• The consequences of greater net price transparency for innovative medicines in Europe: Searching for a consensus

      Riccaboni, Massimo; Van Dyck, Walter; Gyger, Pius; Bentata, Pierre; Marques-Gomes, Joao; Czech, Marcin; Mestre-Ferrandiz, Jorge; Greiner, Wolfgang; Voncina, Luka; Groot, Wim; Wilsdon, Tim; Ross-Stewart, Kirsty; Pistollato, Michele (2020)
      The merits of greater or lesser net price transparency (NPT) has been a topic for discussion for many years across business and industry in general. However, in the past few years, the debate on NPT of innovative medicines has intensified, with organisations such as the United Nations (UN), the World Health Organization (WHO) and the Organisation for Economic Co-operation and Development (OECD) leading calls for greater transparency in the pharmaceutical sector, specifically focused on prices. In May 2019 the World Health Assembly (WHA) approved a resolution to support the greater public disclosure of prices and research and development (R&D) costs for both medicines and other health products supported by several European and non-European governments. To contribute to the international debate on the transparency of medicine prices in Europe, Merck Sharp & Dohme (MSD) asked Charles River Associates (CRA) to curate a panel of experts to develop evidence on the impact of greater NPT of innovative medicines. Professor Walter Van Dyck1 and Professor Massimo Riccaboni2 were asked by CRA to lead this research, supported by a wider panel of 10 experts from a range of European markets. A structured literature review was first conducted to summarise the theoretical consequences of greater NPT. This was supplemented with a survey of national payers and payer experts3 from a range of European markets. This was used as pre-read information for an expert advisory board of 12 economic and health economic experts representing 12 countries selected to give a range of market sizes, national income and payer approaches. The debate and the consensus reached by the advisory board have been summarised in this report. In addition, a computational model has been developed by two key investigators to provide new, empirical evidence to illustrate the impact of NPT on different European markets.
    • Pharmaceutical net price transparency across European markets: Insights from a multi-agent simulation model

      Van Dyck, Walter; Riccaboni, Massimo; Swoboda, Torben (2020)
      In innovative drug markets the widespread practice across the EU of country-specific confidential agreements reached between national payers and innovative pharmaceutical manufacturers continues to be a highly disputed basis for pharmaceutical health policy making. With pharmaceutical health policy striving for fair and sustainable pricing under increasing budgetary pressures, public stakeholders are more and more willing to be involved in transparent access decision-making related to novel medicines, considered to be a societal good. Full net price transparency is believed by many to promote price competition and to increase equity by making presently unaffordable pharmaceutical products accessible to patients in lower-income markets. To investigate the viability of a net price transparency (NPT) system we develop and analyse a multi-agent model representing the European country-level situation to conduct counterfactual analyses of various NPT systems. In line with previous recent NPT research in other geographical, regulatory and market contexts, we find that a full NPT system encompassing higher- and lower-income EU countries would not be viable. This while, counterintuitively and acting as rational economic agents, middle- and lower-income countries would not be deciding to join and give up their confidential agreement system with the pharmaceutical industry. Also, a full NPT system would be seen to be unjust while violating Ramsey pricing and distributive justice principles. Maximally, a partial price transparency system could be a viable solution if entailing only the group of high-income countries including UK and Germany committing to NPT, leaving all other countries free to opt for confidential discounts. Viability of this solution is contingent upon UK or Germany accepting a higher price than they could get in their present confidential rebate system. Finally, in a dynamic game theoretic analysis, we show that middle- and lower-income countries, might be joining the high-income group later. In any case, a net price transparency system would delay access in middle- to lower-income countries. Hence, we conclude that even a partial transparency system would be a challenging case to reach from a political perspective and it will negatively impact population health improvement by the novel therapy, especially in lower-income countries.