After years of hard work the much awaited publication is finally here and published in Frontiers in Pharmacology.
Assessing the Consequences of External Reference Pricing for Global Access to Medicines and Innovation: Economic Analysis and Policy Implications
Louis P. Garrison
As the title suggests, this research explores how external reference pricing (ERP or as also called IRP – International Reference Pricing) is used to set pharmaceutical prices to improve affordability, highlighting how its application may have negative consequences on patient access in certain countries.
The relationship between medicine prices and national income levels
ERP is used in many countries around the world, creating a complex and dynamic network. To analyse the effects of ERP we assessed how individual countries’ choice of ERP instruments and the resulting medicine prices are related to their national income levels as a proxy for their ‘ability to pay’. Data shows that there is a large difference in new drug availability between lower income and higher income countries and many countries reference to a dissimilar basket.
External Reference Pricing (=International Reference Pricing) and Patient Access
To analyse the effect of ERP on patient access and population health outcomes we prepared a case study of sacubitril-valsartan in congestive heart failure. This examines variations in the utilization of an effective, innovative medicine to project the likely reduction in QALYs gained due to access limitations and presumed under-utilization. Health and lives lost due to access restrictions were observed even in higher-income countries; in our case study, worldwide over 500,000 QALYs were lost for just one medicine.
How ERP (IRP) affects the development of new medicines
The analysis in our case study of sacubitril-valsartan can be used to quantify how much additional revenue would be generated for the manufacturer if all patients were treated to the benchmark level. We estimate that providing the same level of access in all investigated countries in this case study as was the case in the benchmark country (Germany) would mean $2.06 billion additional annual revenue from these countries alone. This additional revenue could then be used partially to finance further R&D.
Our team of world-class co-authors Zoltán Kaló, Jaime Espín and Lou Garrison did a great job. We also thank our team members András Incze, Éva Kiss, Sophia Kessabi, Joan Gibert and Chris Shilling for their contributions, along with the Techie Team (Renáta Vincze, Szilárd Boda, Sándor Dimény, Károly Dénes) who mined the necessary data and helped with the modelling using our cloud-based IRP Master Tool.
The article is now available for everyone to read, just click any of the buttons below!
The original full article was published in 06 April 2022 and available in Frontiers.
The full article including figures and references available for download from our website here:
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