PPRI - Comparative Analysis PPRI Project Co-ordination Sabine Vogler, Gesundheit Österreich GmbH PPRI Conference Vienna, 29 June 2007 PPRI Conference, Vienna, 29 June 2007 1
Comparative Analysis - Outline Introduction Pricing Reimbursement Access and affordability PPRI Conference, Vienna, 29 June 2007 2
Introduction 27 different systems in the EU PPRI Conference, Vienna, 29 June 2007 3
Total Pharmaceutical Expenditure per capita in Euro-PPP 2005 550 500 500 450 400 350 426 406 404 401 377 376 372 367 356 353 326 324 319 300 294 286 268 250 200 221 203 203 186 182 169 150 100 84 50 0 FR IT SI ES FI DE LU BE HU PT AT UK NO EL SE SK IE NL DK DK PL LT CY EE Source: PPRI 2006 PPRI Conference, Vienna, 29 June 2007 4
Pharmaceutical Expenditure in % of Health Expenditure (2005) European averages EU-25: 18.6% EU-15: 15.6 % EU-10: 23.7% Member States differences <= 10%: LU, DK, IE, NL; NO => 25%: BG, HU, LT, PL, SI, SK PPRI Conference, Vienna, 29 June 2007 5
Public funding of health care Public health expenditure in % of total health expenditure EU-25: 74 % EU-15: 78 % EU-10: 70 % CZ, NL, UK DK, FI, FR, IE, IT, SE, SK AT, BE, BG 85% -100% 75% - 85% 55% - 75% CY, LV, LT < 55% PPRI Conference, Vienna, 29 June 2007 6
Packages per inhabitant and year 60 Pharmaceutical consumption 50 50 40 33 30 20 22 20 20 20 20 17 15 10 0 FR EL AT BE ES IT PT FI NL PPRI Conference, Vienna, 29 June 2007 7
Pharmaceutical consumption Prescriptions per inhabitant and year 35 30 29 25 20 15 16 12 10 8 8 8 5 0 FR HU AT SE SI SK Source: PPRI 2006 PPRI Conference, Vienna, 29 June 2007 8
Health care systems Organisation and funding Social Insurance systems Traditional Social Insurance countries (e.g. AT, BE, DE, FR, LU, NL) New Member States (BG, CZ, EE, HU, LT, LV, PL, RO, SI, SK) National Health Service The British NHS; IE Mediterranean countries (CY, EL, IT, MT, PT) Nordic countries (DK, FI, SE, NO) PPRI Conference, Vienna, 29 June 2007 9
Pricing and reimbursement Mainly Member State competence As a result, 27 different systems within EU Framework Pharmaceutical systems Framework and organisation Statutory framework (Acts, Decrees) Framework Agreements between industry and government (FR, IE, IT, PT) PPRI Conference, Vienna, 29 June 2007 10
Pricing How the price of a pharmaceutical is set PPRI Conference, Vienna, 29 June 2007 11
Different markets Out-patient and in-patient market Reimbursement market Close linkage to reimbursement! Price level Which price do we talk about? Ex-factory price, pharmacy purchasing price (wholesale price), pharmacy retail price VAT and other taxes PPRI Conference, Vienna, 29 June 2007 12
Terminology regarding pricing Pricing policies Price control (statutory pricing, price negotiation, public procurement) Free pricing Pricing procedures External price referencing Internal price referencing Cost-plus Others (e.g. indirect price control) See PPRI Glossary, http://ppri.oebig.at PPRI Conference, Vienna, 29 June 2007 13
For all pharmaceuticals (BE, BG, CY, CZ, EL, LU; TR) For POM (NL, PT; NO) For reimbursable pharmaceuticals Most common pricing policy No price control DK - however linkage to reimbursement MT Pricing policies Price control (at price setting level) Cf. Handout for detailed overview PPRI Conference, Vienna, 29 June 2007 14
Statutory pricing e.g. BE, BG, CY, CZ, EL, ES, LT, LU, PT, SE; NO, TR Negotiations (FR, IT) Mixture Pricing policies Way of price control Statutory pricing after negotiations (EE, LV, PL) In case of failure of negotiations (e.g. FR) or non-availability of data for comparison (e.g. IE) Public procurement in the hospital sector PPRI Conference, Vienna, 29 June 2007 15
Pricing procedures Methodology to determine a price External price referencing (international price comparisons) Used in nearly all Member States For at least a range of pharmaceuticals Focus on a few countries (exceptions: AT, BE), mostly MS/neighbouring countries Framework Relevance Methodological issues PPRI Conference, Vienna, 29 June 2007 16
Internal price referencing often in connection with reimbursement Cost-plus For locally-produced pharmaceuticals (CZ, CY, EL, SK, exceptionally - UK) Others Pricing procedures Methodology to determine a price Indirect price control - PPRS (UK) Agreed prices - Price competition (SK) PPRI Conference, Vienna, 29 June 2007 17
Setting the price at the Ex-factory price level most common Pharmacy purchasing price level DK, FI, LV, NL, PL, SE, SI; NO Pharmacy retail price level LU, SK Price levels Role of mark-ups PPRI Conference, Vienna, 29 June 2007 18
Wholesale mark-ups Scope All pharmaceuticals: AT, BE, CZ, DE, EE, EL, HU, LU, LV, MT, SK; TR Reimbursable pharmaceuticals: FR, ES, IE, IT, LT, PL Others: BG, PT (POM), UK (branded ph. under PPRS) No statutory-mark-up: CY, DK, FI, NL, SE, SI; NO Schemes Linear mark-up (e.g. IT, EL, PL) Regressive mark-up scheme (e.g. BE, BG, EE, LT) PPRI Conference, Vienna, 29 June 2007 19
Wholesale mark-ups Example of a regressive mark-up scheme - Lithuania Ex-Factory Price in LTL / in up to LTL 6.43 / 1.86 Maximum Mark-up in % of Ex-factory price 14% Wholesale price in LTL / - from LTL 6.44 / 1.87 to LTL 10.00 / 2.89 from LTL 10.01 / 2.90 to LTL 19.44 / 5.63 from LTL 19.45 / 5.64 to LTL 25.00 / 7.24 from LTL 25.01 / 7.25 to LTL 53.57 / 15.51 from LTL 53.58 / 5.52 to LTL 68.18 / 9.74 from LTL 68.19 / 19.75 to LTL 909.09 / 263.28 from LTL 909.10 / 263.29 on - 9% - 7% - 5.5% - LTL 0.90 / 0.26 - LTL 1.75 / 0.51 - LTL 3.75 / 1.09 - LTL 50.00 / 14.48 PPRI Conference, Vienna, 29 June 2007 20
Pharmacy mark-ups Scope All pharmaceuticals: AT, BE, CY, CZ, DK, DE, EE, EL, FI, HU, LU, LV, MT, SE, SI, SK; NO, TR Reimbursable pharmaceuticals: FR, ES, IE, IT, LT, PL, SI, UK POM: BG, PT Remuneration scheme Linear mark-up (e.g. CY, EL, MT) Regressive mark-up scheme (e.g. AT) Fixed fee/fee-for-service: NL, SI, UK PPRI Conference, Vienna, 29 June 2007 21
VAT rates on pharmaceuticals 2006 30% 25% 20% 20% 20% 25% 21% 25% 19% 25% 17,5% 15% 10% 5% 0% 10% 9% 8% 6% 6% 7% 8,5% 5% 5% 5,5% 5% 5% 5% 5% 8% 2,1% 3% 0% 0% 0% 0% 0% AT BE BG CY CZ DK EE EL FI FR HU IE IT LT LV LU MT NL PL PT SE SI SK UK NO TR Source: PPRI 2006 SK: 2007 reduced to 10% PPRI Conference, Vienna, 29 June 2007 22
Reimbursement Who pays the bill? PPRI Conference, Vienna, 29 June 2007 23
Eligibility schemes Product-specific most common (e.g. AT, EL, IT, SK, SI) Disease-specific Baltic states, sub-scheme in some countries (BG, CZ, FR, IE) Patient-group-specific CY, IE, MT; TR Consumption-based DK and SE PPRI Conference, Vienna, 29 June 2007 24
Reimbursement lists Define which pharmaceuticals are considered as reimbursable Positive lists in EU Member States Negative lists seldom used (FI - not implemented; ES and UK) PPRI Conference, Vienna, 29 June 2007 25
What does reimbursable mean? All pharmaceuticals on the positive list(s) are 100% reimbursed only in AT, IT, IE, MT, NL, UK Percentage reimbursement rates according to severity of disease for which the pharmaceutical is used Further co-payments (e.g. prescription fees) Reference price systems PPRI Conference, Vienna, 29 June 2007 26
Reference price systems Methodology Cluster of equivalent/similar pharmaceuticals Setting a reference price Co-payment for pharmaceuticals with higher price Relevance in all EU Member States but AT, CY, FI, IE, LU, MT, SE, UK System of obligatory substitution in SE Step-price system for off-patent pharmaceuticals in NO PPRI Conference, Vienna, 29 June 2007 27
Generic substitution INN prescribing Doctors and pharmacists Framework Generic substitution Not allowed (e.g. AT, BE, BG, IE, MT, UK) Indicative Obligatory substitution (DK, FI, LT, LV, SE) PPRI Conference, Vienna, 29 June 2007 28
Access and affordability Key challenges for the future PPRI Conference, Vienna, 29 June 2007 29
Range of pharmaceuticals Number of pharmaceuticals varies 18.000 16.700 16.000 15.000 14.300 14.000 12.000 10.000 8.000 7.000 7.000 differences in counting authorised pharmaceuticals vs. pharmaceuticals on the market 6.000 4.000 2.000 0 2.000 SK FR AT FI IE CY Source: PPRI 2006 PPRI Conference, Vienna, 29 June 2007 30
Access to pharmacies 18000 16.804 16000 14000 12000 10000 9.103 9.401 8000 6.578 6.9137.1507.179 6000 4000 2000 3.1863.3713.422 3.7623.8124.263 2.8132.833 1.620 1.9291.9992.3402.685 4.769 4.984 0 CY BG BE LT FR IE LV TR IT PL PT HU EE SK UK FI AT SE SI NO NL DK Source: PPRI 2006 Inhabitants per community pharmacy, 2005 or latest available year PPRI Conference, Vienna, 29 June 2007 31
Affordability of pharmaceuticals Patients perspective Private pharmaceutical expenses Co-payments Prescription fees (e.g. AT, DK, EE, FI, IT, PL, SK, UK) Deductibles (IE) Percentage co-payments Reference price system PPRI Conference, Vienna, 29 June 2007 32
Mechanisms for vulnerable groups Reduced co-payments rates Exemption from prescription fees Limits/ceilings Alternatives Affordability of pharmaceuticals States perspective Parallel imported and generic products Generic promotion Pharmacoeconomic tools Evaluations, analyses, guidelines... PPRI Conference, Vienna, 29 June 2007 33
Affordability of pharmaceuticals Conclusion Member States between budgetary constraints and expectations from different stakeholders How to react? Need for prioritisation and cost-containment Need for monitoring, analyses and evaluation Need for information-sharing and lessons-learning The PPRI network brings relevant actors together! PPRI Conference, Vienna, 29 June 2007 34
Thank you for your attention! Contact: ppri@oebig.at Internet: http://ppri.oebig.at PPRI Conference, Vienna, 29 June 2007 35