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What a difference a year (or two) makes. When we published the
2017 edition of our International Reference Pricing Guidebook, we
did so under the banner "
IRP is dead, long live IRP!" This was our nod to the fact that,
in an era of managed-entry agreements, patient access schemes and
other such instruments, a legitimate question has been posed over
the longevity of IRP: to the extent that visible prices in
reference markets increasingly mask varied types of concessions,
has IRP outlived its usefulness?
As we remarked in the 2017 edition of our study, in the final
analysis, IRP remains alive and kicking. Despite the inability to
pierce the veil of confidential discounting, this policy tool
continues to feature prominently in the pricing framework of many
markets, mature and emerging alike.
As we currently finalize the
2019 edition of our Guidebook, we are struck by the extent to
which the intervening period reinforces this observation.
Looking back over just the past few months, we've seen a
veritable wave of IRP reforms:
As of 1 April, Bulgaria's reference basket has been streamlined
and consolidated to do away with the old primary vs. secondary
basket distinction; the IRP formula remains unchanged to reference
the lowest price in the reference basket
In Russia, late last year, a significant number of reference
countries were axed from the basket, and more recently, provisions
have been made for mandatory re-registration of prices
Greece has seen a full overhaul of its pricing framework,
introducing a new reference basket and IRP formula in the
process
In Ukraine, price controls involving IRP have now been extended
to a subsection of the National List of Essential Medicines,
relying on the same reference basket as the Affordable Medicines
pilot, but introducing a new formula
In Malaysia, the cabinet has approved new controls on
pharmaceutical prices involving IRP, with implementation pending
industry consultation
…. and the list goes on. Of course,
the spectre of IRP introduction in the US, in one form or
another, looms large in the background, with potentially
game-changing consequences for industry.
This continued investment in IRP by payers and policymakers
worldwide reflects appreciation for the utility of the tool. Often
positioned alongside other decision-making criteria, or referred to
in the context of negotiation, IRP continues to generate important
benchmarks and points of leverage that payers are not so quick to
relinquish.
For industry, amidst this backdrop of IRP policy churn,
in-depth, nuanced insights on policy evolution are
mission-critical. Maintaining a structured view of the many IRP
parameters in each market - including basket composition, frequency
of re-referencing, scope of medicines covered, exchange rate
mechanisms, and more - is paramount in order to account for the
complexity and interconnectivity of the global IRP landscape.
If there is a clear lesson from our work on the
2019 edition of the Guidebook so far, it is that IRP is
decidedly less dead than it was in years prior.
Posted 12 August 2019 by Cameron Lockwood, Consulting Associate Director, Life Sciences, IHS Markit
