Strategies for pricing of pharmaceuticals and generics in developing countries

Brian Godman, Mohamed Azimi Hassali

Research output: Contribution to journalComment/debate

Abstract

Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries (1), also referred to as lower and middle income countries (LMICs). These include advocating policies regarding mark-ups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics (2-4). However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices (5). There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in the Netherlands, including 3-monthly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2% of the originator price in a short time period (6). In Sweden, compulsory generic substitution with the lowest priced generic also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic was guaranteed a substantial proportion of the market the following month (7, 8).
LanguageEnglish
JournalGenerics and Biosimilars Initiative journal
Publication statusAccepted/In press - 3 Mar 2017

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Developing countries
Developing Countries
Costs and Cost Analysis
Pharmaceutical Preparations
Costs
Medicine
Drug Substitution
Simvastatin
Omeprazole
Scrapie
Launching
Erosion
Sweden
Netherlands
Substitution reactions
Availability
Industry

Keywords

  • pricing strategy
  • external reference pricing
  • pharmaceuticals

Cite this

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title = "Strategies for pricing of pharmaceuticals and generics in developing countries",
abstract = "Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries (1), also referred to as lower and middle income countries (LMICs). These include advocating policies regarding mark-ups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics (2-4). However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices (5). There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in the Netherlands, including 3-monthly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2{\%} of the originator price in a short time period (6). In Sweden, compulsory generic substitution with the lowest priced generic also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic was guaranteed a substantial proportion of the market the following month (7, 8).",
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Strategies for pricing of pharmaceuticals and generics in developing countries. / Godman, Brian; Hassali, Mohamed Azimi.

In: Generics and Biosimilars Initiative journal, 03.03.2017.

Research output: Contribution to journalComment/debate

TY - JOUR

T1 - Strategies for pricing of pharmaceuticals and generics in developing countries

AU - Godman, Brian

AU - Hassali, Mohamed Azimi

PY - 2017/3/3

Y1 - 2017/3/3

N2 - Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries (1), also referred to as lower and middle income countries (LMICs). These include advocating policies regarding mark-ups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics (2-4). However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices (5). There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in the Netherlands, including 3-monthly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2% of the originator price in a short time period (6). In Sweden, compulsory generic substitution with the lowest priced generic also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic was guaranteed a substantial proportion of the market the following month (7, 8).

AB - Rida and Ibrahim are to be congratulated on their extensive review of ongoing pricing strategies in developing countries (1), also referred to as lower and middle income countries (LMICs). These include advocating policies regarding mark-ups for pharmaceuticals, pricing formulae for medicines, external reference pricing, as well as encouraging greater use of generics (2-4). However, there are concerns over external reference pricing (ERP), especially for new medicines where pharmaceutical companies are potentially delaying launch or not launching in some countries to maintain high prices (5). There are also concerns over the ability to rapidly obtain low prices for generics if prices under ERP systems are only reviewed annually or biannually. Aggressive pricing policies in the Netherlands, including 3-monthly tendering, led to prices of generic omeprazole and simvastatin dropping to just 2% of the originator price in a short time period (6). In Sweden, compulsory generic substitution with the lowest priced generic also led to rapid price erosion following generic availability. Prices fell further following the instigation of monthly auctions where the cheapest generic was guaranteed a substantial proportion of the market the following month (7, 8).

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KW - pharmaceuticals

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T2 - Generics and Biosimilars Initiative journal

JF - Generics and Biosimilars Initiative journal

SN - 2033-6403

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