FormalPara Key Points for Decision Makers

Across the Member States of the European Union, medicines are launched at different points in time, with delays of up to 3–5 years. Launch delays occur particularly in lower-income countries, countries with lower medicine prices, and small markets.

The study findings align with previous research that pharmaceutical companies have been applying a strategy to delay the launch of medicines in lower-income countries in light of the widespread use of the external price referencing (EPR) policy.

Since average European prices decrease over the years, regular revisions of the medicine prices in the reference countries, at longer intervals (such as 3 and 5 years), may help maximise the cost-containment potential of EPR.

1 Introduction

Ensuring access to affordable medicines has been a major challenge globally [1]. In recent years, this has also become an issue for high-income countries, given the increasing marketing of medicines with high price tags [2, 3]. While a debate about new pricing and funding policies for medicines and a change in the ‘business model’ of the development of medicines has been ongoing [4,5,6,7,8,9], the policy of external price referencing (EPR) is still a commonly used approach to set medicine prices in the Member States of the European Union (EU) and beyond [10,11,12,13,14]. EPR is defined as ‘a practice of using the price(s) of a medicine in one or several countries in order to derive a benchmark or reference price for the purposes of setting or negotiating the price of the product in a given country [15].

Literature suggests several limitations of EPR, one of which relates to availability concerns. The EPR policy incentivises marketing authorisation holders to first launch medicines in countries with higher price levels, and to market them at a later point in time, or not at all, in countries that would have comparably lower prices for the same medicines. From a company’s perspective, this is done with the aim of not reducing the average benchmark price that will be used by other EPR-applying countries [10, 16,17,18,19,20]. This impacts both higher-income and lower-resourced countries. While the latter are confronted with non-availability or delayed availability of new medicines, early-launch countries risk overpaying in case they do not monitor price developments in their reference countries and therefore miss adjusting their prices accordingly. Based on simulations of fictitious prices in current European EPR schemes, Vogler et al. [13] identified a higher frequency of price evaluations as one of the measures in the EPR methodology that would have high impact in terms of savings for public payers. If all EPR-applying countries re-evaluated their prices, based on the price in the reference countries, every 6 months after an initial price has been set, this would result in an average 6% price reduction in all 28 investigated EPR-applying countries after 10 years, compared with a situation in which countries continued performing EPR based on the same methodology as in 2015.

Against this backdrop, this research aimed to investigate, for a few selected medicines, the availability of price data in EU Member States and the evolution of EU average prices over time. Considering the availability of price data as a proxy for availability of the medicine in national markets, the study also aimed to identify options for improvement in the methodology design of the commonly used EPR policy.

2 Methods

The research was designed as an illustrative case study. Price data were surveyed for a small sample of medicines. Five medicines of different indications with known high budget impact for public payers [6, 21,22,23,24] were chosen: abiraterone (prostate cancer), emtricitabine/rilpivirine/tenofovir disoproxil (AIDS/HIV), fingolimod (multiple sclerosis), linagliptin (type 2 diabetes mellitus), and sofosbuvir (hepatitis C). All selected medicines had been granted a centralised marketing authorisation (i.e. that is valid in all EU Member States, Norway, Iceland and Liechtenstein [25]) in recent years (survey performed in March 2017). For each active ingredient, a specific pharmaceutical presentation representing a defined pharmaceutical form (e.g. tablet), strength and pack size was chosen for the analysis (Table 1).

Table 1 Selected medicines for the price analysis
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Price data were analysed at different points in time: 6, 12, 18, 36 and 60 months after marketing authorisation. Data were retrieved from national administrative price databases and registers accessible through the Pharma Price Information (PPI) service [26] of the Austrian Public Health Institute, in addition to previous price data collections already included in the PPI system.Footnote 1 The survey investigated ex-factory prices. For Cyprus, Denmark, Finland, The Netherlands, Sweden and the UK, where ex-factory prices are not officially available (government authorities set prices at the wholesale price level), the ex-factory prices were calculated through average wholesale margins as published in the Regulation on Procedural Rules for Calculation of the EU Average Price according to the General Social Insurance Law [27] in Austria, which were adjusted over time. Price information refers to official list prices (as published by the competent authorities) without consideration of discounts or claw-backs. While the survey initially aimed to cover all 28 EU Member States, no price data could be retrieved for Malta. Prices for England were taken as proxy for UK prices. In a few cases,Footnote 2 price data were imputed. Prices per pack were compared. In the case of linagliptin, data for the defined pack size (30 film-coated tablets) were not available in a few countries, therefore the prices of the closest pack size (28 film-coated tablets) were considered and adjusted accordingly. For calculation of the average European prices, data from countries that did not have the Euro as its national currency at the surveyed points in time were converted into Euros. Conversion was based on the average monthly exchange rate of the previous month, as indicated by the European Central Bank. However, evolutions in prices were analysed based on data indicated in national currencies in order to avoid distortion related to exchange rate fluctuations.

3 Results

3.1 Availability of Price Data

For the majority of the EU Member States, no price data were available in the first year (6–8 countries had price data after 6 months, and 10–15 countries had price data after 12 months). After 18 and 36 months, data availability had considerably improved for the surveyed medicines (price data were available in 15–20 and 18–23 countries, respectively). Austria, Germany, Denmark and England always had price data available 6 months after marketing authorisation (with one exception for Germany, where linagliptin had not been marketed since no additional therapeutic benefit had been proven in the early benefit evaluation required by the Pharmaceuticals Market Reorganisation Act AMNOG [21]). For some of the medicines, Portugal, Finland and Slovenia had price data published 6 or 12 months after marketing authorisation. In Greece, Estonia, Lithuania and Latvia, as well as Bulgaria, Czech Republic and Slovakia, price data for some of the selected medicines were only available after 36 months, or later, or not at all (Fig. 1 and electronic supplementary material).

Fig. 1
figure 1

Price data availability of the selected medicines in the EU Member States. No data for sofosbuvir were available for the ‘60 months’ period as the product only received marketing authorisation in January 2014 (data surveyed in March 2017). In Portugal, no price data for fingolimod were available from 12 months because, since 2012, no price data for medicines used in hospitals have been published in Portugal; however, the national price list informs that the product is marketed

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3.2 Evolution of European Average Prices

The price analysis showed that the European average prices (i.e. the average of the available prices of the medicines of the sample in the EU Member States) decreased over time (Table 2). On average, the European prices of the selected medicines were reduced by 7.1–12.5% between 6 months and 3 years, and by 9.5–16.2% between 6 months and 5 years after marketing authorisation. For all five surveyed medicines, the average European price was lower at all survey points compared with the previous observation point. The analysis of price evolutions (based on national currency units) showed that in some countries prices tended to remain at the same level in the shorter term (e.g. 1–2 years), while prices tended to decrease in the longer term (see electronic supplementary material). In a few cases, prices increased (e.g. emtricitabine/rilpivirine/tenofovir disoproxil in Finland, and linagliptin in Italy).

Table 2 Change in the average European prices for the selected medicines at 6, 12, 18, 36 and 60 months after marketing authorisation
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4 Discussion

4.1 Findings in Light of Existing Pricing Policies

The availability of price data is an indication for the market entry of medicines. Data from this study point to staggered marketing of medicines across countries (in the literature [10, 17,18,19,20], this approach has been described as a ‘strategic launch’ of marketing authorisation holders). If price data are considered as proxy for the availability of a medicine on the market, the findings imply that in some European countries patients have to wait for months and years after marketing authorisation before they can access the medicine (if affordable). Delayed accessibility of new medicines in some European countries has also been shown in other research [12, 19, 28,29,30].

A country’s income level is one of the commonly provided explanations for staggered market entry. As such, medicines are first launched in countries with high-income (gross domestic product) per inhabitant in which solidarity-based funding schemes are able to afford higher prices. Delayed launches in lower-income and lower-priced countries are attributed to the widespread existence of the EPR policy as this staggered market entry allows companies to delay a reduction in prices [10, 17,18,19,20, 28,29,30,31]. In addition to a country’s income and its medicine price levels, population size can also constitute a cause for availability limitations (delayed availability or non-availability) or affordability issues (i.e. smaller countries, due to their smaller markets, have been confronted with higher prices) [20, 28, 29, 32, 33]. Another factor is the extent and type of price regulation. From a marketing authorisation holder’s perspective, within the (current) EU, Germany and England are considered to be the most attractive markets since they do not apply traditional price control measures [34] (in Germany, medicines can be brought on the market immediately after marketing authorisation, and prices are free during the first year [22]; and England’s Pharmaceutical Price Regulation Scheme (PPRS) is designed as a profit control mechanism [35]). Further administrative reasons, including the marketing authorisation procedure or delays in assessments, may also play a role [29, 30, 36].

Overall, findings of this study suggest that medicines in countries with higher income and also higher medicine prices were launched earlier, compared with markets with lower income and medicine prices (the definition of price levels is based on the results of this analysis as well as further studies with a country basket of at least 15 of the 28 EU Member States [37,38,39]Footnote 3 ). Germany, Austria and Denmark, high-income countries with high price levels, were among countries with early availability of price data and, assumingly, early availability of the medicines on the market, whereas price data were only available at later stages (in some cases even 3 or 5 years after marketing authorisation) in Greece and some Central and Eastern European countries. Research also showed delayed availability in smaller markets, such as the Baltic countries (Estonia, Latvia and Lithuania) and Cyprus. At the same time, a few small markets in higher-income countries (Luxembourg, Slovenia) had earlier availability. Furthermore, the results are mixed with regard to Portugal (hit hard by the global financial crisis a few years ago) and Romania (among the lowest-income countries of the EU), which could have been expected to have major delayed availability. However, this was not the case, suggesting multifactorial reasons (e.g. Romania being a large market). It would require a larger basket of medicines to test whether or not this pattern prevails.

The decreases in the average European prices appear to result from both the inclusion of lower prices in some reference countries in which price data were available at a later point in time, and price reductions in other countries. This indicates that from a cost-containment perspective, EPR-applying countries could also benefit from continuous price revisions and, in particular, at later stages. There is room for improvement for countries that refrain from regular price evaluations or solely perform price revisions in a rather short interval after the launch of the medicine. According to a 2015 survey, 25 of 30 EPR-applying European countries do price monitoring, thereof 17 on a regular basis, whereas the remainder perform ad hoc price revisions. The duration of the intervals was reported to range between 3 months to 5 years [13].

In light of the limitations in access to and affordability of new medicines with high price tags, there have been discussions about the most appropriate pricing, as well as reimbursement and policies, both in research as well as at political levels [4,5,6,7,8,9, 40]. There is no ‘one-size-fits-all’ solution as there are different policies with regard to different types of medicines (e.g. on-patent vs. off-patent), price types (e.g. ex-factory prices vs. pharmacy retail prices) and policy objectives (i.e. early access to medicines, financial sustainability of the healthcare system, reward for innovation). The policy objectives depend on national priorities of policymakers, and are sometimes conflicting. As a result, policymakers may need to opt for a mix of different policy options [41, 42].

Policy options to ensure access to medicines also differ with regard to their feasibility and timelines. While some of them, for instance methodological changes in existing policies, are solutions in technical areas that can be implemented at short notice, others (e.g. collaborative approaches of countries to agree on principles of differential pricing or to do strategic procurement, or new funding mechanisms to simulate research and development) require high political commitment and can only be implemented in the long-term [43].

A pragmatic approach could be that, while policymakers work on developing new policy options in the long-term, they implement feasible, practical measures in the short-term. One of the policy changes that aim to ensure financial sustainability of healthcare systems is an optimisation of the methodological design for EPR; this implies regular revisions. The findings of this study provide (although for only a few medicines) an evidence base that the European average prices continue decreasing, even months and years after marketing authorisation. Since the frequency of price revisions under the EPR policy, and further methodological issues, are either determined in technical methodology papers or are regulated in a decree or a law, at national levels, such measures can be implemented rather swiftly in a country, without consultation of other countries. Nonetheless, it should be considered that EPR, including price revisions, is rather resource-intensive, in particular if the country basket is large. However, since most countries do not survey price data for EPR but ask the marketing authorisation holder to submit the price data of the reference countries [14], workload can be limited. In addition, improved collaboration between countries, such as through the price database Euripid, which is fed by pricing authorities of EU Member States [44], helps reduce the resources required for regular price revisions.

4.2 Limitations

This study has several limitations. First, the research was performed for a sample of a few medicines and is not comprehensive. There is room for further research to investigate whether or not a larger sample would lead to the same findings. Second, data had to be imputed in a few cases in which retrospective price data gathering was not possible and these data had not been included in the PPI system earlier. Third, the selected medicines are likely to be subject to discounts and further price-reducing arrangements, such as risk-sharing agreements and other managed entry agreements between the marketing authorisation holder and the public payer in several countries [3, 45,46,47,48,49,50]. List prices were taken instead of actual discounted prices since the latter cannot be accessed given their confidential nature. Nonetheless, the list prices are relevant in this context as public authorities also use list prices of other countries when they apply EPR (solely the EPR legislation in Germany provides for the use of discounted prices [13]).Footnote 4 Fourth, calculation of the average European prices was based on data expressed in Euros. In non-Euro countries, these data can be flawed due to exchange rate volatility. Finally, the availability of price data does not necessarily translate into actual patient access to medicines. A few countries indicate EPR-derived national prices in their price databases, even for medicines that have not been marketed (and the price database does not indicate their availability). In addition, medicines may have been launched but are not yet available to patients at a certain point in time due to shortages [51] or because they are not affordable to patients in case of high out-of-pocket payments (e.g. as evidenced for cancer medicines [52]). In other countries, patients can have access to a medicine but its price is not necessarily publicly available (e.g. prices for hospital medicines have not been published in Portugal since 2012 [37]).

5 Conclusions

Ensuring affordable access to new high-priced medicines while not jeopardising the financial sustainability of the solidarity-based healthcare systems is a challenge for policymakers of high-income countries as well as lower- and middle-income countries.

As the commonly used EPR policy has major limitations, policymakers are encouraged to explore further pricing policies and alternative approaches beyond pricing in order to better achieve the above-mentioned policy objectives. However, in the meantime, if policymakers consider continuing using EPR as a tool to contain costs, they are advised to opt for a methodological design that is most appropriate for the intended purpose. The findings of this research add to previous studies [12, 13] that highlighted the potential of regular evaluations to bring down prices. Our study confirmed, at least for the sample of the selected medicines, that the availability of list prices in lower-priced countries was observed only years after marketing authorisation. This can be interpreted as an indication for ‘strategic launches’ of pharmaceutical companies. Thus, price revisions at longer intervals extended to some years can help reduce the list prices determined through EPR.