Tendering for medicines in ambulatory care

Generics and biosimilars Initiative

Building trust in cost-effective treatments

Sign up
eng / esp

Tendering for medicines in ambulatory care

Generics/Research | Posted 16/09/2011 0 Post your comment

Tendering is a mechanism whereby a purchaser buys medicines from the pharmaceutical manufacturer that offers the best bid [1]. Whereas tendering is widely used in the hospital sector, it is only recently being rolled out in ambulatory care in an increasing number of countries with a view to constraining pharmaceutical expenditure. Denmark, Germany and The Netherlands are the countries that have taken up the idea most readily. However, the success of this strategy is not yet clear compared to other European generic medicines pricing policies.

In Belgium, a tendering procedure was tried for simvastatin. Data suggests that the simvastatin tender resulted in substantial price reductions and savings for healthcare payers. However, this trend was countered by the growth in expenditure on other statins. Expenditure on medicines containing simvastatin decreased by 30% in 2008 compared to 2007, while expenditure on medicines containing atorvastatin and rosuvastatin increased by 16% and 40% respectively, in the same period. Overall, expenditure on statins was increased by 6.5%. It appears that there are financial incentives to prescribe more expensive products in Belgium, because physicians switched their prescribing patterns to medicines with a similar therapeutic indication that did not fall under the tendering procedure [2].

In Germany, health insurance funds are able to engage in tendering procedures with pharmaceutical manufacturers of originator and generic medicines. Under the tender system, a patient receives a medicine with the active substance, dosage and pack size as prescribed by the physician, but the brand is decided by which manufacturer won the tender. Although no formal evaluation has been undertaken, tendering appears to have resulted in a change in market share from larger to smaller pharmaceutical manufacturers and there have been reports of short-term absences of some medicines due to logistic shortages in Germany and The Netherlands [3, 4].

One study has indicated that cost savings for the pharmaceutical budget have been achieved in the short term due to the significant price reductions. However, a negative impact on the economy was observed in the long term. Countries that implement tendering see a decrease in pharmaceutical investments. This has a negative impact on employment and causes a loss of income from taxes. The development and adoption of generic medicines is also slowed by an aggressive tendering policy [5].

Although many European countries are considering implementing or are implementing tendering procedures for medicines in ambulatory care, its success is by no means proven. There is a need for additional research to document European tendering procedures by exploring the objectives that are pursued by a tender, the legal basis surrounding a tender, the authorities in charge of a tender, the criteria used to award a tender, the frequency and duration of a tender, etc. The short- and the long-term impact of tendering also merits investigation.

For further information on pricing policies in Belgium [6], Germany and The Netherlands [7]; please also see the country focus section of GaBI Online.

Related articles:

Are generic medicines in Europe too expensive?

Challenges facing generic manufacturers in Europe

References

1. Leopold C, Habl C, Vogler S. Tendering of pharmaceuticals in EU Member States and EEA countries. Results from the country survey; ÖBIG Forschungs- und Planungsgesellschaft mbH: Vienna, Austria, 2008.

2. Arickx F, Bormans V, Leveque F, et al. Public tendering for off patent medicines in Belgium—The simvastatin case; RIZIV: Brussels, Belgium, 2009.

3. Dylst P, Simoens S. Generic medicine pricing policies in Europe: current status and impact. Pharmaceuticals. 2010;3(3):471-81.

4. Pharmaceutisch Weekblad 2010;23 April:12–15.

5. Price Waterhouse Coopers. Ontario Public Drug Programs Competitive Agreement Initiative. PWC: Ottawa, ON, Canada, 2007.

6. GaBI Online - Generics and Biosimilars Initiative. Belgium. Policies and legislation [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2011 September 16]. Available from: www.gabionline.net/Country-Focus/Belgium/Policies-and-Legislation

7. GaBI Online - Generics and Biosimilars Initiative. The Netherlands. Policies and Legislation [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2011 September 16]. Available from: www.gabionline.net/Country-Focus/The-Netherlands/Policies-and-Legislation