Market Report Source

Overview

The global pharmaceutical pricing and reimbursement environment is notoriously complex and continuously changing. Pharma companies must implement strategic pricing assessments across global markets and product lifecycle phases in order to develop effective pricing policies. By incorporating such assessments into portfolio evaluations and lifecycle planning, companies can enhance their understanding of potential price profiles for individual drugs and optimise future returns.

Pharmaceutical Pricing and Reimbursement is a new report published by Business Insights that examines the tactical importance of price optimization throughout the product lifecycle. The key issues affecting pricing and reimbursement disciplines are identified and the market environments of individual countries are assessed. This report will also detail the global and lifecycle pricing strategies of new and established drugs, including actionable recommendations and detailed case studies, and provide forecasts for future pricing scenarios in major markets.

Some Key Findings from this Report:

• The annual increase in per capita healthcare spend was more than double that of overall economic growth per capita between 1990 and 2005, according to 2007 data from the Organization for Economic Co-operation and Development (OECD).
• Medicare Part D benefits will include wider drug access, improved compliance and increased utilization, based upon the best-case pricing scenario for US pharma companies. Volumes of effective drugs would be expected to increase in line with the widened coverage.
• Europe’s most likely pricing scenario will see pharmacoeconomics, parallel trade and generic substitution gradually increase their impact. These measures will continue to play an important role in healthcare spend management for all European Governments
• Japan’s price setting will become more complex over the next five years due to the addition of health economic data and generic substitution regulations to the current reference pricing system.
• Lifecycle pricing strategies are dominated by product launches and patent expiry events. Launch pricing can facilitate optimal price and reimbursement coverage, while patent expiry strategies involve brand value maximisation in response to low-priced generics.

Key Issues Examined in this Report:

• Medicare Part D. Doubts have been raised over whether the wider access and coverage associated with Part D drug benefits will outweigh the potential increases in negotiating power for centralized government agencies.
• US re-importation. The re-importation of drugs from Canada to the US has caused friction amongst states, creating a divide between those who support drug availability in online pharmacies and those who oppose such measures. An eventual legislative resolution is unlikely to support bulk re-importation.
• EU accession. Although the accession of 10 new countries has lowered EU reference prices and increased the future potential of parallel imports and generic competition, inward importation from accession countries is likely to protect the EU-15 from major impact.
• Global target pricing. International reference pricing and parallel trade have led to calls for launching key drugs with a common international price. However, optimizing launch sequences with varying prices remains the current strategy of preference.

Top Five Reasons to Order Your Copy Today:

• Anticipate shifts in the global pricing environment with this report’s unique forecasts of the best-case, worst case and most likely pricing scenarios for major countries.
• Improve your price optimization strategies by assessing the impacts of pharmacoeconomic evaluations, parallel trade and reimportation, and generic substitution across key countries.
• Co-ordinate your reimbursement policies more effectively across global markets by evaluating the latest pricing developments in the markets of Japan, France, Germany, Italy, Spain, Canada, Australia, China, the US and the UK.
• Develop optimal global pricing strategies throughout the lifecycles of your leading drugs by examining key considerations during the phases of launch, patent protection and patent expiry.
• Benchmark the pricing tactics of leading companies with this report’s range of successful case studies for a variety of drugs and pricing environments.

Table of Contents

Executive Summary
An introduction to price optimization
Pricing and reimbursement in North America
Pricing and reimbursement in Europe
Pricing and reimbursement in Japan and the rest of the world
Global pricing strategies
Lifecycle pricing strategies

Chapter 1 An introduction to price optimization
Summary
Introduction
Delivering a return on investment
Sustained R&D productivity shortfall
Impending blockbuster patent expiries
Healthcare cost containment
Cost-containment initiatives
Pharmaceutical spend cost containment
Key issues impacting on pricing
Pharmaceutical price optimization
Pricing and reimbursement regulations
Reference pricing
Pharmacoeconomic evaluations
Parallel imports and reimportation
Generic substitution
Global versus lifecycle pricing

Chapter 2 Pricing and reimbursement in North America
Summary
Introduction
US pricing regulations
Medicare
Medicaid
Private healthcare
Pharmacoeconomics
Generic substitution
Recent developments in the US
Medicare Part B revisions
Medicare Part D – one year on
Average manufacturer price
Re-importation in decline
Follow-on biologics
Reverse payments to generic companies
Future pricing scenarios in the US
Best case pricing scenario
Worst case pricing scenario
Most likely pricing scenario
Canadian pricing regulations
Federal measures
Provincial measures
Common drug review expansion
Patented Medicine Price Review Board progress

Chapter 3 Pricing and reimbursement in Europe
Summary
Introduction
European pricing regulations
French pricing regulations
State of the industry
Recent developments in France
Parallel trade
Generic substitution
German pricing regulations
State of the industry
Recent developments in Germany
The Statutory Health Insurance Competition Enhancement law
Italian pricing regulations
State of the industry
Recent developments in Italy
Regional cost-containment
2007 Finance Law
Spanish pricing regulations
State of the industry
Recent developments in Spain
Regional cost-containment
Modified reference price system
Anti-parallel trade strategies
UK pricing regulations
Recent developments in the UK
The future of the PPRS
Risk sharing schemes
Declining parallel trade
Expanding the NICE remit
Future pricing scenarios in Europe
Best case pricing scenario
Worst case pricing scenario
Most likely pricing scenario

Chapter 4 Pricing and reimbursement in Japan and the rest of the world
Summary
Introduction
Japanese pricing regulations
Recent developments in Japan
Biennial price cut
Generic substitution introduced
Future pricing scenarios in Japan
Best case pricing scenario
Worst case pricing scenario
Most likely pricing scenario
Australian pricing regulations
Benchmark pricing
Cost plus method
Average monthly treatment cost
Prices for new items
Recent developments in Australia
Pharmaceutical Benefits Scheme reform
Chinese pricing regulations
Recent developments in China
New drug pricing procedures
Price cuts
Generic prescribing

Chapter 5 Global pricing strategies
Summary
Introduction
Local optimization
Market access and reimbursement
Free price markets
Orphan drugs
Pharmacoeconomic evaluations
Global coordination
Launch sequence
EU launch order
Optimal price differentials
Implementing global pricing strategies

Chapter 6 Lifecycle pricing strategies
Summary
Introduction
Launch phase pricing considerations
Submission dossiers
Identifying key decision makers
Failure to secure reimbursement
Working with decision makers
Applying pressure through lobbying
Brokering deals
Patent protected phase pricing considerations
Case study: the respiratory market
Innovative pricing strategies
Patent expiry phase pricing considerations
Price changes
US patent expiry
European patent expiry
Case study: generic simvastatin
Biosimilar pricing
Implementing lifecycle pricing strategies

Chapter 7 Appendix
Glossary
Sources

List of Figures
Figure 1.1: Declining trend in number of NDA and NME approvals, 1997-2006
Figure 1.2: Rise in the cost of drug development, 1975-2001
Figure 1.3: US patent expiries for top ten selling drugs, 2006-2011
Figure 1.4: Trends in healthcare spending as a proportion of GDP, 1970-2005
Figure 1.5: Pharmaceutical expenditure as a share of total healthcare expenditure in 2005
Figure 2.6: Source of prescription drug expenditures, 2005-2006
Figure 2.7: Canadian cross border internet pharmacy sales, 2002-2006
Figure 2.8: Compensatory final settlements (reverse payments), 2004-2006
Figure 3.9: Average ex-factory drug prices in key European markets, 2005
Figure 4.10: NHI price cuts by therapeutic class, 2006
Figure 5.11: Market share for new products launched in last five years, 2005
Figure 5.12: External reference pricing in Europe, 2007
Figure 5.13: Global pricing and the interaction between countries
Figure 5.14: Global pricing strategies
Figure 6.15: Leading respiratory drugs by global sales, 2006
Figure 6.16: Lifecycle pricing strategies

List of Tables
Table 1.1: Number of NDA and NME approvals by the FDA, 1990-2006
Table 1.2: R&D expenditure within the US and abroad by PhRMA members, 1980-2006
Table 1.3: Trends in healthcare spending as a proportion of GDP, 1970-2005 (%)
Table 2.4: Future pricing scenarios in the US
Table 3.5: Future pricing scenarios in Europe
Table 4.6: Co-payments for drugs/services in Japan
Table 4.7: Classification for price premium (Japanese healthcare system)
Table 4.8: Future pricing scenarios in Japan