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Pricing Pharmaceuticals: Has Public Policy Delivered?

Pricing Pharmaceuticals: Has Public Policy Delivered?. Paul K Gorecki ESRI & TCD Irish Economic Policy Conference 2014: Economic Policy After the Bailout Institute of Bankers, IFC, Dublin 31 January 2014 . STRUCTURE OF PRESENTATION. 2010: What was the problem?

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Pricing Pharmaceuticals: Has Public Policy Delivered?

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  1. Pricing Pharmaceuticals: Has Public Policy Delivered? Paul K Gorecki ESRI & TCD Irish Economic Policy Conference 2014: Economic Policy After the Bailout Institute of Bankers, IFC, Dublin 31 January 2014

  2. STRUCTURE OF PRESENTATION 2010: What was the problem? 2013: Towards a successful resolution? Two Observations on 2010-2013 Future Policy: What Remains to be Done?

  3. Ireland High & Rising Pharma Expenditure:2010 Ireland’s Ranking in Pharmaceutical Expenditure Per Head Cp Other OECD Countries: 2000 – 20th highest of 27 OECD countries 2005 – 9/31 2010 – 3/25 US Pharmaceutical Expenditure Per Head Set = 100, then Ireland would be as follows: 2000 – 46 2005 – 58 2010 - 70

  4. High Input & Mediocre Outcome:2010 “In 2010, per capita expenditure spending on pharmaceuticals in Ireland was the highest in the EU, 34% above the average, while health outcomes are not better than the average for EU countries over a range of high-level indicators.” European Commission, Economic Adjustment Programme for Ireland, Autumn 2012.

  5. Pharmaceutical Prices: 2010 • Generic pharmaceuticals: • Low generic usage cp other MS • High generic prices cp to other MS • New pharmaceuticals: • Consistently high prices cp to other MS • Germany only MS consistently higher prices • Framework for Pricing Decisions: • Voluntary DoH/HSE & industry agreements • No legal basis for generic substitution

  6. Pharmaceutical Pricing: 2013 • Framework for Price Setting • Health (Pricing & Supply of Medical Goods) Act 2013 • Generic Pharmaceuticals (28% expenditure) • Generic substitution permitted • IMB certified 13 active substances (statins, ACE inhibitors) • HSE has set reference price for two drugs (atorvastatin, esomeprazole), large decline in price • New Pharmaceuticals (72% expenditure) • Stock -HSE rolling assessment as per the Act (pregabalin) • Flow – default status quo or use of Act’s powers?

  7. Two Observations on Pharmaceutical Pricing: 2010-2013 • DoH/HSE strategy since 2009 to reduce pharmaceutical expenditure through eg reductions in wholesale & pharmacy margins. • 2010 – 2013 favourable conditions for reform of pharmaceutical pricing • Agreement on problem/solution • Austerity – greater emphasis on VFM • EU-IMF Programme for Reform for Ireland

  8. Future Policy: What Remains to be Done? • Building on the Health (Pricing & Supply of Medical Goods) Act 201 • What is DoH/HSE policy towards pricing of new drugs? • Release on a monthly basis PCRS data • Quality Adjusted Life Year (QALY) • Is €45,000 threshold the right price? • If so, under what conditions, if any, should the threshold be exceeded?

  9. Further reading P. Gorecki, A. Nolan, A. Brick & S Lyons (2012) Delivery of Pharmaceuticals in Ireland. Getting a Bigger Bang for the Buck. RS 24. Dublin: ESRI. A. Brick, P. Gorecki & A. Nolan (2013) Ireland: Pharmaceutical Prices, Prescribing Practices and Usage of Generics in a Comparative Context. RS 32. Dublin: ESRI.

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