Abstract
A price stems from the intersection between supply and demand curves in any common market. However, there are special markets where consumers do not pay for goods directly, and prescription drugs are a well-known example in healthcare. Drugs are mainly funded by public expenditure in well-established welfare systems like those of the Western European countries. However, the present era of austerity in public funding has made financial resources scarce in most European nations. Currently, the leading tendency for pharmaceutical pricing in Europe is direct negotiation with pharma companies. However, these negotiations are administratively burdensome, with costs not necessarily offsetting savings. Moreover, since any trade negotiation implies some degree of confidentiality to be effective these strategies are scantily transparent. When prices are set for many products through unavoidably arbitrary decisions, the final consequence is an irrational allocation of financial resources. Here, we raise a proposal to restore a reasonable balance between public equity objectives of health authorities and private profit incentives of the pharma industry in Europe, switching from pricing to budgeting. The underlying rationale of our proposal is to stop setting arbitrary prices in a context of market failure.
This is a preview of subscription content, log in via an institution to check access.
References
Garattini L, Padula A (2018) Pharmaceutical pricing conundrum: time to get rid of it? Eur J Health Econ 19(8):1035–1038
Balderrama F, Schwartz LJ, Longo CJ (2020) When are pharmaceuticals priced fairly? An alternative risk-sharing model for pharmaceutical pricing. Health Care Anal 28(2):121–136
Vogler S, Paris V, Panteli D (2018) Ensuring access to medicines: how to redesign pricing, reimbursement and procurement? [Internet]. In: Richardson E, Palm W, Mossialos E (eds) European Observatory on Health Systems and Policies, Copenhagen (Denmark)
Rodwin MA (2021) Common pharmaceutical price and cost controls in the United Kingdom, France, and Germany: Lessons for the United States. Int J Health Serv 51(3):379–391
Garattini L, Padula A (2018) Competition in pharmaceuticals: more product-than price-oriented? Eur J Health Econ 19(1):1–4
Padula A, Garattini L (2020) Health technology assessment for pharmaceutical regulation in the European Union: do we need another body? J R Soc Med 113(1):12–15
Garattini L, Padula A (2017) Dutch guidelines for economic evaluation: “from good to better” in theory but further away from pharmaceuticals in practice? J R Soc Med 110(3):98–103
Brooks E, Geyer R (2016) Can a medical need clause help manage the growing costs of prescription drugs in the EU? Health Econ Policy Law 11(2):179–192
Moye-Holz D, Vogler S (2021) Comparison of prices and affordability of cancer medicines in 16 Countries in Europe and Latin America. Appl Health Econ Health Policy. https://doi.org/10.1007/s40258-021-00670-4
Van der Gronde TV, Uyl-de Groot CA, Pieters T (2017) Addressing the challenge of high-priced prescription drugs in the era of precision medicine: a systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks. PLoS ONE 12(8):e0182613
Garattini L, Curto A (2016) Performance-based agreements in Italy: “trendy outcomes” or mere illusions? Pharmacoeconomics 34(10):967–969
Curto A, van de Vooren K, Garattini L (2017) Market approval for drugs in the EU: time to change direction? Eur J Health Econ 18(8):933–936
Garattini L, Padula A (2017) “Appropriateness” in Italy: a “magic word” in pharmaceuticals? Appl Health Econ Health Policy 15(1):1–3
Frakt AB, Chernew ME (2018) The importance of relative prices in health care spending. JAMA 319(5):441–442
Reinhardt U (2015) Probing our moral values in health care: the pricing of specialty drugs. JAMA 314(10):981–982
Shaikh M, Del Giudice P, Kourouklis D (2021) Revisiting the relationship between price regulation and pharmaceutical R&D investment. Appl Health Econ Health Policy 19(2):217–229
Wirtz VJ, Hogerzeil HV, Gray AL, Bigdeli M, de Joncheere CP, Ewen MA et al (2016) Essential medicines for universal health coverage. Lancet 389(10067):403–476
Moors EH, Cohen AF, Schellekens H (2014) Towards a sustainable system of drug development. Drug Discov Today 19(11):1711–1720
Morgan SG, Bathula HS, Moon S (2020) Pricing of pharmaceuticals is becoming a major challenge for health systems. BMJ 368:l4627
Funding
No sources of funding were used to conduct this study or prepare this manuscript.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
Livio Garattini, Bruno Finazzi and Pier Mannuccio Mannucci have no conflicts of interest directly relevant to this article.
Human and animal rights statement
This article does not contain any studies with human participants or animals performed by any of the authors.
Informed consent
For this type of study formal consent is not required.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Garattini, L., Finazzi, B. & Mannucci, P.M. Pharmaceutical pricing in Europe: time to take the right direction. Intern Emerg Med 17, 945–948 (2022). https://doi.org/10.1007/s11739-022-02960-8
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11739-022-02960-8