Will flat EU Pricing become a reality? considerations for the Biopharma industry and whether future EU pricing transparency rules will affect the Current position

  • Ranson P
  • Hill C
  • Cline H
  • et al.
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Abstract

OBJECTIVES: Prices of medicines differ across EU Member States due to factors, some of which are beyond responsibilities of companies. These differences include: wholesaler or pharmacy margins, sales tax, pack sizes, distribution channels, exchange rate fluctuations, and perhaps most importantly, price-setting processes, but also national health and pharmaceutical policies and priorities. Current EU transfer pricing rules only address process rather than the resulting levels of pricing and reimbursement. Member States compare and reference price with each other (so called 'International Reference Pricing' or IRP). We aim to demonstrate that companies need to employ a range of different mechanisms to mitigate the effects of IRP. METHODS: We review how legislation and case law, including that relating to parallel trade or grey market, reinforces national rights to set prices. Current price constraints and their interpretation are considered. We then consider forthcoming proposals and the extent to which they may lead to greater pricing consistency. RESULTS: Based on a review of all nine cases that have proceeded to the EU courts, the principle of EU member state discretion in terms of price setting seems currently sacrosanct and it is unlikely that the legislators will be able to change this position. In order to balance the respective interests of the industry and member states, member states should allow differential pricing; restrict IRP to economically comparable Member States; exclude from IRP those elements related to pharmaceutical regulation and policies, which are country-specific and likely to distort price comparisons; and exclude from IRP and free movement provisions, those countries under austerity measures. CONCLUSIONS: Currently, manufacturers have limited strategies in terms of price corridors and the like; it seems therefore, that more pragmatic solutions will need to be considered at an EU level and supported by the Courts.

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Ranson, P., Hill, C. A., Cline, H., Hill, C. E., Marshall, J. D., & Harries, M. (2015). Will flat EU Pricing become a reality? considerations for the Biopharma industry and whether future EU pricing transparency rules will affect the Current position. Value in Health, 18(3), A89. https://doi.org/10.1016/j.jval.2015.03.522

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