gms | German Medical Science

Background: Most European countries set medicine prices based on the prices of the same medicine in other European countries. Applying this so-called external price referencing policy, they refer to official, published list prices. In practice, pharmaceutical industry offers discounts, rebates and similar arrangements to public payers. Given the confidential nature of such agreements, there is little evidence on this matter. The aim of this study was to survey the relevance and extent of discounts and similar arrangements in pharmaceutical pricing in European countries.

Methods: We did a primary data collection with competent authorities involved in the Pharmaceutical Pricing and Reimbursement Information (PPRI) network. After a pilot with one country (Austria) launched in August 2016, the survey ran from September to December 2016. Preliminary findings were discussed with the respondents during a face-to-face meeting in November 2016. Due to the sensitivity of the data, respondents were offered anonymity if they wished so.

Results: 18 European countries responded to the survey. All 18 countries reported that public payers were granted discounts and similar price reductions by pharmaceutical industry for some new medicines. Discount arrangements were particularly common in the indications of oncology, multiple sclerosis, hepatitis C, and TNF alpha inhibitors. Most frequently reported arrangements included ‘simple’ discounts on list prices as well as price-volume agreements; some countries also informed about performance-based agreements. The extent of the price reductions varied between countries and products; they were reported to be up to 50% for some medicines. In 14 of the 18 responding countries, the discount arrangements were subject to confidentiality.

Conclusion: The study confirmed that confidential discounts and similar arrangements play a major role in pharmaceutical pricing, in particular related to new high-priced medicines. As a result, published list prices do not necessarily reflect the actually paid prices. Policy-makers that set their medicine prices with reference to the list prices of other countries, without accounting for possible discounts, risk over-paying. To afford high-cost medicines, they will also accept discounts, under the condition posed by industry to keep them confidential. Trapped in a kind of prisoners’ dilemma, they thus continue to contribute to the lack of transparency.