PRICENTRIC BRIEF:
- Speaking at World EPA Congress, Alan Crowther, General Manager, Global Pricing & Market Access Solutions at EVERSANA and Amardeep Udeshi, Partner at EVERSANA noted how a number of trends are emerging globally in regard to pharmaceutical net pricing
- At both a European and Asia-Pacific (APAC) level, there are a number of policy and regulation changes that will have a direct impact on companies’ bottom lines
- Primarily, pricing system pressure in Europe is expected to increase, particularly in the key four markets of France, Germany, the UK, and Italy, and transparency is increasing in the APAC region
THE DETAILS
Speaking at World EPA Congress, Alan Crowther, General Manager, Global Pricing & Market Access Solutions at EVERSANA and Amardeep Udeshi, Partner at EVERSANA noted how a number of trends are emerging globally in regard to pharmaceutical net pricing.
At both a European and Asia-Pacific (APAC) level, there are a number of policy and regulation changes that will have a direct impact on companies’ bottom lines.
Primarily, pricing system pressure in Europe is expected to increase, particularly in the key four markets of France, Germany, the UK and Italy.
Germany
At a country level, Germany is seeing growing support for reducing the post-AMNOG 12 month free price period to half the time, just six months. According to Crowther, the move “could happen in 2022.”
In addition to this key potential change, Germany is becoming more scrutinizing of orphan drugs – particularly those with “Unquantifiable Benefit” as determined by the Federal Joint Committee (GBA).
Other notable aspects of the German market include typically lower post-AMNOG list prices than in other key European markets and the fact that it has become a major parallel exporter. These points do not directly impact German net prices, Crowther noted, but do pressure net prices in other markets.
France
As the most heavily referenced market of the four, France is currently balancing pricing pressure and putting an emphasis on access. It typically has lower list prices than the rest of the key European markets, and negotiations have been reported that emphasize an approach whereby an agreed-upon net price must be the list price.
France is also placing particular focus on manufacturing locally – if a drug is largely produced domestically, it will likely be guaranteed a price no lower than the lowest price in its comparator countries like Germany, Italy or Spain.
Italy
Italy is currently placing emphasis on creating headroom via increased competition, such as earlier comparability of biosimilars to drive greater adoption.
Italy also has an accelerated process for parallel trade drugs discounted 7% – which while not a direct pressure on a company’s net price, it indirectly provides overall net price pressure in the category.
According to Crowther, registrations have already been increasing for this process.
He noted that “While Italy has some net price transparency initiatives, it’s interesting that it forces greater inbound disclosure of prices in other markets as part of the negotiation process for innovative products. Really, the net price pressure is on the mature space to create more
headroom in the budget for innovation.”
Asia-Pacific Regional Trends
Transparency is also increasing in the APAC region.
According to Udeshi, overall cost-containment is “top of mind for all payers in key regulated markets. Most notably in China, which has had a dramatic change under the volume-based procurement (VBP) system and through pricing reforms via the national drug reimbursement list (NRDL).
Japan
Japan has to contend with an increasing population and changing economic conditions and as such is now reviewing drug prices annually instead of every two years. HTA use is coming in too, however more for price determination, not reimbursement. Udeshi noted how Japan might be “late in the game,” but has a huge focus on biosimilars.
Following its pricing reforms, prices are likely to be higher for innovative drugs including orphan drugs, and cell therapies.
South Korea
South Korea has a reference pricing system. It references other countries and is also in the reference basket for other countries. Because of this, companies have to be more careful, according to Udeshi, so they’re looking to get into more risk-sharing and confidential agreements to maintain a high list price when it comes to international reference pricing.
China
Going forward, companies need to “continuously do analysis in China to find tradeoffs between pricing decisions and volume. Companies want to launch in China, so they need to prioritize formulating strategies for VBP.”
The NRDL has transformed China from being a passive payer to be a strategic buyer, with its ability to dictate drug prices. As such, companies are now more willing to do managed entry agreements (MEA) or risk-sharing agreements to make sure their list price remains high.
Crowther noted, before closing the presentation, that “South Korea looking to create some room between their list and net prices, and minimize the reference price impact, is a positive trend among these usually negative trends.”
Perspective from Other Industries
Net price transparency pressure is not new, many other industries function effectively within net price transparency. For example, airlines responded to price transparency with the adoption of feebased models such as seat booking and check-in, limiting transparency to the core product price.
Some countries have also rolled back from transparency as they found it ultimately yielded higher drug prices, such as Denmark.
Cross-border collaboration could be the key to reducing risk, Crowther believes, as cross-border health technology assessment (HTA) and joint procurement initiatives represent a smaller risk to portfolios.
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