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Overview on current pricing and reimbursement schemes in the pharmaceutical sector in the EU Nina Zimmermann GÖG/ÖBIG,

Overview on current pricing and reimbursement schemes in the pharmaceutical sector in the EU Nina Zimmermann GÖG/ÖBIG, PPRI Secretariat Healthcare Forum 2009 Bucharest, 30 September 2009 Out l i n e Introduction: P& R in the EU Overview on pricing practises in the EU

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Overview on current pricing and reimbursement schemes in the pharmaceutical sector in the EU Nina Zimmermann GÖG/ÖBIG,

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  1. Overview on current pricing and reimbursement schemes in the pharmaceutical sector in the EU Nina ZimmermannGÖG/ÖBIG, PPRI Secretariat Healthcare Forum 2009Bucharest, 30 September 2009 1

  2. Outline • Introduction: P& R in the EU • Overview on pricing practises in the EU • Overview on reimbursement schemes in the EU • Rational use of pharmaceuticals • Pharmaceutical expenditure &cost-containment measures • European networking initiatives 2

  3. Pharmaceutical P & R in the EU • Market authorisation:regulated at EU level (Directive 2004/27/EC) • Pricing and reimbursement:mainly a competence of the EU Member States • Transparency Directive (Directive 89/105/EEC) 3

  4. Pricing control Definition: Pricing policies where government authorities set the price of a pharmaceutical and/or indirectly influence it (e.g. statutory pricing, price negotiations, public procurement). Contrary to free pricing. Source: PPRI Glossary (http://ppri.goeg.at) Practice in the EU • Price control in 24 of 27 EU-MS (all excl. DK, DE, MT) • In the majority of the EU Member States,price control is limited to reimbursable pharmaceuticals 4

  5. Pricingpolicies at manufacturer level Statutory pricing: Pricing system, where pharmaceutical prices are set on a regulatory basis (e.g. law, enactment, decree). Price negotiations: A form of pricing procedure, where pharmaceutical prices are discussed / negotiated (e.g. between manufacturer and social health insurance / national health service). Public procurement: Buying pharmaceuticals by the state (e.g. public hospitals) on the basis of a tendering procedure, granting the contract to the best tenderer (pharmaceutical company / importer). 5

  6. Pricing policies at manufacturer level • The most common price control policy is statutory pricing (i.e. setting the price on a regulatory, unilateral basis). • e.g. BE, BG, CY, CZ, EL, ES, LT, LU, PT, SE • Price negotiations are used in a few countries (e.g. FR, IT). • Mixture • Statutory pricing after negotiations (EE, LV, PL) • In case of failure of negotiations (e.g. FR) or non-availability of data for comparison (e.g. IE) • Procurement/Negotiations in the hospital sector and/or for public functions 6

  7. Pricing proceduresMethodology to determine a price Pricing procedures • External price referencing • Internal price referencing • Cost-plus • Others (e.g. indirect price control) 7

  8. External Price Referencing Definition: The practice of comparing pharmaceutical prices across countries. There are various methods applied and different country baskets are relevant. Synonym terms: cross-country referencing, international price comparison, international price benchmarking Source: PPRI Glossary, http://ppri.goeg.at Practice in the EU • Increasingly used, currently in 22 EU-MS 8

  9. C. = countries, ref. = reference Note: countries (incl. number of countries) not specified – CZ, IT; respective countries of origin – LU Source:PPRI 2008 External price referencing in the EU MS + NO + TR 9

  10. Pricing policiesat distribution level • 4 of the 27 EU-MS apply no statutory wholesale mark-ups • In these countries (DK, FI, SE, NL) the pharmacy purchasing price is controlled, the ex-factory price is an outcome of negotiations between manufacturer & wholesaler. • All other countries have statutory wholesale mark-ups, either a linear mark-up or a regressive scheme. • Pharmacy margins are regulated in all 27 EU-MS. • Usually, they take the form of a regressive scheme or a linear mark-up. • Pharmacy remuneration - a fixed fee in NL and DE (with a linear mark-up) • SI and UK: fee-for-service remuneration • VAT rates (0-25%) 10

  11. Reimbursement:Positive / negative lists • Positive lists in 23 of the EU Member States (all but DE, ES, EL, UK) • Negative lists are less common (DE, HU, UK; legal basis in EL and FI) • Positive / negative lists have to be seen in consideration with the reimbursement eligibility schemes • Product-specific eligibility (key scheme in 19 EU Member States) • Disease-specific eligibilty (key scheme in the Baltic states) • Population-group-specific eligibility (CY, MT; IE) • Consumption-based-specific eligibility (DK, SE) • Only in a few EU Member States (e.g. AT DE, IT, NL, UK), all pharmaceuticals on the positive list are 100% reimbursed. 11

  12. Reference Price System Definition: The social health insurance / national health service determines a maximum price (= reference price) to be reimbursed for certain pharmaceuticals. On buying a pharmaceutical for which a fixed price / amount ( = reimbursement price) has been determined, the insured person must pay the difference between the fixed price / amount and the actual pharmacy retail price of the pharmaceutical in question, in addition to any fixed co-payment or percentage co-payment rates. Usually the reference price is the samefor all pharmaceuticals in a given ATC 4 and/or ATC 5 level group. Source: PPRI Glossary, http://ppri.goeg.at 12

  13. Reimbursement:Reference price systemsin the EU MS 2009 FI: RPS from 4/2009 on • 22 EU Member States with a reference price system Source: PPRI 2008, updated information Source: PPRI, national information sources 13

  14. Rational use of medicines • Prescription guidelines • All EU MS • mostlyindicative • Prescriptionmonitoring • All EU MS • Referringtothereimbursementmarket • Pharmaceuticalbudgetsfordoctors • Quite rare • Budgets are in: DE, CZ, ES in someregions, IE (withincentives), LV (sanctionsagainstdoctors), SE in someregions, UK 14

  15. Pharmaceutical expenditure per inhabitant 2007in € PPPa *** no data of IE, MT, RO, SI ** NO, IT : 2008 SK 2006 BG (only public expenditure), LU, LV: 2005 CY, EE: 2004 TR: 2000 UK: 1997 Source: OECD 2009, Eurostat 2009, PPRI 15

  16. Pricing-related cost-containment measures • Price control (at manufacturer level):in all EU-27 excl. DK, DE, MT • External price referencing:in 22 EU Member States • Price freezes/cuts:- price freezes - observed in DK, HU, IE, NL, UK- a common measure (e.g. CY, FI, FR, IT, NL, PT, SK, UK) • Price control at distribution level:- wholesale margin in 21 of the 27 EU MS (excl. CY, DK, FI, NL, SE)- pharmacy margin in all PPRI countries • Margin cuts:- very common, e.g. EL, FR, FI, HU, LT, PL, SK, UK- either cuts or changes • Statutory discounts:granted to Third Party Payers, e.g. DE, IT (in form of price cuts) 16

  17. Reimbursement-related cost-containment measures • Changes in reimbursement lists:- in nearly all countries • Changes in reference price systems:- e.g. in BE, DE, HU, PL • Systematic reimbursement reviewsof several therapeutic classes or the whole system:- e.g. in BE,FR, LT, SE • Claw-back system- in place in BE, FR, HU, NL and UK 17

  18. Lessons learned • Total pharmaceutical expenditure has increased; however successful cost-containment does not necessarily mean shifting the burden to the patients ( rational use). • Need for information by the Member States • Sharing information at an ad-hoc basis • In-depth and comparable, up-to-date information • Information on the hospital sector is needed • Need for a common understanding language • Need for improvements in data availability and comparability • Need for an active and sustainable network 18

  19. Pharmaceutical Pricing and Reimbursement Information • Framework • Research project • Funded by European Commission, DG SANCO,co-funded by the Austrian Federal Ministry of Health • Project leader: GÖG/ÖBIGAssociated partner: WHO, Regional Office for Europe • April 2005 – October 2007, from 2008 on: the network continues • Objective • improve knowledge and promotes information exchange about the pharmaceutical systems in the enlarged Europe • Deliverables: Glossary, Pharma Profiles, Set of Core Indicators

  20. Pharmaceutical Health Information System (PHIS), http://phis.goeg.at Scope: To monitor and assess up-to-date health information and data for the field of pharmaceuticals in a comprehensive health system approach (i.e. covering the out-patient and in-patient sector) in the EU Member States, and to evaluate these indicators from a public health perspective, and to build a database  to develop a sustainable pharmaceutical health information system Members: All 27 Member States, ALB, CA, NO, IS, CH, TR, South Afrika, plus hospital representatives. More than 60 institutions Leading Institutions: GÖG/ÖBIG (AT, main partner), AIFA (IT), IHHII (BG), SOGETI (LU), SUKL (SK) Establishment: Executive Agency for Health and Consumers (EAHC), Advisory Board: EAHC, DG SANCO, DG ENTR, DG Eurostat, OECD, WHO HQ + Europe Period: September 2008 – April 2011 20

  21. European Medicines Information Network(EMINet), http://www.eminet.eu • Background: Established in December 2008 following a tender of the European Commission, DG Enterprise • Objective: Support P + R decision- and policy-makers on the national and European level • Tasks: Collect, compare and disseminate knowledge on different pricing practices and cost-containment mechanisms in the EU  Analyses to build further knowledge upon need • Project Organisation: Project Management – GÖG, EASP, LSE Health; Evaluation Committee • Time-table: 2009 - 2013 21

  22. Thankyouforyourattention! Nina Zimmermann Researcher at GÖG/ÖBIG Health Economics GÖG / ÖBIG (Austrian Health Institute) / PPRI Secretariat Stubenring 6, 1010 Vienna. AUSTRIA Tel. +43 1 51561/132 e-mail: nina.zimmermann@goeg.at http://www.goeg.at, Health Economicshttp://ppri..at, http://phis.goeg.at

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