Call for drug pricing transparency

Generics/Research | Posted 05/11/2021 post-comment0 Post your comment

By 2023, pharmaceutical expenditure is expected to reach US$1.5 trillion [1]. This causes significant strain on healthcare systems worldwide and work is underway to bring pharmaceuticals’ spending down.

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Now, a study published in BMJ Open [2], has found additional evidence to support healthcare system interventions, market-specific and governmental regulations, in offering a route to lower drug prices. However, the authors highlight that understanding the actual price paid for products is not straightforward and call for further transparency to facilitate regulation of drug prices by purchasers and policymakers worldwide.

The team, based largely at Radboud University in the Netherlands, investigated the recent factors affecting drug prices both at national and international levels. They carried out a systematic review of peer-reviewed drug price comparison studies (between 2004 and July 2021) to assess factors that can determine the price of drugs. These factors were divided into those that can be modified, and those that cannot.

They found that, of the 31 publications under investigation, only one looked at net drug prices, while the rest included retail drug prices. Net drug prices are the prices actually paid by the purchasing healthcare institute, while retail prices exclude various individual pricing agreements such as rebates. As such, the authors explain that due to the effects of various policy measures, the drug price market is opaque and actual (net) price comparisons is impossible.

Looking at the retail prices, they found that there were five key modifiable factors associated with lower retail prices: generic market portion, discounts, tendering policies, central (governmental) purchasing and pricing regulation schemes. Higher retail prices were found when the originator market portion was greater and for systems in which markups are common.

They also found that retail prices were highest in the US, even compared with other high-income countries. However, when adjusted for purchasing power parity, retail prices were highest in low-income countries.

Overall, various healthcare system interventions, market-specific and governmental regulations are consistently associated with lower retail prices. The authors conclude that many interventions are easily implementable in developing or middle-income countries. These include tendering, central purchasing and fixed pricing regulation

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1. The global use of medicine in 2019 and outlook to 2013: forecasts and areas to Watch. IQVIA Institute for Human Data Science 2019.
2. Janssen Daalen JM, den Ambtman A, Van Houdenhoven M, et al. Determinants of drug prices: a systematic review of comparison studies. BMJ Open. 2021;0:e046917.

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