The Netherlands’ New IRP to Take Effect October 1

Country: NETHERLANDS | Region: EUROPE | Type: Reference Pricing (IRP) | Keywords: #covid19 #drugshortages #drugsupply #generics #hospitalmedicines #maximumprices #medicinespricingact #ministryofhealthwelfareandsport #policy #referencebasket #wgp


PRICENTRIC BRIEF:
  • The Netherlands will be implementing its new international reference pricing (IRP) rule from October 1, 2020; originally, the rule was supposed to take effect April 1 of this year
  • Via the Medicines Pricing Act (WGP), maximum prices are applied in the Netherlands based on the average price for comparable medicines in 4 reference countries – Germany, Belgium, France, UK – but the Netherlands will be swapping out Germany with Norway because many drugs are much more expensive in Germany
  • To prevent exorbitant price decreases (in some cases, 30%-70% decreases), the Ministry of Health, Welfare, and Sport has decided to implement certain mitigating measures, such as imposing a maximum on the decline in prices of 10% to protect medicines at the “bottom of the drug market” (e.g. generics) and allowing companies to be freed from IRP if their products have a yearly turnover below EUR 1 million in the Netherlands

THE DETAILS

AMSTERDAM, The Netherlands – Due to the impact of COVID-19 on the drug supply, the Netherlands will be implementing its new international reference pricing (IRP) rule from October 1, 2020.

Originally, the rule was supposed to take effect April 1 of this year.

According to Martin Van Rijn, Minister of Health, Welfare, and Sport, production is halted in China and there are restrictions on exports in India which have causes shortages and price increases. These could be exacerbated by the implementation of the Netherlands’ new IRP rule.

“In this critical and exceptional circumstance, I have taken specific precautions. One of those measures was the six-month postponement of the price falls as a result of the recalibration of the maximum prices planned for April 1. I took this measure as a precautionary measure for the continuity of the overall drug supply of the patient,” said Van Rijn.

Netherlands’ IRP Basket Swap

Via the Medicines Pricing Act (WGP), maximum prices are applied in the Netherlands based on the average price for comparable medicines in 4 reference countries: Germany, Belgium, France, UK.

However, the Netherlands will be swapping out Germany with Norway because many drugs are much more expensive in Germany than in the Netherlands. In Norway, medicine prices are 20 percent less than they are in Germany, explained EVERSANA Market Access Data Analyst Aatiqah Thanvi.

The Ministry of Health, Welfare, and Sport decided to push back the implementation date to prevent major price declines for medicines at the “bottom of the drug market,” said Van Rijn, meaning generics. Maximum prices for generic drugs would drop substantially, by 30%-70%.

As such, the Ministry has decided to implement certain mitigating measures, such as imposing a maximum on the decline in prices of 10%. In addition, for products with a yearly turnover below EUR 1 million in the Netherlands, companies can request the Ministry to not apply the WGP. This means no IRP, especially if these products are hospital products.

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