Drug price differentials caused by de-listing and price cap policies

This paper analyses the behaviour of pharmaceutical companies that face the threat of having their drugs excluded from reimbursement and the markets characterised also by price caps. We conclude that price elasticity of demand and cost differentials cause the price discounts which drug firms offer to health care organisations. Additionally, we conclude that price cap regulations affect the time path of prices, resulting in higher prices for new products and lower prices for old products.

Drug price differentials caused by de-listing and price cap policies

This paper analyses the behaviour of pharmaceutical companies that face the threat of having their drugs excluded from reimbursement and the markets characterised also by price caps. We conclude that price elasticity of demand and cost differentials cause the price discounts which drug firms offer to health care organisations. Additionally, we conclude that price cap regulations affect the time path of prices, resulting in higher prices for new products and lower prices for old products.

Problems in the regulatory policy of the drug market

OBJECTIVE Analyze the implementation of drug price regulation policy by the Drug Market Regulation Chamber.METHODS This is an interview-based study, which was undertaken in 2012, using semi-structured questionnaires with social actors from the pharmaceutical market, the pharmaceuticals industry, consumers and the regulatory agency. In addition, drug prices were compiled based on surveys conducted in the state of Sao Paulo, at the point of sale, between February 2009 and May 2012.RESULTS The mean drug prices charged at the point of sale (pharmacies) were well below the maximum price to the consumer, compared with many drugs sold in Brazil. Between 2009 and 2012, 44 of the 129 prices, corresponding to 99 drugs listed in the database of compiled prices, showed a variation of more than 20.0% in the mean prices at the point of sale and the maximum price to the consumer. In addition, many laboratories have refused to apply the price adequacy coefficient in their sales to government agencies.CONCLUSIONS The regulation implemented by the pharmaceutical market regulator was unable to significantly control prices of marketed drugs, without succeeding to push them to levels lower than those determined by the pharmaceutical industry and failing, therefore, in its objective to promote pharmaceutical support for the public. It is necessary reconstruct the regulatory law to allow market prices to be reduced by the regulator as well as institutional strengthen this government body.

Strategies for price reduction of HIV medicines under a monopoly situation in Brazil

ABSTRACT OBJECTIVE To analyze Government strategies for reducing prices of antiretroviral medicines for HIV in Brazil. METHODS Analysis of Ministry of Health purchases of antiretroviral medicines, from 2005 to 2013. Expenditures and costs of the treatment per year were analyzed and compared to international prices of atazanavir. Price reductions were estimated based on the terms of a voluntary license of patent rights and technology transfer in the Partnership for Productive Development Agreement for atazanavir. RESULTS Atazanavir, a patented medicine, represented a significant share of the expenditures on antiretrovirals purchased from the private sector. Prices in Brazil were higher than international references, and no evidence was found of a relationship between purchase volume and price paid by the Ministry of Health. Concerning the latest strategy to reduce prices, involving local production of the 200 mg capsule, the price reduction was greater than the estimated reduction. As for the 300 mg capsule, the amounts paid in the first two years after the Partnership for Productive Development Agreement were close to the estimated values. Prices in nominal values for both dosage forms remained virtually constant between 2011 (the signature of the Partnership for Productive Development Agreement), 2012 and 2013 (after the establishment of the Partnership). CONCLUSIONS Price reduction of medicines is complex in limited-competition environments. The use of a Partnership for Productive Development Agreement as a strategy to increase the capacity of local production and to reduce prices raises issues regarding its effectiveness in reducing prices and to overcome patent barriers. Investments in research and development that can stimulate technological accumulation should be considered by the Government to strengthen its bargaining power to negotiate medicines prices under a monopoly situation.

Are prescribing doctors sensitive to the price that their patients have to pay in the Spanish National Health System?

[EN] Background This study aims to design an empirical test on the sensitivity of the prescribing doctors to the price afforded for the patient, and to apply it to the population data of primary care dispensations for cardiovascular disease and mental illness in the Spanish National Health System (NHS). Implications for drug policies are discussed. Methods We used population data of 17 therapeutic groups of cardiovascular and mental illness drugs aggregated by health areas to obtain 1424 observations ((8 cardiovascular groups * 70 areas) + (9 psychotropics groups * 96 areas)). All drugs are free for pensioners. For non-pensioner patients 10 of the 17 therapeutic groups have a reduced copayment (RC) status of only 10% of the price with a ceiling of €2.64 per pack, while the remaining 7 groups have a full copayment (FC) rate of 40%. Differences in the average price among dispensations for pensioners and non-pensioners were modelled with multilevel regression models to test the following hypothesis: 1) in FC drugs there is a significant positive difference between the average prices of drugs prescribed to pensioners and non-pensioners; 2) in RC drugs there is no significant price differential between pensioner and non-pensioner patients; 3) the price differential of FC drugs prescribed to pensioners and non-pensioners is greater the higher the price of the drugs. Results The average monthly price of dispensations to pensioners and non-pensioners does not differ for RC drugs, but for FC drugs pensioners get more expensive dispensations than non-pensioners (estimated difference of €9.74 by DDD and month). There is a positive and significant effect of the drug price on the differential price between pensioners and non-pensioners. For FC drugs, each additional euro of the drug price increases the differential by nearly half a euro (0.492). We did not find any significant differences in the intensity of the price effect among FC therapeutic groups. Conclusions Doctors working in the Spanish NHS seem to be sensitive to the price that can be afforded by patients when they fill in prescriptions, although alternative hypothesis could also explain the results found.

Different approaches to modelling the cost-effectiveness of schistosomiasis control

This paper reviews three different approaches to modelling the cost-effectiveness of schistosomiasis control. Although these approaches vary in their assessment of costs, the major focus of the paper is on the evaluation of effectiveness. The first model presented is a static economic model which assesses effectiveness in terms of the proportion of cases cured. This model is important in highlighting that the optimal choice of chemotherapy regime depends critically on the level of budget constraint, the unit costs of screening and treatment, the rates of compliance with screening and chemotherapy and the prevalence of infection. The limitations of this approach is that it models the cost-effectiveness of only one cycle of treatment, and effectiveness reflects only the immediate impact of treatment. The second model presented is a prevalence-based dynamic model which links prevalence rates from one year to the next, and assesses effectiveness as the proportion of cases prevented. This model was important as it introduced the concept of measuring the long-term impact of control by using a transmission model which can assess reduction in infection through time, but is limited to assessing the impact only on the prevalence of infection. The third approach presented is a theoretical framework which describes the dynamic relationships between infection and morbidity, and which assesses effectiveness in terms of case-years prevented of infection and morbidity. The use of this model in assessing the cost-effectiveness of age-targeted treatment in controlling Schistosoma mansoni is explored in detail, with respect to varying frequencies of treatment and the interaction between drug price and drug efficacy.

Generic entry into a regulated pharmaceutical market

The aim of this paper is to analyse empirically entry decisions by generic firms intomarkets with tough regulation. Generic drugs might be a key driver of competitionand cost containment in pharmaceutical markets. The dynamics of reforms ofpatents and pricing across drug markets in Spain are useful to identify the impact ofregulations on generic entry. Estimates from a count data model using a panel of 86active ingredients during the 1999 2005 period show that the drivers of genericentry in markets with price regulations are similar to less regulated markets: genericfirms entries are positively affected by the market size and time trend, and negativelyaffected by the number of incumbent laboratories and the number of substitutesactive ingredients. We also find that contrary to what policy makers expected, thesystem of reference pricing restrains considerably the generic entry. Short run brandname drug price reductions are obtained by governments at the cost of long runbenefits from fostering generic entry and post-patent competition into the markets.

Demand for pharmaceutical drugs: A choice modelling experiment

Despite the importance of supplier inducement and brand loyalty inthe drug purchasing process, little empirical evidence is to be foundwith regard to the influence that these factors exert on patients decisions. Under the new scenario of easier access to information,patients are becoming more demanding and even go as far asquestioning their physicians prescription. Furthermore, newregulation also encourages patients to adopt an active role in thedecision between brand-name and generic drugs. Using a statedpreference model based on a choice survey, I have found evidenceof how significant physicians prescription and pharmacists recommendation become throughout the drug purchase process and,to what extent, brand loyalty influences the final decision. Asfar as we are aware, this paper is the first to explicitlytake consumers preferences into account rather than focusingon the behavior of health professionals.

Parents' willingness to pay for diminishing children's pain during blood sampling.

BACKGROUND: Blood sampling is a frequent medical procedure, very often considered as a stressful experience by children. Local anesthetics have been developed, but are expensive and not reimbursed by insurance companies in our country. We wanted to assess parents' willingness to pay (WTP) for this kind of drug. PATIENTS AND METHODS: Over 6 months, all parents of children presenting for general (GV) or specialized visit (SV) with blood sampling. WTP was assessed through three scenarios [avoiding blood sampling (ABS), using the drug on prescription (PD), or over the counter (OTC)], with a payment card system randomized to ascending or descending order of prices (AO or DO). RESULTS: Fifty-six responses were collected (34 GV, 22 SV, 27 AO and 29 DO), response rate 40%. Response distribution was wide, with median WTP of 40 for ABS, 25 for PD, 10 for OTC, which is close to the drug's real price. Responses were similar for GV and SV. Median WTP amounted to 0.71, 0.67, 0.20% of respondents' monthly income for the three scenarios, respectively, with a maximum at 10%. CONCLUSIONS: Assessing parents' WTP in an outpatient setting is difficult, with wide result distribution, but median WTP is close to the real drug price. This finding could be used to promote insurance coverage for this drug.

Acesso a medicamentos essenciais em farmácias e drogarias do Município de Araraquara

A survey to determine the availability of 20 essential medicines for the diseases with highest prevalence in primary health care was conducted in the city of Araraquara. The presence and the price of these medicines in private sector pharmacies and drugstores of the city were recorded. Two forms, recommended by the WHO, were used in the survey, one for availability and the other for prices. The drugs most commonly available in pharmacies and drugstores were: propranolol (90.5%), captopril (96%) and ranitidine (96%), while the least available were ferrous sulfate (27%), beclomethasone (33.8%) and ibuprofen (41.9%). The drugs that showed the greatest variation among the prices charged were: propranolol (97.1%), hydrochlorothiazide (96.4%) and glibenclamide (95.0%), while the least variable were salbutamol (30.8%) and trimethoprim-sulfamethoxazole (30.2%). Generic drugs, which were half (10) of those assessed, had the lowest prices. The indicators of access, referring to the ability of patients to acquire drugs for the treatment of major diseases at the primary health care level, showed that no establishment stocked all 20 essential drugs and that wide variations existed in their prices, undermining their availability to drug users, whose only sources are pharmacies and drugstores. These data demonstrate the importance of the popular pharmacy to improve the access to medicines, by lowering the cost and increasing the availability of the items selected for the National List of Essential Drugs (RENAME).

Generic-branded drug competition and the price for pharmaceuticals in procurement auctions

This paper studies the effects of generic drug’s entry on bidding behavior of drug suppliers in procurement auctions for pharmaceuticals, and the consequences on procurer’s price paid for drugs. Using an unique data set on procurement auctions for off-patent drugs organized by Brazilian public bodies, we surprisingly find no statistically difference between bids and prices paid for generic and branded drugs. On the other hand, some branded drug suppliers leave auctions in which there exists a supplier of generics, whereas the remaining ones lower their bidding price. These findings explain why we find that the presence of any supplier of generic drugs in a procurement auction reduces the price paid for pharmaceuticals by 7 percent. To overcome potential estimation bias due to generic’s entry endogeneity, we exploit variation in the number of days between drug’s patent expiration date and the tendering session. The two-stage estimations document the same pattern as the generalized least square estimations find. This evidence indicates that generic competition affects branded supplier’s behavior in public procurement auctions differently from other markets.

Price and purity of cocaine : the relationship to emergency room visits and death, and to drug use among arrestees.

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Prescription drug prices : official index overstates producer price inflation : report to the Chairman, Special Committee on Aging, U.S. Senate /

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Price linkages in pharmaceutical markets

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA – School of Business and Economics