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Generic price linkage as a policy choice
 

Generic price linkage as a policy choice

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Research poster by IHS Healthcare and Pharma covering generic price linkage and policy. ISPOR 2012

Research poster by IHS Healthcare and Pharma covering generic price linkage and policy. ISPOR 2012

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    Generic price linkage as a policy choice Generic price linkage as a policy choice Document Transcript

    • Generic Price Linkage as aPolicy Choice: Review ofRecent DevelopmentsIzmirlieva M & Ando G (IHS, London, United Kingdom)Background è The Czech Republic allows the use of an “accelerated review procedure” (shortening the pricing and reimbursement reviewPrice capping of generics in relation to the originator (also known to 50 days) for companies accepting a reduction in theas price linkage) has been in use for some time despite studies maximum price of 32% below the originator’s price forquestioning its efficacy as a cost-containment mechanism. In generics.particular, a 2007 study from Norway—where internal referenceand generic price linkage to the originator co-existed for some è In Slovakia, under 2011 regulations, the price of generics istime—found that both originator and generic prices fell capped at 30% below the originator’s price level, replacing thesignificantly, but the price decline impact was sharper for previous price limit of 20% below the originator’s price level.originator drugs in the reference pricing group than in the price è  nder austerity measures in Greece, the price of generics has Ucaps group. been capped at 60% of the originator price.Objectives è In Romania, under 2010 regulations, generics have their prices capped at 70% of the price of the originator product, insteadThis study seeks to evaluate if price capping remains a policy of of the previously applicable price cap of 65%.choice in the current austerity climate. è  nder 2010 legislation, Japan caps the price of new oral U generics at 60% of the originator’s price in cases where moreMethods than 10 versions are seeking price approval, replacing a previous cap of 70% of the originator’s price. Under a separateResearch focused on a review of current P&R regulations for 2011 rule, generics priced at less than 30% of the price of thegenerics in EU countries and major markets outside Europe to originator will all be granted the same National Healthidentify which countries have adopted, or are in the process of Insurance price, which will be set at the weighted-averageadopting, new price caps, or have amended existing price caps market price.for generics versus the originator from the start of 2010 to date. è In Canada, Nova Scotia caps the price of generics at no more than 35% of the originator’s price from 1 July 2012, while theResults Ontario government announced it will cap generic prices atSeveral countries recently introduced changes to the ceiling price 25% of the originator’s price for medicines reimbursable underof generics in comparison with the originator’s price: the Ontario Drug Benefit scheme. Meanwhile, private payers have reduced generic price caps from 50% of the originator Generic price capped in drug price in 2010 to 35% on 1 April 2011 and 25% on 1 AprilCountry relation to originators price 2012. In Saskatchewan, for existing generics drug, prices haveAustria √ been reduced to 45% of the originator’s price from 1 JuneBelgium √ 2011 and to 35% of the originator’s price from 1 April 2012,Cyprus √ while for new generic drugs, the maximum price is capped atCzech Republic √ 35% of the originator’s price from April 2012.Estonia √FinlandFrance √ √ ConclusionsGreece √ France, Portugal, Hungary, the Czech Republic, Romania,Hungary √ Slovakia, Greece, Japan, and Canada are among the countriesItaly √ that have recently amended their use of generic price linkage in anLatvia √ attempt to contain pharmaceutical spending. While price capsLithuania √ remain popular, it is rare for countries to use them in isolation.Netherlands √ Internal reference pricing is typically also in use. Among countriesPortugal √ that have recently made changes to their generic price linkageRomania √Slovakia √ system, several have also undertaken changes to their internalSpain √ reference pricing system, as governments attempt to tackle theSweden √ cost-containment paradigm from all sides.United Kingdom √ Generic price caps in relation to the originator clearly remain popular as a cost-containment mechanism. Their impact on theè France limits the price of generics to 60% of the originator’s  entire pharmaceutical market is magnified through the use of price from January 2012, replacing a previous price cap of these prices in setting an internal reference price in therapeutic 55% of the originator’s price. groups, with a positive impact for reimbursement authorities and a negative impact for patients in the form of higher OOP payments.è Portugal caps the price of the first-to-market generic at 50%  of the originator’s price under new legislation published in January 2012.è Hungary requires new generics to be priced at least 35%  below the originator’s price for the first-to-market generic, 45% for the second-to-market generic, and 55% for subsequent- entry generics. FOR MORE INFORMATION ABOUT IHS GLOBAL INSIGHT HEALTHCARE & PHARMACEUTICAL SERVICES www.ihs.com/healthcare and www.ihs.com/healthcareblog Please email: gustav.ando@ihs.com for any questions related to this poster