price Adjustment-Special Order Program Contracts.

Code of Federal Regulations, 2014 CFR

2014-10-01

... 48 Federal Acquisition Regulations System 4 2014-10-01 2014-10-01 false Economic Price Adjustment... Provisions and Clauses 552.216-71 Economic Price Adjustment—Special Order Program Contracts. As prescribed in 516.203-4(a), insert the following clause: Economic Price Adjustment—Special Order Program Contracts...

48 CFR 552.216-71 - Economic Price Adjustment-Special Order Program Contracts.

Code of Federal Regulations, 2013 CFR

2013-10-01

... 48 Federal Acquisition Regulations System 4 2013-10-01 2013-10-01 false Economic Price Adjustment... Provisions and Clauses 552.216-71 Economic Price Adjustment—Special Order Program Contracts. As prescribed in 516.203-4(a), insert the following clause: Economic Price Adjustment—Special Order Program Contracts...

48 CFR 552.216-71 - Economic Price Adjustment-Special Order Program Contracts.

Code of Federal Regulations, 2012 CFR

2012-10-01

... 48 Federal Acquisition Regulations System 4 2012-10-01 2012-10-01 false Economic Price Adjustment... Provisions and Clauses 552.216-71 Economic Price Adjustment—Special Order Program Contracts. As prescribed in 516.203-4(a), insert the following clause: Economic Price Adjustment—Special Order Program Contracts...

Determinants of price setting decisions on anti-malarial drugs at retail shops in Cambodia.

PubMed

Patouillard, Edith; Hanson, Kara; Kleinschmidt, Immo; Palafox, Benjamin; Tougher, Sarah; Pok, Sochea; O'Connell, Kate; Goodman, Catherine

2015-05-30

In many low-income countries, the private commercial sector plays an important role in the provision of malaria treatment. However, the quality of care it provides is often poor, with artemisinin combination therapy (ACT) generally being too costly for consumers. Decreasing ACT prices is critical for improving private sector treatment outcomes and reducing the spread of artemisinin resistance. Yet limited evidence exists on the factors influencing retailers' pricing decisions. This study investigates the determinants of price mark-ups on anti-malarial drugs in retail outlets in Cambodia. Taking an economics perspective, the study tests the hypothesis that the structure of the anti-malarial market determines the way providers set their prices. Providers facing weak competition are hypothesized to apply high mark-ups and set prices above the competitive level. To analyse the relationship between market competition and provider pricing, the study used cross-sectional data from retail outlets selling anti-malarial drugs, including outlet characteristics data (e.g. outlet type, anti-malarial sales volumes), range of anti-malarial drugs stocked (e.g. dosage form, brand status) and purchase and selling prices. Market concentration, a measure of the level of market competition, was estimated using sales volume data. Market accessibility was defined based on travel time to the closest main commercial area. Percent mark-ups were calculated using price data. The relationship between mark-ups and market concentration was explored using regression analysis. The anti-malarial market was on average highly concentrated, suggesting weak competition. Higher concentration was positively associated with higher mark-ups in moderately accessible markets only, with no significant relationship or a negative relationship in other markets. Other determinants of pricing included anti-malarial brand status and generic type, with higher mark-ups on cheaper products. The results indicate that provider pricing as well as other key elements of anti-malarial supply and demand may have played an important role in the limited access to appropriate malaria treatment in Cambodia. The potential for an ACT price subsidy at manufacturer level combined with effective communications directed at consumers and supportive private sector regulation should be explored to improve access to quality malaria treatment in Cambodia.

[Drug expenditures of pensioners in 1997-2000].

PubMed

Swistak, Piotr; Błońska-Fajfrowska, Barbara

2003-01-01

The general purpose of the study, carried out in the group of pensioners was to determine the relation between drug prices, household income and amounts of money spent on drugs in the years 1997-2000. The study was based on representative data gathered from annual household budgets review by Polish Statistical Office and data from pharmaceutical market published in 'Vitamina C++' magazine. The used method combined descriptive, comparative, table-descriptive analysis with graphical analysis. During studied period the real value of expenses on drugs in pensioners' households rose by 39.3% and available income decreased by 5.8%. Increased expenses on drugs caused the rise of the proportion of on spending on drugs in total household expenditure. It rose from 3.9% in 1997 to 5.2% in 2000. Throughout this time period the drug prices increased in real terms: the highest growth (approx. 49%) was noticed in patients' co-payment to reimbursed drugs. Despite rise in spending on drugs, due to the increase in drug retail prices and increasing patients co-payment, pensioners in comparison with 1997, could buy only approx. 93% units of reimbursed drugs in 2000. The possibility of buying drugs within OTC group increased by 18%.

Crowdsourcing Black Market Prices For Prescription Opioids

PubMed Central

Freifeld, Clark; Brownstein, John S; Menone, Christopher Mark; Surratt, Hilary L; Poppish, Luke; Green, Jody L; Lavonas, Eric J; Dart, Richard C

2013-01-01

Background Prescription opioid diversion and abuse are major public health issues in the United States and internationally. Street prices of diverted prescription opioids can provide an indicator of drug availability, demand, and abuse potential, but these data can be difficult to collect. Crowdsourcing is a rapid and cost-effective way to gather information about sales transactions. We sought to determine whether crowdsourcing can provide accurate measurements of the street price of diverted prescription opioid medications. Objective To assess the possibility of crowdsourcing black market drug price data by cross-validation with law enforcement officer reports. Methods Using a crowdsourcing research website (StreetRx), we solicited data about the price that site visitors paid for diverted prescription opioid analgesics during the first half of 2012. These results were compared with a survey of law enforcement officers in the Researched Abuse, Diversion, and Addiction-Related Surveillance (RADARS) System, and actual transaction prices on a “dark Internet” marketplace (Silk Road). Geometric means and 95% confidence intervals were calculated for comparing prices per milligram of drug in US dollars. In a secondary analysis, we compared prices per milligram of morphine equivalent using standard equianalgesic dosing conversions. Results A total of 954 price reports were obtained from crowdsourcing, 737 from law enforcement, and 147 from the online marketplace. Correlations between the 3 data sources were highly linear, with Spearman rho of 0.93 (P<.001) between crowdsourced and law enforcement, and 0.98 (P<.001) between crowdsourced and online marketplace. On StreetRx, the mean prices per milligram were US$3.29 hydromorphone, US$2.13 buprenorphine, US$1.57 oxymorphone, US$0.97 oxycodone, US$0.96 methadone, US$0.81 hydrocodone, US$0.52 morphine, and US$0.05 tramadol. The only significant difference between data sources was morphine, with a Drug Diversion price of US$0.67/mg (95% CI 0.59-0.75) and a Silk Road price of US$0.42/mg (95% CI 0.37-0.48). Street prices generally followed clinical equianalgesic potency. Conclusions Crowdsourced data provide a valid estimate of the street price of diverted prescription opioids. The (ostensibly free) black market was able to accurately predict the relative pharmacologic potency of opioid molecules. PMID:23956042

Evidence-based decision-making within Australia's pharmaceutical benefits scheme.

PubMed

Lopert, Ruth

2009-07-01

In Australia, most prescription drugs are subsidized through the Pharmaceutical Benefits Scheme (PBS), one of several government programs in which evidence-based decision making is applied to the funding of health technologies. PBS processes are intended to ensure "value for money" for the Australian taxpayer and to support affordable, equitable access to prescription medicines; they are not intended as a mechanism for cost containment. The inclusion of a drug on the national formulary depends on the recommendation of the Pharmaceutical Benefits Advisory Committee (PBAC), which considers not only the comparative effectiveness but also the comparative cost-effectiveness of drugs proposed for listing. While some decisions have been controversial, the PBS retains strong public support. Moreover, evidence does not suggest that the consideration of cost-effectiveness has created a negative environment for the drug industry: Australia has a high penetration of patented medicines, with prices for some recently approved drugs at U.S. levels.

Cost-effectiveness analysis in markets with high fixed costs.

PubMed

Cutler, David M; Ericson, Keith M Marzilli

2010-01-01

We consider how to conduct cost-effectiveness analysis when the social cost of a resource differs from the posted price. From the social perspective, the true cost of a medical intervention is the marginal cost of delivering another unit of a treatment, plus the social cost (deadweight loss) of raising the revenue to fund the treatment. We focus on pharmaceutical prices, which have high markups over marginal cost due to the monopoly power granted to pharmaceutical companies when drugs are under patent. We find that the social cost of a branded drug is approximately one-half the market price when the treatment is paid for by a public insurance plan and one-third the market price for mandated coverage by private insurance. We illustrate the importance of correctly accounting for social costs using two examples: coverage for statin drugs and approval for a drug to treat kidney cancer (sorafenib). In each case, we show that the correct social perspective for cost-effectiveness analysis would be more lenient than researcher recommendations.

Price differentiation and transparency in the global pharmaceutical marketplace.

PubMed

Ridley, David B

2005-01-01

Pharmaceutical manufacturers have increased the availability of their products and sometimes increased their own financial returns by charging lower prices outside of the US and by discounting to lower-income patients in the US. Examples include discounted HIV-AIDS drugs in developing countries and pharmaceutical manufacturers' discount cards in the US. Representatives of some international organisations argue that the price reductions are insufficient to make the medications widely available to lower-income patients. The WHO advocates both differential pricing and price transparency. While its efforts are well meaning, this paper identifies six concerns about its methods of comparing the price of a given molecule across manufacturers and across countries. More significantly, the WHO efforts to increase transparency are likely to lead to less price differentiation and less access to innovative pharmaceuticals. An important reason why manufacturers are reluctant to charge lower prices in lower-income countries is that they fear that such low prices will undermine the prices they charge to higher-income consumers. International organisations should not facilitate transparency but should dissuade governments from making price comparisons and basing their prices on those of lower-income countries. Furthermore, they should endeavour to keep low-priced and free drugs in the hands of the low-income consumers for which they were intended.

76 FR 19162 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness...

Federal Register 2010, 2011, 2012, 2013, 2014

2011-04-06

... Amend the BOX Rules To Expand the $2.50 Strike Price Program March 31, 2011. Pursuant to Section 19(b)(1..., LLC (``BOX'') to expand the $2.50 Strike Price Program. The text of the proposed rule change is... Strike Price Program (``Program'') \\4\\ to permit the listing of options with $2.50 strike price intervals...

Incentive pricing and cost recovery at the basin scale.

PubMed

Ward, Frank A; Pulido-Velazquez, Manuel

2009-01-01

Incentive pricing programs have potential to promote economically efficient water use patterns and provide a revenue source to compensate for environmental damages. However, incentive pricing may impose disproportionate costs and aggravate poverty where high prices are levied for basic human needs. This paper presents an analysis of a two-tiered water pricing system that sets a low price for subsistence needs, while charging a price equal to marginal cost, including environmental cost, for discretionary uses. This pricing arrangement can promote efficient and sustainable water use patterns, goals set by the European Water Framework Directive, while meeting subsistence needs of poor households. Using data from the Rio Grande Basin of North America, a dynamic nonlinear program, maximizes the basin's total net economic and environmental benefits subject to several hydrological and institutional constraints. Supply costs, environmental costs, and resource costs are integrated in a model of a river basin's hydrology, economics, and institutions. Three programs are compared: (1) Law of the River, in which water allocations and prices are determined by rules governing water transfers; (2) marginal cost pricing, in which households pay the full marginal cost of supplying treated water; (3) two-tiered pricing, in which households' subsistence water needs are priced cheaply, while discretionary uses are priced at efficient levels. Compared to the Law of the River and marginal cost pricing, two-tiered pricing performs well for efficiency and adequately for sustainability and equity. Findings provide a general framework for formulating water pricing programs that promote economically and environmentally efficient water use programs while also addressing other policy goals.

Evaluating Drug Prices, Availability, Affordability, and Price Components: Implications for Access to Drugs in Malaysia

PubMed Central

Babar, Zaheer Ud Din; Ibrahim, Mohamed Izham Mohamed; Singh, Harpal; Bukahri, Nadeem Irfan; Creese, Andrew

2007-01-01

Background Malaysia's stable health care system is facing challenges with increasing medicine costs. To investigate these issues a survey was carried out to evaluate medicine prices, availability, affordability, and the structure of price components. Methods and Findings The methodology developed by the World Health Organization (WHO) and Health Action International (HAI) was used. Price and availability data for 48 medicines was collected from 20 public sector facilities, 32 private sector retail pharmacies and 20 dispensing doctors in four geographical regions of West Malaysia. Medicine prices were compared with international reference prices (IRPs) to obtain a median price ratio. The daily wage of the lowest paid unskilled government worker was used to gauge the affordability of medicines. Price component data were collected throughout the supply chain, and markups, taxes, and other distribution costs were identified. In private pharmacies, innovator brand (IB) prices were 16 times higher than the IRPs, while generics were 6.6 times higher. In dispensing doctor clinics, the figures were 15 times higher for innovator brands and 7.5 for generics. Dispensing doctors applied high markups of 50%–76% for IBs, and up to 316% for generics. Retail pharmacy markups were also high—25%–38% and 100%–140% for IBs and generics, respectively. In the public sector, where medicines are free, availability was low even for medicines on the National Essential Drugs List. For a month's treatment for peptic ulcer disease and hypertension people have to pay about a week's wages in the private sector. Conclusions The free market by definition does not control medicine prices, necessitating price monitoring and control mechanisms. Markups for generic products are greater than for IBs. Reducing the base price without controlling markups may increase profits for retailers and dispensing doctors without reducing the price paid by end users. To increase access and affordability, promotion of generic medicines and improved availability of medicines in the public sector are required. PMID:17388660

Evaluating drug prices, availability, affordability, and price components: implications for access to drugs in Malaysia.

PubMed

Babar, Zaheer Ud Din; Ibrahim, Mohamed Izham Mohamed; Singh, Harpal; Bukahri, Nadeem Irfan; Creese, Andrew

2007-03-27

Malaysia's stable health care system is facing challenges with increasing medicine costs. To investigate these issues a survey was carried out to evaluate medicine prices, availability, affordability, and the structure of price components. The methodology developed by the World Health Organization (WHO) and Health Action International (HAI) was used. Price and availability data for 48 medicines was collected from 20 public sector facilities, 32 private sector retail pharmacies and 20 dispensing doctors in four geographical regions of West Malaysia. Medicine prices were compared with international reference prices (IRPs) to obtain a median price ratio. The daily wage of the lowest paid unskilled government worker was used to gauge the affordability of medicines. Price component data were collected throughout the supply chain, and markups, taxes, and other distribution costs were identified. In private pharmacies, innovator brand (IB) prices were 16 times higher than the IRPs, while generics were 6.6 times higher. In dispensing doctor clinics, the figures were 15 times higher for innovator brands and 7.5 for generics. Dispensing doctors applied high markups of 50%-76% for IBs, and up to 316% for generics. Retail pharmacy markups were also high-25%-38% and 100%-140% for IBs and generics, respectively. In the public sector, where medicines are free, availability was low even for medicines on the National Essential Drugs List. For a month's treatment for peptic ulcer disease and hypertension people have to pay about a week's wages in the private sector. The free market by definition does not control medicine prices, necessitating price monitoring and control mechanisms. Markups for generic products are greater than for IBs. Reducing the base price without controlling markups may increase profits for retailers and dispensing doctors without reducing the price paid by end users. To increase access and affordability, promotion of generic medicines and improved availability of medicines in the public sector are required.

Pharma Pricing & Market Access Europe 2016--Health Network Communications' Tenth Annual Conference (February 23-25, 2016--London, UK).

PubMed

D'Souza, P

2016-03-01

Tighter national budgets and escalating drug prices continue to present challenges for pharmaceutical market access strategies and societal cost of care. As pharmaceutical companies and medical governmental advisory organizations enter tougher negotiations, hospital trusts and other dispensary firms face barriers to receiving the best medical treatment, and as a result patient access is limited. The 2016 HealthNetwork Communications' Pharma Pricing & Market Access Europe meeting brought together pharmaceutical, medical governmental advisory and stakeholders and market access/pricing consultants, to encourage discussions and negotiations into how to improve the drug pricing system and consequential market access strategies while achieving the respective reimbursement and affordability objectives. Copyright 2016 Prous Science, S.A.U. or its licensors. All rights reserved.

Administration costs of intravenous biologic drugs for rheumatoid arthritis.

PubMed

Soini, Erkki J; Leussu, Miina; Hallinen, Taru

2013-01-01

Cost-effectiveness studies explicitly reporting infusion times, drug-specific administration costs for infusions or real-payer intravenous drug cost are few in number. Yet, administration costs for infusions are needed in the health economic evaluations assessing intravenously-administered drugs. To estimate the drug-specific administration and total cost of biologic intravenous rheumatoid arthritis (RA) drugs in the adult population and to compare the obtained costs with published cost estimates. Cost price data for the infusions and drugs were systematically collected from the 2011 Finnish price lists. All Finnish hospitals with available price lists were included. Drug administration and total costs (administration cost + drug price) per infusion were analysed separately from the public health care payer's perspective. Further adjustments for drug brand, dose, and hospital type were done using regression methods in order to improve the comparability between drugs. Annual expected drug administration and total costs were estimated. A literature search not limited to RA was performed to obtain the per infusion administration cost estimates used in publications. The published costs were converted to Finnish values using base-year purchasing power parities and indexing to the year 2011. Information from 19 (95%) health districts was obtained (107 analysable prices out of 176 observations). The average drug administration cost for infliximab, rituximab, abatacept, and tocilizumab infusion in RA were €355.91; €561.21; €334.00; and €293.96, respectively. The regression-adjusted (dose, hospital type; using semi-log ordinary least squares) mean administration costs for infliximab and rituximab infusions in RA were €289.12 (95% CI €222.61-375.48) and €542.28 (95% CI €307.23-957.09). The respective expected annual drug administration costs were €2312.96 for infliximab during the first year, €1879.28 for infliximab during the forthcoming years, and €1843.75 for rituximab. The obtained average administration costs per infusion were higher (1.8-3.3 times depending on the drug) than the previously published purchasing power adjusted and indexed average administration costs for infusions in RA. The administration costs of RA infusions vary between drugs, and more effort should be made to find realistic drug-specific estimates for cost-effectiveness evaluations. The frequent assumption of intravenous drug administration costs equalling outpatient visit cost can underestimate the costs.

Drug repurposing in pharmaceutical industry and its impact on market access: market access implications.

PubMed

Murteira, Susana; Millier, Aurélie; Toumi, Mondher

2014-01-01

Drug repurposing is a group of development strategies employed in order to overcome some of the hurdles innate to drug research and development. Drug repurposing includes drug repositioning, reformulation and combination. This study aimed to identify the determinants of successful market access outcome for drug repurposing in the United States of America (USA) and in Europe. The case studies of repurposing strategies were identified through a systematic review of the literature. Price information and reimbursement conditions for all the case studies were collected mainly through access of public datasources. A list of attributes that could be associated with market access outcome (price level and reimbursement conditions) was developed, discussed, and validated by an external expert group. Detailed information for all attributes was researched and collected for each case study. Bivariate regression models were conducted to identify factors associated with price change for all repurposing cases. A similar analysis was performed for reformulation and repositioning cases, in the USA and in Europe, separately. A significance level of 5% was used for all analyses. A total of 144 repurposing case studies were included in the statistical analysis for evaluation of mean price change. Combination cases (the combination of two or more individual drug components) were excluded from the statistical analysis due to the low number of cases retrieved. The main attributes associated with a significant price increase for overall repurposing cases were 'change in administration setting to hospital' (374%, p<0.0001), 'addressing unmet needs' (69%, p<0.05), 'reformulations belonging to Group 3'-that is, change in administration route (117%, p<0.001), and being a repurposed product with the 'same brand name' as the original product (65%, p<0.05). We found that the ability of the repurposed product to address unmet needs, a reformulation where the target product had a different administration route than the source product, and having a similar brand name for repurposed and original products, were variables that impacted a positive price change for repurposed drugs overall. Our research results also suggested that orphan designation could have a positive impact for repositioning in the USA, in particular. Although a change of administration from ambulatory to hospital setting seemed to be significantly correlated with a price increase for the target product, only one case was retrieved for this parameter; as such, it was not possible to infer a firm correlation between this parameter and a change in price.

Drug repurposing in pharmaceutical industry and its impact on market access: market access implications

PubMed Central

Murteira, Susana; Millier, Aurélie; Toumi, Mondher

2014-01-01

Background Drug repurposing is a group of development strategies employed in order to overcome some of the hurdles innate to drug research and development. Drug repurposing includes drug repositioning, reformulation and combination. Objective This study aimed to identify the determinants of successful market access outcome for drug repurposing in the United States of America (USA) and in Europe. Methods The case studies of repurposing strategies were identified through a systematic review of the literature. Price information and reimbursement conditions for all the case studies were collected mainly through access of public datasources. A list of attributes that could be associated with market access outcome (price level and reimbursement conditions) was developed, discussed, and validated by an external expert group. Detailed information for all attributes was researched and collected for each case study. Bivariate regression models were conducted to identify factors associated with price change for all repurposing cases. A similar analysis was performed for reformulation and repositioning cases, in the USA and in Europe, separately. A significance level of 5% was used for all analyses. Results A total of 144 repurposing case studies were included in the statistical analysis for evaluation of mean price change. Combination cases (the combination of two or more individual drug components) were excluded from the statistical analysis due to the low number of cases retrieved. The main attributes associated with a significant price increase for overall repurposing cases were ‘change in administration setting to hospital’ (374%, p<0.0001), ‘addressing unmet needs’ (69%, p<0.05), ‘reformulations belonging to Group 3’—that is, change in administration route (117%, p<0.001), and being a repurposed product with the ‘same brand name’ as the original product (65%, p<0.05). Conclusion We found that the ability of the repurposed product to address unmet needs, a reformulation where the target product had a different administration route than the source product, and having a similar brand name for repurposed and original products, were variables that impacted a positive price change for repurposed drugs overall. Our research results also suggested that orphan designation could have a positive impact for repositioning in the USA, in particular. Although a change of administration from ambulatory to hospital setting seemed to be significantly correlated with a price increase for the target product, only one case was retrieved for this parameter; as such, it was not possible to infer a firm correlation between this parameter and a change in price. PMID:27226833

Norwegian physicians' knowledge of the prices of pharmaceuticals: a survey.

PubMed

Eriksen, Ida Iren; Melberg, Hans Olav; Bringedal, Berit

2013-01-01

The objectives of this study are to measure physicians' knowledge of the prices of pharmaceuticals, and investigate whether there are differences in knowledge of prices between groups of physicians. This article reports on a survey study of physicians' knowledge of the prices of pharmaceuticals conducted on a representative sample of Norwegian physicians in the autumn of 2010. The importance of physicians' knowledge of costs derives from their influence on total spending and allocation of limited health-care resources. Physicians are important drivers in the effort to contain costs in health care, but only if they have the knowledge needed to choose the most cost-effective treatment options. A survey was sent to 1543 Norwegian physicians, asking them for price estimates and their opinions on the importance of considering the cost of treatment to society as a decision factor when treating their patients. This article deals with a subsection in which the physicians were asked to estimate the price of five pharmaceuticals: simvastatin, alendronate (Fosamax), infliximab (Remicade), natalizumab (Tysabri) and escitalopram (Cipralex). The response rate was 65%. For all the five pharmaceuticals, more than 50% and as many as 83% gave responses that differed more than 50% from the actual drug price. The price of more expensive pharmaceuticals was underestimated, while the opposite was the case for less expensive medicines. The data show that physicians in general have poor knowledge of the prices of the pharmaceuticals they offer their patients. However, the physicians who frequently deal with a drug have better knowledge of its price than those who do not handle a medication as often. The data also suggest that those physicians who agree that cost of care to society is an important decision factor have better knowledge of drug prices.

Norwegian Physicians’ Knowledge of the Prices of Pharmaceuticals: A Survey

PubMed Central

Eriksen, Ida Iren; Melberg, Hans Olav; Bringedal, Berit

2013-01-01

The objectives of this study are to measure physicians’ knowledge of the prices of pharmaceuticals, and investigate whether there are differences in knowledge of prices between groups of physicians. This article reports on a survey study of physicians’ knowledge of the prices of pharmaceuticals conducted on a representative sample of Norwegian physicians in the autumn of 2010. The importance of physicians’ knowledge of costs derives from their influence on total spending and allocation of limited health-care resources. Physicians are important drivers in the effort to contain costs in health care, but only if they have the knowledge needed to choose the most cost-effective treatment options. A survey was sent to 1 543 Norwegian physicians, asking them for price estimates and their opinions on the importance of considering the cost of treatment to society as a decision factor when treating their patients. This article deals with a subsection in which the physicians were asked to estimate the price of five pharmaceuticals: simvastatin, alendronate (Fosamax), infliximab (Remicade), natalizumab (Tysabri) and escitalopram (Cipralex). The response rate was 65%. For all the five pharmaceuticals, more than 50% and as many as 83% gave responses that differed more than 50% from the actual drug price. The price of more expensive pharmaceuticals was underestimated, while the opposite was the case for less expensive medicines. The data show that physicians in general have poor knowledge of the prices of the pharmaceuticals they offer their patients. However, the physicians who frequently deal with a drug have better knowledge of its price than those who do not handle a medication as often. The data also suggest that those physicians who agree that cost of care to society is an important decision factor have better knowledge of drug prices. PMID:24040402

Alternative to the traditional discount method of wholesaler purchasing.

PubMed

Lee, G F; Bair, J N; Piz, J W

1982-07-01

A program of purchasing drugs from wholesalers at the wholesaler's exact invoice cost plus a percentage is described and compared with the traditional method of average wholesale price (AWP) less a discount. The comparison was conducted by the pharmacy department of a 310-bed, teaching hospital that awarded a one-year contract to a wholesaler offering its items at the exact cost plus a pre-established percentage. Data collected from monthly wholesaler computer printouts gave the following information on each product: (1) list price per item, (2) actual cost to pharmacy per item, (3) percentage discount from AWP, and (4) quantity ordered. The net percentage discount from AWP for 12 months was calculated and compared to the former (traditional) discount rate. The net discount from AWP was 15.6% for purchases made by the hospital during the first 12 months of the program. When compared with the smaller discount the hospital traditionally received, the new program saved the hospital $5758 on annual purchases of $136,419. The actual dollar savings to an institution that changes from a traditional discount program to a cost-plus-percentage program depends on: (1) the negotiated percentage added to wholesaler cost, (2) the discount from AWP that the institution was previously receiving, and (3) the volume of wholesale purchases.

77 FR 61001 - Agency Information Collection Activities: Proposed Collection; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2012-10-05

... currently approved collection; Title of Information Collection: Bid Pricing Tool (BPT) for Medicare... organizations (MAO) and Prescription Drug Plans (PDP) are required to submit an actuarial pricing ``bid'' for... PDPs use the Bid Pricing Tool (BPT) software to develop their actuarial pricing bid. The information...

75 FR 79000 - Agency Information Collection Activities: Proposed Collection; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2010-12-17

... States submit pricing information for the 50 most widely prescribed drugs so that the States' prices can be compared to the national average prices obtained from the survey. The States pricing information... health care payment and remittance advices, transmit health plan premium payments, determine health care...

Paying a high price for low costs: why there should be no legal constraints on the profits that can be made on drugs for tropical diseases.

PubMed

Sonderholm, J

2009-05-01

This paper deals with the question of how to price drugs for tropical diseases. The thesis defended in the paper is: (i) there should be no legal constraints on the profits pharmaceutical companies can make on their products for tropical diseases. In essence, (i) expresses the idea that drugs for tropical diseases should be treated as any other product on the free market and that the producers of these drugs should be allowed to sell their products at whatever price the market can bear. The main argument in favour of (i) is first outlined. Five common arguments against (i) are thereafter discussed, and it is argued that all of these fail in their intended purpose.

Beneficiary price sensitivity in the Medicare prescription drug plan market.

PubMed

Frakt, Austin B; Pizer, Steven D

2010-01-01

The Medicare stand-alone prescription drug plan (PDP) came into existence in 2006 as part of the Medicare prescription drug benefit. It is the most popular plan type among Medicare drug plans and large numbers of plans are available to all beneficiaries. In this article we present the first analysis of beneficiary price sensitivity in the PDP market. Our estimate of elasticity of enrollment with respect to premium, -1.45, is larger in magnitude than has been found in the Medicare HMO market. This high degree of beneficiary price sensitivity for PDPs is consistent with relatively low product differentiation, low fixed costs of entry in the PDP market, and the fact that, in contrast to changing HMOs, beneficiaries can select a PDP without disrupting doctor-patient relationships.

National and State-Specific Sales and Prices for Electronic Cigarettes-U.S., 2012-2013.

PubMed

Loomis, Brett R; Rogers, Todd; King, Brian A; Dench, Daniel L; Gammon, Doris G; Fulmer, Erika B; Agaku, Israel T

2016-01-01

The growing market for electronic cigarettes (e-cigarettes) has been widely reported in the media, but very little objective data exist in the scientific literature, and no data have been published on state-specific trends in prices or sales. Our objective is to assess state-specific annual sales and average prices for e-cigarettes in the U.S. Commercial retail scanner data were used to assess total dollar sales and average price per unit for disposable e-cigarettes, starter kits, and cartridge refills for selected states and the total U.S. during 2012-2013. Data were analyzed in 2014. Data were available for convenience stores (29 states) and food, drug, and mass merchandisers (44 states). In convenience stores, dollar sales increased markedly during 2012-2013: 320.8% for disposable e-cigarettes, 72.4% for starter kits, and 82% for cartridges. In food, drug, and mass merchandisers, dollar sales increased 49.5% for disposable e-cigarettes, 89.4% for starter kits, and 126.2% for cartridges. Average prices across all product categories increased in convenience stores and decreased in food, drug, and mass merchandisers. Sales and prices varied substantially across states included in the analyses. Sales of all e-cigarette device types grew considerably in convenience stores and food, drug, and mass merchandisers during 2012-2013. The market for e-cigarettes is growing rapidly, resulting in dynamic sales and price changes that vary across the U.S. Continued state-specific surveillance of the e-cigarette market is warranted. Copyright © 2016 American Journal of Preventive Medicine. All rights reserved.

National and State-Specific Sales and Prices for Electronic Cigarettes—U.S., 2012–2013

PubMed Central

Loomis, Brett R.; Rogers, Todd; King, Brian A.; Dench, Daniel L.; Gammon, Doris G.; Fulmer, Erika B.; Agaku, Israel T.

2015-01-01

Introduction The growing market for electronic cigarettes (e-cigarettes) has been widely reported in the media, but very little objective data exist in the scientific literature, and no data have been published on state-specific trends in prices or sales. Our objective is to assess state-specific annual sales and average prices for e-cigarettes in the U.S. Methods Commercial retail scanner data were used to assess total dollar sales and average price per unit for disposable e-cigarettes, starter kits, and cartridge refills for selected states and the total U.S. during 2012–2013. Data were analyzed in 2014. Data were available for convenience stores (29 states) and food, drug, and mass merchandisers (44 states). Results In convenience stores, dollar sales increased markedly during 2012–2013: 320.8% for disposable e-cigarettes, 72.4% for starter kits, and 82% for cartridges. In food, drug, and mass merchandisers, dollar sales increased 49.5% for disposable e-cigarettes, 89.4% for starter kits, and 126.2% for cartridges. Average prices across all product categories increased in convenience stores and decreased in food, drug, and mass merchandisers. Sales and prices varied substantially across states included in the analyses. Conclusions Sales of all e-cigarette device types grew considerably in convenience stores and food, drug, and mass merchandisers during 2012–2013. The market for e-cigarettes is growing rapidly, resulting in dynamic sales and price changes that vary across the U.S. Continued state-specific surveillance of the e-cigarette market is warranted. PMID:26163173

Using Pharmacoeconomic Modelling to Determine Value-Based Pricing for New Pharmaceuticals in Malaysia

PubMed Central

Dranitsaris, George; Truter, Ilse; Lubbe, Martie S; Sriramanakoppa, Nitin N; Mendonca, Vivian M; Mahagaonkar, Sangameshwar B

2011-01-01

Background: Decision analysis (DA) is commonly used to perform economic evaluations of new pharmaceuticals. Using multiples of Malaysia’s per capita 2010 gross domestic product (GDP) as the threshold for economic value as suggested by the World Health Organization (WHO), DA was used to estimate a price per dose for bevacizumab, a drug that provides a 1.4-month survival benefit in patients with metastatic colorectal cancer (mCRC). Methods: A decision model was developed to simulate progression-free and overall survival in mCRC patients receiving chemotherapy with and without bevacizumab. Costs for chemotherapy and management of side effects were obtained from public and private hospitals in Malaysia. Utility estimates, measured as quality-adjusted life years (QALYs), were determined by interviewing 24 oncology nurses using the time trade-off technique. The price per dose was then estimated using a target threshold of US$44 400 per QALY gained, which is 3 times the Malaysian per capita GDP. Results: A cost-effective price for bevacizumab could not be determined because the survival benefit provided was insufficient According to the WHO criteria, if the drug was able to improve survival from 1.4 to 3 or 6 months, the price per dose would be $567 and $1258, respectively. Conclusion: The use of decision modelling for estimating drug pricing is a powerful technique to ensure value for money. Such information is of value to drug manufacturers and formulary committees because it facilitates negotiations for value-based pricing in a given jurisdiction. PMID:22589671

Health Plans and Drug Companies Dip Their Toes Into Value-Based Pricing: The Pressure Is on P&T Committees to Monitor Utilization.

PubMed

Barlas, Stephen

2016-01-01

The agreement between Harvard Pilgrim and Amgen on a "pay for performance" deal involving evolocumab could encourage other manufacturers, health plans, and policy-makers to press for value-based pricing as drug costs continue to escalate.

Pricing and reimbursement of in-patent drugs in seven European countries: a comparative analysis.

PubMed

Garattini, Livio; Cornago, Dante; De Compadri, Paola

2007-08-01

The main objective of this comparative analysis was to assess regulations applied by EU governments to reward potentially innovative drugs. We focused on the pharmaceutical policy for in-patent drugs in seven EU countries: Belgium, France, Germany, Italy, the Netherlands, Spain, and the UK. A common scheme was applied to all seven countries: first, pricing and reimbursement procedures for new and innovative drugs were investigated; secondly, we focused on the use in the regulatory process of economic evaluations. The analysis involved reviewing the literature and interviewing a selected panel of local experts in each country. According to our comparative analysis, a first sensible step might be to classify active ingredients as those addressing neglected pathologies and those for diseases that are already successfully treated, thus offering more limited therapeutic gains by definition. A reasonable solution to reward real innovation could be to admit a premium price for very innovative drugs according to their estimated cost-effectiveness. New drugs with modest improvement could be grouped in therapeutic clusters and submitted to a common reference price, despite patent expiration. Such a "dual approach" could be a sensible compromise to restrict pharmaceutical expenditure while at the same time rewarding companies that invest in high-risk basic research.

Evaluation of factors affecting prescribing behaviors, in iran pharmaceutical market by econometric methods.

PubMed

Tahmasebi, Nima; Kebriaeezadeh, Abbas

2015-01-01

Prescribing behavior of physicians affected by many factors. The present study is aimed at discovering the simultaneous effects of the evaluated factors (including: price, promotion and demographic characteristics of physicians) and quantification of these effects. In order to estimate these effects, Fluvoxamine (an antidepressant drug) was selected and the model was figured out by panel data method in econometrics. We found that insurance and advertisement respectively are the most effective on increasing the frequency of prescribing, whilst negative correlation was observed between price and the frequency of prescribing a drug. Also brand type is more sensitive to negative effect of price than to generic. Furthermore, demand for a prescription drug is related with physician demographics (age and sex). According to the results of this study, pharmaceutical companies should pay more attention to the demographic characteristics of physicians (age and sex) and their advertisement and pricing strategies.

Evaluation of Factors Affecting Prescribing Behaviors, in Iran Pharmaceutical Market by Econometric Methods

PubMed Central

Tahmasebi, Nima; Kebriaeezadeh, Abbas

2015-01-01

Prescribing behavior of physicians affected by many factors. The present study is aimed at discovering the simultaneous effects of the evaluated factors (including: price, promotion and demographic characteristics of physicians) and quantification of these effects. In order to estimate these effects, Fluvoxamine (an antidepressant drug) was selected and the model was figured out by panel data method in econometrics. We found that insurance and advertisement respectively are the most effective on increasing the frequency of prescribing, whilst negative correlation was observed between price and the frequency of prescribing a drug. Also brand type is more sensitive to negative effect of price than to generic. Furthermore, demand for a prescription drug is related with physician demographics (age and sex). According to the results of this study, pharmaceutical companies should pay more attention to the demographic characteristics of physicians (age and sex) and their advertisement and pricing strategies. PMID:25901174

Drug pricing and reimbursement information management: processes and decision making in the global economy.

PubMed

Tsourougiannis, Dimitrios

2017-01-01

Background : Cost-containment initiatives are re-shaping the pharmaceutical business environment and affecting market access as well as pricing and reimbursement decisions. Effective price management procedures are too complex to accomplish manually. Prior to February 2013, price management within Astellas Pharma Europe Ltd was done manually using an Excel database. The system was labour intensive, slow to update, and prone to error. An innovative web-based pricing information management system was developed to address the shortcomings of the previous system. Development : A secure web-based system for submitting, reviewing and approving pricing requests was designed to: track all pricing applications and approval status; update approved pricing information automatically; provide fixed and customizable reports of pricing information; collect pricing and reimbursement rules from each country; validate pricing and reimbursement rules monthly. Several sequential phases of development emphasized planning, time schedules, target dates, budgets and implementation of the entire system. A test system was used to pilot the electronic (e)-pricing system with three affiliates (four users) in February 2013. Outcomes : The web-based system was introduced in March 2013, currently has about 227 active users globally and comprises more than 1000 presentations of 150 products. The overall benefits of switching from a manual to an e-pricing system were immediate and highly visible in terms of efficiency, transparency, reliability and compliance. Conclusions : The e-pricing system has improved the efficiency, reliability, compliance, transparency and ease of access to multinational drug pricing and approval information.

Drug pricing and reimbursement information management: processes and decision making in the global economy

PubMed Central

Tsourougiannis, Dimitrios

2017-01-01

ABSTRACT Background: Cost-containment initiatives are re-shaping the pharmaceutical business environment and affecting market access as well as pricing and reimbursement decisions. Effective price management procedures are too complex to accomplish manually. Prior to February 2013, price management within Astellas Pharma Europe Ltd was done manually using an Excel database. The system was labour intensive, slow to update, and prone to error. An innovative web-based pricing information management system was developed to address the shortcomings of the previous system. Development: A secure web-based system for submitting, reviewing and approving pricing requests was designed to: track all pricing applications and approval status; update approved pricing information automatically; provide fixed and customizable reports of pricing information; collect pricing and reimbursement rules from each country; validate pricing and reimbursement rules monthly. Several sequential phases of development emphasized planning, time schedules, target dates, budgets and implementation of the entire system. A test system was used to pilot the electronic (e)-pricing system with three affiliates (four users) in February 2013. Outcomes: The web-based system was introduced in March 2013, currently has about 227 active users globally and comprises more than 1000 presentations of 150 products. The overall benefits of switching from a manual to an e-pricing system were immediate and highly visible in terms of efficiency, transparency, reliability and compliance. Conclusions: The e-pricing system has improved the efficiency, reliability, compliance, transparency and ease of access to multinational drug pricing and approval information. PMID:28740622

Drug Policy in Poland.

PubMed

Jahnz-Różyk, Karina; Kawalec, Pawel; Malinowski, Krzysztof; Czok, Katarzyna

2017-09-01

We presented a general overview of the health care system as well as the pricing and reimbursement environment in Poland. Poland aims to ensure proper access to safe and effective medicines while reducing patients' share in treatment costs. Nevertheless, the co-payment for pharmacotherapy is still high (more than 60%). The key policymaker and regulator in the system is the Ministry of Health, which is supported by the Polish Agency for Health Technology Assessment and Tariff System (Agencja Oceny Technologii Medycznych i Taryfikacji), responsible for evaluating applicant drugs, and the Economic Commission, responsible for negotiating the official sales prices and conditions for reimbursement with pharmaceutical companies (e.g., level of reimbursement and risk-sharing scheme agreements). The Agency for Health Technology Assessment and Tariff System dossier is obligatory for reimbursement application and includes the analysis of clinical effectiveness, economic analysis (with the threshold of quality-adjusted life-year established as no more than 3 times the gross domestic product per capita), and the analysis of budget impact. In Poland, only a positive list of reimbursed drugs is published and it is updated every 2 months. The following levels of reimbursement are in use: 100%, 70%, 50%, and lump sum (about €0.8). The first reimbursement decision is given for a period of 2 years only, the second for 3 years, and the third for 5 years. There is no separate budget or special legal regulations for orphan drugs. Generic substitution of drugs is desired but not mandatory. Physicians are not assigned with pharmaceutical budgets. The access to real-world data is limited; the only registers available are for drugs used in drug programs. Copyright © 2017. Published by Elsevier Inc.

Using disease management and market reforms to address the adverse economic effects of drug budgets and price and reimbursement regulations in Germany.

PubMed

Schwermann, Tim; Greiner, Wolfgang; v d Schulenburg, J M Graf

2003-01-01

Germany spends the highest share (10.4%) of its gross domestic product on health care among European Union countries. The majority of this financing comes from an earmarked tax on labor earnings. Drug spending, as a share (12.7%), is relatively low, as is per-capita drug spending. Over the past decade, a number of specific budgeting initiatives were introduced to control drug spending-with some success, at least until the 11% increase in the first 6 months of 2001. This article describes and analyzes these governmental initiatives as well as other market reforms. Germany has had a "drug budget silo mentality" throughout this period. But the focus of the mentality moved rapidly from the central budget to regional budgets and to drug budgets per physician based on historical data. These amounts do not correspond to either medical necessity or economic considerations. An analysis of the health-care system as a whole shows that the efforts to constrain spending with budget in one area can lead to higher total costs. This article also considers the impact of introducing other actual or proposed reforms such as a positive list to replace the negative list, generic substitution, retail price competition among pharmacies, and E-health commerce. There is also a new national institute constructing a database of information on health technology assessments. To overcome the strong segmentation of the health system in physician, drug, and hospital budgets, we recommend using this information from proper cost-effectiveness evaluations to develop clear guidelines for disease management programs, reinforced by appropriate financial incentives.

77 FR 292 - Agency Information Collection Activities: Submission for OMB Review; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2012-01-04

... Pricing Tool. Ultimately, CMS decides whether to approve the plan pricing (i.e., payment and premium...: Bid Pricing Tool (BPT) for Medicare Advantage (MA) Plans and Prescription Drug Plans (PDP); Use: Under... to submit an actuarial pricing ``bid'' for each plan offered to Medicare beneficiaries for approval...

Scoring the best deal: Quantity discounts and street price variation of diverted oxycodone and oxymorphone.

PubMed

Lebin, Jacob A; Murphy, David L; Severtson, Stevan Geoffrey; Bau, Gabrielle E; Dasgupta, Nabarun; Dart, Richard C

2018-05-15

Diverted prescription opioids are significant contributors to drug overdose mortality. Street price has been suggested as an economic metric of the diverted prescription opioid black market. This study examined variables that may influence the street price of diverted oxycodone and oxymorphone. A cross-sectional study was conducted utilizing data from the previously validated, crowdsourcing website StreetRx. Street price reports of selected oxycodone and oxymorphone products, between August 22, 2014 and June 30, 2016, were considered for analysis. Geometric means and 95% confidence intervals were calculated comparing prices per milligram of drug in US dollars. Univariate and multivariable regressions were used to examine the influence of dosage strength, drug formulation, and bulk purchasing on street price. A total of 5611 oxycodone and 1420 oxymorphone reports were analyzed. Across various dosages and formulations, geometric mean prices per milligram ranged between $0.12 and $1.07 for oxycodone and $0.73 and $2.90 for oxymorphone. For a 2-fold increase in dosage strength, there is a 24.0% (95% CI: -28.1%, -19.6%, P < 0.001) and a 22.5% (95% CI: -24.2%, -20.8%, P < 0.001) decrease on average in price per milligram for oxycodone and oxymorphone, respectively. Lower potency, high dosage strength, crush-resistant opioids, and those purchased in bulk were significantly cheaper. Street prices for diverted oxycodone and oxymorphone are influenced by multiple factors including potency, dosage, formulation, and bulk purchasing. Buyers who purchase large quantities of low potency, large dosage, crush-resistant formulation prescription opioids can expect to achieve the lowest price. Copyright © 2018 John Wiley & Sons, Ltd.

Financial Toxicity of Cancer Drugs: Possible Remedies from an Ethical Perspective

PubMed Central

Marckmann, Georg; in der Schmitten, Jürgen

2017-01-01

Spiraling costs of cancer treatments have become a major concern for the payers in the health care system and for individual patients suffering from the cancer drugs' financial toxicity. This article discusses possible solutions from an ethical perspective. First, it gives some orientation about what constitutes a fair price for innovative anticancer agents. While a definitive answer remains difficult, there are good reasons to enter into price negotiations with the pharmaceutical companies to align the price with the R&D costs and the added value of the product. Information about the drug's cost-effectiveness should be available, a fixed threshold, however, seems ethically problematic. Rather, a ‘signal cost-effectiveness threshold’ should indicate when the drug price requires special justification. Further strategies include an improved benefit assessment after market authorization by independent publicly financed studies, which will provide a valid basis for price negotiations and clinical decision-making at the micro level. Last but not least, cancer treatments should be tailored not only to the biology of the tumor but also to the preferences of the patient. Primarily mandated by the respect for autonomy, promoting patient-centered care has the potential to improve quality of care and enable a wise use of scarce health care resources. PMID:28559763

Modeling HIV/AIDS Drug Price Determinants in Brazil: Is Generic Competition a Myth?

PubMed Central

Meiners, Constance; Sagaon-Teyssier, Luis; Hasenclever, Lia; Moatti, Jean-Paul

2011-01-01

Background Brazil became the first developing country to guarantee free and universal access to HIV/AIDS treatment, with antiretroviral drugs (ARVs) being delivered to nearly 190,000 patients. The analysis of ARV price evolution and market dynamics in Brazil can help anticipate issues soon to afflict other developing countries, as the 2010 revision of the World Health Organization guidelines shifts demand towards more expensive treatments, and, at the same time, current evolution of international legislation and trade agreements on intellectual property rights may reduce availability of generic drugs for HIV care. Methods and Findings Our analyses are based on effective prices paid for ARV procurement in Brazil between 1996 and 2009. Data panel structure was exploited to gather ex-ante and ex-post information and address various sources of statistical bias. In-difference estimation offered in-depth information on ARV market characteristics which significantly influence prices. Although overall ARV prices follow a declining trend, changing characteristics in the generic segment help explain recent increase in generic ARV prices. Our results show that generic suppliers are more likely to respond to factors influencing demand size and market competition, while originator suppliers tend to set prices strategically to offset compulsory licensing threats and generic competition. Significance In order to guarantee the long term sustainability of access to antiretroviral treatment, our findings highlight the importance of preserving and stimulating generic market dynamics to sustain developing countries' bargaining power in price negotiations undertaken with originator companies. PMID:21858138

Modeling HIV/AIDS drug price determinants in Brazil: is generic competition a myth?

PubMed

Meiners, Constance; Sagaon-Teyssier, Luis; Hasenclever, Lia; Moatti, Jean-Paul

2011-01-01

Brazil became the first developing country to guarantee free and universal access to HIV/AIDS treatment, with antiretroviral drugs (ARVs) being delivered to nearly 190,000 patients. The analysis of ARV price evolution and market dynamics in Brazil can help anticipate issues soon to afflict other developing countries, as the 2010 revision of the World Health Organization guidelines shifts demand towards more expensive treatments, and, at the same time, current evolution of international legislation and trade agreements on intellectual property rights may reduce availability of generic drugs for HIV care. Our analyses are based on effective prices paid for ARV procurement in Brazil between 1996 and 2009. Data panel structure was exploited to gather ex-ante and ex-post information and address various sources of statistical bias. In-difference estimation offered in-depth information on ARV market characteristics which significantly influence prices. Although overall ARV prices follow a declining trend, changing characteristics in the generic segment help explain recent increase in generic ARV prices. Our results show that generic suppliers are more likely to respond to factors influencing demand size and market competition, while originator suppliers tend to set prices strategically to offset compulsory licensing threats and generic competition. In order to guarantee the long term sustainability of access to antiretroviral treatment, our findings highlight the importance of preserving and stimulating generic market dynamics to sustain developing countries' bargaining power in price negotiations undertaken with originator companies.

The Nutritional Impact of the Dairy Price Support Program.

ERIC Educational Resources Information Center

Heien, Dale; Wessells, Cathy Roheim

1988-01-01

Examined the impact of the dairy price support program and its resulting higher prices on nutrition intake, especially calcium. A demand system emphasizing dairy products was estimated. Concluded that nutrient intake would increase substantially if the program was terminated. (JOW)

Initial results of the use of prescription order change forms to achieve dose form optimization (consolidation and tablet splitting) of SSRI antidepressants in a state Medicaid program.

PubMed

Hamer, Ann M; Hartung, Daniel M; Haxby, Dean G; Ketchum, Kathy L; Pollack, David A

2006-01-01

One method to reduce drug costs is to promote dose form optimization strategies that take advantage of the flat pricing of some drugs, i.e., the same or nearly the same price for a 100 mg tablet and a 50 mg tablet of the same drug. Dose form optimization includes tablet splitting; taking half of a higher-strength tablet; and dose form consolidation, using 1 higher-strength tablet instead of 2 lower-strength tablets. Dose form optimization can reduce the direct cost of therapy by up to 50% while continuing the same daily dose of the same drug molecule. To determine if voluntary prescription change forms for antidepressant drugs could induce dosing changes and reduce the cost of antidepressant therapy in a Medicaid population. Specific regimens of 4 selective serotonin reuptake inhibitors (SSRIs)- citalopram, escitalopram, paroxetine, and sertraline- were identified for conversion to half tablets or dose optimization. Change forms, which served as valid prescriptions, were faxed to Oregon prescribers in October 2004. The results from both the returned forms and subsequent drug claims data were evaluated using a segmented linear regression. Citalopram claims were excluded from the cost analysis because the drug became available in generic form in October 2004. A total of 1,582 change forms were sent to 556 unique prescribers; 9.2% of the change forms were for dose consolidation and 90.8% were for tablet splitting. Of the 1,118 change forms (70.7%) that were returned, 956 (60.4% of those sent and 85.5% of those returned) authorized a prescription change to a lower-cost dose regimen. The average drug cost per day declined by 14.2%, from Dollars 2.26 to Dollars 1.94 in the intervention group, versus a 1.6% increase, from Dollars 2.52 to Dollars 2.56, in the group without dose consolidation or tablet splitting of the 3 SSRIs (sertraline, escitalopram, and immediate-release paroxetine). Total drug cost for the 3 SSRIs declined by 35.6%, from Dollars 333,567 to Dollars 214,794, as a result of a 24.8% decline in the total days of SSRI drug therapy and the 14.2% decline in average SSRI drug cost per day. The estimated monthly cost avoidance from this intervention, based on pharmacy claims data, was approximately Dollars 35,285, about 2% of the entire spending on SSRI drugs each month, or about Dollars 0.09 per member per month. Program administration costs, excluding costs incurred by prescribers and pharmacy providers, were about 2% of SSRI drug cost savings. Voluntary prescription change forms appear to be an effective and well-accepted tool for obtaining dose form optimization through dose form consolidation and tablet splitting, resulting in reduction in the direct costs of SSRI antidepressant drug therapy with minimal additional program administration costs.

A comparative study of European rare disease and orphan drug markets.

PubMed

Denis, Alain; Mergaert, Lut; Fostier, Christel; Cleemput, Irina; Simoens, Steven

2010-10-01

This article aims to compare regulatory aspects of rare disease and orphan drug markets in Belgium, France, Italy, the Netherlands, Sweden and the United Kingdom. Information was derived from the international literature, analysis of legal texts, and a survey completed by national experts. These countries adopted varying approaches towards regulating rare disease and orphan drug markets and, hence, the availability, pricing and reimbursement of orphan drugs vary between countries. Strategies to keep down prices include public procurement in Sweden, profit controls in the United Kingdom, and price comparisons with other countries. To gain reimbursement, the cost-effectiveness and/or budget impact of orphan drugs is considered in some countries. Other societal considerations, such as whether the drug treats a life-threatening disease, are sometimes taken into account. Extensive government intervention exists in rare disease and orphan drug markets in the countries studied. Our recommendations are to define priorities for research on rare diseases and orphan drugs at the European level, to set up disease and patient registries with a view to investigating the long-term effectiveness and cost-effectiveness of orphan drugs, to assess the profitability of orphan drugs, and to take into account societal considerations when evaluating orphan drugs. Copyright (c) 2010 Elsevier Ireland Ltd. All rights reserved.

Update on the Costs of Depakote and Depakene.

ERIC Educational Resources Information Center

Feldstein, Jerome H.; Curtis, Judy L.

1995-01-01

This update on the costs of two anticonvulsant drugs points out that a substantial price increase for Depakene makes it nearly twice as expensive as Depakote and, thus, now makes Depakote the preferred drug over Depakene. Implications of price increases for treatment of individuals with mental retardation who exhibit behavior or mental disorders…

Reference pricing of pharmaceuticals for Medicare: evidence from Germany, The Netherlands, and New Zealand.

PubMed

Danzon, Patricia M; Ketcham, Jonathan D

2004-01-01

This paper describes three prototypical systems of therapeutic reference pricing (RP) for pharmaceuticals--Germany, the Netherlands, and New Zealand--and examines their effects on the availability of new drugs, reimbursement levels, manufacturer prices, and out-of-pocket surcharges to patients. RP for pharmaceuticals is not simply analogous to a defined contribution approach to subsidizing insurance coverage. Although a major purpose of RP is to stimulate competition, theory suggests that the achievement of this goal is unlikely, and this is confirmed by the empirical evidence. Other effects of RP differ across countries in predictable ways, reflecting each country's system design and other cost-control policies. New Zealand's RP system has reduced reimbursement and limited the availability of new drugs, particularly more expensive drugs. Compared to these three countries, if RP were applied in the United States, it would likely have a more negative effect on prices of onpatent products because of the more competitive U.S. generic market, and on research and development (R&D) and the future supply of new drugs, because of the much larger U.S. share of global pharmaceutical sales.

Marketing and pricing strategies of online pharmacies.

PubMed

Levaggi, Rosella; Orizio, Grazia; Domenighini, Serena; Bressanelli, Maura; Schulz, Peter J; Zani, Claudia; Caimi, Luigi; Gelatti, Umberto

2009-10-01

Internet and e-commerce have profoundly changed society, the economy, and the world of health care. The web offers opportunities to improve health, but it may also represent a big health hazard since it is a basically unregulated market with very low consumer protection. In this paper we analyze marketing and pricing strategies of online pharmacies (OPs). Our analysis shows that OPs use strategies that would be more suitable for a commodity market than for drugs. These strategies differentiate according to variety (brand or generic), quality, quantity, and target group. OPs are well aware that the vacuum in the legislation allows them to reach a target of consumers that pharmacies cannot normally reach, such as those who would like to use the drug without consulting a physician (or, even worse, against the physician's advice). In this case, they usually charge a higher price, reassure the users by minimizing on the side effects, and induce them to bulk purchase through sensible price discounts. This analysis suggests that the selling of drugs via the Internet can turn into a "public health risk", as has been pointed out by the US Food and Drug Administration.

A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries.

PubMed

Moon, Suerie; Jambert, Elodie; Childs, Michelle; von Schoen-Angerer, Tido

2011-10-12

Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the poor. We carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. We found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers vis-à-vis consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that "de-link" the financing of R&D from the price of medicines merit further attention, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices. However, in special cases - such as when market volumes are very small or multi-source production capacity is lacking - tiered pricing may offer the only practical option to meet short-term needs for access to a product. In such cases, steps should be taken to ensure affordability and availability in the longer-term. To ensure access to medicines for populations in need, alternate strategies should be explored that harness the power of competition, avoid arbitrary market segmentation, and/or recognize government responsibilities. Competition should generally be the default option for achieving affordability, as it has proven superior to tiered pricing for reliably achieving the lowest sustainable prices.

A win-win solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries

PubMed Central

2011-01-01

Background Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialized countries - has received widespread support from industry, policymakers, civil society, and academics as a way to improve access to medicines for the poor. We carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. Discussion We found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers vis-à-vis consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that "de-link" the financing of R&D from the price of medicines merit further attention, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices. However, in special cases - such as when market volumes are very small or multi-source production capacity is lacking - tiered pricing may offer the only practical option to meet short-term needs for access to a product. In such cases, steps should be taken to ensure affordability and availability in the longer-term. Summary To ensure access to medicines for populations in need, alternate strategies should be explored that harness the power of competition, avoid arbitrary market segmentation, and/or recognize government responsibilities. Competition should generally be the default option for achieving affordability, as it has proven superior to tiered pricing for reliably achieving the lowest sustainable prices. PMID:21992405

Estimating Prices of Products

NASA Technical Reports Server (NTRS)

Aster, R. W.; Chamberlain, R. G.; Zendejas, S. C.; Lee, T. S.; Malhotra, S.

1986-01-01

Company-wide or process-wide production simulated. Price Estimation Guidelines (IPEG) program provides simple, accurate estimates of prices of manufactured products. Simplification of SAMIS allows analyst with limited time and computing resources to perform greater number of sensitivity studies. Although developed for photovoltaic industry, readily adaptable to standard assembly-line type of manufacturing industry. IPEG program estimates annual production price per unit. IPEG/PC program written in TURBO PASCAL.

PubMed

Balmaceda, Carlos; Espinoza, Manuel A; Diaz, Janepsy

2015-12-01

Bioequivalence has become a standard request for drug commercialization in most high income countries, and significant efforts have been made to implement it in many low and middle income countries. In Chile, the requirement of bioequivalency has been gradually implemented since 2008, associated to a communicational campaign to inform the general population about its scope and importance. The objective of this study is to estimate the effect of the implementation of bioequivalence on the prices of products that have been affected by this policy. We conducted a difference in difference study in a set of 30 chronic use drugs, selected from the eighty clinical guidelines published by the Chilean Ministry of Health. The effect was assessed according to the date when the corresponding ministerial decree was published. A control drugs was selected for each analyzed medication in order to estimate the effect of implementation independently of other factors of the market. We identified three groups of drugs: (i) those which experimented a significant increment of price due to bioequivalence; (ii) those where prices decreased; and (iii) those where prices did not (significantly changed) decrease. A sensitivity analysis complemented the study results and identified the significant effect of the date when the bioequivalence was implemented. It is concluded that the implementation of bioequivalence in Chile had a significant effect on prices of some medications. However, the magnitude and direction of such effect depends on the characteristics of the particular market defined by each drug. Copyright © 2015 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

Temporary authorization for use: does the French patient access programme for unlicensed medicines impact market access after formal licensing?

PubMed

Degrassat-Théas, Albane; Paubel, Pascal; Parent de Curzon, Olivier; Le Pen, Claude; Sinègre, Martine

2013-04-01

To reach the French market, a new drug requires a marketing authorization (MA) and price and reimbursement agreements. These hurdles could delay access to new and promising drugs. Since 1992, French law authorizes the use of unlicensed drugs on an exceptional and temporary basis through a compassionate-use programme, known as Temporary Authorization for Use (ATU). This programme was implemented to improve early access to drugs under development or authorized abroad. However, it is suspected to be inflationary, bypassing public bodies in charge of health technology assessment (HTA) and of pricing. The aim of this study is to observe the market access after the formal licensing of drugs that went through this compassionate-use programme. We included all ATUs that received an MA between 1 January 2005 and 30 June 2010. We first examined market access delays from these drugs using the standard administrative path. We positioned this result in relation to launch delays observed in France (for all outpatient drugs) and in other major European markets. Second, we assessed the bargaining power of a hospital purchaser after those drugs had obtained an MA by calculating the price growth rate after the approval. During the study period, 77 ATUs were formally licensed. The study concluded that, from the patient's perspective, licensing and public bodies' review time was shortened by a combined total of 36 months. The projected 11-month review time of public bodies may be longer than delays usually observed for outpatient drugs. Nonetheless, the study revealed significant benefits for French patient access based on comparable processing to launch time with those of other European countries with tight price control policies. In return, a 12 % premium, on average, is paid to pharmaceutical companies while drugs are under this status (sub-analysis on 56 drugs). In many instances, the ATU programme responds to a public health need by accelerating the availability of new drugs even though this study suggests an impact of the programme on the market access of these drugs for which the standard administrative path is longer than usual. In addition, pharmaceutical companies seem to market compassionate-use drugs with a presumed benefit/risk ratio at a price that guarantees a margin for future negotiation.

Effect of management, marketing, and certified health programs on the sale price of beef calves sold through a livestock video auction service from 1995 through 2009.

PubMed

Seeger, Jon T; King, Michael E; Grotelueschen, Dale M; Rogers, Glenn M; Stokka, Gerald S

2011-08-15

To evaluate and update the previously quantified effects of management, marketing, and certified health programs on the sale price of beef calves sold through a livestock video auction service. Longitudinal study. 41,657 lots representing 5,042,272 beef calves sold from 1995 through 2009. Data describing each lot of beef calves marketed from 1995 through 2009 by a livestock video auction service were obtained from sale catalogues. For each year of the study, multiple regression analysis was used to quantify the effect of management, marketing, and certified health programs on sale price. Sale date, base sale weight, quadratic effect of base weight, sex of calf, region of origin, breed description, inclusion in a certified health program, and number of calves in the lot significantly affected sale price for every year of the study. Variation in body weight, flesh score, and number of days between sale and delivery date had significant effects on price in most of the years; frame score and calves with horns affected price in 7 of 15 years; age and source verification influenced sale price in every year since source verification was introduced in 2005; and the auction service's progressive genetics program increased price during the 1 year that program was available. Some management, marketing, and certified health initiatives have consistently increased the sale price of beef calves, and producers can increase the price of their calves by implementing these practices.

75 FR 10843 - Special Summer Postal Rate Program

Federal Register 2010, 2011, 2012, 2013, 2014

2010-03-09

..., Pricing Strategy, as the official available to provide prompt responses to requests for clarification from... special volume pricing incentive for certain Standard Mail this summer. This document announces... Standard Mail Volume Incentive Pricing Program (Standard Mail Incentive Program) similar to the one...

Lessons from international experience in controlling pharmaceutical expenditure. III: Regulating industry.

PubMed Central

Bloor, K.; Maynard, A.; Freemantle, N.

1996-01-01

This is the third of three papers that review international policies to control spending on drugs and to improve the efficiency of drug use. This paper reviews policies regulating the supply of drugs, particularly licensing and reimbursement controls, price and profit regulation. Price and profit controls contain few incentives for improving cost effective use of drugs, and focus on cost containment and profitability of domestic industry. Carefully monitored economic evaluation could lead to improvements in efficiency and benefits to patients and the health care system. PMID:8664771

Drug Policy in Bulgaria.

PubMed

Dimova, Antoniya; Rohova, Maria; Atanasova, Elka; Kawalec, Paweł; Czok, Katarzyna

2017-09-01

Bulgaria has a mixed public-private health care financing system. Health care is financed mainly from compulsory health insurance contributions and out-of-pocket payments. Out-of-pocket payments constitute a large share of the total health care expenditure (44.14% in 2014). The share of drugs expenditure for outpatient treatment was 42.3% of the total health care expenditure in 2014, covered mainly by private payments (78.6% of the total pharmaceutical expenditure). The drug policy is run by the Ministry of Health (MoH), the National Council on Prices and Reimbursement of Medicinal Products, and the Health Technology Assessment Commission. The MoH defines diseases for which the National Health Insurance Fund (NHIF) pays for medicines. The National Council on Prices and Reimbursement of Medicinal Products maintains a positive drug list (PDL) and sets drug prices. Health technology assessment was introduced in 2015 for medicinal products belonging to a new international nonproprietary name group. The PDL defines prescription medicines that are paid for by the NHIF, the MoH, and the health care establishments; exact patient co-payments and reimbursement levels; as well as the ceiling prices for drugs not covered by the NHIF, including over-the-counter medicines. The reimbursement level can be 100%, 75%, or up to 50%. The PDL is revised monthly in all cases except for price increase. Physicians are not assigned with pharmaceutical budgets, there is a brand prescribing practice, and the substitution of prescribed medicines by pharmacists is prohibited. Policies toward cost containment and effectiveness increase include introduction of a reference pricing system, obligation to the NHIF to conduct mandatory centralized bargaining of discounts for medicinal products included in the PDL, public tendering for medicines for hospital treatment, reduction of markup margins of wholesalers and retailers, patient co-payment, and the introduction of health technology assessment. Although most of the policies have been introduced since 2011, there is still weak evidence for improvement regarding cost containment and effectiveness. Copyright © 2017. Published by Elsevier Inc.

Estimating pharmacy level prescription drug acquisition costs for third-party reimbursement.

PubMed

Kreling, D H; Kirk, K W

1986-07-01

Accurate payment for the acquisition costs of drug products dispensed is an important consideration in a third-party prescription drug program. Two alternative methods of estimating these costs among pharmacies were derived and compared. First, pharmacists were surveyed to determine the purchase discounts offered to them by wholesalers. A 10.00% modal and 11.35% mean discount resulted for 73 responding pharmacists. Second, cost-plus percents derived from gross profit margins of wholesalers were calculated and applied to wholesaler product costs to estimate pharmacy level acquisition costs. Cost-plus percents derived from National Median and Southwestern Region wholesaler figures were 9.27% and 10.10%, respectively. A comparison showed the two methods of estimating acquisition costs would result in similar acquisition cost estimates. Adopting a cost-plus estimating approach is recommended because it avoids potential pricing manipulations by wholesalers and manufacturers that would negate improvements in drug product reimbursement accuracy.

Antihypertensive drugs: a perspective on pharmaceutical price erosion and its impact on cost-effectiveness.

PubMed

Refoios Camejo, Rodrigo; McGrath, Clare; Herings, Ron; Meerding, Willem-Jan; Rutten, Frans

2012-01-01

When comparators' prices decrease due to market competition and loss of exclusivity, the incremental clinical effectiveness required for a new technology to be cost-effective is expected to increase; and/or the minimum price at which it will be funded will tend to decrease. This may be, however, either unattainable physiologically or financially unviable for drug development. The objective of this study is to provide an empirical basis for this discussion by estimating the potential for price decreases to impact on the cost-effectiveness of new therapies in hypertension. Cost-effectiveness at launch was estimated for all antihypertensive drugs launched between 1998 and 2008 in the United Kingdom using hypothetical degrees of incremental clinical effectiveness within the methodologic framework applied by the UK National Institute for Health and Clinical Excellence. Incremental cost-effectiveness ratios were computed and compared with funding thresholds. In addition, the levels of incremental clinical effectiveness required to achieve specific cost-effectiveness thresholds at given prices were estimated. Significant price decreases were observed for existing drugs. This was shown to markedly affect cost-effectiveness of technologies entering the market. The required incremental clinical effectiveness was in many cases greater than physiologically possible so, as a consequence, a number of products might not be available today if current methods of economic appraisal had been applied. We conclude that the definition of cost-effectiveness thresholds is fundamental in promoting efficient innovation. Our findings demonstrate that comparator price attrition has the potential to put pressure in the pharmaceutical research model and presents a challenge to new therapies being accepted for funding. Copyright © 2012 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

The maximum potential market for dengue drugs V 1.0.

PubMed

Dow, Geoffrey; Mora, Eric

2012-11-01

Drugs offer a complementary approach to vaccines for preventing the progression of symptoms and onset of the severe manifestations of dengue. Despite the rapid maturation of the research and development infrastructure for dengue drugs and the increasing frequency of dengue inhibitors reported in the scientific literature, the potential size of the market for dengue drugs has not been articulated. In the present work, extrapolating from publicly available information, we explored the economic burden attributable to dengue, the impact of dengue vaccines on clinical case loads, a possible alternative to tiered pricing for products for neglected diseases, and defined the maximum potential market for a dengue drug. Our projections suggest that in 2006, the annual global burden of dengue was US $1.7billion. Our proposed alternative to existing tiered pricing structures is that during a temporary period of market exclusivity, individual countries would pay 50% of the per-case equivalent of economic costs saved through the use of a dengue drug. This would yield prices per case of US $13-$239 depending on drug effectiveness and cost of medical and indirect costs and lost productivity in different countries. Assuming that such a pricing scheme was embraced, the maximum potential market for a dengue drug or drugs that on average reduced 40% of economic costs might be as high as US $338million annually. Our simulations suggest that dengue vaccines will begin to reduce the clinical case load of dengue in 2022, but that the number of cases will not decrease below 2006 levels and the proportion vaccinated will remain well below that required for the onset of herd immunity during the period of market exclusivity after the licensure of the first wave of dengue drugs. Copyright © 2012 Elsevier B.V. All rights reserved.

Planning and development of the Better Bites program: a pricing manipulation strategy to improve healthy eating in a hospital cafeteria.

PubMed

Liebert, Mina L; Patsch, Amy J; Smith, Jennifer Howard; Behrens, Timothy K; Charles, Tami; Bailey, Taryn R

2013-07-01

The Better Bites program, a hospital cafeteria nutrition intervention strategy, was developed by combining evidence-based practices with hospital-specific formative research, including key informant interviews, the Nutrition Environment Measures Study in Restaurants, hospital employee surveys, and nutrition services staff surveys. The primary program components are pricing manipulation and marketing to promote delicious, affordable, and healthy foods to hospital employees and other cafeteria patrons. The pricing manipulation component includes decreasing the price of the healthy items and increasing the price of the unhealthy items using a 35% price differential. Point-of-purchase marketing highlights taste, cost, and health benefits of the healthy items. The program aims to increase purchases of healthy foods and decrease purchases of unhealthy foods, while maintaining revenue neutrality. This article addresses the formative research, planning, and development that informed the Better Bites program.

The impact of condom prices on sales in social marketing programs.

PubMed

Harvey, P D

1994-01-01

The issue of pricing contraceptives in family planning programs is becoming more and more important. What is the relationship between consumer prices and demand, and how can we strike the correct balance between the two? This report examines the correlation between consumer prices for condoms, expressed as a percentage of per-capita gross national product, and per-capita sales of condoms in 24 social marketing programs. The correlation that emerges is strong and negative: Even when the data are controlled for age of program and other independent variables, there is a clear negative correlation between prices and contraceptive sales in these programs. The conclusion is clear that condom prices must be set very low--well below the equivalent of 1 percent of per-capita gross national product for a year's supply--in order to achieve satisfactory prevalence for condoms in either a family-planning or an AIDS-prevention context.

Mixed integer nonlinear programming model of wireless pricing scheme with QoS attribute of bandwidth and end-to-end delay

NASA Astrophysics Data System (ADS)

Irmeilyana, Puspita, Fitri Maya; Indrawati

2016-02-01

The pricing for wireless networks is developed by considering linearity factors, elasticity price and price factors. Mixed Integer Nonlinear Programming of wireless pricing model is proposed as the nonlinear programming problem that can be solved optimally using LINGO 13.0. The solutions are expected to give some information about the connections between the acceptance factor and the price. Previous model worked on the model that focuses on bandwidth as the QoS attribute. The models attempt to maximize the total price for a connection based on QoS parameter. The QoS attributes used will be the bandwidth and the end to end delay that affect the traffic. The maximum goal to maximum price is achieved when the provider determine the requirement for the increment or decrement of price change due to QoS change and amount of QoS value.

Orphan drugs for rare diseases: is it time to revisit their special market access status?

PubMed

Simoens, Steven; Cassiman, David; Dooms, Marc; Picavet, Eline

2012-07-30

Orphan drugs are intended for diseases with a very low prevalence, and many countries have implemented legislation to support market access of orphan drugs. We argue that it is time to revisit the special market access status of orphan drugs. Indeed, evidence suggests that there is no societal preference for treating rare diseases. Although society appears to assign a greater value to severity of disease, this criterion is equally relevant to many common diseases. Furthermore, the criterion of equity in access to treatment, which underpins orphan drug legislation, puts more value on health improvement in rare diseases than in common diseases and implies that population health is not maximized. Finally, incentives for the development, pricing and reimbursement of orphan drugs have created market failures, including monopolistic prices and the artificial creation of rare diseases. We argue that, instead of awarding special market access status to orphan drugs, there is scope to optimize research and development (R&D) of orphan drugs and to control prices of orphan drugs by means of, for example, patent auctions, advance purchase commitments, pay-as-you-go schemes and dose-modification studies. Governments should consider carefully the right incentive strategy for R&D of orphan drugs in rare diseases.

Pricing schemes for new drugs: a welfare analysis.

PubMed

Levaggi, Rosella

2014-02-01

Drug price regulation is acquiring increasing significance in the investment choices of the pharmaceutical sector. The overall objective is to determine an optimal trade-off between the incentives for innovation, consumer protection, and value for money. However, price regulation is itself a source of distortion. In this study, we examine the welfare properties of listing through a bargaining process and value-based pricing schemes. The latter are superior instruments to uncertain listing processes for maximising total welfare, but the distribution of the benefits between consumers and the industry depends on rate of rebate chosen by the regulator. However, through an appropriate choice, it is always possible to define a value-based pricing scheme with risk sharing, which both consumers and the industry prefer to an uncertain bargaining process. Copyright © 2013 Elsevier Ltd. All rights reserved.

Sharing, samples, and generics: an antitrust framework.

PubMed

Carrier, Michael A

Rising drug prices are in the news. By increasing price, drug companies have placed vital, even life-saving, medicines out of the reach of consumers. In a recent development, brand firms have prevented generics even from entering the market. The ruse for this strategy involves risk-management programs known as Risk Evaluation and Mitigation Strategies ("REMS"). Pursuant to legislation enacted in 2007, the FDA requires REMS when a drug's risks (such as death or injury) outweigh its rewards. Brands have used this regime, intended to bring drugs to the market, to block generic competition. Regulations such as the federal Hatch-Waxman Act and state substitution laws foster widespread generic competition. But these regimes can only be effectuated through generic entry. And that entry can take place only if a generic can use a brand's sample to show that its product is equivalent. More than 100 generic firms have complained that they have not been able to access needed samples. One study of 40 drugs subject to restricted access programs found that generics' inability to enter cost more than $5 billion a year. Brand firms have contended that antitrust law does not compel them to deal with their competitors and have highlighted concerns related to safety and product liability in justifying their refusals. This Article rebuts these claims. It highlights the importance of samples in the regulatory regime and the FDA's inability to address the issue. It shows how a sharing requirement in this setting is consistent with Supreme Court caselaw. And it demonstrates that the brands' behavior fails the defendant-friendly "no economic sense" test because the conduct literally makes no sense other than by harming generics. Brands' denial of samples offers a textbook case of monopolization. In the universe of pharmaceutical antitrust behavior, other conduct--such as "pay for delay" settlements between brands and generics and "product hopping" from one drug to a slightly modified version--has received the lion's share of attention. But sample denials are overdue for antitrust scrutiny. This Article fills this gap. Given the failure of Congress and the FDA to remedy the issue, antitrust can play a crucial role in ensuring generic access to samples, affirming a linchpin of the pharmaceutical regime.

Customer response to day-ahead wholesale market electricity prices: Case study of RTP program experience in New York

DOE Office of Scientific and Technical Information (OSTI.GOV)

Goldman, C.; Hopper, N.; Sezgen, O.

2004-07-01

There is growing interest in policies, programs and tariffs that encourage customer loads to provide demand response (DR) to help discipline wholesale electricity markets. Proposals at the retail level range from eliminating fixed rate tariffs as the default service for some or all customer groups to reinstituting utility-sponsored load management programs with market-based inducements to curtail. Alternative rate designs include time-of-use (TOU), day-ahead real-time pricing (RTP), critical peak pricing, and even pricing usage at real-time market balancing prices. Some Independent System Operators (ISOs) have implemented their own DR programs whereby load curtailment capabilities are treated as a system resource andmore » are paid an equivalent value. The resulting load reductions from these tariffs and programs provide a variety of benefits, including limiting the ability of suppliers to increase spot and long-term market-clearing prices above competitive levels (Neenan et al., 2002; Boren stein, 2002; Ruff, 2002). Unfortunately, there is little information in the public domain to characterize and quantify how customers actually respond to these alternative dynamic pricing schemes. A few empirical studies of large customer RTP response have shown modest results for most customers, with a few very price-responsive customers providing most of the aggregate response (Herriges et al., 1993; Schwarz et al., 2002). However, these studies examined response to voluntary, two-part RTP programs implemented by utilities in states without retail competition.1 Furthermore, the researchers had limited information on customer characteristics so they were unable to identify the drivers to price response. In the absence of a compelling characterization of why customers join RTP programs and how they respond to prices, many initiatives to modernize retail electricity rates seem to be stymied.« less

Cost of Cancer Drugs: Something Has To Give.

PubMed

Bender, Eric

2018-05-01

The drugs often are more effective and have fewer side effects. The science-often just amazing. Medically, cancer treatment has never been in a better place. But are high prices making it unaffordable? Payers, providers, policymakers, and drugmakers themselves are wrestling with the issue. Meanwhile, many patients are being priced out of treatments that could save their lives.

78 FR 70057 - Agency Information Collection Activities: Submission for OMB Review; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2013-11-22

... Cost Report; Use: In accordance with sections 1815(a), 1833(e), and 1861(v)(1)(A) of the Social... Pricing and Network Pharmacy Data from Medicare Prescription Drug Plans (PDPs and MA-PDs) and Supporting...-PDs) plans are required to submit drug pricing and pharmacy network data to us. These data are made...

Paying for On-Patent Pharmaceuticals

PubMed Central

Goldfield, Norbert

2016-01-01

In this article we propose a new approach to pricing for patent-protected (on-patent) pharmaceuticals. We describe and define limit pricing as a method for drug companies to maximize revenue for their investment by offering budget-neutral pricing to encourage early adoption by payers. Under this approach, payers are incentivized to adopt innovative but expensive drugs more quickly if drug companies provide detailed analyses of the net impact of the new pharmaceutical upon total health budgets. For payers to adopt use of a new pharmaceutical, they would require objective third-party evaluation and pharmaceutical manufacturer accountability for projected outcomes efficacy of their treatments on population health. The pay for outcomes underpinning of this approach falls within the wider aspirations of health reform. PMID:26945298

Presenting Germany's drug pricing rule as a cost-per-QALY rule.

PubMed

Gandjour, Afschin

2012-06-01

In Germany, the Institute for Quality and Efficiency in Health Care (IQWiG) makes recommendations for ceiling prices of drugs based on an evaluation of the relationship between costs and effectiveness. To set ceiling prices, IQWiG uses the following decision rule: the incremental cost-effectiveness ratio of a new drug compared with the next effective intervention should not be higher than that of the next effective intervention compared to its comparator. The purpose of this paper is to show that IQWiG's decision rule can be presented as a cost-per-QALY rule by using equity-weighted QALYs. This transformation shows where both rules share commonalities. Furthermore, it makes the underlying ethical implications of IQWiG's decision rule transparent and open to debate.

Direct to consumer advertising in pharmaceutical markets.

PubMed

Brekke, Kurt R; Kuhn, Michael

2006-01-01

We study effects of direct-to-consumer advertising (DTCA) in the prescription drug market. There are two pharmaceutical firms providing horizontally differentiated (branded) drugs. Patients differ in their susceptibility to the drugs. If DTCA is allowed, this can be employed to induce (additional) patient visits. Physicians perfectly observe the patients' type (of illness), but rely on information to prescribe the correct drug. Drug information is conveyed by marketing (detailing), creating a captive and a selective segment of physicians. First, we show that detailing, DTCA and price (if not regulated) are complementary strategies for the firms. Thus, allowing DTCA induces more detailing and higher prices. Second, firms benefit from DTCA if detailing competition is not too fierce, which is true if investing in detailing is sufficiently costly. Otherwise, firms are better off with a ban on DTCA. Finally, DTCA tends to lower welfare if insurance is generous (low copayments) and/or price regulation is lenient. The desirability of DTCA also depends on whether or not the regulator is concerned with firms' profit.

A multi-center prospective cohort study to evaluate the effect of differential pricing and health systems strengthening on access to medicines and management of hypertension and diabetes in Ghana: A study protocol.

PubMed

Mobula, Linda Meta; Sarfo, Stephen; Arthur, Lynda; Burnham, Gilbert; Plange-Rhule, Jacob; Ansong, Daniel; Gavor, Edith; Ofori-Adjei, David

2018-02-07

Background: There is evidence to suggest that the prevalence of non-communicable diseases (NCDs), in particular cardiovascular diseases and diabetes, are being recognized as forming a substantial proportion of the burden of disease among populations in Low- and Middle-Income Countries (LMICs).  Access to treatment is likely a key barrier to the control and prevention of NCD outcomes.  Differential pricing, an approach used to price drugs based on the purchasing power of patients in different socioeconomic segments, has been shown to be beneficial and leads to improved access and affordability. Methods: This is a quasi-experimental study, with a pragmatic trial design, to be conducted over the course of three years. A mixed methods design will be used to evaluate the effects of health systems strengthening and differential pricing on the management of diabetes, hypertension and selected cancers in Ghana. A public private partnership was established between all sites that will receive multi-level interventions, including health systems strengthening  and access to medicines interventions. Study populations and sites: Study participants will include individuals with new or recently diagnosed hypertension and diabetes (n=3,300), who present to two major referral hospitals, Komfo Anokye Teaching Hospital and Tamale Teaching Hospital, as well as three district hospitals, namely Kings Medical Centre, Agogo Presbyterian District Hospital, and Atua Government Hospital. Discussion: The objective of this study aims to test approaches intended to improve access to drugs for the treatment of hypertension and diabetes, and improve disease control. Patients with these conditions will benefit from health systems strengthening interventions (education, counseling, improved management of disease), and increased access to innovative medicines via differential pricing. Pilot programs also will facilitate health system strengthening at the participating institutions, which includes training of clinicians and updating of guidelines and production of protocols for the treatment of diabetes, hypertension and cancer.

Pricing products: juxtaposing affordability with quality appeal.

PubMed

1984-01-01

Choosing appropriate product prices is 1 of the most crucial steps in creating an effective contraceptive social marketing (CSM) sales campaign. The Social Marketing Forum conducted an informal survey of social marketing project managers, international contractors, and marketing consultants to determine how CSM programs cope with pricing problems and ways to circumvent some obstacles. According to Diana Altman, a family planning consultant, low prices that make products available to needy individuals are more important than the program's self sufficiency, yet if prices are too low, consumers think the products were unusable in the US and thus were dumped on local markets. Other key factors include commercial competition, spiraling inflation rates, and problems with rising prices and retailer/distributor margins. A sampling of per capita gross national products indicates the poverty level of most CSM projects' target market. Consequently, CSM projects must set low pices, regardless of program operating costs. The goal often is to increase the demand and availability for contraceptives. The fact that social marketing products must pass through retail networks to reach consumers complicates the pricing equation. To deal with the problem, India's Nirodh program gives a 25% margin to distributors/wholesalers, compared to 6% offered on most other goods. Retailers also receive a 25% margin, more than double the commercial rate. Once prices are set, increases pose hazards. Local government approval often is a prerequisite and can require lengthy negotiations. Market studies remain a valuable approach to effective pricing, according to PNA's Mallamad and other research consultants. They cite such effective research strategies as test marketing products and asking consumers how prices affect buying habits. Further, CSM projects can jump over some pricing hurdles through creative marketing. An effective pricing strategy alone cannot produce a successful CSM program. Pricing must accompany such factors as strong advertising, committed management, and adept salespersons.

39 CFR 551.6 - Pricing.

Code of Federal Regulations, 2010 CFR

2010-07-01

... 39 Postal Service 1 2010-07-01 2010-07-01 false Pricing. 551.6 Section 551.6 Postal Service UNITED STATES POSTAL SERVICE POSTAGE PROGRAMS SEMIPOSTAL STAMP PROGRAM § 551.6 Pricing. (a) The Semipostal Authorization Act, as amended by Public Law 107-67, section 652, 115 Stat. 514 (2001), prescribes that the price...

Competition in the pharmaceutical industry: how do quality differences shape advertising strategies?

PubMed

de Frutos, Maria-Angeles; Ornaghi, Carmine; Siotis, Georges

2013-01-01

We present a Hotelling model of price and advertising competition between prescription drugs that differ in quality/side effects. Promotional effort results in the endogenous formation of two consumer groups: brand loyal and non-brand loyal ones. We show that advertising intensities are strategic substitutes, with the better quality drugs being the ones that are most advertised. This positive association stems from the higher rents that firms can extract from consumers whose brand loyalty is endogenously determined by promotional effort. The model's main results on advertising and pricing strategies are taken to the data. The latter consists of product level data on prices and quantities, product level advertising data, as well as the qualitative information on drug quality contained in the Orange Book compiled by the Food and Drug Administration (FDA). The empirical results provide strong support to the model's predictions. Copyright © 2012 Elsevier B.V. All rights reserved.

How can states provide affordable pharmaceuticals to the underserved?

PubMed

Zara, Jane

2006-11-01

Advocates of drug price restrictions in the U.S. argue that pharmaceutical companies operate in an unregulated market, free to charge whatever price the market will bear. The pharmaceutical industry insists that these large profits are justified for investments toward discovering new life saving medicines. As innovation wanes, marketing costs soar, and drug profits rise, public interest advocates and state leaders are challenging this justification. This article examines current problems associated with the ability to procure affordable medicines, and examines mounting tensions between the federal government and the states, particularly regarding the states' ability to negotiate lower prices with drug manufacturers in light of the recent Medicare changes. It provides a brief survey of efforts underway to secure affordable pharmaceuticals for state's residents, addressing the history and feasibility of using compulsory licensing for producing affordable life-saving drugs with respect to public health, constitutional, eminent domain, and anti-trust issues.

How to prevent the next Marathon Pharmaceuticals.

PubMed

David, Frank S; Dixit, Richa

2018-01-01

In recent years, several drug companies have exploited U.S. regulatory policies to acquire exclusive rights to cheap therapies and substantially raise their prices, and Federal agencies and state governments are exploring various ways to prevent or punish such behavior in the future. Among these cases, however, Marathon Pharmaceuticals' handling of Emflaza (deflazacort) is unique, because the drug was previously only available abroad, and was never previously sold in the U.S. before the company obtained FDA approval for it. Thus, laws and policies designed to address price hikes on already-marketed drugs are unlikely to prevent additional Marathon-like scenarios. In this article, we describe in more detail the unique features of Emflaza compared with these other recent cases of drug price increases, determine the likelihood that similar situations will arise in the future, and explore legislative and administrative options to specifically prevent such behavior.

Pricing and reimbursement of drugs in Ireland.

PubMed

Barry, Michael; Tilson, Lesley; Ryan, Máirín

2004-06-01

Expenditure on healthcare in Ireland, which is mainly derived from taxation, has increased considerably in recent years to an estimated 9.2 billion euro in 2003. Pharmaceuticals account for approximately 10% of total healthcare expenditure. Approximately one-third of patients receive their medications free of charge whilst the remaining two-thirds are subject to a co-payment threshold of 78 euro per month, i.e. 936 euro per year. The price of medications in Ireland is linked to those of five other member states where the price to the wholesaler of any medication will not exceed the lesser of the currency-adjusted wholesale price in the United Kingdom or the average of wholesale prices in Denmark, France, Germany, The Netherlands and the United Kingdom. A price freeze at the introduction price has been in existence since 1993. Despite the price freeze, expenditure on medicines on the community drugs scheme has increased from 201 million euro in 1993 to 898 million euro in 2002. The two main factors contributing to the increased expenditure on medicines include "product mix", the prescribing of new and more expensive medication, and "volume effect" comprising growth in the number of prescription items. Changing demographics and the extension of the General Medical Services (GMS) Scheme to provide free medicines for all those over the age of 70 years have also contributed. Prior to reimbursement under the community drugs schemes, a medicine must be included in the GMS code book or positive list. A demonstration of cost-effectiveness is not a pre-requisite for reimbursement.

Linking the Price of Cancer Drug Treatments to Their Clinical Value.

PubMed

Gozzo, Lucia; Navarria, Andrea; Drago, Valentina; Longo, Laura; Mansueto, Silvana; Pignataro, Giacomo; Cicchetti, Americo; Salomone, Salvatore; Drago, Filippo

2016-07-01

Appropriate pricing of medications is one of the ultimate goals for decision makers, but reliable data on the risk/benefit ratio are often lacking when a Marketing Authorization Application is submitted. Here we propose a method to consistently evaluate price adequacy, which we applied to six anticancer medications approved in Italy in recent years. We obtained ratios of cost per survival per day (cost/survival/day) by dividing the total costs of evaluated medications for the median survival gain in days. Each cost/survival/day corresponds to a crude score, with 0 assigned to a cost/survival/day ≥€586. The maximum price considered as adequate was €91 cost/survival/day (score 75) while a score of 100 corresponded to a cost/survival/day ≤€11, based on the thresholds set by the British National Health System (NHS) and the "willingness-to-pay" of the Italian NHS. Crude scores were then adjusted using correction factors for efficacy, safety, quality of life, and prevalence of disease. None of the analyzed medications (abiraterone, afatinib, aflibercept, bevacizumab, dabrafenib, and ipilimumab) achieved a final score of 75, corresponding to adequate pricing. The final score for afatinib was the highest with 55 points. Prices of all the other drugs resulted in being inadequate, with negative final scores for bevacizumab, dabrafenib, and ipilimumab. This method may be considered a tool for the evaluation of appropriateness of price proposed at negotiation and could represent a reliable resource for decision-making. Furthermore, this analysis suggests that most recently approved cancer drugs in Italy do not fulfill price adequacy.

Latent factor structure of a behavioral economic cigarette demand curve in adolescent smokers

PubMed Central

Bidwell, L. Cinnamon; MacKillop, James; Murphy, James G.; Tidey, Jennifer W.; Colby, Suzanne M.

2012-01-01

Behavioral economic demand curves, or quantitative representations of drug consumption across a range of prices, have been used to assess motivation for a variety of drugs. Such curves generate multiple measures of drug demand that are associated with cigarette consumption and nicotine dependence. However, little is known about the relationships among these facets of demand. The aim of the study was to quantify these relationships in adolescent smokers by using exploratory factor analysis to examine the underlying structure of the facets of nicotine incentive value generated from a demand curve measure. Participants were 138 adolescent smokers who completed a hypothetical cigarette purchase task, which assessed estimated cigarette consumption at escalating levels of price/cigarette. Demand curves and five facets of demand were generated from the measure: Elasticity (i.e., 1/α or proportionate price sensitivity); Intensity (i.e., consumption at zero price); Omax (i.e., maximum financial expenditure on cigarettes); Pmax (i.e., price at which expenditure is maximized); and Breakpoint (i.e., the price that suppresses consumption to zero). Principal components analysis was used to examine the latent structure among the variables. The results revealed a two-factor solution, which were interpreted as “Persistence,” reflecting insensitivity to escalating price, and “Amplitude,” reflecting the absolute levels of consumption and price. These findings suggest a two factor structure of nicotine incentive value as measured via a demand curve. If supported, these findings have implications for understanding the relationships among individual demand indices in future behavioral economic studies and may further contribute to understanding of the nature of cigarette reinforcement. PMID:22727784

Industry Perspectives on Market Access of Innovative Drugs: The Relevance for Oncology Drugs.

PubMed

Pauwels, Kim; Huys, Isabelle; Casteels, Minne; Simoens, Steven

2016-01-01

Key Points - Representatives of the pharmaceutical industry call for a broader recognition of value within the assessment and appraisal of innovative drugs- Focus on value within the assessment and appraisal of drugs is jeopardized by financial drives as the side of industry and at the side of the payers- A well-considered value-framework, with attention for patient reported outcomes, societal preferences and dynamic approach on the drug life cycle, needs to be incorporated in assessment and appraisal at national and European level in order to coordinate the views of different stakeholders and allow efficient resource allocation This study presents industry perspectives on the challenges related to market access of innovative drugs in general and oncology drugs in specific. Fifteen interviews were conducted with representatives of pharmaceutical companies and industry associations. Interviewees call for a broader recognition of value within the assessment and appraisal of drugs. According to interviewees, focus on value is jeopardized by the lack of a common value definition across Europe, poor availability and validity of value measures and cost-saving measures such as external reference price setting and cost-effectiveness analysis at the side of the payers. Centralized assessment of relative-effectiveness at European level would provide a common value estimate across member states, independent of financial drivers. Empirical evidence on PRO and societal preferences is however essential in the development of a value definition. Furthermore, value-based pricing would imply a dynamic approach where the price is differentiated across indications and across the lifecycle of the drug, especially in fields such as oncology. Financial drivers however also threat the application of value-based pricing at the side of the industry, making value-based profitability a more appropriate term.

Spending on pharmaceuticals in Italy: macro constraints with local autonomy.

PubMed

Mapelli, Vittorio; Lucioni, Carlo

2003-01-01

Italy has a national health service (SSN) that is moving toward decentralization and empowerment of local health enterprises (LHEs)-the arms of the regions for delivering health services. Drug policy and spending decisions are both influenced by central government and local authorities. At the "macro" level, the government holds the power to decide the amount of drug expenditure, currently at 13% of total SSN expenditure; the pricing policy, price negotiation, reference price, and price cuts; criteria for reimbursement, inclusion in the positive list, and restrictive notes; and the copayments and exemptions. So far, the government concern has been predominantly on cost containment, and its approach in selecting drugs for reimbursement has been cost minimization. Italy has no centralized office for health technology assessment and this hinders the search for an efficient use of drugs. At the "micro" level, however, the LHEs are showing a great vitality in fostering a better use of drugs by general practitioners. One of the tools employed is local voluntary agreements between LHEs and general practitioners (GPs) that may be supported by economic incentives, in cash or in kind. In 2000 there were 61 agreements in place, 31% of total LHEs, which concerned the respect of drug expenditure ceilings and the local development and implementation of clinical guidelines (47% of LHEs). A traditional and widespread tool for controlling drug expenditure is providing GPs with regular reports on their drug prescriptions (59% of LHEs). Monitoring, moral suasion, and clinical guidelines are the main incentives for efficiency at local level, but focus on health outcomes is limited. The cost-containment mentality still prevails and the use of drug budget for purchasing better health is at its very early stage.

76 FR 61469 - Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of...

Federal Register 2010, 2011, 2012, 2013, 2014

2011-10-04

... Amending Commentary .06 to Rule 903 in Order To Simplify the $1 Strike Price Program September 28, 2011... to Rule 903 in order to simplify the $1 Strike Price Program. The text of the proposed rule change is... order to simplify the $1 Strike Price Program (``Program''). In 2003, the Commission issued an order...

Evaluating availability and price of essential medicines in Boston area (Massachusetts, USA) using WHO/HAI methodology.

PubMed

Sharma, Abhishek; Rorden, Lindsey; Ewen, Margaret; Laing, Richard

2016-01-01

Many patients even those with health insurance pay out-of-pocket for medicines. We investigated the availability and prices of essential medicines in the Boston area. Using the WHO/HAI methodology, availability and undiscounted price data for both originator brand (OB) and lowest price generic (LPG) equivalent versions of 25 essential medicines (14 prescription; 11 over-the-counter (OTC)) were obtained from 17 private pharmacies. The inclusion and prices of 26 essential medicines in seven pharmacy discount programs were also studied. The medicine prices were compared with international reference prices (IRPs). In surveyed pharmacies, the OB medicines were less available as compared to the generics. The OB and LPG versions of OTC medicines were 21.33 and 11.53 times the IRP, respectively. The median prices of prescription medicines were higher, with OB and LPG versions at 158.14 and 38.03 times the IRP, respectively. In studied pharmacy discount programs, the price ratios of surveyed medicines varied from 4.4-13.9. While noting the WHO target that consumers should pay no more than four times the IRPs, medicine prices were considerably higher in the Boston area. The prices for medicines included in the pharmacy discount programs were closest to WHO's target. Consumers should shop around, as medicine inclusion and prices vary across discount programs. In order for consumers to identify meaningful potential savings through comparison shopping, price transparency is needed.

International best practices for negotiating 'reimbursement contracts' with price rebates from pharmaceutical companies.

PubMed

Morgan, Steven; Daw, Jamie; Thomson, Paige

2013-04-01

Reimbursement contracts, in which health insurers receive rebates from drug manufacturers instead of paying the transparent list price, are becoming increasingly common worldwide. Through interviews with policy makers in nine high-income countries, we describe the use of these contracts around the globe and identify related policy challenges and best practices. Of the nine countries surveyed, the majority routinely use confidential reimbursement contracts. This alternative to drug coverage at list prices offers benefits but is not without challenges. Payers face increased administrative costs, difficulties enforcing contracts, and reduced information about prices paid by others. Among the best practices identified, policy makers recommend establishing clear and consistent processes for negotiating contracts with relatively simple rebate structures and transparency to the public about the existence, purpose, and type of reimbursement contracts in place. Policy makers should also work to address undesirable price disparities within their countries and internationally, which may occur as a result of this new pricing paradigm.

Current Situation, Determinants, and Solutions to Drug Shortages in Shaanxi Province, China: A Qualitative Study.

PubMed

Yang, Caijun; Wu, Lina; Cai, Wenfang; Zhu, Wenwen; Shen, Qian; Li, Zongjie; Fang, Yu

2016-01-01

Drug shortages were a complex global problem. The aim of this study was to analyze, characterize, and assess the drug shortages, and identify possible solutions in Shaanxi Province, western China. A qualitative methodological approach was conducted during May-June 2015 and December 2015-January 2016. Semi-structured interviews were performed to gather information from representatives of hospital pharmacists, wholesalers, pharmaceutical producers, and local health authorities. Thirty participants took part in the study. Eight traditional Chinese medicines and 87 types of biologicals and chemicals were reported to be in short supply. Most were essential medicines. Five main determinants of drug shortages were detected: too low prices, too low market demands, Good Manufacturing Practice (GMP) issues, materials issues, and approval issues for imported drugs. Five different solutions were proposed by the participants: 1) let the market decide the drug price; 2) establish an information platform; 3) establish a reserve system; 4) enhance the communication among the three parties in the supply chain; and 5) improve hospital inventory management. Western China was currently experiencing a serious drug shortage. Numerous reasons for the shortage were identified. Most drug shortages in China were currently because of "too low prices." To solve this problem, all of the stakeholders, especially the government, needed to participate in managing the drug shortages.

Is response to price equal for those with higher alcohol consumption?

PubMed

Byrnes, Joshua; Shakeshaft, Anthony; Petrie, Dennis; Doran, Christopher M

2016-01-01

To determine if taxation policies that increase the price of alcohol differentially reduce alcohol consumption for heavy drinkers in Australia. A two-part demand model for alcohol consumption is used to determine the price elasticity of alcohol. Quantile regression is used to determine the price elasticity estimates for various levels of consumption. The study uses Australian data collected by the National Drug Strategy Household Survey for the years 2001, 2004 and 2007. Measures of individual annual alcohol consumption were derived from three waves of the National Drug Strategy Household Survey; alcohol prices were taken from market research reports. For the overall population of drinkers, a 1% increase in the price of alcohol was associated with a 0.96% (95% CI -0.35%, -1.57%) reduction in alcohol consumption. For those in the highest 10% of drinkers by average amount consumed, a 1% increase in the price of alcohol was associated with a 1.26% (95% CI 0.82%, 1.70%) reduction in consumption. Within Australia, policies that increase the price of alcohol are about equally effective in relative terms for reducing alcohol consumption both for the general population and among those who drink heavily.

Quantifying Components of Drug Expenditure Inflation: The British Columbia Seniors' Drug Benefit Plan

PubMed Central

Morgan, Steven G

2002-01-01

Objective To quantify the relative and absolute importance of different factors contributing to increases in per capita prescription drug costs for a population of Canadian seniors. Data Sources/Study Setting Data consist of every prescription claim from 1985 to 1999 for the British Columbia Pharmacare Plan A, a tax-financed public drug plan covering all community-dwelling British Columbians aged 65 and older. Study Design Changes in per capita prescription drug expenditures are attributed to changes to four components of expenditure inflation: (1) the pattern of exposure to drugs across therapeutic categories; (2) the mix of drugs used within therapeutic categories; (3) the rate of generic drug product selection; and (4) the prices of unchanged products. Data Collection/Extraction Methods Data were extracted from administrative claims files housed at the UBC Centre for Health Services and Policy Research. Principal Findings Changes in drug prices, the pattern of exposure to drugs across therapeutic categories, and the mix of drugs used within therapeutic categories all caused spending per capita to increase. Incentives for generic substitution and therapeutic reference pricing policies temporarily slowed the cost-increasing influence of changes in product selection by encouraging the use of generic drug products and/or cost-effective brand-name products within therapeutic categories. Conclusions The results suggest that drug plans (and patients) would benefit from more concerted efforts to evaluate the relative cost-effectiveness of competing products within therapeutic categories of drugs. PMID:12479495

Evolution of drug reimbursement in Canada: the Pan-Canadian Pharmaceutical Alliance for new drugs.

PubMed

Husereau, Don; Dempster, William; Blanchard, Adrienne; Chambers, Johanne

2014-12-01

Canada has a unique system of public drug coverage and reimbursement characterized by a centralized review agency that makes funding recommendations along with decentralized authority for delivering health care across 10 provinces and three territories. There has been a significant increase in price negotiation for new pharmaceuticals in the past 10 years, first by individual provinces and now through a collective price negotiation process called the "Pan-Canadian Pharmaceutical Alliance." As of February 2014, the Pan-Canadian Pharmaceutical Alliance has already completed 32 negotiations despite still being in a formative stage; it is anticipated that a formal process will be developed in the coming year. In this article, we describe the evolution of price negotiation in Canada and identify several opportunities for improvement of the current process, including the incorporation of economic considerations into price negotiation. Copyright © 2014 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

Regulation and competition in the Taiwanese pharmaceutical market under national health insurance.

PubMed

Liu, Ya-Ming; Yang, Yea-Huei Kao; Hsieh, Chee-Ruey

2012-05-01

This article investigates the determinants of the prices of pharmaceuticals and their impact on the demand for prescription drugs in the context of Taiwan's pharmaceutical market where medical providers earn profit directly from prescribing and dispensing drugs. Based on product-level data, we find evidence that the profit-seeking behavior of the medical providers in the prescription drug market transfers the force of competition from the unregulated wholesale market to the regulated retail market and hence market competition still plays an important role in the determination of the regulated price. We also find that the profit-seeking behavior plays a similar role to advertising in that it increases the brand loyalty and hence lowers price elasticity. An important implication of our study is that the institutional features in the pharmaceutical market matter in shaping the nature of pharmaceutical competition and the responsiveness of pharmaceutical consumption with respect to changes in price. Copyright © 2012 Elsevier B.V. All rights reserved.

Pharmaceutical pricing and reimbursement in China: When the whole is less than the sum of its parts.

PubMed

Hu, Jia; Mossialos, Elias

2016-05-01

In recent years, there has been rapid growth in pharmaceutical spending in China. In addition, the country faces many challenges with regards to the quality, pricing and affordability of drugs. Pricing and reimbursement are important aspects of pharmaceutical policy that must be prioritised in order to address the many challenges. This review draws on multiple sources of information. A review of the academic and grey literature along with official government statistics were combined with information from seminars held by China's State Council Development Research Center to provide an overview of pharmaceutical pricing and reimbursement in China. Pricing and reimbursement policy were analysed through a framework that incorporates supply-side policies, proxy-demand policies and demand-side policies. China's current pharmaceutical policies interact in such a way to create dysfunction in the form of high prices, low drug quality, irrational prescribing and problems with access. Finally, the country's fragmented regulatory environment hampers pharmaceutical policy reform. The pricing and reimbursement policy landscape can be improved through higher drug quality standards, greater market concentration, an increase in government subsidies, quality-oriented tendering, wider implementation of the zero mark-up policy, through linking reimbursement with rational prescribing, and the promotion of health technology assessment and comparative effectiveness research. Addressing broader issues of regulatory fragmentation, the lack of transparency and corruption will help ensure that policies are created in a coherent, evidence-based fashion. Copyright © 2016 Elsevier Ireland Ltd. All rights reserved.

77 FR 52370 - Agency Information Collection Activities; Submission for OMB Review; Comment Request...

Federal Register 2010, 2011, 2012, 2013, 2014

2012-08-29

... for OMB Review; Comment Request; International Price Program U.S. Export and Import Price Indexes...) sponsored information collection request (ICR) titled, ``International Price Program U.S. Export and Import Price Indexes to the Office of Management and Budget (OMB) for review and approval for continued use in...

7 CFR 220.20 - Free and reduced price breakfasts.

Code of Federal Regulations, 2011 CFR

2011-01-01

... 7 Agriculture 4 2011-01-01 2011-01-01 false Free and reduced price breakfasts. 220.20 Section 220..., DEPARTMENT OF AGRICULTURE CHILD NUTRITION PROGRAMS SCHOOL BREAKFAST PROGRAM § 220.20 Free and reduced price breakfasts. The determination of the children to whom free and reduced price breakfasts are to be served...

7 CFR 220.20 - Free and reduced price breakfasts.

Code of Federal Regulations, 2010 CFR

2010-01-01

... 7 Agriculture 4 2010-01-01 2010-01-01 false Free and reduced price breakfasts. 220.20 Section 220..., DEPARTMENT OF AGRICULTURE CHILD NUTRITION PROGRAMS SCHOOL BREAKFAST PROGRAM § 220.20 Free and reduced price breakfasts. The determination of the children to whom free and reduced price breakfasts are to be served...

48 CFR 235.006 - Contracting methods and contract type.

Code of Federal Regulations, 2010 CFR

2010-10-01

... Defense (Acquisition, Technology, and Logistics) (USD(AT&L)) of an intent not to exercise a fixed-price... award a fixed-price type contract for a development program effort unless— (1) The level of program risk permits realistic pricing; (2) The use of a fixed-price type contract permits an equitable and sensible...

Affordability Challenges to Value-Based Pricing: Mass Diseases, Orphan Diseases, and Cures.

PubMed

Danzon, Patricia M

2018-03-01

To analyze how value-based pricing (VBP), which grounds the price paid for pharmaceuticals in their value, can manage "affordability" challenges, defined as drugs that meet cost-effectiveness thresholds but are "unaffordable" within the short-run budget. Three specific contexts are examined, drawing on recent experience. First, an effective new treatment for a chronic, progressive disease, such as hepatitis C, creates a budget spike that is transitory because initial prevalence is high, relative to current incidence. Second, "cures" that potentially provide lifetime benefits may claim abnormally high VBP prices, with high immediate budget impact potentially/partially offset by deferred cost savings. Third, although orphan drugs in principle target rare diseases, in aggregate they pose affordability concerns because of the growing number of orphan indications and increasingly high prices. For mass diseases, the transitory budget impact of treating the accumulated patient stock can be managed by stratified rollout that delays treatment of stable patients and prioritizes patients at high risk of deterioration. Delay spreads the budget impact and permits potential savings from launch of competing treatments. For cures, installment payments contingent on outcomes could align payment flows and appropriately shift risk to producers. This approach, however, entails high administrative and incentive costs, especially if applied across multiple payers in the United States. For orphan drugs, the available evidence on research and development trends and returns argues against the need for a higher VBP threshold to incentivize research and development in orphan drugs, given existing statutory benefits under orphan drug legislation. Copyright © 2018 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.

75 FR 50847 - Cotton Program Changes for Upland Cotton, Adjusted World Price, and Active Shipping Orders

Federal Register 2010, 2011, 2012, 2013, 2014

2010-08-18

... Cotton Program Changes for Upland Cotton, Adjusted World Price, and Active Shipping Orders AGENCY... previous final rule that implemented the 2008 Farm Bill provisions for the cotton program. The correction removes definitions that are no longer used concerning Northern Europe prices for cotton. CCC is also...

76 FR 20764 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and...

Federal Register 2010, 2011, 2012, 2013, 2014

2011-04-13

... Rule Change To Expand the $2.50 Strike Price Program April 8, 2011. Pursuant to Section 19(b)(1) of the... expand the $2.50 Strike Price program. The text of the proposed rule change is available on the Exchange... proposed rule change is to expand the current $2.50 Strike Price Program (``Program'') \\5\\ to permit the...

76 FR 19160 - Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule...

Federal Register 2010, 2011, 2012, 2013, 2014

2011-04-06

... LLC To Expand the $2.50 Strike Price Program March 31, 2011. Pursuant to Section 19(b)(1) of the... proposes to amend Commentary .07 to NYSE Amex Rule 903 to expand the $2.50 Strike Price Program. The text... expand the current $2.50 Strike Price Program (``Program'')\\3\\ to permit the listing of options with $2...

Effects on the medical revenue of comprehensive pricing reform in Chinese urban public hospitals after removing drug markups: case of Nanjing.

PubMed

Tang, Wenxi; Xie, Jing; Lu, Yijuan; Liu, Qizhi; Malone, Daniel; Ma, Aixia

2018-04-01

The State Council of China requires that all urban public hospitals must eliminate drug markups by September 2017, and that hospital drugs must be sold at the purchase price. Nanjing-one of the first provincial capital cities to implement the reform-is studied to evaluate the effects of the comprehensive reform on drug prices in public hospitals, and to explore differential compensation plans. Sixteen hospitals were selected, and financial data were collected over the 48-month period before the reform and for 12 months after the reform. An analysis was carried out using a simple linear interrupted time series model. The average difference ratio of drug surplus fell 13.39% after the reform, and the drug markups were basically eliminated. Revenue from medical services showed a net growth of 28.25%. The overall compensation received from government financial budget and medical service revenue growth was 103.69% for the loss from policy-permitted 15% markup sales, and 116.48% for the net loss. However, there were large differences in compensation levels at different hospitals, ranging from -21.92% to 413.74% by medical services revenue growth, causing the combined rate of both financial and service compensation to vary from 28.87-413.74%, There was a significant positive correlation between the services compensation rate and the proportion of medical service revenue (p < .001), and the compensation rate increased by 8% for every 1% increase in the proportion of services revenue. Nanjing's pricing and compensation reform has basically achieved the policy targets of eliminating the drug markups, promoting the growth of medical services revenue, and adjusting the structure of medical revenue. However, the growth rate of service revenue of hospitals varied significantly from one another. Nanjing's reform represents successful pricing and compensation reform in Chinese urban public hospitals. It is recommended that a differentiated and dynamic compensation plan should be established in accordance with the revenue structure of different hospitals.

Pricing medicines: theory and practice, challenges and opportunities.

PubMed

Gregson, Nigel; Sparrowhawk, Keiron; Mauskopf, Josephine; Paul, John

2005-02-01

The pricing of medicines has become one of the most hotly debated topics of recent times, with the pharmaceutical industry seemingly being attacked from all quarters. From a company perspective, determining the price for each new product is more crucial than ever, given the present dearth of new drug introductions. But how are pricing strategies developed in practice? What is value-based pricing and how are financial models of return on investment constructed? What are the challenges faced in setting the price for a particular product, and how will scientific and environmental trends provide future pricing challenges or opportunities?

Implementing differential pricing for essential medicines via country-specific bilateral negotiated discounts.

PubMed

Tetteh, Ebenezer Kwabena

2009-01-01

It is widely acknowledged that limited access to essential medicines undermines efforts at improving the health and economic well-being of low-income populations. This has spurred on a number of solutions, including differential pricing based on the economics of price discrimination. A desirable feature of differential pricing is its potential ability to reconcile static and dynamic efficiency concerns. There are, however, various shades of differential pricing and this paper aims to evaluate their consistency with economic theory. Starting with the report of the workshop on 'Differential Pricing and Financing of Essential Drugs' held by secretariats of the World Trade Organization and WHO in Hosbjor, Norway, in 2001, this paper takes issue with how differential pricing has been defined as a tool for improving access to essential drug benefits. The paper notes that inadequate attention has been given to policies and institutional arrangements for creating, expressing and maintaining 'truly' price-elastic demands in low-income nations and for segmenting markets. In addition, considerations of equity and solidarity have distracted policy advocates from balancing conflicting, yet well intended, views and general rules. The paper argues why differential pricing should be implemented via country-specific bilateral negotiated discounts. It maintains that it is feasible to muster an environment conducive to profitable differential pricing whilst satisfying general rules and concerns about self-reliance, transparency, accountability, equity and solidarity.

Prices and availability of pharmaceuticals: evidence from nine countries.

PubMed

Danzon, Patricia M; Furukawa, Michael F

2003-01-01

This study compares average price levels for pharmaceuticals in eight countries--Canada, Chile, France, Germany, Italy, Japan, Mexico, and the United Kingdom--relative to the United States. Our most comprehensive indexes, adjusted for U.S. manufacturer discounts, show Japan's prices to be higher than U.S. prices, and other countries' prices ranging from 6 percent to 33 percent lower than U.S. prices. The decline of the Canadian dollar and rise of the U.K. pound contribute to the finding of lower Canadian prices and higher U.K. prices in 1999 than in 1992. Our findings suggest that U.S.-foreign price differentials are roughly in line with income and smaller for drugs than for other medical services.

Assessment of the impact of market regulation in Mali on the price of essential medicines provided through the private sector.

PubMed

Maïga, Diadié; Williams-Jones, Bryn

2010-10-01

In 1998, the government of Mali adopted a national pharmaceutical policy aimed at promoting a supply system for generic essential medicines that would guarantee equal access for all citizens. Distribution and delivery is a shared responsibility of both public and private sectors (wholesalers and pharmacies). To influence private sector behaviour, the national policy uses a combination of government regulation and market forces. In 2006, the government issued a decree fixing maximum prices in the private sector for 107 prescription drugs from the national list of 426 essential medicines. The current study assessed the impact of this intervention on the evolution of market prices (wholesale and retail), and the subsequent availability and public access to essential medicines in Mali. A cross-sectional descriptive survey was conducted in February and May 2006, and January 2009, with 16 wholesalers and 30 private drugstores in Bamako, Mali. The overall availability of essential medicines at private wholesalers (p=1) and pharmacies (p=0.53) was identical before and after the enforcement of the 2006 decree fixing maximum drug prices. Contrary to concerns expressed by wholesalers and pharmacies, and the other stakeholders, the decree did not impact negatively on availability of essential medicines. In fact, median wholesale prices in 2009 were 25.6% less than those fixed by the decree. In private pharmacies, retail prices were only 3% more expensive than the recommended prices, compared with being 25.5% more expensive prior to enforcement of the decree. The study shows that prices of essential medicines in Mali have evolved favourably towards the prices recommended by the government decree. Further, the study contributes to mounting evidence that market regulation by governments does not necessarily negatively affect drug availability; in fact, given the reduction in prices, the study shows that Malians arguably have better access to more affordable essential medicines. Copyright © 2010 Elsevier Ireland Ltd. All rights reserved.

Sustainable rare diseases business and drug access: no time for misconceptions.

PubMed

Rollet, Pierrick; Lemoine, Adrien; Dunoyer, Marc

2013-07-23

Legislative incentives enacted in Europe through the Regulation (EC) No. 141/2000 to incentivize orphan drug development have over the last 12 years constituted a powerful impetus toward R&D directed at the rare diseases population. However, despite therapeutic promises contained in these projects and significant economic impact linked to burgeoning R&D expenditures, the affordability and value of OMPs has become a topic of health policy debate in Europe fueled by the perception that OMPs have high acquisition costs, and by misconceptions around pricing dynamics and rare-diseases business models. In order to maintain sustainable patient access to new and innovative therapies, it is essential to address these misconceptions, and to ensure the successful continuation of a dynamic OMPs R&D within rare-diseases public health policy. Misconceptions abound regarding the pricing of rare diseases drugs and reflect a poor appreciation of the R&D model and the affordability and value of OMPs. Simulation of potential financial returns of small medium sized rare diseases companies focusing on high priced drugs show that their economic returns are likely to be close to their cost of capital. Research in rare diseases is a challenging endeavour characterised by high fixed costs in which companies accrue substantial costs for several years before potentially generating returns from the fruits of their investments. Although heavily dependent upon R&D capabilities of each individual company or R&D organization, continuous flow of R&D financial investment should allow industry to increasingly include efficiencies in research and development in cost considerations to its customers. Industry should also pro-actively work on facilitating development of a specific value based pricing approach to help understanding what constitute value in rare diseases. Policy makers must reward innovation based upon unmet need and patient outcome. Broader understanding by clinicians, the public, and policy makers of the complexity of clinical programs to deliver OMPs to market is required to better comprehend the decisions needed and made by industry. In parallel, an overt effort to consider the impact of public policies on R&D investments is key to enable policy makers to better reconcile the incentives provided by public policy decisions and companies investments decisions in a more positive manner.

Sustainable rare diseases business and drug access: no time for misconceptions

PubMed Central

2013-01-01

Legislative incentives enacted in Europe through the Regulation (EC) No. 141/2000 to incentivize orphan drug development have over the last 12 years constituted a powerful impetus toward R&D directed at the rare diseases population. However, despite therapeutic promises contained in these projects and significant economic impact linked to burgeoning R&D expenditures, the affordability and value of OMPs has become a topic of health policy debate in Europe fueled by the perception that OMPs have high acquisition costs, and by misconceptions around pricing dynamics and rare-diseases business models. In order to maintain sustainable patient access to new and innovative therapies, it is essential to address these misconceptions, and to ensure the successful continuation of a dynamic OMPs R&D within rare-diseases public health policy. Misconceptions abound regarding the pricing of rare diseases drugs and reflect a poor appreciation of the R&D model and the affordability and value of OMPs. Simulation of potential financial returns of small medium sized rare diseases companies focusing on high priced drugs show that their economic returns are likely to be close to their cost of capital. Research in rare diseases is a challenging endeavour characterised by high fixed costs in which companies accrue substantial costs for several years before potentially generating returns from the fruits of their investments. Although heavily dependent upon R&D capabilities of each individual company or R&D organization, continuous flow of R&D financial investment should allow industry to increasingly include efficiencies in research and development in cost considerations to its customers. Industry should also pro-actively work on facilitating development of a specific value based pricing approach to help understanding what constitute value in rare diseases. Policy makers must reward innovation based upon unmet need and patient outcome. Broader understanding by clinicians, the public, and policy makers of the complexity of clinical programs to deliver OMPs to market is required to better comprehend the decisions needed and made by industry. In parallel, an overt effort to consider the impact of public policies on R&D investments is key to enable policy makers to better reconcile the incentives provided by public policy decisions and companies investments decisions in a more positive manner. PMID:23879976

Access to benznidazole for Chagas disease in the United States-Cautious optimism?

PubMed

Alpern, Jonathan D; Lopez-Velez, Rogelio; Stauffer, William M

2017-09-01

Drugs for neglected tropical diseases (NTD) are being excessively priced in the United States. Benznidazole, the first-line drug for Chagas disease, may become approved by the Food and Drug Administration (FDA) and manufactured by a private company in the US, thus placing it at risk of similar pricing. Chagas disease is an NTD caused by Trypanosoma cruzi; it is endemic to Latin America, infecting 8 million individuals. Human migration has changed the epidemiology causing nonendemic countries to face increased challenges in diagnosing and managing patients with Chagas disease. Only 2 drugs exist with proven efficacy: benznidazole and nifurtimox. Benznidazole has historically faced supply problems and drug shortages, limiting accessibility. In the US, it is currently only available under an investigational new drug (IND) protocol from the CDC and is provided free of charge to patients. However, 2 companies have stated that they intend to submit a New Drug Application (NDA) for FDA approval. Based on recent history of companies acquiring licensing rights for NTD drugs in the US with limited availability, it is likely that benznidazole will become excessively priced by the manufacturer-paradoxically making it less accessible. However, if the companies can be taken at their word, there may be reason for optimism.

Issues in drug pricing, reimbursement, and access in China with references to other Asia-Pacific region.

PubMed

Chen, Yingyao; Schweitzer, Stuart O

2008-03-01

Pharmaceutical policies have become paramount in China and other countries of the Asia-Pacific region because of rapidly rising expenditures on drugs. The problems are especially acute in China because expenditures on drugs are typically so large. This article intends to review effects of the policy of drug expenditure containment with primary reference to China, and it proposes some measures to deal with rising pharmaceutical expenditures. This article overviews the issues of pharmaceutical pricing, reimbursement, and access in China, and there are a number of policies or measures to control pharmaceutical expenditures. Nevertheless, the effect of those policies of containing drug expenditure is ambiguous so far, and some policies have negative impacts to the manufacturers, providers, and patients. Some underlying reasons are identified. First, the policy's focus on health-care costs is, to some extent, neglected. Second, the governance of the health sector, including pharmaceutical sector, needs to be improved by both the government and the market. This article proposes some suggestions to change policies in drug pricing, reimbursement, and access, and make policies more responsive to the main problem of rising health-care expenditures rather than that of pharmaceutical expenditures alone. The policy suggestions include those of setting the reasonable price for pharmaceuticals, instituting reasonable incentives for all health decision-makers to encourage efficient use of pharmaceuticals and other health resources, and making pharmaceutical markets more efficient, either in the demand or the supply side.

Affordably priced new drugs for poor populations: Approaches for a global solution.

PubMed

Mossialos, E; Dukes, G

2001-01-01

A very large proportion of the world's population, particularly the poor in developing countries, still have insufficient access or none at all to treatment with essential drugs. This situation can arise with any drug and for various reasons, but it exists in extreme form where the drug is irreplaceable yet entirely unaffordable. That is the case with new or relatively recent drugs which could save lives or eradicate endemic disease, but which (particularly during their period of patent protection) are usually sold at prices higher than patients or their community can afford to pay. The consequences of this situation in terms of persistent illness, suffering and large-scale mortality are felt most immediately in the developing world, but because today disease travels so rapidly it represents a threat to the world as a whole. As of late 2001, only a number of limited ad hoc solutions to these problems have emerged. They have provided relief in a number of specific situations but they offer no guarantee of permanence, are applied mainly at the discretion of multinational companies or aid agencies and leave the bulk of the global problem unchanged. The problem must be capable of a broad and lasting solution since the basic costs of manufacturing and distributing most of the drugs in question are not in themselves prohibitive. High prices are primarily a consequence of the need to provide an adequate return on investment, to finance research and development, and to pay the very high costs of promotion in intensively competitive markets. At present, however, these secondary costs are almost entirely covered by the sales income from industrialized countries, and that is unlikely to change. In the developing world, where the sales of such drugs has been negligible, it must be possible to supply them in more adequate quantities, at a fair and affordable prices which are very close to the basic manufacturing and distribution costs. This will require an innovative commercial approach but it may not demand a sacrifice; in many instances it will be the key to opening new emergent markets where low profit margins can be outweighed by high unit sales. The feasibility of sharply differential pricing for drugs has indeed been demonstrated already in various countries and regions where specific agreements for low-cost supply have operated successfully, for example, for vaccines and contraceptives but also for some therapeutic drugs still protected by patent. If this type of approach can be extended so that important new drugs are as a matter of routine made available to developing countries at highly preferential prices it would contribute greatly to the solution of major health problems. Naturally a number of safeguards are necessary. The most important of these is that drugs sold at "minimal" prices to a developing country must not leak across its borders to be re-sold at a profit elsewhere. Experience with vaccine and contraceptive agreements shows that this risk can be virtually eliminated, although the parallels with therapeutic drugs are not exact and the possibility of theft and "leakage" might be greater with such items, especially where they have a high potential market value. Nor must a drug, which enters a developing country at a preferential price then be burdened by taxes, customs duties or excessive wholesale or retail profit margins that might again put it out of reach of those who need it. Again, one would not wish to discourage the further evolution of good-quality drug manufacturing in developing countries, which is already making an important contribution to health and to the national economy. Safeguards on these and other matters could well be incorporated into a global working agreement between all parties, seeking to define and promote the use of minimum-level pricing for vital new drugs. That agreement would be implemented through specific arrangements and unilateral initiatives of an already familiar type; these would be centrally registered and monitored, as would situations of ongoing need. In this way, activities could be better attuned to need, progress assessed and the entire situation rendered transparent.

[Prudent use price controls in Chinese medicines market: based on statistical data analysis].

PubMed

Yang, Guang; Wang, Nuo; Huang, Lu-Qi; Qiu, Hong-Yan; Guo, Lan-Ping

2014-01-01

A dispute about the decreasing-price problem of traditional Chinese medicine (TCM) has recently arisen. This article analyzes the statistical data of 1995-2011 in China, the results showed that the main responsibility of expensive health care has no direct relationship with the drug price. The price index of TCM rose significantly slower than the medicine prices, the production margins of TCM affected by the material prices has been diminishing since 1995, continuous price reduction will further depress profits of the TCM industry. Considering the pros and cons of raw materials vary greatly in price, decreasing medicine price behavior will force enterprises to use inferior materials in order to maintain corporate profits. The results have the guiding meaning to medicine price management.

Benefit assessment in Germany: implications for price discounts.

PubMed

Theidel, Ulrike; von der Schulenburg, J-Matthias Graf

2016-12-01

The AMNOG regulation, introduced in 2011 in Germany, changed the game for new drugs. Now, the industry is required to submit a dossier to the GBA (the central decision body in the German sickness fund system) to show additional benefit. After granting the magnitude of the additional benefit by the GBA, the manufacturer is entitled to negotiate the reimbursement price with the GKV-SV (National Association of Statutory Health Insurance Funds). The reimbursement price is defined as a discount on the drug price at launch. As the price or discount negotiations between the manufacturers and the GKV-SV takes place behind closed doors, the factors influencing the results of the negotiation are not known. The aim of this evaluation is to identify factors influencing the results of the AMNOG price negotiation process. The analysis was based on a dataset containing detailed information on all assessments until the end of 2015. A descriptive analysis was followed by an econometric analysis of various potential factors (benefit rating, size of target population, deviating from appropriate comparative therapy and incorporation of HRQoL-data). Until December 2015, manufacturers and the GKV-SV finalized 96 negotiations in 193 therapeutic areas, based on assessment conducted by the GBA. The GBA has granted an additional benefit to 100/193 drug innovations. Negotiated discount was significantly higher for those drugs without additional benefit (p = 0.030) and non-orphan drugs (p = 0.015). Smaller population size, no deviation from recommended appropriate comparative therapy and the incorporation of HRQoL-data were associated with a lower discount on the price at launch. However, neither a uni- nor the multivariate linear regression showed enough power to predict the final discount. Although the AMNOG regulation implemented binding and strict rules for the benefit assessment itself, the outcome of the discount negotiations are still unpredictable. Obviously, negotiation tactics, the current political situation and soft factors seem to play a more influential role for the outcome of the negotiations than the five hard and known factors analyzed in this study. Further research is needed to evaluate additional factors.

Determinants of Market Exclusivity for Prescription Drugs in the United States.

PubMed

Kesselheim, Aaron S; Sinha, Michael S; Avorn, Jerry

2017-11-01

The high prices of brand-name prescription drugs are a growing source of controversy in the United States. Manufacturers of brand-name drugs can command high prices because they are protected from generic competition by two types of government-granted monopoly rights. The first are patents on the drugs that generally define the basic period of brand-name-only sales. The second is awarded at the time of US Food and Drug Administration (FDA) approval and usually defines the minimum time until a generic can be sold. The initial patents last for 20 years and may be extended to account for time spent in clinical trials and regulatory review; other laws prevent approval of other manufacturers' versions of new drugs for about 6 to 7 years, and for new biologics for 12 years. Overall, most new drugs receive about 12 to 16 years of market exclusivity from both kinds of monopoly protection combined. We reviewed the peer-reviewed medical and health policy literature to identify studies that described the different types of patent protection and regulatory exclusivities that shield brand-name prescription drugs from competition and thus help to sustain high drug prices. We also identified potential policy reforms intended to modify exclusivity periods to address public health needs by balancing drug affordability and industry revenue. The goal of policy in this area should be to ensure that drug market exclusivity periods provide for fair return on investment but do not indefinitely block availability of lower-cost generic drugs.

Bib Pharma Monopoly: Why Consumers Keep Landing on "Park Place" and How the Game is Rigged.

PubMed

Levy, Mark S

Now, more than ever before, pharmacologists are contributing medical advances to confront ravaging disease. They are developing drugs to mitigate the effects of Alzheimer’s, HIV, multiple sclerosis, and various forms of cancer. To capitalize on the opportunity, brand-name pharmaceutical firms are patenting these drugs, consequently guarding formulas and, with it, profits. Patents grant brand-name firms market exclusivity, which essentially allows them to set their own prices. Even though brand-name firms are investing some of their capital to cultivate new drugs, they also are enjoying gigantic revenue streams, absurd profit margins, and seemingly unfettered control of their respective markets. Consequently, sick patients are unable to afford their medication; high prices are bankrupting consumers in the absence of reasonably-priced generic alternatives. Despite the fact that generic drugs contain identical ingredients, cure the same symptoms, and cost 70% less, brand-name drugs persistently dominate their generic counterparts. Indeed, brand-name firms are improperly preventing generic market entry. Without generic competition, no watchdog exists to curb big pharma’s prohibitive prices. Despite the Supreme Court’s fleeting fix in FTC v. Actavis, which condemned reverse payment settlements that precluded competition, brand-name firms are employing other tactics predatorily to extend their market exclusivity and charge consumers unaffordable prices. To prevent brand-name abuse and help infirm patients afford their medication, this Comment proposes that courts apply federal antitrust law to brand-name firms that attempt to monopolize a pharmaceutical market through anticompetitive means, particularly by abusing Risk Evaluation & Mitigation Strategies (REMS) and by "product hopping." To combat exclusionary conduct, courts should mirror the “rule of reason” framework set forth in Actavis and apply an "enhanced" version specifically tailored to the pharmaceutical industry, giving stronger credence to generic challengers. In addition to finding brand-name tactics exclusionary, this Comment also proposes that courts adopt a bright-line rule prohibiting brand-name firms from exploiting the "legitimate business" defense to immunize their destructive conduct. The current framework perpetuates abuse and grants brand-name firms ostensibly indefinite monopolies. Analyzing brand-name defensive tactics under federal antitrust law would facilitate generic market entry and consequently moderate drug prices. Even after sacrificing their entire financial portfolios, patients are still unable to afford their medication. This Comment interprets Actavis as prohibiting the “legitimate business” defense and provides a remedy to deserving consumers by preventing REMS abuse and product hopping, fostering generic competition, and tempering excessive drug prices.

Latent factor structure of a behavioral economic cigarette demand curve in adolescent smokers.

PubMed

Bidwell, L Cinnamon; MacKillop, James; Murphy, James G; Tidey, Jennifer W; Colby, Suzanne M

2012-11-01

Behavioral economic demand curves, or quantitative representations of drug consumption across a range of prices, have been used to assess motivation for a variety of drugs. Such curves generate multiple measures of drug demand that are associated with cigarette consumption and nicotine dependence. However, little is known about the relationships among these facets of demand. The aim of the study was to quantify these relationships in adolescent smokers by using exploratory factor analysis to examine the underlying structure of the facets of nicotine incentive value generated from a demand curve measure. Participants were 138 adolescent smokers who completed a hypothetical cigarette purchase task, which assessed estimated cigarette consumption at escalating levels of price/cigarette. Demand curves and five facets of demand were generated from the measure: Elasticity (i.e., 1/α or proportionate price sensitivity); Intensity (i.e., consumption at zero price); O(max) (i.e., maximum financial expenditure on cigarettes); P(max) (i.e., price at which expenditure is maximized); and Breakpoint (i.e., the price that suppresses consumption to zero). Principal components analysis was used to examine the latent structure among the variables. The results revealed a two-factor solution, which were interpreted as "Persistence," reflecting insensitivity to escalating price, and "Amplitude," reflecting the absolute levels of consumption and price. These findings suggest a two factor structure of nicotine incentive value as measured via a demand curve. If supported, these findings have implications for understanding the relationships among individual demand indices in future behavioral economic studies and may further contribute to understanding of the nature of cigarette reinforcement. Copyright © 2012 Elsevier Ltd. All rights reserved.

Market Access Agreements for pharmaceuticals in Europe: diversity of approaches and underlying concepts.

PubMed

Jarosławski, Szymon; Toumi, Mondher

2011-10-08

Market Access Agreements (MAA) between pharmaceutical industry and health care payers have been proliferating in Europe in the last years. MAA can be simple discounts from the list price or very sophisticated schemes with inarguably high administrative burden. We distinguished and defined from the health care payer perspective three kinds of MAA: Commercial Agreements (CA), Payment for Performance Agreements (P4P) and Coverage with Evidence Development (CED). Apart from CA, the agreements assumed collection and analysis of real-life health outcomes data, either from a cohort of patients (CED) or on per patient basis (P4P). We argue that while P4P aim at reducing drug cost to payers without a systematic approach to addressing uncertainty about drugs' value, CED were implemented provisionally to reduce payer's uncertainty about value of a medicine within a defined time period. We are of opinion that while CA and P4P have a potential to reduce payers' expenditure on costly drugs while maintaining a high list price, CED address initial uncertainty related to assessing the real-life value of new drugs and enable a final HTA recommendation or reimbursement and pricing decisions. Further, we suggest that real cost to health care payers of drugs in CA and P4P should be made publicly available in a systematic manner, to avoid a perverse impact of these MAA types on the international reference pricing system.

Paying the right price for pharmaceuticals: a case study of why the comparator matters.

PubMed

Spinks, Jean M; Richardson, Jeff R J

2011-08-01

This article considers the pricing policy for pharmaceuticals in Australia, which is widely seen as having achieved low drug prices. However, compared to New Zealand, the evidence implies that Australia might have improved its performance significantly if it had proactively sought market best pricing. The Australian record suggests that the information sought by authorities may not be sufficient for optimal pricing and that the economic evaluation of pharmaceuticals may be neither necessary nor sufficient for achieving this goal.

[The French medecine pricing committee and the medicine economic policy: Rules and competences].

PubMed

Giorgi, D

2017-09-01

The French medicine pricing committee (CEPS), a governmental and inter-institutional body exercises essential competences for the regulation of the economy of the reimbursable drugs in France. It provides a good example of administered price regulation. It also supervises the proper use of products (control of promotion, conventional control of sales volumes). Finally, it regulates the annual envelope of drug expenditures by means of discounts paid by pharmaceutical companies. The article presents the legal criteria and the doctrine of price setting used in France. It details the types of market access contracts concluded by the CEPS. It specifies the conditions governing the annual envelope of expenditures on reimbursable medicines. Copyright © 2017 Académie Nationale de Pharmacie. Published by Elsevier Masson SAS. All rights reserved.

Parallel imports and the pricing of pharmaceutical products: evidence from the European Union.

PubMed

Ganslandt, Mattias; Maskus, Keith E

2004-09-01

We consider policy issues regarding parallel imports (PIs) of brand-name pharmaceuticals in the European Union, where such trade is permitted. We develop a simple model in which an original manufacturer competes in its home market with PI firms. The model suggests that for small trade costs the original manufacturer will accommodate the import decisions of parallel traders and that the price in the home market falls as the volume of parallel imports rises. Using data from Sweden we find that the prices of drugs subject to competition from parallel imports fell relative to other drugs over the period 1994-1999. Econometric analysis finds that parallel imports significantly reduced manufacturing prices, by 12-19%. There is evidence that this effect increases with multiple PI entrants.

Drug Pricing Evolution in Hepatitis C.

PubMed

Vernaz, Nathalie; Girardin, François; Goossens, Nicolas; Brügger, Urs; Riguzzi, Marco; Perrier, Arnaud; Negro, Francesco

2016-01-01

We aimed to determine the association between the stepwise increase in the sustained viral response (SVR) and Swiss and United States (US) market prices of drug regimens for treatment-naive, genotype 1 chronic hepatitis C virus (HCV) infection in the last 25 years. We identified the following five steps in the development of HCV treatment regimens: 1) interferon (IFN)-α monotherapy in the early '90s, 2) IFN-α in combination with ribavirin (RBV), 3) pegylated (peg) IFN-α in combination with RBV, 4) the first direct acting antivirals (DAAs) (telaprevir and boceprevir) in combination with pegIFN-α and RBV, and 5) newer DAA-based regimens, such as sofosbuvir (which is or is not combined with ledipasvir) and fixed-dose combination of ritonavir-boosted paritaprevir and ombitasvir in combination with dasabuvir. We performed a linear regression and mean cost analysis to test for an association between SVRs and HCV regimen prices. We conducted a sensitivity analysis using US prices at the time of US drug licensing. We selected randomized clinical trials of drugs approved for use in Switzerland from 1997 to July 2015 including treatment-naïve patients with HCV genotype 1 infection. We identified a statistically significant positive relationship between the proportion of patients achieving SVRs and the costs of HCV regimens in Switzerland (with a bivariate ordinary least square regression yielding an R2 measure of 0.96) and the US (R2 = 0.95). The incremental cost per additional percentage of SVR was 597.14 USD in Switzerland and 1,063.81 USD in the US. The pricing of drugs for HCV regimens follows a value-based model, which has a stable ratio of costs per achieved SVR over 25 years. Health care systems are struggling with the high resource use of these new agents despite their obvious long-term advantages for the overall health of the population. Therefore, the pharmaceutical industry, health care payers and other stakeholders are challenged with finding new drug pricing schemes to treat the entire population infected with HCV.

Drug Pricing Evolution in Hepatitis C

PubMed Central

Vernaz, Nathalie; Girardin, François; Goossens, Nicolas; Brügger, Urs; Riguzzi, Marco; Perrier, Arnaud; Negro, Francesco

2016-01-01

Objective We aimed to determine the association between the stepwise increase in the sustained viral response (SVR) and Swiss and United States (US) market prices of drug regimens for treatment-naive, genotype 1 chronic hepatitis C virus (HCV) infection in the last 25 years. We identified the following five steps in the development of HCV treatment regimens: 1) interferon (IFN)-α monotherapy in the early '90s, 2) IFN-α in combination with ribavirin (RBV), 3) pegylated (peg) IFN-α in combination with RBV, 4) the first direct acting antivirals (DAAs) (telaprevir and boceprevir) in combination with pegIFN-α and RBV, and 5) newer DAA-based regimens, such as sofosbuvir (which is or is not combined with ledipasvir) and fixed-dose combination of ritonavir-boosted paritaprevir and ombitasvir in combination with dasabuvir. Design We performed a linear regression and mean cost analysis to test for an association between SVRs and HCV regimen prices. We conducted a sensitivity analysis using US prices at the time of US drug licensing. We selected randomized clinical trials of drugs approved for use in Switzerland from 1997 to July 2015 including treatment-naïve patients with HCV genotype 1 infection. Results We identified a statistically significant positive relationship between the proportion of patients achieving SVRs and the costs of HCV regimens in Switzerland (with a bivariate ordinary least square regression yielding an R2 measure of 0.96) and the US (R2 = 0.95). The incremental cost per additional percentage of SVR was 597.14 USD in Switzerland and 1,063.81 USD in the US. Conclusion The pricing of drugs for HCV regimens follows a value-based model, which has a stable ratio of costs per achieved SVR over 25 years. Health care systems are struggling with the high resource use of these new agents despite their obvious long-term advantages for the overall health of the population. Therefore, the pharmaceutical industry, health care payers and other stakeholders are challenged with finding new drug pricing schemes to treat the entire population infected with HCV. PMID:27310294

Estimated generic prices of cancer medicines deemed cost-ineffective in England: a cost estimation analysis

PubMed Central

Hill, Andrew; Redd, Christopher; Gotham, Dzintars; Erbacher, Isabelle; Meldrum, Jonathan; Harada, Ryo

2017-01-01

Objectives The aim of this study was to estimate lowest possible treatment costs for four novel cancer drugs, hypothesising that generic manufacturing could significantly reduce treatment costs. Setting This research was carried out in a non-clinical research setting using secondary data. Participants There were no human participants in the study. Four drugs were selected for the study: bortezomib, dasatinib, everolimus and gefitinib. These medications were selected according to their clinical importance, novel pharmaceutical actions and the availability of generic price data. Primary and secondary outcome measures Target costs for treatment were to be generated for each indication for each treatment. The primary outcome measure was the target cost according to a production cost calculation algorithm. The secondary outcome measure was the target cost as the lowest available generic price; this was necessary where export data were not available to generate an estimate from our cost calculation algorithm. Other outcomes included patent expiry dates and total eligible treatment populations. Results Target prices were £411 per cycle for bortezomib, £9 per month for dasatinib, £852 per month for everolimus and £10 per month for gefitinib. Compared with current list prices in England, these target prices would represent reductions of 74–99.6%. Patent expiry dates were bortezomib 2014–22, dasatinib 2020–26, everolimus 2019–25 and gefitinib 2017. The total global eligible treatment population in 1 year is 769 736. Conclusions Our findings demonstrate that affordable drug treatment costs are possible for novel cancer drugs, suggesting that new therapeutic options can be made available to patients and doctors worldwide. Assessing treatment cost estimations alongside cost-effectiveness evaluations is an important area of future research. PMID:28110283

Pricing and reimbursement of pharmaceuticals in Norway.

PubMed

Hågå, A; Sverre, J M

2002-01-01

Although not a member of the EU, Norway participates in the European-wide regulatory framework for granting marketing authorization to pharmaceutical products. Maximum prices for prescription medicines are determined by the Norwegian Medicines Agency that sets pharmacy purchase prices (based on prices in other Northern European countries) and the Ministry of Health that sets pharmacy margins. A "discount sharing model" encourages pharmacies to perform parallel import and generic switching by allowing them to keep up to 50% of the difference between maximum price and actual price. The costs of pharmaceuticals in Norway are covered in part by the public budget and in part directly by the patient. Over one-half of pharmaceutical costs are borne by the Norwegian National Insurance Administration through the reimbursement scheme; membership in this program is mandatory, and costs are covered through taxes from employers and employees. Over 90% of reimbursed drug sales are accounted for by the established product list for general reimbursement, but supplementary reimbursement can be granted on the basis of individual patient applications and also to ensure that all patients with serious communicable diseases are given adequate treatment without costs to the patient (e.g., HIV/AIDS, tuberculosis). Patient copayment currently amounts to 36% of the total amount of prescriptions; the maximum per prescription is 48 euros, and total within a single calendar year is 180 euros. Copayments for physician visits, radiology examinations, and laboratory tests, can be included in this amount. The overall system is now undergoing reevaluation, as it has been criticized for being complicated and difficult to comprehend for the users.

Impact of cigarette minimum price laws on the retail price of cigarettes in the USA.

PubMed

Tynan, Michael A; Ribisl, Kurt M; Loomis, Brett R

2013-05-01

Cigarette price increases prevent youth initiation, reduce cigarette consumption and increase the number of smokers who quit. Cigarette minimum price laws (MPLs), which typically require cigarette wholesalers and retailers to charge a minimum percentage mark-up for cigarette sales, have been identified as an intervention that can potentially increase cigarette prices. 24 states and the District of Columbia have cigarette MPLs. Using data extracted from SCANTRACK retail scanner data from the Nielsen company, average cigarette prices were calculated for designated market areas in states with and without MPLs in three retail channels: grocery stores, drug stores and convenience stores. Regression models were estimated using the average cigarette pack price in each designated market area and calendar quarter in 2009 as the outcome variable. The average difference in cigarette pack prices are 46 cents in the grocery channel, 29 cents in the drug channel and 13 cents in the convenience channel, with prices being lower in states with MPLs for all three channels. The findings that MPLs do not raise cigarette prices could be the result of a lack of compliance and enforcement by the state or could be attributed to the minimum state mark-up being lower than the free-market mark-up for cigarettes. Rather than require a minimum mark-up, which can be nullified by promotional incentives and discounts, states and countries could strengthen MPLs by setting a simple 'floor price' that is the true minimum price for all cigarettes or could prohibit discounts to consumers and retailers.

Drug usage by outpatients in Croatia during an 8-year period: Influence of changes in pricing policy.

PubMed

Vitezic, Dinko; Madjarevic, Tomislav; Gantumur, Monja; Buble, Tonci; Vitezic, Miomira; Kovacevic, Miljenko; Mrsic-Pelcic, Jasenka; Sestan, Branko

2012-07-01

The aim of our study was to investigate the changes in drug usage and financial expenditure according to legal changes in Croatia during the period 2001 - 2008, especially considering pricing policy. The data on outpatient drug usage during the studied period was obtained from the Croatian National Health Insurance (CNHI). CNHI maintains a database on drugs prescribed by primary health care physicians and dispensed by pharmacies. The data was calculated and presented in defined daily doses (DDD) per inhabitant per year for antibiotics and in DDD/1,000 inhabitants/day for other drugs. The data is also presented in Euro/DDD and the financial expenditures are presented in Euros. During the investigated period drug usage increased 81.33%, while financial expenditure increased 77.23%. While total DDD/1,000 increased ~ 10% every year, financial expenditure increased 10 - 20% annually until 2006, but since then there have been no significant changes. Pricing policy changes could influence drug financial expenditure considerably in the short-term, but it is also important to apply a combination of measures for drug expenditure control. Numerous interventions from authorities from different countries all over the world, prove that there is still no so called "gold standard" which could restrain growing usage and expenditure of drugs. Clinical pharmacologists and clinical pharmacists should be included in these processes.

Current Situation, Determinants, and Solutions to Drug Shortages in Shaanxi Province, China: A Qualitative Study

PubMed Central

Yang, Caijun; Wu, Lina; Cai, Wenfang; Zhu, Wenwen; Shen, Qian; Li, Zongjie; Fang, Yu

2016-01-01

Objective Drug shortages were a complex global problem. The aim of this study was to analyze, characterize, and assess the drug shortages, and identify possible solutions in Shaanxi Province, western China. Methods A qualitative methodological approach was conducted during May–June 2015 and December 2015–January 2016. Semi-structured interviews were performed to gather information from representatives of hospital pharmacists, wholesalers, pharmaceutical producers, and local health authorities. Results Thirty participants took part in the study. Eight traditional Chinese medicines and 87 types of biologicals and chemicals were reported to be in short supply. Most were essential medicines. Five main determinants of drug shortages were detected: too low prices, too low market demands, Good Manufacturing Practice (GMP) issues, materials issues, and approval issues for imported drugs. Five different solutions were proposed by the participants: 1) let the market decide the drug price; 2) establish an information platform; 3) establish a reserve system; 4) enhance the communication among the three parties in the supply chain; and 5) improve hospital inventory management. Conclusions Western China was currently experiencing a serious drug shortage. Numerous reasons for the shortage were identified. Most drug shortages in China were currently because of “too low prices.” To solve this problem, all of the stakeholders, especially the government, needed to participate in managing the drug shortages. PMID:27780218

Five-year examination of utilization and drug cost outcomes associated with benefit design changes including reference pricing for proton pump inhibitors in a state employee health plan.

PubMed

Johnson, Jill T; Neill, Kathryn K; Davis, Dwight A

2011-04-01

The Arkansas State Employee Benefits Division (EBD) is a self-insured program comprising public school and other state employees, their spouses, and dependents. Previous research published in JMCP (2006) showed drug cost savings of $2.20 per member per month (PMPM; 37.6%) or annualized savings of $3.4 million associated with a benefit design change and coverage of the proton pump inhibitor (PPI) omeprazole over-the-counter (OTC) beginning in March 2004. On May 1, 2005, brand esomeprazole was excluded from coverage, with current users grandfathered for 4 months until September 2005. Reference pricing for PPIs, including esomeprazole but excluding generic omeprazole, was implemented on September 1, 2005, and the beneficiary cost share for all PPIs except generic omeprazole was determined from comparison of the PPI actual price to the $0.90 omeprazole OTC reference price per unit. To examine PPI utilization and drug costs before and after (a) excluding esomeprazole from coverage (with grandfathering current users) and (b) implementing a therapeutic maximum allowable cost (TMAC), or reference-pricing benefit design, for the PPI class in a large state employee health plan with fairly stable enrollment of approximately 127,500 members in 2005 through 2008 and approximately 128,000 members in 2009 Q1. The pharmacy claims database for the EBD was used to examine utilization and cost data for PPIs in a longitudinal analysis for the 61-month period from March 1, 2004, through March 31, 2009. Pharmacy claims data were compared for the period 14 months prior to esomeprazole exclusion (preperiod), 4 months during the esomeprazole exclusion (postperiod 1), and the ensuing 43 months of PPI reference pricing (postperiod 2). PPI cost and utilization data for the intervention group of approximately 127,500 beneficiaries were compared with a group of 122 self-insured employers with a total of nearly 1 million beneficiaries whose pharmacy benefits did not include reference pricing for PPIs. Despite 79% of existing esomeprazole users being grandfathered during the 4-month esomeprazole-exclusion period (postperiod 1), the share of omeprazole OTC claims increased from 35.2% to 42.5% (+ 7.3 percentage points) of all PPI claims, and esomeprazole claims decreased from 16.7% to 12.0% (-4.7 percentage points), with little change in the use of other PPIs. The average allowed charge (price) per day of PPI drug therapy decreased in postperiod 1 by 8.9% from $2.81 to $2.56, while utilization increased by 2.2% from 1.83 days PMPM to 1.87 days PMPM; the net plan cost PMPM decreased by $0.40 PMPM from $3.78 to $3.38 (-10.6%), representing a reduction in spending of $35,664 per month while the average member copayment per claim was essentially unchanged. In the 43 months of reference pricing in postperiod 2, PPI utilization was essentially unchanged at 1.82 days PMPM compared with the preperiod (1.83 days PMPM) and 2.7% lower than the esomeprazole-exclusion period (1.87 days PMPM); however, price (charge per day) decreased by 38.4% during refer- RESEARCH ence pricing to $1.73 from $2.81 in the preperiod and by 32.4% compared with $2.56 in the esomeprazole-exclusion period, despite an increase in the average pharmacy dispensing fee to $5.21 per PPI claim. Net plan cost decreased by $1.87 PMPM (49.5%) to $1.91 PMPM during reference pricing compared with the preperiod ($3.78 PMPM) and by $1.47 PMPM (43.5%) compared with the esomeprazole-exclusion period 1 ($3.38 PMPM). Beneficiary costs (copayment per claim) for PPIs decreased to $1.24 PMPM ($23.27 per claim) compared with the preperiod ($1.37 PMPM, $24.95 per claim) and compared with the esomeprazole-exclusion period ($1.40 PMPM, $25.06 per claim). The reductions in net plan costs represented lower plan spending for the 43 months of reference pricing (postperiod 2) of approximately $9.4 million or an average of approximately $219,500 per month compared with the preperiod or $7.9 million (approximately $183,900 per month) compared with the esomeprazole-exclusion period. Compared with a group of self-insured health plans without pharmacy benefit reference pricing of PPIs, the cost savings over the 43-month period from September 1, 2005, through March 31, 2009, were approximately $7.2 million or $1.31 PMPM. For this state employee health plan, the policy change that excluded esomeprazole from coverage but grandfathered current users was associated with a relatively small reduction in PMPM spending on PPIs compared with the subsequent policy change that applied reference pricing to the PPI class based on the price (drug cost plus dispensing fee) for omeprazole OTC. Over 43 months of reference pricing, net plan costs fell dramatically by 49.5% PMPM compared with the preperiod or decreased by 43.5% compared with the esomeprazole-exclusion period. While utilization was essentially unchanged compared with the 18 months before reference pricing, the average pharmacy dispensing fee per PPI claim increased, and beneficiary costs PMPM decreased.

Systematic review on the evaluation criteria of orphan medicines in Central and Eastern European countries.

PubMed

Zelei, Tamás; Molnár, Mária J; Szegedi, Márta; Kaló, Zoltán

2016-06-04

In case of orphan drugs applicability of the standard health technology assessment (HTA) process is limited due to scarcity of good clinical and health economic evidence. Financing these premium priced drugs is more controversial in the Central and Eastern European (CEE) region where the public funding resources are more restricted, and health economic justification should be an even more important aspect of policy decisions than in higher income European countries. To explore and summarize the recent scientific evidence on value drivers related to the health technology assessment of ODs with a special focus on the perspective of third party payers in CEE countries. The review aims to list all potentially relevant value drivers in the reimbursement process of orphan drugs. A systematic literature review was performed; PubMed and Scopus databases were systematically searched for relevant publications until April 2015. Extracted data were summarized along key HTA elements. From the 2664 identified publications, 87 contained relevant information on the evaluation criteria of orphan drugs, but only 5 had direct information from the CEE region. The presentation of good clinical evidence seems to play a key role especially since this should be the basis of cost-effectiveness analyses, which have more importance in resource-constrained economies. Due to external price referencing of pharmaceuticals, the relative budget impact of orphan drugs is expected to be higher in CEE than in Western European (WE) countries unless accessibility of patients remains more limited in poorer European regions. Equity principles based on disease prevalence and non-availability of alternative treatment options may increase the price premium, however, societies must have some control on prices and a rationale based on multiple criteria in reimbursement decisions. The evaluation of orphan medicines should include multiple criteria to appropriately measure the clinical added value of orphan drugs. The search found only a small number of studies coming from CEE, therefore European policies on orphan drugs may be based largely on experiences in WE countries. More research should be done in the future in CEE because financing high-priced orphan drugs involves a greater burden for these countries.

Was Part D a giveaway to the pharmaceutical industry?

PubMed

Newhouse, Joseph P; Seiguer, Erica; Frank, Richard G

2007-01-01

The Medicare Modernization Act (MMA) prohibited the government from negotiating drug prices, a feature that the act's critics characterize as a giveaway to the drug industry. Instead of the government negotiating to keep prices down, the act relies on competition among drug companies to obtain business from private insurers; yet, competition cannot be effective when there are no close clinical substitutes. In the past few years, the rate of introduction of first-in-class drugs has been low; if this continues, the prohibition on negotiation may be only a minor problem. However, if the prior rate of introduction resumes, the government may find itself with unacceptable expenditure levels.

How firms set prices for medical materials: a multi-country study.

PubMed

Ide, Hiroo; Mollahaliloglu, Salih

2009-09-01

This study presents a comparison of medical material prices, discusses why differences exist, and examines methods for comparing prices. Market prices for drug-eluting stents (DES), non-drug-eluting stents (non-DES), and percutaneous transluminal coronary angioplasty (PTCA) catheters were collected from five countries: the United States, Japan, Korea, Turkey, and Thailand. To compare prices, three adjustment methods were used: currency exchange rates, purchasing power parity (PPP), and gross domestic product (GDP) per capita. The ratios of medical material prices compared with those in the United States were higher in Japan (from 1.4 for DES to 5.0 for PTCA catheters) and Korea (from 1.2 for DES to 4.0 for PTCA catheters), and lower in Turkey (from 0.8 for non-DES to 1.4 for DES) and Thailand (from 0.5 for non-DES to 1.3 for PTCA catheters). The PPP-adjusted ratios changed slightly for Japan, Korea, and Turkey. When the prices were adjusted by GDP per capita, the ratios were much higher. Comparing prices using currency exchange rates or PPP is applicable only between countries with stable economic relations; adjustment by GDP per capita reflects the actual burden. Further study is needed to fully elucidate the factors influencing the global medical material market.

Charging for hospital pharmaceutical services: flat free based on the medication record.

PubMed

Wyatt, B K

1979-03-01

A 200-bed hospital's change in pricing drug products from a cost-plus-fee system to a flat fee per dose based on the medication administration record (MAR) is described. With the flat-fee system, drug charges are not recorded when the drug is dispensed by the pharmacy; data for charging doses are obtained directly from the MAR forms generated by the nursing staff. Charges are 55 cents per oral or suppository dose and $3.00 per injection dose. Drugs administered intravenously, topical drugs, injections costing more than $10.00 per dose, and miscellaneous nondrug items are still charged on a cost-plus-fee basis. Man-hours are saved in the pharmacy department because of the elimination of the pricing function and maintenance of price lists. The need for nursing staff to charge for any doses administered from emergency or Schedule II floor-stock supplies is eliminated. The workload for business office personnel is reduced because the number of individual charges is less than with the cost-plus charging system. The system is accepted by patients and third-party payers and has made a complete unit dose drug distribution system possible at lower cost.

Price pressure. As the number of costly specialty drugs grows, insurers and providers push for more reasonable alternatives.

PubMed

Evans, Melanie

2013-01-28

Faced with a rising tide of specialty drugs with eyebrow-raising prices, hospitals and insurers are pushing back. That means looking for less-costly alternatives, though options are limited. "Our goal is, as more patients come along, we get them on Elelyso and not on more expensive Cerezyme," says Eric Cannon, chief of pharmacy for insurer SelectHealth. Elelyso entered the market in 2012 and costs about $150,000 per year for a patient, versus the more costly rival drug Cerezyme.

Budget Impact Analysis of Biosimilar Trastuzumab for the Treatment of Breast Cancer in Croatia.

PubMed

Cesarec, August; Likić, Robert

2017-04-01

Breast cancer is the most common cancer in women and has considerable impact on healthcare budgets and patients' quality of life. Trastuzumab (Herceptin ® ) is a monoclonal antibody directed against the human epidermal growth factor receptor (HER2) for the treatment of breast cancer. Several trastuzumab biosimilars are currently in development. In 2015, trastuzumab was the drug with the highest financial consumption among all drugs in Croatia. This model estimates the 1-year budget impact of the introduction of biosimilar trastuzumab in Croatia. A budget impact model, based on approvals for trastuzumab treatment in 2015, was developed for the introduction of biosimilars. Two biosimilar scenarios were developed: biosimilar scenario 1, based on all approvals in 2015, and biosimilar scenario 2, based on approvals after February 2015 and the reimbursement of the subcutaneous formulation of trastuzumab in Croatia. Only trastuzumab-naïve patients and drug-acquisition costs were used in the model. Uptake of biosimilar was assumed at 50 %. Scenarios were calculated with price discounts of 15, 25 and 35 %. The robustness of the model was tested by extensive sensitivity analyses. The projected drug cost savings from the introduction of biosimilar trastuzumab range from €0.26 million (scenario 2, 15 % price discount) to €0.69 million (scenario 1, 35 % price discount). If budget savings were reinvested to treat additional patients with trastuzumab, 14 (scenario 2, 15 % price discount) to 47 (scenario 1, 35 % price discount) additional patients could be treated. Sensitivity analyses showed that the incidence of breast cancer had the highest impact on the model, with a 10 % decrease in incidence leading to an 11.3 % decrease in projected savings. The introduction of biosimilar trastuzumab could lead to significant drug cost savings in Croatia.

Need for multicriteria evaluation of generic drug policies.

PubMed

Kaló, Zoltán; Holtorf, Anke-Peggy; Alfonso-Cristancho, Rafael; Shen, Jie; Ágh, Tamás; Inotai, András; Brixner, Diana

2015-03-01

Policymakers tend to focus on improving patented drug policies because they are under pressure from patients, physicians, and manufacturers to increase access to novel therapies. The success of pharmaceutical innovation over the last few decades has led to the availability of many off-patent drugs to treat disease areas with the greatest public health need. Therefore, the success of public health programs in improving the health status of the total population is highly dependent on the efficiency of generic drug policies. The objective of this article was to explore factors influencing the true efficiency of generic prescription drug policies in supporting public health initiatives in the developed world. Health care decision makers often assess the efficiency of generic drug policies by the level of price erosion and market share of generics. Drug quality, bioequivalence, in some cases drug formulations, supply reliability, medical adherence and persistence, health outcomes, and nondrug costs, however, are also attributes of success for generic drug policies. Further methodological research is needed to measure and improve the efficiency of generic drug policies. This also requires extension of the evidence base of the impact of generic drugs, partly based on real-world evidence. Multicriteria decision analysis may assist policymakers and researchers to evaluate the true value of generic drugs. Copyright © 2015. Published by Elsevier Inc.

Antiretroviral purchasing and prescription practices in Mexico: constraints, challenges and opportunities.

PubMed

Chaumont, Claire; Bautista-Arredondo, Sergio; Calva, Juan José; Bahena-González, Roberto Isaac; Sánchez-Juárez, Gerda Hitz; González de Araujo-Muriel, Arturo; Magis-Rodríguez, Carlos; Hernández-Ávila, Mauricio

2015-01-01

This study examines the antiretroviral (ARV) market characteristics for drugs procured and prescribed to Mexico's Social Protection System in Health beneficiaries between 2008 and 2013, and compares them with international data. Procurement information from the National Center for the Prevention and the Control of HIV/AIDS was analyzed to estimate volumes and prices of key ARV. Annual costs were compared with data from the World Health Organization's Global Price Reporting Mechanism for similar countries. Finally, regimens reported in the ARV Drug Management, Logistics and Surveillance System database were reviewed to identify prescription trends and model ARV expenditures until 2018. Results show that the first-line ARV market is concentrated among a small number of patented treatments, in which prescription is clinically adequate, but which prices are higher than those paid by similar countries. The current set of legal and structural options available to policy makers to bring prices down is extremely limited. Different negotiation policies were not successful to decrease ARV high prices in the public health market. The closed list approach had a good impact on prescription quality but was ineffective in reducing prices. The Coordinating Commission for Negotiating the Price of Medicines and other Health Supplies also failed to obtain adequate prices. To maximize purchase efficiency, policy makers should focus on finding long-term legal and political safeguards to counter the high prices imposed by pharmaceutical companies.

75 FR 1059 - Agency Information Collection Activities: Submission for OMB Review; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2010-01-08

... decides whether to approve the plan pricing (i.e., payment and premium) proposed by each organization... collection; Title of Information Collection: CY 2011 Bid Pricing Tool (BPT) for Medicare Advantage (MA) Plans...) and Prescription Drug Plans are required to submit an actuarial pricing ``bid'' for each plan offered...

76 FR 1435 - Agency Information Collection Activities: Submission for OMB Review; Comment Request

Federal Register 2010, 2011, 2012, 2013, 2014

2011-01-10

... approve the plan pricing (i.e., payment and premium) proposed by each organization. Form Number: CMS...: CY 2012 Bid Pricing Tool (BPT) for Medicare Advantage (MA) Plans and Prescription Drug Plans (PDP... required to submit an actuarial pricing ``bid'' for each plan offered to Medicare beneficiaries for...

42 CFR 414.904 - Average sales price as the basis for payment.

Code of Federal Regulations, 2014 CFR

2014-10-01

... subsection (c), the term billing unit means the identifiable quantity associated with a billing and payment code, as established by CMS. (c) Single source drugs—(1) Average sales price. The average sales price... report as required by section 623(c) of the Medicare Prescription Drug, Improvement, and Modernization...

42 CFR 414.904 - Average sales price as the basis for payment.

Code of Federal Regulations, 2012 CFR

2012-10-01

... subsection (c), the term billing unit means the identifiable quantity associated with a billing and payment code, as established by CMS. (c) Single source drugs—(1) Average sales price. The average sales price... report as required by section 623(c) of the Medicare Prescription Drug, Improvement, and Modernization...

7 CFR 245.8 - Nondiscrimination practices for children eligible to receive free and reduced price meals and...

Code of Federal Regulations, 2012 CFR

2012-01-01

..., School Breakfast Program or Special Milk Program or of commodity only schools shall take all actions that... PROGRAMS DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS AND FREE MILK IN SCHOOLS § 245.8 Nondiscrimination practices for children eligible to receive free and reduced price meals and free milk. School Food...

7 CFR 245.8 - Nondiscrimination practices for children eligible to receive free and reduced price meals and...

Code of Federal Regulations, 2013 CFR

2013-01-01

..., School Breakfast Program or Special Milk Program or of commodity only schools shall take all actions that... PROGRAMS DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS AND FREE MILK IN SCHOOLS § 245.8 Nondiscrimination practices for children eligible to receive free and reduced price meals and free milk. School Food...

7 CFR 245.8 - Nondiscrimination practices for children eligible to receive free and reduced price meals and...

Code of Federal Regulations, 2014 CFR

2014-01-01

..., School Breakfast Program or Special Milk Program or of commodity only schools shall take all actions that... PROGRAMS DETERMINING ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS AND FREE MILK IN SCHOOLS § 245.8 Nondiscrimination practices for children eligible to receive free and reduced price meals and free milk. School Food...

76 FR 48935 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Proposed...

Federal Register 2010, 2011, 2012, 2013, 2014

2011-08-09

... the $1 Strike Price Interval Program August 4, 2011. Pursuant to Section 19(b)(1) of the Securities... Proposed Rule Change CBOE proposes to amend its rules in order to simplify the $1 Strike Price Interval... Policy .01 to Rule 5.5 in order to simplify the $1 Strike Price Interval Program (``Program''). In 2003...

Costs of Public Pharmaceutical Services in Rio de Janeiro Compared to Farmácia Popular Program

PubMed Central

da Silva, Rondineli Mendes; Caetano, Rosângela

2016-01-01

ABSTRACT OBJECTIVE To analyze the costs of public pharmaceutical services compared to Farmácia Popular Program (Popular Pharmacy Program). METHODS Comparison between prices paid by Aqui Tem Farmácia Popular Program (Farmácia Popular is available here) with the full costs of medicine provision by the Municipal Health Department of Rio de Janeiro. The comparison comprised 25 medicines supplied by both the municipal pharmaceutical service and Aqui Tem Farmácia Popular Program. Calculating the cost per pharmaceutical unit of each medicine included expenditure by Municipal Health Department of Rio de Janeiro with procurement (price), logistics, and local dispensation. The reference price of medicines paid by Aqui Tem Farmácia Popular was taken from the Brazilian Ministry of Health standard in force in 2012. Comparisons included full reference price; reference price minus 10.0% copayment by users; and maximum reference paid by the Ministry of Health (minus copayment and taxes). Simulations were carried out of the differences between the costs of Municipal Health Department of Rio de Janeiro with the common medicines and those potentially incurred based on the reference price of Aqui Tem Farmácia Popular. RESULTS The Municipal Health Department of Rio de Janeiro spent R$28,526,526.57 with 25 medicines of the common list in 2012; 58.7% accounted for direct procurement costs. The estimated costs of the Health Department were generally lower than the reference prices of the Aqui Tem Farmácia Popular Program for 20 medicines, regardless of reference prices. The potential costs incurred by Health Department if expenditure of its consumption pattern were based on the reference prices of Aqui Tem Farmácia Popular would be R$124,170,777.76, considering the best scenario of payment by the Brazilian Ministry of Health (90.0% of the reference price, minus taxes). CONCLUSIONS The difference in costs between public provision by Municipal Health Department of Rio de Janeiro and Farmácia Popular Program indicates that some reference prices could be reviewed aiming at their reduction. PMID:28099664

[Availability of generic drugs in the public sector and prices in the private sector in different regions of Brazil].

PubMed

Miranda, Elaine Silva; Pinto, Cláudia Du Bocage Santos; dos Reis, André Luis de Almeida; Emmerick, Isabel Cristina Martins; Campos, Mônica Rodrigues; Luiza, Vera Lucia; Osorio-de-Castro, Claudia Garcia Serpa

2009-10-01

A study to identify availability and prices of medicines, according to type of provider, was conducted in the five regions of Brazil. A list of medicines to treat prevalent diseases was investigated, using the medicines price methodology developed by the World Health Organization and Health Action International, adapted for Brazil. In the public sector, bioequivalent (vis-à-vis reference brand) generics are less available than multisource products. For most medicines (71.4%), the availability of bioequivalent generics was less than 10%. In the private sector, the average number of different bioequivalent generic versions in the outlets was far smaller than the number of versions on the market. There was a positive correlation between the number of generics on the market, or those found at outlets, and the price variation in bioequivalent generic products, in relation to the maximum consumer price. It is estimated that price competition is occurring among bioequivalent generic drugs and between them and multisource products for the same substance, but not with reference brands.

Use of comparative effectiveness research in drug coverage and pricing decisions: a six-country comparison.

PubMed

Sorenson, Corinna

2010-07-01

Comparative effectiveness research (CER) has assumed an increasing role in drug coverage and, in some cases, pricing decisions in Europe, as decision-makers seek to obtain better value for money. This issue brief comparatively examines the use of CER across six countries--Denmark, England, France, Germany, the Netherlands, and Sweden. With CER gaining traction in the United States, these international experiences offer insights and potential lessons. Investing in CER can help address the current gap in publicly available, credible, up-to-date, and scientifically based comparative information on the effectiveness of drugs and other health interventions. This information can be used to base coverage and pricing decisions on evidence of value, thereby facilitating access to and public and private investment in the most beneficial new drugs and technologies. In turn, use of CER creates incentives for more efficient, high-quality health care and encourages development of innovative products that offer measurable value to patients.

Prescription drug accessibility and affordability in the United States and abroad.

PubMed

Morgan, Steve; Kennedy, Jae

2010-06-01

This issue brief contrasts prescription drug access, affordability, and costs in the United States with six other high-income countries, drawing from Commonwealth Fund survey data of patient experiences as well as international spending and pricing data. The analysis reveals that Americans, particularly the relatively young and healthy, are more likely to use prescription drugs than are residents of Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom, but they also experience more financial barriers in accessing medications and spend more out-of-pocket for prescriptions. In the U.S., there are also larger income-related inequities in pharmaceutical use. Despite access barriers and disparities, spending per person in the U.S. is far higher, likely the result of paying higher prices for similar medications and using a more expensive mix of drugs. The authors say that value-based benefit designs, reference pricing, and group purchasing could reduce financial barriers and keep down pharmaceutical spending.

Access to Orphan Drugs: A Comprehensive Review of Legislations, Regulations and Policies in 35 Countries.

PubMed

Gammie, Todd; Lu, Christine Y; Babar, Zaheer Ud-Din

2015-01-01

To review existing regulations and policies utilised by countries to enable patient access to orphan drugs. A review of the literature (1998 to 2014) was performed to identify relevant, peer-reviewed articles. Using content analysis, we synthesised regulations and policies for access to orphan drugs by type and by country. Fifty seven articles and 35 countries were included in this review. Six broad categories of regulation and policy instruments were identified: national orphan drug policies, orphan drug designation, marketing authorization, incentives, marketing exclusivity, and pricing and reimbursement. The availability of orphan drugs depends on individual country's legislation and regulations including national orphan drug policies, orphan drug designation, marketing authorization, marketing exclusivity and incentives such as tax credits to ensure research, development and marketing. The majority of countries (27/35) had in place orphan drug legislation. Access to orphan drugs depends on individual country's pricing and reimbursement policies, which varied widely between countries. High prices and insufficient evidence often limit orphan drugs from meeting the traditional health technology assessment criteria, especially cost-effectiveness, which may influence access. Overall many countries have implemented a combination of legislations, regulations and policies for orphan drugs in the last two decades. While these may enable the availability and access to orphan drugs, there are critical differences between countries in terms of range and types of legislations, regulations and policies implemented. Importantly, China and India, two of the largest countries by population size, both lack national legislation for orphan medicines and rare diseases, which could have substantial negative impacts on their patient populations with rare diseases.

National reimbursement listing determinants of new cancer drugs: a retrospective analysis of 58 cancer treatment appraisals in 2007-2016 in South Korea.

PubMed

Kim, Eun-Sook; Kim, Jung-Ae; Lee, Eui-Kyung

2017-08-01

Since the positive-list system was introduced, concerns have been raised over restricting access to new cancer drugs in Korea. Policy changes in the decision-making process, such as risk-sharing agreement and the waiver of pharmacoeconomic data submission, were implemented to improve access to oncology medicines, and other factors are also involved in the reimbursement for cancer drugs. The aim of this study is to investigate the reimbursement listing determinants of new cancer drugs in Korea. All cancer treatment appraisals of Health Insurance Review and Assessment during 2007-2016 were analyzed based on 13 independent variables (comparative effectiveness, cost-effectiveness, drug-price comparison, oncology-specific policy, and innovation such as new mode of action). Univariate and multivariate logistic analyses were conducted. Of 58 analyzed submissions, 40% were listed in the national reimbursement formulary. In univariate analysis, four variables were related to listing: comparative effectiveness, drug-price comparison, new mode of action, and risk-sharing agreement. In multivariate logistic analysis, three variables significantly increased the likelihood of listing: clinical improvement, below alternative's price, and risk-sharing arrangement. Cancer drug's listing increased from 17% to 47% after risk-sharing agreement implementation. Clinical improvement, cost-effectiveness, and RSA application are critical to successful national reimbursement listing.

The effects of macro-level interventions on addictive behavior.

PubMed

Pacula, R L; Chaloupka, F J

2001-12-01

Drug addictions are often viewed as compulsive behaviors, not sensitive to the typical rules of self-discipline or market forces. Nonetheless, many governments try to discourage consumption of addictive substances through macro policy tools, such as taxation, regulation and prohibition, in an effort to reduce the harmful consequences that result from their consumption. The government's ability to discourage this type of behavior through these macro policies depends critically on the responsiveness of addictive consumption to market interventions. This paper reviews the growing literature that applies economic principles to the analysis of "substance abuse." Specifically, we review the impact of prices and public policies on the demands for tobacco, alcohol, and illicit drugs. The findings from these studies clearly demonstrate that even addictive behaviors are sensitive to changes in the price of substances being abused. When the full price of the addictive good rises, consumption of that good falls, even among abusers. Therefore, public policies that raise the full price of a drug to a consumer, particularly youth, are likely to result in long run reductions in rates of addiction.

Encouraging the use of generic medicines: implications for transition economies.

PubMed

King, Derek R; Kanavos, Panos

2002-08-01

Generic drugs have a key role to play in the efficient allocation of financial resources for pharmaceutical medicines. Policies implemented in the countries with a high rate of generic drug use, such as Canada, Denmark, Germany, the Netherlands, the United Kingdom, and the United States, are reviewed, with consideration of the market structures that facilitate strong competition. Savings in these countries are realized through increases in the volume of generic drugs used and the frequently significant differences in the price between generic medicines and branded originator medicines. Their policy tools include the mix of supply-side measures and demand-side measures that are relevant for generic promotion and higher generic use. On the supply-side, key policy measures include generic drug marketing regulation that facilitates market entry soon after patent expiration, reference pricing, the pricing of branded originator products, and the degree of price competition in pharmaceutical markets. On the demand-side, measures typically encompass influencing prescribing and dispensing patterns as well as introducing a co-payment structure for consumers/patients that takes into consideration the difference in cost between branded and generic medicines. Quality of generic medicines is a pre-condition for all other measures discussed to take effect. The paper concludes by offering a list of policy options for decision-makers in Central and Eastern European economies in transition.

Pricing of alcohol in Canada: A comparison of provincial policies and harm-reduction opportunities.

PubMed

Giesbrecht, Norman; Wettlaufer, Ashley; Thomas, Gerald; Stockwell, Tim; Thompson, Kara; April, Nicole; Asbridge, Mark; Cukier, Samantha; Mann, Robert; McAllister, Janet; Murie, Andrew; Pauley, Chris; Plamondon, Laurie; Vallance, Kate

2016-05-01

Alcohol pricing is an effective prevention policy. This paper compares the 10 Canadian provinces on three research-based alcohol pricing policies-minimum pricing, pricing by alcohol content and maintaining prices relative to inflation. The selection of these three policies was based on systematic reviews and seminal research papers. Provincial data for 2012 were obtained from Statistics Canada and relevant provincial ministries, subsequently sent to provincial authorities for verification, and then scored by team members. All provinces, except for Alberta, have minimum prices for at least one beverage type sold in off-premise outlets. All provinces, except for British Columbia and Quebec, have separate (and higher) minimum pricing for on-premise establishments. Regarding pricing on alcohol content, western and central provinces typically scored higher than provinces in Eastern Canada. Generally, minimum prices were lower than the recommended $1.50 per standard drink for off-premise outlets and $3.00 per standard drink in on-premise venues. Seven of 10 provinces scored 60% or higher compared to the ideal on indexing prices to inflation. Prices for a representative basket of alcohol products in Ontario and Quebec have lagged significantly behind inflation since 2006. While examples of evidence-based alcohol pricing policies can be found in every jurisdiction in Canada, significant inter-provincial variation leaves substantial unrealised potential for further reducing alcohol-related harm and costs. This comparative assessment of alcohol price policies provides clear indications of how individual provinces could adjust their pricing policies and practices to improve public health and safety. [Giesbrecht N, Wettlaufer A, Thomas G, Stockwell T, Thompson K, April N, Asbridge M, Cukier S, Mann R, McAllister J, Murie A, Pauley C, Plamondon L, Vallance K. Pricing of alcohol in Canada: A comparison of provincial policies and harm-reduction opportunities. Drug Alcohol Rev 2016;35:289-297]. © 2015 Australasian Professional Society on Alcohol and other Drugs.

A cross-sectional study of the availability and price of anti-malarial medicines and malaria rapid diagnostic tests in private sector retail drug outlets in rural Western Kenya, 2013.

PubMed

Kioko, Urbanus; Riley, Christina; Dellicour, Stephanie; Were, Vincent; Ouma, Peter; Gutman, Julie; Kariuki, Simon; Omar, Ahmeddin; Desai, Meghna; Buff, Ann M

2016-07-12

Although anti-malarial medicines are free in Kenyan public health facilities, patients often seek treatment from private sector retail drug outlets. In mid-2010, the Affordable Medicines Facility-malaria (AMFm) was introduced to make quality-assured artemisinin-based combination therapy (ACT) accessible and affordable in private and public sectors. Private sector retail drug outlets stocking anti-malarial medications within a surveillance area of approximately 220,000 people in a malaria perennial high-transmission area in rural western Kenya were identified via a census in September 2013. A cross-sectional study was conducted in September-October 2013 to determine availability and price of anti-malarial medicines and malaria rapid diagnostic tests (RDTs) in drug outlets. A standardized questionnaire was administered to collect drug outlet and personnel characteristics and availability and price of anti-malarials and RDTs. Of 181 drug outlets identified, 179 (99 %) participated in the survey. Thirteen percent were registered pharmacies, 25 % informal drug shops, 46 % general shops, 13 % homesteads and 2 % other. One hundred sixty-five (92 %) had at least one ACT type: 162 (91 %) had recommended first-line artemether-lumefantrine (AL), 22 (12 %) had recommended second-line dihydroartemisinin-piperaquine (DHA-PPQ), 85 (48 %) had sulfadoxine-pyrimethamine (SP), 60 (34 %) had any quinine (QN) formulation, and 14 (8 %) had amodiaquine (AQ) monotherapy. The mean price (range) of an adult treatment course for AL was $1.01 ($0.35-4.71); DHA-PPQ was $4.39 ($0.71-7.06); QN tablets were $2.24 ($0.12-4.71); SP was $0.62 ($0.24-2.35); AQ monotherapy was $0.42 ($0.24-1.06). The mean AL price with or without the AMFm logo did not differ significantly ($1.01 and 1.07, respectively; p = 0.45). Only 17 (10 %) drug outlets had RDTs; 149 (84 %) never stocked RDTs. The mean RDT price was $0.92 ($0.24-2.35). Most outlets never stocked RDTs; therefore, testing prior to treatment was unlikely for customers seeking treatment in the private retail sector. The recommended first-line treatment, AL, was widely available. Although SP and AQ monotherapy are not recommended for treatment, both were less expensive than AL, which might have caused preferential use by customers. Interventions that create community demand for malaria diagnostic testing prior to treatment and that increase RDT availability should be encouraged.

[Toward a conditional price for medicine?].

PubMed

Baseilhac, E

2013-09-01

For the first time, and as an exceptional option, the 2012 LEEM-CEPS framework agreement introduces the notion of conditional prices in conventional practice. The contractualization of drug price according to changes in its value that could occur in "real world" enables the Payer and the Company to settle, in a predictable manner, the "bet" represented by first registration price setting. Its systematization is based on the ability to standardize the implementation and assessment of observational studies, whereas the analysis and sharing of the risk of value changes (depreciation, appreciation) are structuring elements of the contractualization. Ethical from both the payer's and patient's point of view, drug price conditionality on its value is impeded by compliance with legal and economic constraints for the company, that should be taken into account by legalising this latter's ability to influence it through observance or therapeutic education and by guaranteeing a sufficiently long period of revenues for the company. Copyright © 2013 Elsevier Masson SAS. All rights reserved.

Reference pricing with endogenous generic entry.

PubMed

Brekke, Kurt R; Canta, Chiara; Straume, Odd Rune

2016-12-01

Reference pricing intends to reduce pharmaceutical expenditures by increasing demand elasticity and stimulating generic competition. We develop a novel model where a brand-name producer competes in prices with several generics producers in a market with brand-biased and brand-neutral consumers. Comparing with coinsurance, we show that reference pricing, contrary to policy makers' intentions, discourages generic entry, as it induces the brand-name producer to price more aggressively. Thus, the net effect of reference pricing on drug prices is ambiguous, implying that reference pricing can be counterproductive in reducing expenditures. However, under price regulation, we show that reference pricing may stimulate generic entry, since a binding price cap weakens the aggressive price response by the brand-name producer. This may explain mixed empirical results on the competitive effects of reference pricing. Finally, we show that reference pricing may be welfare improving when accounting for brand preferences despite its adverse effects on entry and prices. Copyright © 2016 Elsevier B.V. All rights reserved.

Beyond Fees and Charges: The Need for a Pricing Strategy.

ERIC Educational Resources Information Center

Tugman, Sarah Jones

1985-01-01

As citizens demand governmental accountability, recreation agencies must devote attention to determining the cost of programs and to justifying the fee structure assigned to each program. This article addresses the need for proper pricing and offers a plan for establishing a pricing strategy. (MT)

The role of bioethics in the international prescription drug market: economics and global justice.

PubMed

Newland, Shelby E

2006-01-01

In terms of health care access, bioethics has an important role to inform and shape policy issues and develop interdisciplinary ideas and interventions. The rising price of prescription drugs presents one of the most looming barriers to health care access in the world today. Including both theoretical and practical features of the pharmaceutical industry's behavior is necessary to find ethical solutions towards increasing access. Bioethics can evaluate global justice by weighing human rights theory and future innovation at the macro level, and by addressing market forces and responsibilities at the micro level. Inherent structural features of pharmaceuticals, such as its reliance on research and development, cause the industry to employ pricing strategies that seem counter-intuitive to conventional wisdom, but that result in producing a just allocation as defined by market forces. Parallel trade and drug exportation/reimportation threaten the saliency of the industry's differential pricing scheme; a case-study of a single "Euro-price" within the European Union illustrates how this will actually create harm to the most needy member states. This complex situation requires solutions weighing arguments from human rights theory with those from economic theory to arrive at the most globally just allocation of prescription drugs in the global marketplace, as well as to ensure future innovation and scientific progress. Bioethicists as well as economists need to partake urgently in this discourse for the betterment of the global injustices in the international prescription drug market.

Demand curves for hypothetical cocaine in cocaine-dependent individuals.

PubMed

Bruner, Natalie R; Johnson, Matthew W

2014-03-01

Drug purchasing tasks have been successfully used to examine demand for hypothetical consumption of abused drugs including heroin, nicotine, and alcohol. In these tasks, drug users make hypothetical choices whether to buy drugs, and if so, at what quantity, at various potential prices. These tasks allow for behavioral economic assessment of that drug's intensity of demand (preferred level of consumption at extremely low prices) and demand elasticity (sensitivity of consumption to price), among other metrics. However, a purchasing task for cocaine in cocaine-dependent individuals has not been investigated. This study examined a novel Cocaine Purchasing Task and the relation between resulting demand metrics and self-reported cocaine use data. Participants completed a questionnaire assessing hypothetical purchases of cocaine units at prices ranging from $0.01 to $1,000. Demand curves were generated from responses on the Cocaine Purchasing Task. Correlations compared metrics from the demand curve to measures of real-world cocaine use. Group and individual data were well modeled by a demand curve function. The validity of the Cocaine Purchasing Task was supported by a significant correlation between the demand curve metrics of demand intensity and O max (determined from Cocaine Purchasing Task data) and self-reported measures of cocaine use. Partial correlations revealed that after controlling for demand intensity, demand elasticity and the related measure, P max, were significantly correlated with real-world cocaine use. Results indicate that the Cocaine Purchasing Task produces orderly demand curve data, and that these data relate to real-world measures of cocaine use.

Bid purchasing of pharmaceuticals.

PubMed

Swift, R G; Ryan, M R

1978-11-01

The effects of bid purchasing of drug products by hospitals and the factors to consider in bid purchasing of pharmaceuticals are reviewed; further, the prices available with bid purchasing to a specific hospital in 1974 and 1977 are presented. Factors important for a successful bid purchasing system of pharmaceuticals are: (1) use of a formulary policy, (2) an effective procedure for handling bid purchasing and (3) criteria for evaluation of drug products. Significant differences were found between prices available with and without bid purchasing for 50 nonproprietary drug products in 1974 and for 19 products in 1977. Although monetary savings to hospitals do exist with bid purchasing of pharmaceuticals, the degree of savings is dependent upon the drug usage for that hospital.

48 CFR 619.806 - Pricing the 8(a) contract.

Code of Federal Regulations, 2014 CFR

2014-10-01

... PROGRAMS SMALL BUSINESS PROGRAMS Contracting with the Small Business Administration (The 8(a) Program) 619... obtain certified cost or pricing data directly from the 8(a) contractor if the contract is being awarded...

48 CFR 619.806 - Pricing the 8(a) contract.

Code of Federal Regulations, 2012 CFR

2012-10-01

... PROGRAMS SMALL BUSINESS PROGRAMS Contracting with the Small Business Administration (The 8(a) Program) 619... obtain certified cost or pricing data directly from the 8(a) contractor if the contract is being awarded...

48 CFR 619.806 - Pricing the 8(a) contract.

Code of Federal Regulations, 2013 CFR

2013-10-01

... PROGRAMS SMALL BUSINESS PROGRAMS Contracting with the Small Business Administration (The 8(a) Program) 619... obtain certified cost or pricing data directly from the 8(a) contractor if the contract is being awarded...