Pharmaceutical Pricing Policies in Italy

Abstract

This chapter provides an overview of drug price and reimbursement regulations in Italy within the general context of Italian pharmaceutical policy.

Reimbursement and ex-factory prices are negotiated by the National Drug Agency and the relevant company, whereas the distribution margins and VAT (Value Added Tax) are set by law. The pharmaceutical companies are free to set prices for non-reimbursable (prescription-only and non-prescription) drugs.

Disease burden, comparative risk-benefit profiles and drug budget impacts are the key parameters considered in the negotiation process of ex-factory prices. Many drug price approvals are accompanied by managed market entry contracts, including financially based contracts (e.g., price-volume agreements) and outcome-based contracts (especially for cancer drugs). Generic reference pricing has been applied since 2001, while therapeutic reference pricing, temporarily introduced by regions, has not been allowed since October 2007. Regions, local health authorities and hospital trusts play important roles in managing market access to drugs: despite they cannot change list prices chosen at the national level, they implemented aggressive procurement policies to reduce actual prices and policies aimed at promoting prescribing behavior that favors cheaper drugs.

Pricing policy has doubtlessly improved in the last 20 years (i.e., after the 1993–1994 scandals that revealed that companies, policy makers and top public officials constructed an illegal system to set prices), with a profound cultural change, an increasing role played by evidence-based medicine and, more generally, by technical competence. However, there are some critical factors that should be addressed in the future political agenda. A clearer pathway to defining innovation, increased transparency of assessment and appraisal processes, a more rational distribution of competencies between central and regional authorities, and a softer approach to drug budgets, with an explicit recognition of the impact of drugs in the use (and cost) of other health care services (and vice versa), may further improve the Italian drug pricing policy.