Reference pricing, generic drugs and proposed changes to the Pharmaceutical Benefits Scheme (original) (raw)
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PharmacoEconomics, 2002
Pharmaceutical expenditure is rising more rapidly than the general inflation rate in most advanced countries. One strategy that has been introduced to control pharmaceutical costs is reference-based pricing (RBP). Its potential is restricted to those specific segments of the drug market where several drugs (and/or their generic forms) exist without substantial evidence that any particular agent is superior. Three broad approaches have been adopted. These involve the aggregation of drugs into generic groups, related drug groups (e.g. ACE inhibitors) or drugs grouped by therapeutic indication (e.g. antihypertensives). For each drug group, a single reimbursement level or reference price is set. Drugs above the reference price require part or total payment by the patient. The experience with RBP ranges from over 10 years in Germany (involving all levels of RBP) to the more recent implementation of RBP for related drug groups in Australia. This review summarises the current state of know...
Pharmaceutical policies: effects of reference pricing, other pricing, and purchasing policies
Cochrane Database of Systematic Reviews, 2014
Cochrane Database of Systematic Reviews drug use, healthcare utilisation and health outcomes or costs (expenditures); the study had to be a randomised trial, non-randomised trial, interrupted time series (ITS), repeated measures (RM) study or a controlled before-a er study of a pharmaceutical pricing or purchasing policy for a large jurisdiction or system of care. Data collection and analysis Two review authors independently extracted data and assessed the risk of bias. Results were summarised in tables. There were too few comparisons with similar outcomes across studies to allow for meta-analysis or meaningful exploration of heterogeneity. Main results We included 18 studies (seven identified in the update): 17 of reference pricing, one of which also assessed maximum prices, and one of index pricing. None of the studies were trials. All included studies used ITS or RM analyses. The quality of the evidence was low or very low for all outcomes. Three reference pricing studies reported cumulative drug expenditures at one year a er the transition period. Two studies reported the median relative insurer's cumulative expenditures, on both reference drugs and cost share drugs, of-18%, ranging from-36% to 3%. The third study reported relative insurer's cumulative expenditures on total market of-1.5%. Four reference pricing studies reported median relative insurer's expenditures on both reference drugs and cost share drugs of-10%, ranging from-53% to 4% at one year a er the transition period. Four reference pricing studies reported a median relative change of 15% in reference drugs prescriptions at one year (range-14% to 166%). Three reference pricing studies reported a median relative change of-39% in cost share drugs prescriptions at one year (range-87% to-17%). One study of index pricing reported a relative change of 55% (95% CI 11% to 98%) in the use of generic drugs and-43% relative change (95% CI-67% to-18%) in brand drugs at six months a er the transition period. The same study reported a price change of-5.3% and-1.1% for generic and brand drugs respectively six months a er the start of the policy. One study of maximum prices reported a relative change in monthly sales volume of all statins of 21% (95% CI 19% to 24%) a er one year of the introduction of this policy. Four studies reported e ects on mortality and healthcare utilisation, however they were excluded because of study design limitations. Authors' conclusions The majority of the studies of pricing and purchasing policies that met our inclusion criteria evaluated reference pricing. We found that internal reference pricing may reduce expenditures in the short term by shi ing drug use from cost share drugs to reference drugs. Reference pricing may reduce related expenditures with e ects on reference drugs but the e ect on expenditures of cost share drugs is uncertain. Reference pricing may increase the use of reference drugs and may reduce the use of cost share drugs. The analysis and reporting of the e ects on patients' drug expenditures were limited in the included studies and administration costs were not reported. Reference pricing e ects on health are uncertain due to lack of evidence. The e ects of other purchasing and pricing policies are until now uncertain due to sparse evidence. However, index pricing may reduce the use of brand drugs, increase the use of generic drugs, and may also slightly reduce the price of the generic drug when compared with no intervention.
Generic and therapeutic substitutions in the UK: are they a good thing?
British Journal of Clinical Pharmacology, 2010
There is considerable interest and debate concerning the place of generic substitution (switching from a brand to generic product); and on therapeutic substitution, that is, switching to a cheaper, but apparently equivalent, product, usually within the drug class. Generic substitution by pharmacists is standard practice in UK hospital settings, and is being proposed for implementation in primary care. Although most prescriptions are already written generically (83% in the community in England in 2008), there are still cost savings that could be made if generic medicines are substituted against prescriptions written by branded name or by getting prescribers to adhere to advice to prescribe generically. Therapeutic substitution is more contentious, as direct evidence to support equivalence is normally lacking. However, the price differential between established drugs whose patents have expired and for which generics are available and newer, branded medicines within the same therapeutic class, makes therapeutic substitution an attractive application of cost-minimization analysis for the more efficient use of healthcare resources. Here we explore the tension that exists between the clinical appropriateness and safety of switching from an individual patient perspective and the consideration of value for money which is required to maximize population health from a health service perspective. Although substitution may affect individual patients (such as, for instance, reduced adherence, increased potential for medication error), it might be a price worth paying given the opportunity cost associated with the use of medicines that are clinically no better than cheaper alternatives. PCTs should be influencing and advising GPs to substitute British Journal of Clinical Pharmacology
Australian Health Review, 2009
Australia?s system for assessing the cost-effectiveness of drugs for listing under the Pharmaceutical Benefits Scheme (PBS) is recognised internationally. A variety of mechanisms, such as evidencebased rules for determining eligibility for initial or continuing subsidy, price-volume agreements, rebates, and caps on government expenditure are used to contain PBS expenditures. In this paper we assess the extent of use of special pricing arrangements in Australia and how and where they are communicated to health professionals and the community. We searched publicly available documents published by the Pharmaceutical Benefits Advisory Committee (PBAC) and the Pharmaceutical Benefits Pricing Authority (PBPA). We found 73 medicines where special pricing arrangements had been applied and where prices appearing on the Schedule of Pharmaceutical Benefits might differ from those considered to be ?cost-effective? by the PBAC. Reporting of these special pricing agreements was inconsistent and g...
Use of Generics—A Critical Cost Containment Measure for All Healthcare Professionals in Europe?
Pharmaceuticals, 2010
Pharmaceutical expenditures in ambulatory care rose rapidly in Europe in the 1990s and early 2000s. This was typically faster than other components of healthcare spending, leading to reforms to moderate future growth. A number of these centered on generic medicines with measures to lower reimbursed prices as well as enhance their prescribing and dispensing. The principal objective of this paper is to review additional measures that some European countries can adopt to further reduce reimbursed prices for generics. Secondly, potential approaches to address concerns with generics when they arise to maximize savings. Measures to enhance the prescribing of generics will also briefly be discussed. A narrative review of the extensive number of publications and associated references from the co-authors was conducted supplemented with known internal or webbased articles. In addition, health authority and health insurance databases, principally from 2001 to 2007, were analyzed to assess the impact of the various measures on price reductions for generic omeprazole and generic simvastatin vs. pre-patent loss prices, as well as overall efficiency in Proton Pump Inhibitor (PPI) and statin prescribing. The various initiatives generally resulted in considerable lowering of the prices of generics as well as specifically for generic omeprazole and generic simvastatin vs. pre-patent loss prices. At one stage in the UK, generic simvastatin was just 2% of the originator price. These measures also led to increased efficiency for PPI and statin prescribing with reimbursed expenditure for the PPIs and statins either falling or increasing at appreciably lower rates than increases in utilization. A number of strategies have also been introduced to address patient and physician concerns with generics to maximize savings. In conclusion, whilst recent reforms have been successful, European countries must continue learning from each other to fund increased volumes and new innovative drugs as resource pressures grow. Policies regarding generics and their subsequent impact on reimbursement and utilization of single sourced products will continue to play a key role to release Pharmaceuticals 2010, 3 2472 valuable resources. However, there must continue to be strategies to address concerns with generics when they exist.
European Scientific Journal, 2015
Continued growth of spending on drugs in Health care, especially in the public sector encouraged initiatives for reforms in the system of determining the prices of medicines. These initiatives that were undertaken, were primarily aimed at reducing the cost of drugs but parallel to become a generic medications simultaneously promoting an adjustment of reimbursement procedures in the pharmaceutical sector. The policies for the regulation of the pharmaceutical market come as a response to health care classical market failures. This article will focus on the features, implementation and impact of these policies in some EU member states. Most EU countries, apply the external reference system of prices, whereupon the price of a certain medication is determined based on the price of the same product in other countries. On the other hand, in twenty other EU member states, prices are determined by comparing the prices of the same products according to chemical, pharmacological or therapeutic grouping. The reference pricing system has been adopted by governments as a mechanism to reduce the costs in the public health care system. By setting a price limit, competition among producers has been stimulated.