After the US FDA revoked its emergency use authorization for hydroxychloroquine/chloroquine, Gilead Sciences (US)'s… https://t.co/Fh762DWhkJ
The Access to Medicine Index 2016: Highlighting the role for tiered pricing
In the wake of the US presidential election results, let us not forget another important set of results released this month, namely the ranking of the world's top 20 research-based pharmaceutical companies in the Access to Medicine Index 2016. This initiative, funded by the Bill & Melinda Gates Foundation and Dutch and UK governments, provides an independent assessment of what the pharmaceutical industry is doing to help make medicines more accessible in low- and middle-income countries.
First published in 2008 and updated every two years, the Index is now in its fifth edition, with GlaxoSmithKline having maintained its position at the top of the ranking since inception. As we discussed earlier this year, GSK has recently developed a graduated approach to intellectual property management, sitting alongside an established tiered pricing framework. The Access to Medicine Foundation, in its separate report card for GSK, applauded the company for having the highest number of products with what it calls equitable pricing strategies in place targeting priority countries.
Tiered or equitable pricing is one of a number of elements falling under the umbrella of Pricing, Manufacturing & Distribution, one of seven so-called Technical Areas against which companies are assessed. Rankings take into consideration not only company performance, but also commitments, level of transparency, and degree of innovation across these different domains.
The Access to Medicine Foundation, in addition to capturing how broadly across its portfolio and to which countries a company applies tiered pricing, also considers the range of socio-economic and other factors taken into account to formulate actual tiers. GSK is once again applauded for considering the most socio-economic factors on average per strategy.
Johnson & Johnson, whom we also wrote about earlier this year in the context of the company's new global public health strategy, similarly received praise for the range of factors defining its inter-country tiered pricing framework, including level of economic development, disease burden, state of the healthcare system, and level of out-of-pocket payments.
Other companies noted for having significantly expanded tiered pricing activities in the last two years include Novartis (which has more than doubled the number of products associated with this approach), Sanofi and AstraZeneca.
The increased attention given to tiered pricing reflects the extent to which a consensus has begun to emerge seeing it as a viable option, alongside other tools, for helping to develop pricing models that expand access. Officials from the World Health Organization, for example, have referenced tiered pricing as having a potential role to play in development of a "fair pricing model," a priority for the agency in 2017.
Despite resistance to the concept of tiered pricing from certain NGOs, as well as question marks from some corners of the industry over both the workability and applicability of the model in practice, these developments, alongside the Access to Medicine Index, indicate that tiered pricing is more than just a flash in the pan, or preserve of only certain kinds of companies with certain kinds of assets.
Indeed, within the Life Sciences team, we continue to work with a growing number of companies interested in an opportunity assessment of, or formalization of an approach for, tiered pricing. By having joined forces with our colleagues in Economics and Country Risk, we are able to provide clients with a holistic view that marries together consumer, epidemiological, macroeconomic and demographic data. Pairing this insight with data forecasts and a forward-looking view on the direction of health policy enables companies to adopt a longer-term perspective.
To learn more about tiered pricing approaches, purchase our multi-client studies on inter- and intra -country tiered pricing, or get in touch to discuss how we can bring combined expertise in Life Sciences and Economics and Country Risk to support your organization.
Cameron Lockwood is the Manager of the Life Sciences EMEA consulting team for IHS Markit
Posted 15 November 2016
- The case of remdesivir: How do you calculate the cost of a pandemic drug?
- COVID-19 treatments: No magic bullet
- The race intensifies for a COVID-19 vaccine as hope builds for emergency approval by September
- Is the US ready to start relaxing COVID-19 lockdowns?
- COVID-19 could cause delays for price framework agreements in parts of Europe
- US scrambles for resources in COVID-19 response
- COVID-19: Risk of severe complications among the United States health workforce
- COVID-19 pandemic: Health system surge capacity
Generating an effective vaccine with any long-term effect has initiated a diverse selection of vaccine projects- wh… https://t.co/7f0HYLEY6P