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South Med Rev. 2012 Dec;5(2):34-41. Epub 2012 Dec 27.

Impact of external price referencing on medicine prices - a price comparison among 14 European countries.

Author information

  • 1WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Health Economics Department, Gesundheit Österreich GmbH / Austrian Health Institute, Vienna, Austria ; WHO Collaborating Centre for Pharmacoepidemiology and Pharmaceutical Policy, Division of Pharmacoepidemiology and Clinical Pharmacology, Utrecht Institute for Pharmaceutical Sciences, Utrecht, the Netherlands.

Abstract

OBJECTIVES:

This study aims to examine the impact of external price referencing (EPR) on on-patent medicine prices, adjusting for other factors that may affect price levels such as sales volume, exchange rates, gross domestic product (GDP) per capita, total pharmaceutical expenditure (TPE), and size of the pharmaceutical industry.

METHODS:

Price data of 14 on-patent products, in 14 European countries in 2007 and 2008 were obtained from the Pharmaceutical Price Information Service of the Austrian Health Institute. Based on the unit ex-factory prices in EURO, scaled ranks per country and per product were calculated. For the regression analysis the scaled ranks per country and product were weighted; each country had the same sum of weights but within a country the weights were proportional to its sales volume in the year (data obtained from IMS Health). Taking the scaled ranks, several statistical analyses were performed by using the program "R", including a multiple regression analysis (including variables such as GDP per capita and national industry size).

RESULTS:

This study showed that on average EPR as a pricing policy leads to lower prices. However, the large variation in price levels among countries using EPR confirmed that the price level is not only driven by EPR. The unadjusted linear regression model confirms that applying EPR in a country is associated with a lower scaled weighted rank (p=0.002). This interaction persisted after inclusion of total pharmaceutical expenditure per capita and GDP per capita in the final model.

CONCLUSIONS:

The study showed that for patented products, prices are in general lower in case the country applied EPR. Nevertheless substantial price differences among countries that apply EPR could be identified. Possible explanations could be found through a correlation between pharmaceutical industry and the scaled price ranks. In conclusion, we found that implementing external reference pricing could lead to lower prices.

KEYWORDS:

Europe; external price referencing; medicines; prices; pricing policy

PMID:
23532710
[PubMed]
PMCID:
PMC3606937
Free PMC Article

Images from this publication.See all images (4)Free text

Figure 1: Impact of EPR on scaled ranks (incl. both years)
Figure 2: Price variances among the selected products within individual countries; countries are displayed in order of GDP per capita in 2007
Figure 3: Price variances among the selected products within individual countries; countries are displayed in order of GDP per capita in 2008
Figure 4: Scatter plat of pharmaceutical employment per 100,000 inhabitants vs. the scaled ranks
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