External Reference Pricing may have negative effects globally? – research article in Frontiers

Frontiers Publication about ERP


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

Worls-class co-authors and Akceso team

Louis P. Garrison
Jaime Espín
Zoltán Kaló

06 April 2022
frontiers in Pharmacology  

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. 

World-class authors

Our team of world-class co-authors Zoltán KalóJaime Espín and Lou Garrison did a great job. We also thank our team members András InczeÉva KissSophia KessabiJoan Gibert and Chris Shilling for their contributions, along with the Techie Team (Renáta VinczeSzilárd BodaSándor DiményKároly 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: 

Contact us for a helping hand!

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Contact as for a helping hand and we will  support your decision with data from our up-to-date, industry leading database of pharmaceutical prices and reimbursement conditions across portfolios and countries, and advise  building your strategy with simulations and analyzing pathways. 

Contact us and have a look on the Verity IRP Master Toolwhich was also used for simulations during the research published recently. 

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