Home | Publications | Regulation & Policy | Pricing & Reimbursement place holder
place holder place holder

Pricing & Reimbursement

Pharmaceutical Pricing: global perspectives


Publication Date   September 2004
Publisher   URCH Publishing
Product Type   Report
Pages   133
ISBN Number   095469810X
Product Code   URC138
Ask a question about this product?

Price £625.00

approximately: $1,104 | €793

Summary


Pharmaceutical Pricing - Global Perspectives is a strategic report, that analyses all aspects of pharmaceutical pricing and reimbursement strategies through extensive use of case studies.

The pricing of new pharmaceutical products is crucial and must not be left to luck. If the price is set too high, the product may fail to gain reimbursement or be excluded from formularies. If the price is too low, profitability will be reduced. Thus, it is essential for pharmaceutical companies to fully understand the principles governing pricing and the market environment in which they are operating.

The report's text is complimented with key case studies of how pharmaceutical companies have managed the prices of their key products, to ensure continued profitability in the light of competition and patent expiry, including:
  • Merck's single European pricing scheme for Crixivan
  • Eli Lilly's proactive strategy for patent expiry
  • The life-cycle of Genzyme's Ceredase and Cerezyme
  • Upjohn's sale of Dalacin in Denmark
  • Biogeneric competition to Epogen

    In almost every country there is ongoing discussion about pharmaceutical pricing. This report examines the major regional issues including;

    Europe
     - How parallel trade ('grey market') within the EU affects ethical manufacturer's profitability.
    - Why inter-country reference pricing has grown in importance in Europe?
    - Is a European-wide pricing assessment body a realistic prospect?

    North America
     - Will US follow the rest of the world and move away from free pricing and implement some controls.
    - Are the high prices achieved sustainable in the longer term and how are lower prices in Canada affecting the US political arena?

    Rest of World
     - How the economic downturn and cost containment in Japan has hit the pharmaceutical industry hard.
    - Why the pharmaceutical industry has come under attack from countries where AIDS is prevalent.
    - How Brazil exploited international patent rules to produce its own generic medicines.

    Five reasons why your organisation should invest in this report
    - Stay up-to-date with the latest trends in global pharmaceutical pricing & reimbursement
    - Learn common jargon and terminology used in the pricing & reimbursement fields
    - Gain insight into growing role of pharmacoeconomics in demonstrating the financial value of drugs
    - Forecast how governments will implement drug spending cost containment measures
    - Understand the increasing pressure from less developed countries to access drugs at lower prices

    The text also contains detailed descriptions for issues and terms connected with pricing, which can be used as an encyclopaedia of terminology.
    		•

    Content


    Chapter 1: Pricing and the Pharmaceutical Market

    The definition of price
    The functions of price
    The marketing mix
    The product
    Case study: Lilly's proactive strategy for patent expiry The place
    The rise of the Internet as a sales channel 8
    The price Promotion
    The effect of price on the other elements of the marketing mix: the product
    Therapeutic efficacy
    Therapeutic enhancements
    Case study: drug delivery system strategies
    The brand
    Pricing objectives
    Target return on investment
    Market share
    Meeting competition
    Profit maximisation
    Stabilisation of prices
    Pricing strategies to meet objectives
    Skimming
    Prestige pricing
    Penetration pricing
    Extinction pricing
    Case study: Losec price reduction in Denmark
    List prices and contract prices
    Case study: US states launch innovative pooled drug purchasing programme
    Pricing freedom
    Pricing and external issues
    Pricing and government policy shifts
    Case study: changes to Russian taxation system impact on pharmaceutical industry profits
    Case study: Philippines government pharmaceutical policy affects industr
    revenues
    Currency fluctuations
    Case study: Indian pharmaceutical companies deal with falls in the US dollar
    The EU
    EU expansion and the pharmaceutical market
    The euro
    The euro and the pharmaceutical industry
    The rise of the euro
    Parallel importation
    The euro and parallel trade
    Case study: a single European pricing scheme for Crixivan
    EU expansion and pharmaceutical pricing
    The European Economic Area (EEA)
    EU enlargement and the EEA
    Pricing issues in the US
    Pricing issues in Europe and Japan
    Pharmacoeconomics
    The rise of pharmacoeconomics and health economics
    Case study: treatments for congestive heart failure
    Case study: Neoral and Sandimmun
    Case study: cheaper diagnostic test for HIV
    The economic costs of disease
    Case study: the impact of ageing on healthcare resource allocation
    Case study: pharmacoeconomics and drug prescribing for children in Italy
    Case study: the financial consequences of inappropriate antibiotic prescribing
    Case study: rising drug costs restrict uptake of malaria therapies in developing countries

    Chapter 2: Pricing through the Pharmaceutical Product Life Cycle

    The life cycle of a pharmaceutical
    The classical pharmaceutical life cycle
    Changes to the classic pharmaceutical product life cycle
    Case study: Viagra
    Case study: Levitra
    Case study: Cialis
    Brand development
    Rx-to-OTC switching
    Case study: the UK's smoking cessation market Time to market
    Cost of R&D
    Global roll-out
    New product pricing
    Customers
    The company
    Competitors
    Case study: Biogen's Avonex
    The decline of exclusivity for 'pioneer' pharmaceutical products
    Manufacturing costs of a product
    Case study: Genzyme's Ceredase and Cerezyme

    Chapter 3: Parallel Trade

    The view of pharmaceutical manufacturers
    The view of parallel traders
    Legalities of parallel trade
    Case study: Ferring v. Eurim-Pharm
    Case study: Leo Pharma v. Orifarm
    Repackaging and re-labelling of products
    Case study: Upjohn sale of Dalacin in Denmark
    International parallel trade
    Case study: parallel trade in Kenya
    Protection of products from parallel importation
    European hospitals and parallel importers
    Governments and other purchasers
    Competitors
    Pricing differentials
    Differentials created by price discounts
    Price differentials resulting from variations in pricing regulations
    Creation of post-patent price differentials
    Pricing within a single price band

    Chapter 4: Rx-to-OTC Switching and Pricing

    The marketing mix for switched drugs
    Product
    Place
    Price
    Promotion
    Case study: Claritin pricing
    The implications of OTC status
    Strong branding
    Effects of patent expiry

    Chapter 5: Generic Drugs

    The popularity of generics
    Encouraging the use of generics
    Wholesalers in the EU
    The potential for biogenerics
    Obstacles to biogenerics
    Facing up to generic competition
    Case study: Augmentin loses US patent Case study: Viagra patent legal battle
    Future patent battles
    Case study: biogeneric competition to Epogen
    Case study: patent fears overshadow Sanofi-Synthlabo and Aventis tie-up
    Strategies to extend effective patent life
    Case study: 6-month exclusivity for Diflucan
    New formulations

    Chapter 6: Company and Customer Interactions

    Clinicians
    Case study: resistance to OTC Zocor in the UK
    Patients
    Case study: patient protests at halting of clinical trials for an anti-viral compound
    The traditional supplier-customer frameworkClinician pressure
    Case study: US doctors prescribe expensive high blood pressure
    medications
    Case study: poor awareness of drug prices in Canada
    Company strategies
    Disease management packages
    Case study: Novo Nordisk and diabetes treatments
    Collaborations with healthcare providers
    Case study: the development of new antibiotics
    'Bundling' Internet mail order
    Case study: Internet trade in the US
    Tendering
    Case study: cancer trials
    Consumer views on pricing
    Case study: international consumer survey on pharmaceutical prices
    Case study: AIDS drug price increase angers US patient group
    Case study: Public Citizen group advocacy in the US
    Price fixing
    Case study: Lupron price-fixing allegations in the US
    Case study: generic antibiotic price fixing in the UK
    EU vitamin price-fixing scandal
    Case study: generic anti-anxiety drug price fixing in the US
    Hospital negotiation of pharmaceutical prices
    Price analysis
    Case study: parallel importation by Belgian hospitals
    Case study: parallel trade of anti-retroviral drugs
    Government
    Direct price controls
    Positive lists
    Negative lists
    Reference pricing
    Reimbursement levels
    Dealing with wholesalers and retailers
    Government interventions in the pharmaceutical market and the view of the industry
    Case study: German pharmaceutical industry resists government cost containment policies
    Intellectual property
    Patent piracy
    Case study: IP and the Chinese pharmaceutical market
    Case study: IP and the Latin American pharmaceutical market
    Case study: the Indian pharmaceutical industry
    Price controls in various countries
    Buyers in the US
    Pricing/volume agreements
    Profit control in the UK

    Chapter 7: Pharmaceutical Pricing in North America

    The US
    The US healthcare system
    The US pharmaceutical market
    US drug spending
    International price comparisons
    The reaction of the industry
    Determination of drug prices by manufacturers
    Average wholesale price and average sales price
    Case study: Medicare reform and oncology drug reimbursement
    Cost containment
    Generics
    A move towards pricing control measures?
    Canada
    The Patented Medicine Prices Review Board
    Case study: the FDA and industry resist cross-border trade in pharmaceuticals

    Chapter 8: Phamaceutical Pricing in Japan

    Cost containment
    Drug pricing in Japan

    Chapter 9: Pharmaceutical Spending Controls in Europe

    The UK
    The Pharmaceutical Price Regulation Scheme (PPRS)
    The National Institute for Clinical Excellence (NICE)
    The prospects for 'Euro-NICE'
    France
    Healthcare spending
    Revisions to the pricing system
    Germany
    Healthcare reforms
    Fixed pricing schemes
    Viewpoint of the pharmaceutical industry
    Case study: cross-border purchase of pharmaceuticals in Poland
    Spain
    Pricing
    Pharmaceutical demand
    Government incentives to industry
    Italy
    Pricing system
    Case study: investigation of price fixing in Italy

    Chapter 10: Pharmaceutical Pricing and the Developing World

    Case study: adverse UK media coverage of the pharmaceutical industry
    The concept of compulsory licensing
    The grounds for using a compulsory licence
    Case study: compulsory licensing in North America
    Africa and the AIDS crisis
    South Africa and HIV drug pricing
    Brazil and HIV drug pricing
    The future of compulsory licensing
    Case study: diversion of anti-retroviral drugs destined for Africa
    Anti-diversion tactics
    Funding for AIDS drugs in the developing world
    The Mdecins Sans Frontires campaign for access to essential medicines


    List Of Figures

    Figure 1.1 Breakdown of retail medicine price in Europe 6
    Figure 1.2 Internet usage statistics (2004) 9
    Figure 1.3 Online Canadian pharmacy cost for Prozac and generic fluoxetine (10 mg 100) in 2004
    Figure 1.4 Clinical development projects employing drug delivery technologies 12
    Figure 1.5 Periods of market exclusivity between the launch of an innovative medicine and competitor products
    Figure 1.6 Currency fluctuations: monthly exchange rate of Japanese yen to US$1 during 2003 20
    Figure 1.7 Currency fluctuation; monthly exchange rate for US$ to 1 during 2003
    Figure 1.8 Composition of international reserves
    Figure 1.9 Spend on medicines as a percentage of GDP in various countries 28
    Figure 1.10 Neoral costs (1998)
    Figure 1.11 Annual economic burden of major diseases in the US
    Figure 1.12 European hospital costs for osteoporosis-related hip fracture
    Figure 1.13 Population estimates and projections (1990 and 2020): percentage of the population aged 65 years or over
    Figure 2.1 Online unit cost for Viagra 100 mg tablets in North American pharmacies (2004)
    Figure 2.2 Online US pharmacy cost for Levitra 20 mg (2004)
    Figure 2.3 Online US pharmacy cost for Cialis 10 mg (2004)
    Figure 3.1 Financial effect on the German pharmaceutical industry of government intervention since 1999
    Figure 3.2 UK versus Europe: HIV drug prices (1999) 56
    Figure 3.3 Bilateral comparisons of ex-manufacturer prices for France, Spain and Italy versus the UK
    Figure 3.4 Bilateral comparisons of ex-manufacturer prices for the US versus the UK (UK = 100%)
    Figure 4.1 Online unit cost for Claritin 10 mg tablets in North American pharmacies (2004)
    Figure 5.1 Development of the French generics market (by value)
    Figure 5.2 Breakdown of sales by distribution channel in France (2002)
    Figure 5.3 Sales of Viagra
    Figure 5.4 Worldwide sales of Epogen
    Figure 5.5 Sales of Diflucan
    Figure 6.1 Number of Internet users in Europe (2004)
    Figure 6.2 Online unit cost for Celebrex 200 mg in North American pharmacies (2004)
    Figure 6.3 Public Citizen cost estimates of a 30-day supply of selected CNS drugs
    Figure 6.4 Public Citizen estimates of long-term 'excess costs' for CNS drugs in the US compared with the average cost in other countries
    Figure 6.5 Parallel importation: Zerit
    Figure 6.6 Parallel importation: Inverase
    Figure 7.1 Online unit cost for Prozac 10 mg tablets in US pharmacies (2004)
    Figure 7.2 Average country prescription drug prices as a proportion of corresponding US prices
    Figure 7.3 Average annual percentage change, patented drug prices (1996-2001)
    Figure 8.1 Population projections for 2000 and 2020 - proportion of the population aged 65 years or over
    Figure 8.2 Number of NHI-listed pharmaceuticals in Japan
    Figure 9.1 R&D expenditure by pharmaceutical companies in the US and Europe
    Figure 9.2 UK family expenditure survey: daily expenditure (2000/01)
    Figure 9.3 Estimated UK healthcare savings for selected diseases through reduced use of hospital beds since 1957
    Figure 9.4 Estimated UK healthcare savings for selected diseases through reduced use of hospital beds since 1957
    Figure 9.5 Sales of pharmaceuticals in France (2002)
    Figure 9.6 The financing of statutory health insurance in Germany
    Figure 10.1 Global status of the HIV/AIDS epidemic
    Figure 10.2 National HIV prevalence rates in Africa (2003)

    List of Tables

    Table 1.1 Expansion of the EU
    Table 1.2 Some parallel import options offered to European hospitals in 1997
    Table 1.3 The core features of a pharmaceutical
    Table 1.4 Evaluating the costs of disease
    Table 2.1 Summary of pharmaceutical company options to counter parallel importing
    Table 4.1 Useful attributes for OTC drugs
    Table 4.2 Potential audiences for OTC promotion
    Table 10.1 Key points of the TRIPS agreement
    Table 10.2 International approaches to compulsory licensing (as of 2004)
    Table 10.3 Overview of MSF proposals to improve access to medicines in developing regions