4 Pricing Trends to Watch: That brings you to a total of 2017 – credit or cash?
Trend #1: More reviews.
Why will 2017 be the year where we see more re-referencing in IRP?
Increasing the number of times a country applies IRP rules after launch – also known as re-referencing – is a fairly simple measure to drive prices down. Studies, as well as real world examples, have proven this practice works to cut costs.
Recently, Japan announced that they will increase their number of reviews. Although these reviews are not solely linked to IRP, the outcome will drive down prices. When a major pharma market (like Japan) amends the rules, other countries are likely to copy.
Pharma companies should examine different scenarios, know what the global impact on profit will be, and enter into dialogue with local authorities with that knowledge in hand.
Trend #2: Countries referencing discounted prices in another country.
Official list prices and confidential discounted prices are often two very different things. What will happen if the confidentiality is broken?
But we already see examples taking place. Rather than the visible mandatory discounted prices of 5-10%, I am referring to real confidential discounted prices…that suddenly no longer are confidential. A new much lower price in one country is likely to spread faster than pharma companies can control.
Pharma companies should assess the risk, looking at the discount levels they work with, and evaluate the global consequence of a new low price entering the IRP spider web.
Trend #4: Pricing database – per invite only.
What scenarios will the common EURIPID pricing database present to us, and how will pharma companies react when they have no access to view data?
Funded by the European Commission, the EURIPID pharma pricing database takes the lead on gathering pharma prices around Europe and some neighboring countries. It is per invite only. Health authorities are welcome; pharma companies are not. It is an obvious one-stop shop for any country to gather the needed prices for referencing.
The risk of comparing apples and oranges is high when comparing pharma prices across health care systems and exchange rates. Pharma companies have no chance to validate the reference prices and given the high complexity, 2017 is likely to present numerous examples of misunderstandings.
Pharma companies have to be pushy and seek insight from local data in countries referring to prices from EURIPID.
Trend #4: Collateral damage or collateral collaboration.
In any crystal ball, there is room for the extraordinary. What will happen if pharma companies joined forces and even supported the reimbursement system?
Risk sharing, innovative pricing, no cure no pay, differential pricing—these are just a few examples of the many names available for setting the pharmaceutical price in an alternative way.
As a group, pharma companies have an interest in protecting the reimbursement system funding them, but as an individual company--it is another story. Still, could 2017 give us examples where several pharma companies strike deals with payers in specific disease areas? Will we see examples of mortgage kinds of payment schemes for an expensive curative pharma product, spreading costs over several years? The 2017 crystal ball is getting vague on these issues, but the speed of innovation has a tendency to surprise.