Content
Executive summary
Chapter 1. Pricing In The Market
Introduction
Definition and function of price
The definition of price
Functions of price
Case study: Prograf
The marketing mix
The product
The place
The price
Promotion
The effect of price on the other elements of the marketing mix
The product
Therapeutic efficacy
Therapeutic enhancements
The brand
Pricing objectives
Target return on investment
Market share
Meeting competition
Profit maximisation
Stabilisation of prices
Pricing strategies to meet objectives
Skimming
Prestige pricing
Penetration pricing 17
Extinction pricing 17
Case study: Losec discount in Denmark 17
Case study: setting a price for Avonex 18
List prices and contract prices 19
Pricing secrecy 19
Currency trends 20
South-East Asia impact 22
European Monetary Union 23
Challenging European pricing controls
The new marketing mix: the rise of pharmaco-economics
Ability of European health systems to pay for drugs
Reducing drug costs
Case study: Sweden
Case study: colony stimulating factors
Case study: antibiotics
The pharmaco-economic properties of drugs
Case study: congestive heart failure
Case study: migraine
Case study: Neoral and Sandimmun
Case study: interferon gamma
Case study: anti-ulcer therapy
Assessing the cost of disease
European economic studies of disease costs
Case study: schizophrenia
Case study: osteoporosis
The future role of pharmaco-economics
Estimating the European drug market
Case study: Protein Design Labs
Case study: European cyclosporin market
Chapter 2. Pricing Through The Pharmaceutical Product Lifecycle
The lifecycle of a pharmaceutical
The classical pharmaceutical lifecycle
Changes to the classic pharmaceutical product lifecycle
Case study: Zyprexa
Case study: Paxil
Rx-to-OTC switching
Time-to-market
Case study: British Biotech
New product pricing
Case study: the UK antidepressant market
Customers
The company
Competitors
Internal factors affecting the price of a new product
The decline of exclusivity for ‘pioneer’ pharmaceutical products
Manufacturing costs of a product
Parallel importation
Introduction
The view of pharmaceutical manufacturers
Repackaging of parallel imports
The view of parallel importers
The view of the European Commission
Case study: South Africa
Case study: Merck versus Primecrown and Beecham versus Europharm
Case study: UCB S.A. versus Paranova and Orifarm
Protection of products from parallel importation
Example: GlaxoWellcome’s European price for Imigran
Hospital pharmacies and parallel importers
Generic drugs
Generics in the EU
The view of generics’ manufacturers
The view of pharmaceutical manufacturers
Generics in the US
Generics in Japan
Wholesalers in the EU
External influences on the price of a new product
Governments and other purchasers
Competitors
Country differentials for the price of new drugs
Pricing differentials
Factors that cause price differentials
Differentials created by price discounts
Price differentials resulting from variations in pricing regulations
Creation of post-patent price differentials
Pricing within a single price band
Using otc switches to extend product lifecycle
The marketing mix for switched drugs
Product
Place
Price
Promotion
Pricing issues in the UK
Case study: Claritin pricing
Methods of differentiation
Strong branding
Effects of patent expiry
Recent patent battles
Case study: Taxol
Case study: Retrovir
Case study: Prozac
Case study: cyclosporin
Case study: clozapine
Case study: Zantac
Case study: Prilosec
The Spanish market
Strategies to extend effective patent life
Case study: Claritin
Launch of generic products
New formulations
Future patent battles
Chapter 3: Company And Customer Strategies
Roles and value criteria of various groups in the pricing chain
The traditional supplier–customer framework
Clinician pressure
Company strategies
Disease management packages
Case study: SangStat
Case study: AstraZeneca
Collaborations with healthcare providers
Case study: antibiotic resistance
‘Bundling’ of products
Currency contract clauses
Internet mail order
Tendering
Case study: cancer trials
Patient groups
Case study: cytomegalovirus disease
Case study: multiple sclerosis
Case study: schizophrenia
Case study: European orphan drug legislation
Hospital negotiation of drug prices
Introduction
Price analysis
HIV treatment
New chemical entities
Hospital negotiation of HIV drug prices
Future strategies
Treatments moving out of hospitals
Government
Pricing controls
Direct price controls
Positive lists
Negative lists
Reference pricing
Reimbursement levels
Pharmaceutical distribution systems
Dealing with wholesalers and retailers
Regulation of pharmaceutical markets
Government interventions in the pharmaceutical market
Goals of market intervention
Industry’s view on governmental intervention
Industry promotes a free market
Fighting pricing controls with economic studies
Intellectual property
Patent piracy 109
Price controls in various countries 109
Introduction
Buyers in the US
Volume controls
Pricing/volume agreements
Profit control in the UK
Chapter 4: Country Profiles
Introduction
Canada
The Canadian healthcare system
Benefits of Medicare
Principles of Medicare
Drug utilisation trends
Cost containment
Economic benefits of Medicare
National Forum on Health
The Canadian Coordinating Office for Health Technology Assessment (CCOHTA)
The Canadian pharmaceutical market
Pharmaceutical pricing
Price trends versus the US
Patented drug prices
Canadian prices relative to foreign prices
Non-patented drug and generic prices
Opposition to reference pricing in British Columbia
The US
The US healthcare system
The US pharmaceutical market
Drug spending
International price comparisons
US pharmaceutical prices
Determination of drug prices by manufacturers
Average wholesale price
Comparative price paid
Cost containment
Generics
The view of the US pharmaceutical industry on recent pricing control proposals
Promoting a free pharmaceutical market
Japan
The Japanese healthcare system
Cost sensitivity
Pharmaceutical price control
Price setting
Pharmaceutical manufacturers
Pharmaceuticals
The future of the Japanese pharmaceutical market
The UK
The UK healthcare system
Cost containment
Pricing
The Pharmaceutical Price Regulation Scheme (PPRS)
Governmental price increase restrictions
Recent changes to the PPRS
The limited list
The Prescribing Analysis and Cost System (PACS) and the Indicative Prescribing Scheme (IPS)
Future developments in the UK
Generics
Parallel importation
National Institute for Clinical Excellence
Industry alternative to NICE
France
The French healthcare system
New medical contracts
Cost containment
Therapeutics equivalent list
Pharmaceutical regulation
New remuneration system
Reimbursement review
Industry views
Statins
The French pharmaceutical market
Generics
The future of the French pharmaceutical market
Distribution
Germany
The German healthcare system
Reunification
Cost containment
Reforming the reference price system
Industry’s view of proposals for a new reference price system
Generics
The future of the German pharmaceutical market
Biotechnology
Distribution channels
The Netherlands
The Dutch healthcare system
Pharmaceutical pricing
Cost containment
Price controls
Currency fluctuations
Wholesaler margin
Pharmacist margin
Reimbursement
Positive lists
Delisting
Reimbursing new products
Budgetary consequences
Modernisation of the GVS (Medicines Reimbursement System)
Interference between the price law and the GVS
Patient co-payments
Generics
Industry view of the future market
Spain
The Spanish healthcare system
La Agencia de Evaluación de Technologías Sanitarias (AETS)
Pharmaceutical pricing
Negative list
Cost containment
Industry views on cost containment
Generics
Dual pricing
Italy
The Italian healthcare system
Drug care
Price regulation
Note 73 and reimbursement battles
Cost containment
Pharmaceuticals
Generics
Norway
The Norwegian healthcare system
Pharmaceuticals
Generics
Parallel importation
Competition among wholesalers
Sweden
The Swedish healthcare system
Statensberedning för Medicinsk Utvärdering (SBUS)
Pharmaceuticals
Cost containment
Generics
Parallel importation of Losec
Glossary
Information Sources And Bibliography
List of Tables
Table 2.1: Types of prescription drugs
Table 2.2: Some parallel import options offered to European hospitals in 1997
Table 2.3: Generic subsidiaries or divisionaries of brand name manufacturers
Table 2.4: Future GlaxoWellcome patents due to expire in the US
Table 2.5: Generic competition to Eli Lilly’s Prozac (fluoxetine)
Table 2.6: Generic competition to Novartis’ Neoral (cyclosporin)
Table 2.7: Generic competition to GlaxoWellcome’s Zantac (ranitidine hydrochloride)
Table 3.1: Anti-retroviral drugs
Table 4.1: Current and future projects of the Canadian Coordinating Office for Health Technology Assessment (CCOHTA)
Table 4.2: Current projects of La Agencia de Evaluación de Technologías Sanitarias (AETS)
Table 4.3: Current projects of the Statensberedning för Medicinsk Utvärdering (SBUS)
List ff Figures
Figure 1.1: R&D expenditure by the pharmaceutical industry
Figure 1.2: Standard daily cost of Prograf
Figure 1.3: Estimated daily cost with AmBisome
Figure 1.4: Novartis healthcare sales by region, 1997
Figure 1.5: GlaxoWellcome estimates of world markets, 1996/9
Figure 1.6: Pfizer revenues by geographic areas, 1997
Figure 1.7: Cost of treating an episode of febrile neutropenia following cancer chemotherapy
Figure 1.8: Yearly cost of CHF treatment with ACE inhibitors
Figure 1.9: Estimated Neoral treatment cost, 1997
Figure 1.10: Estimated yearly cost of anti-secretory therapy for ulcer attack
Figure 1.11: European hospital costs for osteoporosis-related hip fracture
Figure 1.12: Estimated marketing delays in European countries, 1997
Figure 2.1: New Zyprexa prescriptions – weekly US market share, 1997
Figure 2.2: Average cost of anti-depressant prescriptions in Europe
Figure 2.3: World pricing for amoxicillin
Figure 2.4: Estimated European generics market by volume
Figure 3.1: Worldwide market for antibiotics by product class
Figure 3.2: Annual treatment cost for oral ganciclovir
Figure 3.3: Patient access to interferon beta MS treatments in different countries
Figure 3.4: Weekly hospital cost for Clozaril treatment
Figure 3.5: Reported contract price discount for HIV drugs in the UK
Figure 3.6: Potential savings on HIV drug expenditures from the use of parallel importers (based on UK list price)
Figure 3.7: Volume controls
Figure 3.8: Price controls
Figure 3.9: Spending controls
Figure 4.1: Pharmaceutical expenditure as a percentage of health expenditure
Figure 4.2: R&D expenditure in British Columbia
Figure 4.3: Growth in the market share of generics in the US
Figure 4.4: Average time in the US from clinical testing to final approval of an innovator drug
Figure 4.5: Life expectancies at birth
Figure 4.6: Percentage sales by therapeutic category in France
Figure 4.7: Payouts by German insurance funds
Figure 4.8: Top five generics’ manufacturers in Germany, 1995
Figure 4.9: The pharma market in Germany
Figure 4.10: Percentage share of the Norwegian pharma market
Figure 4.11: Percentage of the Norwegian market accounted for by parallel importation
|
TABLE OF CONTENTS
