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How Cost-Containment Policies Impact Drug Prices and Reimbursement Lists in CEE Countries
With pharmaceutical spending largely increasing in CEE countries, cost-containment policies are now in the radar of those governments. To get a better understanding of how cost-containment policies impact drug prices, we looked into ex-factory price changes between 2011 and 2012 in the Czech Republic, Hungary, Poland, Romania and Slovakia. Results are summarised in the table below:
We also looked at price levels for 10 innovative drugs available in each of these countries. Results are summarised in the table below (Indexes calculated on the basis of 100 attached to the country where prices are the highest).
The Czech Republic, Hungary and Romania Are Less Impacted by Cost-containment Policies Aiming at Lowering Drug Prices.
Prices in the Czech Republic are the highest. What's more, certain case studies demonstrate that prices sometimes challenge those in Germany, a well known high-priced country for drugs. This is largely explained by the fact that a 7% one-year price cut expired in April 2012, which prompted some manufacturers to raise prices. Additionally, the basket of drugs funded in this country is quite large (more than 9,000 drugs) and drugs are on average 70% funded by the government (source: PharmOnline International). Nevertheless, in some occasions, prices are among the lowest, which has prompted drug exports and drugs shortages have been reported in the country.
In Romania, most drugs experienced a price increase between 2011 and 2012. This is however directly linked to the annual adjustment now in place to take into account of fluctuations in the rate of exchange between the Romanian leu and the European euro. While it would be difficult to say that prices in Romania are high, they are nevertheless not the lowest within the basket of drugs studied. Prices in Poland or Slovakia are the lowest. Additionally, around 30% of the drugs on the market are not funded.
In Hungary, prices tend to either remain constant or lower over time. Even if this country ranks second in terms of price index, this result is somehow distorted with Baraclude, which price is significantly higher. The average price per mg per unit is €37.94 in Hungary, while it is €22.58 in the Czech Republic. In addition, conditions in Hungary are not necessarily optimal since no new innovative drug has been included in the reimbursement list since May 2012.
Poland and Slovakia Are Hit Hard: Price Cuts Impact Innovative Drugs, Lowest Price Levels
With more than 50% of the presentations available on those markets experiencing a price cut, results demonstrate that cost-containment policies in Poland and Slovakia strongly focus on lowering drug prices. This is probably the reason why prices tend to be the lowest in those two countries (out of the countries analysed).
In Poland, price cuts are mostly the result of the implantation of the Reimbursement Act in 2012, while price cuts in Slovakia are linked to a change in the International Reference Pricing (IRP).
Those cost-containment policies have enabled governments to lower prices at such low levels that drugs have started to be exported in countries where prices are higher, leading to drug shortages. As a consequence, governments are now assessing the possibility to either increase prices (change in the IRP system in Slovakia for instance) or legislate parallel import.
To make things worse, the number of drugs funded has decreased over time in those two countries. In Poland while around 4,000 presentations were funded in 2011, this figure dropped by around 38% in 2012 following the implementation of the Reimbursement Act in 2012. In Slovakia, the figure is not as alarming as 4% of the drugs funded in 2011 are no longer funded in 2012. This is mostly the result of pharmaceutical companies withdrawing off patent drugs or certain generics when prices are too low.
Towards Stricter P&R procedures for Innovative Drugs
Overall, governments use different types of cost-containment policies aiming at lowering pharmaceutical expenditure. They mainly target drug prices and/or reimbursement. While price cuts were initially mostly targeting off-patent drugs and their generic counterparts, they now impact innovative products, sometimes when new alternatives enter the market. For instance, in the Czech Republic the price of a type 2 diabetes drug - Januvia - experienced a 60% price cut following the market entry of a new therapeutic alterative - Trajenta.
Finally, reimbursement is also increasingly challenging, with countries delaying inclusion or withdrawing drugs of reimbursement lists (Romania, Hungary, Poland).
For More on P&R Join our Webcast on 15 November
When we return from ISPOR Berlin, we are holding a webinar on the pricing and reimbursement challenges facing Europe. Register and come discuss the issues with us-15 November.
Posted 5 November 2012
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