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Abstract:
Dr Brian Godman and Professor Mohamed Azmi Hassali review Rida et al. regarding pricing strategies for pharmaceuticals in developing countries.
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Submitted: 15 March 2017; Revised: 22 March 2017; Accepted: 24 March 2017; Published online first: 6 April 2017
Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries [1], also referred to as lowerand middle-income countries (LMICs). These include advocating policies regarding markups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics [2–4]. However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices [5]. There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in The Netherlands, including quarterly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2% of the originator price in a short time period [6]. In Sweden, compulsory generics substitution with the lowest priced generic drug also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic drug was guaranteed a substantial proportion of the market the following month [7, 8].
The prices of pharmaceuticals are a particular issue in LMICs, where medicines can account for up to 60% of total healthcare expenditures, and where up to 90% of the population purchase medicines through copayments [9, 10]. High co-payments impact on adherence of non-communicable diseases (NCDs) as well as on access to biologicals to treat immunological diseases [11–13]. This is a concern with NCDs as for example, currently three out of four patients with hypertension live in LMICs [14]. As mentioned by Rida and Ibrahim, promoting generics is a major way to reduce prices and enhance access to appropriate medicines [1, 10, 15, 16]. Although things are changing [10, 16], to date, there have only been a limited number of policy evaluations surrounding generics in LMICs [17]. There is also a comparative lack of strategies in place to combat the activities of pharmaceutical companies who are promoting their branded medicines negatively impacting on the use of generics [18]. The lack of promotion of generics can often be coupled with a lack of formal pricing strategies for generics [8]. This can be a major concern for countries and patients with NCDs, as generics for NCDs can be manufactured and distributed for as little as US$1 per patient per month [19, 20].
The lack of formal pricing strategies in place for generics in LMICs contrasts sharply with European countries where there are multiple formal pricing policies. These can be collated under three main themes [10, 21, 22] and include [8]: regulated systems (prescriptive pricing) where there are established rules for the pricing of generics, as seen in Belgium, Croatia, France, Hungary, Norway and Poland; free pricing – where manufacturers are (relatively) free to set prices of generics, as seen in Germany, The Netherlands, Sweden and the UK; however, typically there are programmes in place to obtain low prices; or a mixed approach – which is a combination of the two different approaches, as currently seen in Austria [10, 23–26].
As a result of the different pricing policies, there can be substantial price differences for generics [8, 22, 27]. Overall, generics prices can vary by up to 36 fold across countries depending on the pricing policies [28], with prices generally lower in countries with higher consumption of generics [29]. This is independent of the size of the country [30, 31]. Different countries across Europe and other parts of the world have also used a variety of other approaches to promote the use of generics. These include educational approaches, financial incentives and laws. Laws include compulsory generics substitution, as seen in Sweden, or compulsory International Nonproprietary Name (INN) prescribing, as seen in Lithuania [7, 30].
Despite the efforts being made, there are still a number of barriers that need to be addressed to enhance the prescribing and dispensing of generics, especially in LMICs [10, 32, 33]. These include addressing fears associated with generics substitution that are enhanced by concerns over the efficacy and safety of generics [34, 35]. Such fears resulted in Hassali et al. developing a list of requirements that should be met to enhance successful substitution [36]. Educational needs include encouraging high INN prescribing which is advocated by the World Health Organization (WHO) for non-controversial products, as seen in Scotland where rates are close to the 100% [8, 37]. Financial incentives include greater patient co-payments for branded products of the same molecule, which is typically practised across Europe [22]. Potential initiatives can also include reducing financial disincentives to the prescribing of generics, as currently seen in China. Here, both hospitals and physicians need to prescribe branded products with associated procured discounts to enhance their incomes [38]. This is in addition to the measures mentioned in Table 1 by Rida and Ibrahim [1].
It is important that appropriate care is taken when introducing pricing policies for generics. In 2012, the South Korean Government set the same maximum reimbursement price for originators and generics in an attempt to make the market more competitive [39], building on earlier reforms mentioned in Table 1 by Rida and Ibrahim [1]. However, given the concerns that still exist among physicians in Korea regarding generics, the opposite was achieved. The price dispersion between different generics significantly decreased and originator utilization significantly increased [39]. A similar situation was seen when compulsory INN prescribing was introduced in Abu Dhabi, United Arab Emirates. Implementation of this policy did not achieve the desired results as physicians were not incentivized to preferentially prescribe the generic medicines and pharmacists’ remuneration was not altered to preferentially dispense the cheapest INN product [40].
Many countries have also implemented a variety of approaches to the pricing and reimbursement of new medicines. Whilst all countries use critical appraisal techniques to assess the level of health gain with new medicines as part of pricing negotiations, some countries use this as a basis for pricing negotiations, e.g. Austria, France and Germany. Others use this information to develop economic para meters, such as the extent of an increase in quality adjusted life years (QALYs) with the new medicine with or without a budget impact analysis [41–43]. One concern is that most countries that utilize QALYs do not set thresholds, which can be exploited by pharmaceutical companies, especially in emotive disease areas, such as cancer and orphan diseases [41, 44, 45].
There is also growing use of risk-sharing arrangements brought about by the everincreasing prices of new medicines and issues of affordability in European countries [42, 46, 47]. This contrasts sharply with LMIC countries where there are currently few formal pricing approaches for new medicines, as discussed by Rida and Ibrahim [1]. Examples of pricing strategies that could be considered by LMICs when funding new medicines include those currently instigated in Austria [42, 48]. This is in addition to ERP as advocated by WHO [4]. In Austria, new medicines that are similar to existing standards are expected to be priced lower than the current standard prices for reimbursement [49]. New medicines that have added benefit can potentially command up to 10% more than the current standard prices, with prices for new medicines that are deemed to have substantially more added value, being allowed to have prices similar to European countries endorsed by health economic evaluations [49]. In the case of LMICs, this would mean prices similar to other LMICs with similar economic situations, as seen in Europe [3]. With only a few new medicines typically seen as innovative, this means that most new medicines will be priced below or just above current standards [42, 48], greatly increasing affordability and access.
In conclusion, Rida and Ibrahim’s research has been extensive. They have highlighted the need for LMICs to develop suitable pricing strategies for medicines to enhance access to affordable medicines. This is essential given rising rates of NCDs and other diseases. There is an opportunity for LMICs to learn from other countries, such as those in Europe who are developing strategies to cope with growing resource pressures on healthcare systems and the need to maintain equitable and comprehensive health care for all [8, 42].
Competing interests: None.
Provenance and peer review: Commissioned; externally peer reviewed.
Authors
Brian Godman1,2,3, BSc, PhD
Professor Mohamed Azmi Hassali4, PhD
1Strathclyde Institute of Pharmacy and Biomedical Sciences, University of Strathclyde, G4 0RE Glasgow, UK
2Department of Laboratory Medicine, Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-14186 Stockholm, Sweden
3Health Economics Centre, University of Liverpool Management School, Liverpool, UK
4Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, MY-11800 Minden, Penang, Malaysia
References
1. Rida NMA, Ibrahim M. Pricing strategies for pharmaceuticals in developing countries: what option do we have? Generics and Biosimilars Journal (GaBI Journal). 2017;6(1):4-6. doi:10.5639/gabij.2017.0601.002
2. Putrik P, Ramiro S, Kvien TK, Sokka T, Pavlova M, Uhlig T, et al. Inequities in access to biologic and synthetic DMARDs across 46 European countries. Ann Rheum Dis. 2014;73(1):198-206.
3. Leopold C, Vogler S, Mantel-Teeuwisse AK, de Joncheere K, Leufkens HG, Laing R. Differences in external price referencing in Europe: a descriptive overview. Health Policy. 2012;104(1):50-60.
4. World Health Organization. WHO Guideline on country pharmaceutical pricing policies [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://apps.who.int/medicinedocs/documents/s21016en/s21016en.pdf
5. European Commission. Carone G, Schwierz C, Xavier A. Cost-containment policies in public pharmaceutical spending in the EU [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://ec.europa.eu/economy_finance/publications/economic_paper/2012/pdf/ecp_461_en.pdf
6. Woerkom Mv, Piepenbrink H, Godman B, Metz J, Campbell S, Bennie M, et al. Ongoing measures to enhance the efficiency of prescribing of proton pump inhibitors and statins in The Netherlands: influence and future implications. J Comp Eff Res. 2012;1(6):527-38.
7. Godman B, Wettermark B, Hoffmann M, Andersson K, Haycox A, Gustafsson LL. Multifaceted national and regional drug reforms and initiatives in ambulatory care in Sweden: global relevance. Expert Rev Pharmacoecon Outcomes Res. 2009;9(1): 65-83
8. Godman B, Baker A, Leporowski A, Morton A, Baumgärtel C, Bochenek T, Fadare J, et al. Initiatives to increase the prescribing of low cost generics; the case of Scotland in the international context. Medical Research Archives. 2017;5(3):1-34
9. Cameron A, Ewen M, Ross-Degnan D, Ball D, Laing R. Medicine prices, availability, and affordability in 36 developing and middle-income countries: a secondary analysis. Lancet. 2009;373(9659):240-9.
10. HAI. Policy options for promoting the use of generic medicines in low and middle-income countries. March 2016 [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://haiweb.org/wp-content/uploads/2017/02/HAI_Review_generics_policies_final.pdf
11. Kostic M, Djakovic L, Šujić R, Godman B, Jankovic SM. Inflammatory Bowel Diseases (Crohn’s Disease and Ulcerative Colitis): cost of treatment in Serbia and the implications. Appl Health Econ Health Policy. 2017;15(1):85-93.
12. Choudhry NK, Denberg TD, Qaseem A. Improving adherence to therapy and clinical outcomes while containing costs: opportunities from the greater use of generic medications: best practice advice from the Clinical Guidelines Committee of the American College of Physicians. Ann Intern Med. 2016;164(1):41-9.
13. Simoens S, Sinnaeve PR. Patient co-payment and adherence to statins: a review and case studies. Cardiovasc Drugs Ther. 2014;28(1):99-109.
14. Irazola VE, Gutierrez L, Bloomfield G, Carrillo-Larco RM, Dorairaj P, Gaziano T, et al. Hypertension prevalence, awareness, treatment, and control in selected LMIC Communities: results from the NHLBI/UHG Network of Centers of Excellence for Chronic Diseases. Glob Heart. 2016;11(1):47-59.
15. Cameron A, Mantel-Teeuwisse AK, Leufkens HG, Laing RO. Switching from originator brand medicines to generic equivalents in selected developing countries: how much could be saved? Value Health. 2012;15(5):664-73.
16. Hassali MA, Alrasheedy AA, McLachlan A, Nguyen TA, Al-Tamimi SK, Ibrahim MI, et al. The experiences of implementing generic medicine policy in eight countries: a review and recommendations for a successful promotion of generic medicine use. Saudi Pharm J. 2014;22(6):491-503.
17. Kaplan WA, Ritz LS, Vitello M, Wirtz VJ. Policies to promote use of generic medicines in low and middle income countries: a review of published literature, 2000-2010. Health Policy. 2012;106(3):211-24.
18. Civaner M. Sale strategies of pharmaceutical companies in a “pharmerging” country: the problems will not improve if the gaps remain. Health Policy. 2012;106(3):225-32.
19. Novartis. Kenya first country to launch ‘Novartis Access’, expanding affordable treatment options against chronic diseases. 15 Oct 2015. Available from: https://www.novartis.com/news/media-releases/kenya-first-country-launch-novartis-access-expanding-affordable-treatment
20. Novartis. Novartis access. Available from: https://www.novartis.com/about-us/corporate-responsibility/expanding-access-healthcare/novartisaccess
21. Godman B, Shrank W, Wettermark B, Andersen M, Bishop I, Burkhardt T, et al. Use of genericsa critical cost containment measure for all healthcare professionals in Europe? Pharmaceuticals (Basel). 2010;3(8):2470-94.
22. Simoens S. A review of generic medicine pricing in Europe. Generics and Biosimilar Journal. 2012;1(1):8-12. doi:10.5639/gabij.2012.0101.004
23. Sermet C, Andrieu V, Godman B, Van Ganse E, Haycox A, Reynier JP. Ongoing pharmaceutical reforms in France: implications for key stakeholder groups. Appl Health Econ Health Policy. 2010;8(1):7-24.
24. Dylst P, Vulto A, Simoens S. Analysis of French generic medicines retail market: why the use of generic medicines is limited. Expert Rev Pharmacoeco Outcomes Res. 2014;14(6):795-803.
25. Godman B, Sakshaug S, Berg C, Wettermark B, Haycox A. Combination of prescribing restrictions and policies to engineer low prices to reduce reimbursement costs. Expert Rev Pharmacoecon Outcomes Res. 2011;11(1):121-9.
26. Brkičić LS, Godman B, Bogut M, Sršen M, Kwon H-Y, de Bruyn W, Tabain T. Pharmaceutical pricing in Croatia: a comparison of ordinances in 2013 versus 2009 and their potential savings to provide future guidance. Generics and Biosimilars Initiative Journal (GaBI Journal). 2015;4(2):79-89. doi:10.5639/gabij.2015.0402.017
27. Vogler S. The impact of pharmaceutical pricing and reimbursement policies on generics uptake: implementation of policy options on generics in 29 European countries–an overview. Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(2):93-100. doi:10.5639/gabij.2012.0102.020
28. Simoens S. International comparison of generic medicine prices. Curr Med Res Opin. 2007;23(11):2647-54.
29. Dylst P, Simoens S. Does the market share of generic medicines influence the price level?: a European analysis. Pharmacoeconomics. 2011;29(10):875-82.
30. Garuoliene K, Godman B, Gulbinovič J, Wettermark B, Haycox A. European countries with small populations can obtain low prices for drugs: Lithuania as a case history. Expert Rev Pharmacoecon Outcomes Res. 2011;11(3):343-9.
31. Markovic-Pekovic V, Skrbić R, Godman B, Gustafsson LL. Ongoing initiatives in the Republic of Srpska to enhance prescribing efficiency: influence and future directions. Expert Rev Pharmacoecon Outcomes Res. 2012;12(5):661-71.
32. Nguyen TA, Hassali MAA, McLachlan A. Generic medicines policies in the Asia Pacific region: ways forward. WHO South-East Asia Journal of Public Health. 2013;2(1):72-4.
33. Fadare JO, Adeoti AO, Desalu OO, Enwere OO, Makusidi AM, Ogunleye O, et al. The prescribing of generic medicines in Nigeria: knowledge, perceptions and attitudes of physicians. Expert Rev Pharmacoecon Outcomes Res. 2016;16(5):639-50.
34. Kumar R, Hassali MA, Saleem F, Alrasheedy AA, Kaur N, Wong ZY, et al. Knowledge and perceptions of physicians from private medical centres towards generic medicines: a nationwide survey from Malaysia. J Pharm Policy Pract. 2015;8(1):11.
35. Hassali MA, Wong ZY, Alrasheedy AA, Saleem F, Mohamad Yahaya AH, Aljadhey H. Perspectives of physicians practicing in low and middle income countries towards generic medicines: a narrative review. Health Policy. 2014;117(3):297-310.
36. Hassali MA, Thambyappa J, Saleem F, ul Haq N, Aljadhey H. Generic substitution in Malaysia: recommendations from a systematic review. J Appl Pharm Sci. 2012;2(8):159-64.
37. Ofori-Asenso R, Brhlikova P, Pollock AM. Prescribing indicators at primary health care centers within the WHO African region: a systematic analysis (1995–2015). BMC Public Health. 2016;16:724.
38. Zeng W, Zhen J, Feng M, Campbell SM, Finlayson AE, Godman B. Analysis of the influence of recent reforms in China: cardiovascular and cerebrovascular medicines as a case history to provide future direction. J Comp Eff Res. 2014;3(4):371-86.
39. Kwon HY, Kim H, Godman B, Reich MR. The impact of South Korea’s new drug-pricing policy on market competition among off-patent drugs. Expert Rev Pharmacoecon Outcomes Res. 2015;15(6):1007-14.
40. Abuelkhair M, Abdu S, Godman B, Fahmy S, Malmström RE, Gustafsson LL. Imperative to consider multiple initiatives to maximize prescribing efficiency from generic availability: case history from Abu Dhabi. Expert Rev Pharmacoecon Outcomes Res. 2012;12(1):115-24.
41. Organisation for Economic C-operation and Development. Paris V. Belloni A. Value in pharmaceutical pricing [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://www.oecd-ilibrary.org/social-issues-migration-health/value-in-pharmaceutical-pricing_5k43jc9v6knx-en
42. European Parliament. Godman B, Ortwijn W, de Waure C, Mosca I, Puggina A, Specchia ML et al. Links between pharmaceutical R&D models and access to affordable medicines. A study for the ENVI Committee [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://www.europarl. europa.eu/RegData/etudes/STUD/2016/587321/IPOL_STU(2016)587321_EN.pdf
43. Faleiros DR, Alvares J, Almeida AM, de Araújo VE, Andrade EI, Godman BB, et al. Budget impact analysis of medicines: updated systematic review and implications. Expert Rev Pharmacoecon Outcomes Res. 2016;16(2):257-66.
44. Simoens S, Picavet E, Dooms M, Cassiman D, Morel T. Cost-effectiveness assessment of orphan drugs: a scientific and political conundrum. Appl Health Econ Health Policy. 2013;11(1):1-3.
45. Haycox A. Why cancer? Pharmacoeconomics. 2016;34(7):625-7.
46. Ferrario A, Kanavos P. Dealing with uncertainty and high prices of new medicines: a comparative analysis of the use of managed entry agreements in Belgium, England, the Netherlands and Sweden. Soc Sci Med. 2015;124:39-47.
47. Ferrario A, Kananvos P. Managed entry agreements for pharmaceuticals: the European experience. EMiNet, Brussels, Belgium. Available from: http://eprints.lse.ac.uk/50513/2013
48. World Health Organization. Access to new medicines in Europe: technical review of policy initiatives and opportunities for collaboration and research. [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://www.euro.who.int/_data/assets/pdf_file/0008/306179/Access-new-medicines-TR-PIO-collaboration-research.pdf?ua=1
49. Godman B, Bucsics A, Burkhardt T, Haycox A, Seyfried H, Wieninger P. Insight into recent reforms and initiatives in Austria: implications for key stakeholders. Expert Rev Pharmacoecon Outcomes Res. 2008;8(4):357-71.
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Author for correspondence: Brian Godman, BSc, PhD, Strathclyde Institute of Pharmacy and Biomedical Sciences, University of Strathclyde, G4 0RE Glasgow, UK; Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-14186 Stockholm, Sweden
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Strategies for pricing of pharmaceuticals and generics in developing countries
Generics and Biosimilars Initiative Journal (GaBI Journal). 2017;6(2):58-60.
Published in: Volume 6 / Year 2017 / Issue 2DOI: 10.5639/gabij.2017.0602.013
Category: Commentary
Page: 58-60
Author(s): Brian Godman, BSc, PhD, Professor Mohamed Azmi Hassali, PhD
Visits: 9223 total, 2 today
Abstract:
Dr Brian Godman and Professor Mohamed Azmi Hassali review Rida et al. regarding pricing strategies for pharmaceuticals in developing countries.
Submitted: 15 March 2017; Revised: 22 March 2017; Accepted: 24 March 2017; Published online first: 6 April 2017
Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries [1], also referred to as lowerand middle-income countries (LMICs). These include advocating policies regarding markups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics [2–4]. However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices [5]. There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in The Netherlands, including quarterly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2% of the originator price in a short time period [6]. In Sweden, compulsory generics substitution with the lowest priced generic drug also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic drug was guaranteed a substantial proportion of the market the following month [7, 8].
The prices of pharmaceuticals are a particular issue in LMICs, where medicines can account for up to 60% of total healthcare expenditures, and where up to 90% of the population purchase medicines through copayments [9, 10]. High co-payments impact on adherence of non-communicable diseases (NCDs) as well as on access to biologicals to treat immunological diseases [11–13]. This is a concern with NCDs as for example, currently three out of four patients with hypertension live in LMICs [14]. As mentioned by Rida and Ibrahim, promoting generics is a major way to reduce prices and enhance access to appropriate medicines [1, 10, 15, 16]. Although things are changing [10, 16], to date, there have only been a limited number of policy evaluations surrounding generics in LMICs [17]. There is also a comparative lack of strategies in place to combat the activities of pharmaceutical companies who are promoting their branded medicines negatively impacting on the use of generics [18]. The lack of promotion of generics can often be coupled with a lack of formal pricing strategies for generics [8]. This can be a major concern for countries and patients with NCDs, as generics for NCDs can be manufactured and distributed for as little as US$1 per patient per month [19, 20].
The lack of formal pricing strategies in place for generics in LMICs contrasts sharply with European countries where there are multiple formal pricing policies. These can be collated under three main themes [10, 21, 22] and include [8]: regulated systems (prescriptive pricing) where there are established rules for the pricing of generics, as seen in Belgium, Croatia, France, Hungary, Norway and Poland; free pricing – where manufacturers are (relatively) free to set prices of generics, as seen in Germany, The Netherlands, Sweden and the UK; however, typically there are programmes in place to obtain low prices; or a mixed approach – which is a combination of the two different approaches, as currently seen in Austria [10, 23–26].
As a result of the different pricing policies, there can be substantial price differences for generics [8, 22, 27]. Overall, generics prices can vary by up to 36 fold across countries depending on the pricing policies [28], with prices generally lower in countries with higher consumption of generics [29]. This is independent of the size of the country [30, 31]. Different countries across Europe and other parts of the world have also used a variety of other approaches to promote the use of generics. These include educational approaches, financial incentives and laws. Laws include compulsory generics substitution, as seen in Sweden, or compulsory International Nonproprietary Name (INN) prescribing, as seen in Lithuania [7, 30].
Despite the efforts being made, there are still a number of barriers that need to be addressed to enhance the prescribing and dispensing of generics, especially in LMICs [10, 32, 33]. These include addressing fears associated with generics substitution that are enhanced by concerns over the efficacy and safety of generics [34, 35]. Such fears resulted in Hassali et al. developing a list of requirements that should be met to enhance successful substitution [36]. Educational needs include encouraging high INN prescribing which is advocated by the World Health Organization (WHO) for non-controversial products, as seen in Scotland where rates are close to the 100% [8, 37]. Financial incentives include greater patient co-payments for branded products of the same molecule, which is typically practised across Europe [22]. Potential initiatives can also include reducing financial disincentives to the prescribing of generics, as currently seen in China. Here, both hospitals and physicians need to prescribe branded products with associated procured discounts to enhance their incomes [38]. This is in addition to the measures mentioned in Table 1 by Rida and Ibrahim [1].
It is important that appropriate care is taken when introducing pricing policies for generics. In 2012, the South Korean Government set the same maximum reimbursement price for originators and generics in an attempt to make the market more competitive [39], building on earlier reforms mentioned in Table 1 by Rida and Ibrahim [1]. However, given the concerns that still exist among physicians in Korea regarding generics, the opposite was achieved. The price dispersion between different generics significantly decreased and originator utilization significantly increased [39]. A similar situation was seen when compulsory INN prescribing was introduced in Abu Dhabi, United Arab Emirates. Implementation of this policy did not achieve the desired results as physicians were not incentivized to preferentially prescribe the generic medicines and pharmacists’ remuneration was not altered to preferentially dispense the cheapest INN product [40].
Many countries have also implemented a variety of approaches to the pricing and reimbursement of new medicines. Whilst all countries use critical appraisal techniques to assess the level of health gain with new medicines as part of pricing negotiations, some countries use this as a basis for pricing negotiations, e.g. Austria, France and Germany. Others use this information to develop economic para meters, such as the extent of an increase in quality adjusted life years (QALYs) with the new medicine with or without a budget impact analysis [41–43]. One concern is that most countries that utilize QALYs do not set thresholds, which can be exploited by pharmaceutical companies, especially in emotive disease areas, such as cancer and orphan diseases [41, 44, 45].
There is also growing use of risk-sharing arrangements brought about by the everincreasing prices of new medicines and issues of affordability in European countries [42, 46, 47]. This contrasts sharply with LMIC countries where there are currently few formal pricing approaches for new medicines, as discussed by Rida and Ibrahim [1]. Examples of pricing strategies that could be considered by LMICs when funding new medicines include those currently instigated in Austria [42, 48]. This is in addition to ERP as advocated by WHO [4]. In Austria, new medicines that are similar to existing standards are expected to be priced lower than the current standard prices for reimbursement [49]. New medicines that have added benefit can potentially command up to 10% more than the current standard prices, with prices for new medicines that are deemed to have substantially more added value, being allowed to have prices similar to European countries endorsed by health economic evaluations [49]. In the case of LMICs, this would mean prices similar to other LMICs with similar economic situations, as seen in Europe [3]. With only a few new medicines typically seen as innovative, this means that most new medicines will be priced below or just above current standards [42, 48], greatly increasing affordability and access.
In conclusion, Rida and Ibrahim’s research has been extensive. They have highlighted the need for LMICs to develop suitable pricing strategies for medicines to enhance access to affordable medicines. This is essential given rising rates of NCDs and other diseases. There is an opportunity for LMICs to learn from other countries, such as those in Europe who are developing strategies to cope with growing resource pressures on healthcare systems and the need to maintain equitable and comprehensive health care for all [8, 42].
Competing interests: None.
Provenance and peer review: Commissioned; externally peer reviewed.
Authors
Brian Godman1,2,3, BSc, PhD
Professor Mohamed Azmi Hassali4, PhD
1Strathclyde Institute of Pharmacy and Biomedical Sciences, University of Strathclyde, G4 0RE Glasgow, UK
2Department of Laboratory Medicine, Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-14186 Stockholm, Sweden
3Health Economics Centre, University of Liverpool Management School, Liverpool, UK
4Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, MY-11800 Minden, Penang, Malaysia
References
1. Rida NMA, Ibrahim M. Pricing strategies for pharmaceuticals in developing countries: what option do we have? Generics and Biosimilars Journal (GaBI Journal). 2017;6(1):4-6. doi:10.5639/gabij.2017.0601.002
2. Putrik P, Ramiro S, Kvien TK, Sokka T, Pavlova M, Uhlig T, et al. Inequities in access to biologic and synthetic DMARDs across 46 European countries. Ann Rheum Dis. 2014;73(1):198-206.
3. Leopold C, Vogler S, Mantel-Teeuwisse AK, de Joncheere K, Leufkens HG, Laing R. Differences in external price referencing in Europe: a descriptive overview. Health Policy. 2012;104(1):50-60.
4. World Health Organization. WHO Guideline on country pharmaceutical pricing policies [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://apps.who.int/medicinedocs/documents/s21016en/s21016en.pdf
5. European Commission. Carone G, Schwierz C, Xavier A. Cost-containment policies in public pharmaceutical spending in the EU [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://ec.europa.eu/economy_finance/publications/economic_paper/2012/pdf/ecp_461_en.pdf
6. Woerkom Mv, Piepenbrink H, Godman B, Metz J, Campbell S, Bennie M, et al. Ongoing measures to enhance the efficiency of prescribing of proton pump inhibitors and statins in The Netherlands: influence and future implications. J Comp Eff Res. 2012;1(6):527-38.
7. Godman B, Wettermark B, Hoffmann M, Andersson K, Haycox A, Gustafsson LL. Multifaceted national and regional drug reforms and initiatives in ambulatory care in Sweden: global relevance. Expert Rev Pharmacoecon Outcomes Res. 2009;9(1): 65-83
8. Godman B, Baker A, Leporowski A, Morton A, Baumgärtel C, Bochenek T, Fadare J, et al. Initiatives to increase the prescribing of low cost generics; the case of Scotland in the international context. Medical Research Archives. 2017;5(3):1-34
9. Cameron A, Ewen M, Ross-Degnan D, Ball D, Laing R. Medicine prices, availability, and affordability in 36 developing and middle-income countries: a secondary analysis. Lancet. 2009;373(9659):240-9.
10. HAI. Policy options for promoting the use of generic medicines in low and middle-income countries. March 2016 [homepage on the Internet]. [cited 2017 Mar 22]. Available from: http://haiweb.org/wp-content/uploads/2017/02/HAI_Review_generics_policies_final.pdf
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Author for correspondence: Brian Godman, BSc, PhD, Strathclyde Institute of Pharmacy and Biomedical Sciences, University of Strathclyde, G4 0RE Glasgow, UK; Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-14186 Stockholm, Sweden
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