Report of the Independent Body on Pharmacy Contract Pricing

Report of the Independent Body on Pharmacy Contract Pricing On 18 February 2008 the Minister for Health and Children announced the appointment of an Independent Body to recommend a new, interim community pharmacy dispensing fee for the General Medical Service (GMS), Drugs Payment Scheme (DPS) and other community drug schemes.The Terms of Reference for the Independent Body on Pharmacy Contract Pricing are as follows: â?oTo advise the Minister for Health and Children on the appropriate level of dispensing fee to be paid to community pharmacists for existing services provided under the GMS and community drug schemes having regard to: Click here to download PDF: 110kb

The determinants of pricing in pharmaceuticals: Are U.S. prices really higher than those of Canada?

This paper studies price determination in pharmaceutical markets using data for 25 countries, six years and a comprehensive list of products from the MIDAS IMS database. We show that market power and the quality of the product has a significantly positive impact of prices. The nationality of the producer appears to have a small and often insignificant impact on prices, which suggests that countries which regulates prices have relatively little power to do it in a way that advances narrow national interest. We produce a theoretical explanation for this phenomenon based on the fact that low negotiated prices in a country would have a knock-on effect in other markets, and is thus strongly resisted by producers.Another key finding is that the U.S. has prices that are not significantly higher than those of countries with similar income levels. This, together with the former observation on the effect of the nationality of producers casts doubt on the ability of countries to pursue "free-riding" regulation.

Multimarket contact in pharmaceutical markets

We analyze the effect of multimarket contact on the pricing behavior of pharmaceutical firms controlling for different levels of regulatory constraints using the IMS MIDAS database for the industry. Theoretically, under product differentiation, firms may find it profitable to allocate their market power among markets where they are operating, specifically from more collusive to more competitive ones. We present evidence for nine OECD countries suggesting the existence of a multimarket effect for more market friendly countries (U.S. and Canada) and less regulated ones (U.K., Germany, Netherlands), while the results are more unstable for highly regulated countries with some countries being consistent with the theory (France) while others contradicting it (Japan, Italy and Spain). A key result indicates thatin the latter countries, price constraints are so intense, that there is little room for allocating market power. Thus equilibrium prices are expected in general to be lower in regulated countries.

R&D in the pharmaceutical industry: A world of small innovations

It is commonly argued that in recent years pharmaceutical companies have directed theirR&D towards small improvements of existing compounds instead of more risky drastic innovations. In this paper we show that the proliferation of these small innovations is likely to be linked to the lack of market sensitivity of a part of the demand to changes in prices. Compared to their social contribution, small innovations are relatively more profitable than large ones because they are targeted to the smaller but more inelastic part of the demand. We also study the effect of regulatory instruments such as price ceilings, copayments and reference prices and extend the analysis to competition in research.

Differences in pharmaceutical consumption and expenses between immigrant and Spanish-born populations in Lleida, (Spain): a 6-months prospective observational study

Background: There are few studies comparing pharmaceutical costs and the use of medications between immigrants and the autochthonous population in Spain. The objective of this study is to evaluate whether there are differences in pharmaceutical consumption and expenses between immigrant and Spanish-born populations. Methods: Prospective observational study in 1,630 immigrants and 4,154 Spanish-born individuals visited by fifteen primary care physicians at five public Primary Care Clinics (PCC) during 2005 in the city of Lleida, Catalonia (Spain). Data on pharmaceutical consumption and expenses was obtained from a comprehensive computerized data-collection system. Multinomial regression models were used to estimate relative risks and confidence intervals of pharmaceutical expenditure, adjusting for age and sex. Results: The percentage of individuals that purchased medications during a six-month period was 53.7% in the immigrant group and 79.2% in the autochthonous group. Pharmaceutical expenses and consumption were lower in immigrants than in autochthonous patients in all age groups and both genders. The relative risks of being in the highest quartile of expenditure, for Spanish-born versus immigrants, were 6.9, 95% CI = (4.2, 11.5) in men and 5.3, 95% CI = (3.5, 8.0) in women, with the reference category being not having any pharmaceutical expenditure. Conclusion: Pharmaceutical expenses are much lower for immigrants with respect to autochthonous patients, both in the percentage of prescriptions filled at pharmacies and the number of containers of medication obtained, as well as the prices of the medications used. Future studies should explore which factors explain the observed differences in pharmaceutical expenses and if these disparities produce health inequalities.

Entry Strategy Issues in the Ophthalmic Industry: Entry Mode, Pricing and Distribution

Maahantulostrategia asettaa yrityksen kansainvälisiä liiketoimintoja ohjaavat tavoitteet, päämäärät, resurssit ja toiminnan suuntaviivat. Tämä diplomityö käsittelee yrityksen maahantulostrategian elementeistä operaatiomuodon valintaa, hinnoittelua ja jakelua. Työssä rakennetaan teoriakehys elementteihin liittyvien päätösten tutkimiseksi lääketeollisuuden ominaispiirteet huomioiden. Lääketeollisuudella on muihin teollisuudenaloihin verrattuna useita erityispiirteitä, joihin työ perehdyttää. Lisäksi työn olennainen osa on selvittää lääketeollisuuden maakohtaisia säädöksiä ja toimintamalleja. Diplomityö on tehty silmäläkkeitä valmistavalle, kehittävälle ja markkinoivalle Santen Oy:lle, joka suunnittelee toimintansa laajentamista Keski- ja Etelä-Euroopan markkinoille. Tässä laajentumisprosessissa ensimmäisenä kohdemaana on Saksa, jonka markkinoille suuntautuvia toimenpiteitä työ tutkii. Teoriakehyksen, markkinoiden ominaispiirteiden sekä useiden erilaisten analyysien pohjalta työn tavoitteena on antaa operaatiomuotoa, tuotteiden hinnoittelua ja jakelua koskevia suosituksia.

Flow injection green method for the quantitative analysis of ketoconazole in pharmaceutical preparations

A flow injection method for the quantitative analysis of ketoconazole in tablets, based on the reaction with iron (III) ions, is presented. Ketoconazole forms a red complex with iron ions in an acid medium, with maximum absorbance at 495 nm. The detection limit was estimated to be 1×10--4 mol L-1; the quantitation limit is about 3×10--4 mol L-1 and approximately 30 determinations can be performed in an hour. The results were compared with those obtained with a reference HPLC method. Statistical comparisons were done using the Student's t procedure and the F test. Complete agreement was found at the 0.95 significance level between the proposed flow injection and the HPLC procedures. The two methods present similar precision, i.e., for HPLC the mean relative standard deviation was ca. 1.2% and for FIA ca. 1.6%.

Sequential injection analysis system with spectrophotometric detection for determination of norfloxacin and ciprofloxacin in pharmaceutical formulations

This work proposes a sequential injection analysis (SIA) system for the spectrophotometric determination of norfloxacin (NOR) and ciprofloxacin (CIP) in pharmaceutical formulations. The methodology was based on the reaction of these drugs with p-(dimethylamino)cinnamaldehyde in micellar medium, producing orange colored products (λmax = 495 nm). Beer´s law was obeyed in the concentration range from 2.75x10-5 to 3.44x10-4 mol L-1 and 3.26x10-5 to 3.54x10-4 mol L-1 for NOR and CIP, respectively and sampling rate was 25 h-1. Commercial samples were analyzed and results obtained through the proposed method were in good agreement with those obtained using the reference procedure for a 95% confidence level.

Studies on the development of spectrophotometric method for the determination of haloperidol in pharmaceutical preparations

A spectrophotometric method based on the formation of ion-pair complex between haloperidol and eriochrome black T (EBT) at pH 1.85 has been described. The formed complex was extracted quantitatively into chloroform and measured at 510 nm. Infra red (IR) studies were performed to confirm the formation of ion-pair complex. Beer's law was obeyed in the concentration range of 2.0-9.0 µg mL-1 with molar absorptivity of 2.67 × 10(4) L mol-1 cm-1. The detection limit was found to be 0.18 µg mL-1. Statistical comparison of the results of the proposed method with those of the reference method shows excellent agreement and indicates no significant difference in accuracy and precision.

Spectrophotometric determination of mosapride in pure and pharmaceutical preparations

Two simple and sensitive spectrophotometric methods (M1 and M2) for the determination of mosapride in pure and in pharmaceutical preparations are described. These methods are based on the interaction of diazotized mosapride (MSP) couples with chromotropic acid (CTA) [M1] in alkaline medium and diphenylamine (DPA) [M2] in acidic medium. The resulting azo-dyes exhibit maximum absorption at 560 nm and at 540 nm for methods M1 and M2, respectively. All variables were studied in order to optimize the reaction conditions. No interferences were observed from excipients, and the validity of the each method was tested against reference method.

Simple and sensitive spectrophotometric methods for the determination of acebutolol hydrochloride in bulk sample and pharmaceutical preparations

A direct, extraction-free spectrophotometric method has been developed for the determination of acebutolol hydrochloride (ABH) in pharmaceutical preparations. The method is based on ion-pair complex formation between the drug and two acidic dyes (sulphonaphthalein) namely bromocresol green (BCG) and bromothymol blue (BTB). Conformity to Beer's law enabled the assay of the drug in the range of 0.5-13.8 µg mL-1 with BCG and 1.8-15.9 µg mL-1 with BTB. Compared with a reference method, the results obtained were of equal accuracy and precision. In addition, these methods were also found to be specific for the analysis of acebutolol hydrochloride in the presence of excipients, which are co-formulated in the drug.

Spectrophotometric determination of metronidazole through Schiff's base system using vanillin and PDAB reagents in pharmaceutical preparations

Two simple sensitive and reproducible spectrophotometric methods have been developed for the determination of metronidazole either in pure form or in their tablets. The proposed methods are based on the reduction of the nitro group to amino group of the drug. The reduction of metronidazole was carried out with zinc powder and 5 N hydrochloric acid at room temperature in methanol. The resulting amine was then subjected to a condensation reaction with aromatic aldehyde namely, vanillin and p-dimethyl amino benzaldehyde (PDAB) to yield yellow colored Schiff's bases. The formed Schiff's bases are quantified spectrophotometrically at their absorption maxima at 422 nm for vanillin and 494 nm for PDAB. Beer's law was obeyed in the concentration ranges 10 to 65 µg mL-1 and 5 to 40 µg mL-1 with a limit of detection (LOD) of 0.080 µg mL-1 and 0.090 µg mL-1 for vanillin and PDAB, respectively. The mean percentage recoveries were found to be 100.05 ± 0.37 and 99.01 ± 0.76 for the two methods respectively. The proposed methods were successfully applied to determine the metronidazole in their tablet formulations and the results compared favorably to that of reference methods. The proposed methods are recommended for quality control and routine analysis.

Lääkevaihdon ja viitehintajärjestelmän vaikutukset patenttisuojattujen lääkevalmisteiden kohtuullisen tukkuhinnan vahvistamismenettelyyn

Pro gradu-tutkielman ensisijaisena tavoitteena oli selvittää, millaisia muutoksia lääkevaihto ja lääkkeiden viitehintajärjestelmä ovat aiheuttaneet patenttisuojattujen lääkevalmisteiden kohtuullisen tukkuhinnan vahvista-mismenettelyyn. Tätä menettelyä koskevat säännökset sisältyvät sairausvakuutuslain 6. lukuun, joten tutkimuksessa pyrittiin selvittämään kyseisen luvun soveltamista ja siinä mahdollisesti tapahtuneita muutoksia. Lääkevaihto otettiin Suomessa käyttöön 1.4.2003 ja viitehintajärjestelmä 1.4.2009. Lääkevalmisteiden hinnat ovat laskeneet niiden myötä merkittävästi. Tutkimusaineiston muodostivat 241 lääkkeiden hintalautakunnan sairausvakuutuskorvattavuutta ja kohtuullista tukkuhintaa koskevaa päätöstä vuosilta 2000-2010. Lisäksi käytössä oli muita päätöksiin liittyviä dokumentteja. Tutkimusaineisto lääkevaihdon käyttöönottoa edeltäneeltä ajalta jäi niukaksi. Tutkimuksen keskeiset havainnot liittyvätkin nimenomaan viitehintajärjestelmän käyttöönottoon. Nämä havainnot kuvaavat sitä, millaiset muutokset kohtuullisen tukkuhinnan vahvistamisessa ovat johtaneet patenttisuojattujen lääkevalmisteiden hintojen laskuun.

Strategic outsourcing of R&D: The location-specific advantages of India to the pharmaceutical industry

Companies are increasingly under pressure to be more efficient both in terms of costs and overall performance and thus, they seek new ways to develop their products and innovate. For pharmaceutical industry it can take several decades to launch a new drug to the markets. Since pharmaceutical industry is one of the most research-intensive industries, is outsourcing one way to enhance the R&D processes of such companies. It is said that outsourcing to offshore locations is vastly more challenging and complicated than any other exporting activity or inter-company relationship that has evoked a lot of discussion. By outsourcing strategically, companies must also thoroughly focus on transaction costs and core competences. Today, the suppliers are looked for beyond national boundaries and furthermore, the location of the outsourcing activity must also be thoroughly considered. Consequently, the purpose of this study is to analyze what is known of strategic outsourcing of pharmaceutical R&D to India. In order to meet the purpose of the study, this study tries to answer three sub-questions set to it: first, what is strategic outsourcing, second, why pharmaceutical companies utilize strategic outsourcing of R&D and last, why pharmaceutical companies select India as the location for outsourcing their R&D. The study is a qualitative study. The purpose of the study was approached by a literature review with systematic elements and sub-questions were analyzed through different relevant theories, such as theory of transaction costs, core competences and location advantages. Applicable academic journal articles were comprehensively included in the study. The data was collected from electronic journal article databases using key words and almost only peer-reviewed, as new as possible articles were included. Also both the reference list of the included articles and article recommendations from professionals generated more articles for inclusion. The data was analyzed through thematization that resulted in themes that illuminate the purpose of the study and sub-questions. As an outcome of the analysis, each of the theory chapters in the study represents one sub-question. The literature used in this study revealed that strategic outsourcing of R&D is increasingly used in pharmaceutical industry and the major motives to practice it has to do with lowering costs, accessing skilled labor, resources and knowledge and enhancing their quality while speeding up the introduction of new drugs. Mainly for the above-mentioned motives India is frequently chosen as the target location for pharma outsourcers. Still, the literature is somewhat incomplete in this complex phenomenon and more research is needed.

Value based pricing and marketing of marine engines

Objective of the thesis is to create a value based pricing model for marine engines and study the feasibility of implementing such model in the sales organization of a specific segment in the case company’s marine division. Different pricing strategies, concept of “value”, and how perceptions of value can be influenced through value based marketing are presented as theoretical background for the value based pricing model. Forbis and Mehta’s Economic Value to Customer (EVC) was selected as framework to create the value based pricing model for marine engines. The EVC model is based on calculating and comparing life-cycle costs of the reference product and competing products, thus showing the quantifiable value of the company’s own product compared to competition. In the applied part of the thesis, the components of the EVC model are identified for a marine diesel engine, the components are explained, and an example calculation created in Excel is presented. When examining the possibilities to implement in practice a value based pricing strategy based on the EVC model, it was found that the lack of precise information on competing products is the single biggest obstacle to use EVC exactly as presented in the literature. It was also found that sometimes necessary communication channels are missing and that there is simply a lack of interest from some clients and product end-users part to spend time on studying the life-cycle costs of the product. Information on the company’s own products is however sufficient and the sales force is capable to communicate to sufficiently high executive levels in the client organizations. Therefore it is suggested to focus on quantifying and communicating the company’s own value proposition. The dynamic nature of the business environment (variance in applications in which engines are installed, different clients, competition, end-clients etc.) means also that each project should be created its own EVC calculation. This is demanding in terms of resources needed, thus it is suggested to concentrate on selected projects and buyers, and to clients where the necessary communication channels to right levels in the customer organization are available. Finally, it should be highlighted that as literature suggests, implementing a value based pricing strategy is not possible unless the whole business approach is value based.