Mrs. Martinez Vallejo Pricing and Reimbursement in · PDF filePHARMACEUTICAL PRICING AND Dirección General de Farmacia y Productos Sanitarios 1 REIMBURSEMENT SYSTEM IN SPAIN Mercedes

PHARMACEUTICAL PRICING AND

Dirección General de Farmacia y Productos SanitariosDirección General de Farmacia y Productos SanitariosDirección General de Farmacia y Productos SanitariosDirección General de Farmacia y Productos Sanitarios 1

PRICING AND REIMBURSEMENT

SYSTEM IN SPAIN

Mercedes Martínez Vallejo, Head of Economy of Pharmaceuticals

LEGAL FRAMEWORK

• General Health Act - 1986:

- Established a National Health System in Spain in accordance with the following principles:


● Universal and free health care

● Management system decentraliced by regions

● Equity and equality for all citizens having access to health care services and supplies across the Spanish territory

LEGAL FRAMEWORK

• Act 29/2006, July 26, for Guarantees and the Rational Use of Medicines and Healthcare Products:– Art. 89. Public financing procedure:

• a) The severity, duration and sequels of the different pathologies for which medicines are indicated


for which medicines are indicated

• b) Specific needs of certain groups of people

• c) Therapeutic and social utility of each medicinal product

• d) Rationalization of public expenditure devoted to pharmaceuticals

• e) Existence of available reimbursed alternatives for the same disease

• f) Degree of pharmaceutical innovation

LEGAL FRAMEWORK

• Act 29/2006 for Guarantees and the Rational Use of Medicines and Healthcare Products:

– Art. 90. Price Fixing:


– Art. 90. Price Fixing:

• Interministry Commission on Pharmaceutical Prices.

Competent body for pricing of pharmaceuticals

– Artículo 91. Revision of price

LEGAL FRAMEWORK

• Directive 89/105/CEE, transposed by

• Royal Decree 271/1990, issued February 23, pricing intervention– Art. 3. Procedure for pricing of new


– Art. 3. Procedure for pricing of new pharmaceuticals

• Case by case process

• Maximum ex-factory price calculation, corrected for the therapeutic usefulness

LEGAL FRAMEWORK

• Strategic Plan (Pharmaceutical policy) for the Spanish National Health System 2009-2012.– Selective reimbursement on the basis of the

maximum available scientific evidence


maximum available scientific evidence

– Therapeutic usefulness

– Pharmacoeconomic assessment

PHARMACEUTICAL POLICY PRACTICES IN SPAIN

• Supply side Demand side -Price regulation/control -Targeted to physicians/GP

-Ex-factory pricing -Incentives for good prescribing -Revision of price (Price review) practices-Reference pricing -Continued health training programs-Generics policy for health care professionals

-Direct expenditure control -Targeted to patients


-Direct expenditure control -Targeted to patients-Rebates -Cost-sharing-Use of price freezes and cuts -Information and education campaigns-Negative lists-Margins regulation -Targeted to pharmacists-Discounts and clinical performance -Generic substitutionfor hospitalary pharmaceuticals -Claw-back(Hospitals/Health Services in regions)

PRICE CONTROL PRACTICE. PROCEDURE FOR EX-FACTORY PRICING

• Classification of interest of pharmaceuticals vis-à-vis reimbursement:

– Pharmaceutical with evident interest


– Pharmaceutical with evident interest

– Pharmaceutical with relative interest

– Pharmaceutical with low or no interest


• Pharmaceutical with evident interest for reimbusement:– covers a therapeutic gap

• Benchmarking: external reference price

– improves the benefit/risk ratio when compared to


– improves the benefit/risk ratio when compared to an alternative: higher efficacy and same risk, or same efficacy but lower risk

• Benchmarking:– Internal reference price (cost of the alternative)

– External reference price


• Pharmaceutical with relative interest for reimbusement:– Another alternative for treating the pathology

– Some benefit to a subpopulation of patients


– Some benefit to a subpopulation of patients• Reference Price in both cases:

– Cost of the alternative or the lowest Europen price


• Pharmaceutical with low or no interest for reimbusement:– Does not fill any of the aforementioned criteria and

is proposed as non reimbursable


is proposed as non reimbursable


• Modulation items:

– Reimbursed in other countries: France, Italy, Belgium, Portugal, UK, Germany..


Belgium, Portugal, UK, Germany..

– Access to the new drug in specific situations

– Budget impact analysis

– Degree of innovation

Revision of price

• Annual price revisions are applied to new pharmaceuticals whose pricing decisions are conditional– European price level


– European price level

– Price-volume adjustments

– Effectiveness assessment

Reference Price System

• Act 13/1996 modified the 1990 Medicines Act and established the basis of the reference price system

• Royal Decree 1035/99, issued June 18:


• Royal Decree 1035/99, issued June 18: homogeneous group– Bioequivalent medicinal products

– Availability of generics

– Reference price not below the cheapest generic


• Cohesion and Quality Act for the National Health System– Homogeneous group: same API and route of

administration (ATC5 level)


administration (ATC5 level)

– Price calculation procedure:• Average of three lowest DCT

• Three different MAH

• Products cheaper than 2€ are excluded


• Act 29/2006 of Guarantees and Rational Use of Medicines and Healthcare Products:– Art. 93 Reference Price System

• Independent groups for paediatrics


• Independent groups for paediatrics

• Innovative dosage forms excluded for 5 years

• Graduality

• Reductions of 20%


• Royal Decree 1338/2006, issued November 21– Annual update of groups

– Annual review of already-existing groups


• Up to date, 170 groups are in force and 24 new ones are under consideration

Generic MP: policy

• Substitution encouraged

• Mandatory substitution in the retail pharmacy in accordance with reference price principles

• Promotion of the prescription by International


• Promotion of the prescription by International Nonproprietary Name (INN)

• Market share of generics is increasing

1.9 9 9

2000

N umb er o f annual reimbursab le g ener ic p harmaceut ica ls vs t o t al number o f reimb ursab le pharmaceut icals ( g ener ics includ ed )

Genéricos

Evolution of reimbursable generics (2004 - 2007)


6 76

1.4 9 2

6 4 4

1.2 561.0 9 8

1.53 4

1.13 3

0

500

1000

1500

2004 2005 2006 2007

Genéricos

Total

Evolution of reimbursable generics (2004 - 2007)

19

11

25

19

0

5

10

15

20

25

676 644

1.098 1.133

0

200

400

600

800

1000

1200

Number of new generics Number of reimbursable generic pharmaceuticals (A)


02004 2005 2006 2007

1.492

1.256

1.534

1.999

0

500

1000

1500

2000

2004 2005 2006 2007

45,3%51,3%

71,6%

56,7%

0,00%

20,00%

40,00%

60,00%

80,00%

2004 2005 2006 2007

02004 2005 2006 2007

Number of total reimbursable pharmaceuticals (gener ics included) (B)

(A) / (B)

IMPACT OF GENERIC MP POLICY

MARKET SHARE OF GENERICS IN VOLUME at SPANISH NHS

20,94% 21,81%25,00%

PACKAGES


8,85%

12,03%14,10%

16,72%

20,94%

5,00%

10,00%

15,00%

20,00%

2003 2004 2005 2006 2007 2008% generic packages/ Total …

IMPACT OF GENERIC MP POLICY

MARKET SHARE OF GENERICS IN VALUE IN NHS - SPAIN

VALUE (€)

9,23% 9,20%11,00%


6,03%6,58%

7,35%

8,54%9,23% 9,20%

3,00%

5,00%

7,00%

9,00%

2003 2004 2005 2006 2007 2008

% generics/Total pharmaceuticals

REBATES

• Act 29/2006

Annual company sales1


Annual company salesUp to 3 Million € 1.5 %From 3 Million € 2.0 %

1 minoration: assessing the company according to its R&D activities

MARK-UPS

• Wholesale and pharmacy margins in Spain:

Ex-factory price in € (VAT excluded)

Wholesale margin Pharmacy margin


0.01-91.63 7.6% of the wholesale price

27.9% of the pharmacy retail

price

>91.63 €7.54 €38.37

DISCOUNTS and RISK-SHARING PRACTICES

• Public tender procedures for pharmaceuticals in hospitals

• Discounts are applied from the maximum ex-


• Discounts are applied from the maximum ex-factory price

• Thinking over risk-sharing agreements

CLAW-BACK SYSTEM

Total sales (pharmacy retail

price VAT incl.) up to €

Deduction Rest up to Percentage applied

32,336.12

43,583.47

0

899,79

43,583.47

58,345.61

8.00

9.4


43,583.47

58,345.61

120,206.01

208,075.90

295,242.83

899,79

2,287.43

9,030.21

20,892.64

33,531.85

58,345.61

120,206.01

208,075.90

295,242.83

Forward

9.4

10.9

13.5

14.5

15

COST-SHARING

Cost-sharing on the pharmaceutical

expenditure (at pharmacy retail level)

Patients under

65 years 40%


Patientes over

65 years (pensioners) Free

*For pharmaceuticals used to treat chronic diseases and life-theatening diseases a maximum of 10% public price is paid

COST-SHARING

EXPENDITURE FOR PHARMACEUTICALS(million EURO)

8.9419.515

10.05110.636

11.19111.971

11.000

13.000


8.9419.515

3.000

5.000

7.000

9.000

2003 2004 2005 2006 2007 2008

COST-SHARING

222,25233,69 241,23 250,77 260,47 272,52

200

250

300

PHARMACEUTICAL EXPENDITURE PER INSURED PERSON (€)


2003 2004 2005 2006 2007 2008

EPIP 222,25 233,69 241,23 250,77 260,47 272,52

% ∆ LAST YEAR 9,69 5,15 3,22 3,96 3,87 4,63

0

50

100

150

COST-SHARING

COST-SHARING ON THE PHARMACEUTICAL EXPENDITURE

(million €)

679,7 669,2694,8

720,4749,3

780,3

700,0

800,0


400,0

500,0

600,0

700,0

2003 2004 2005 2006 2007 2008

COST-SHARING

% COST-SHARING ON THE PHARMACEUTICAL EXPENDITURE (at pharmacy retail price level)

6,37

6,85

6,6

6,8

7


6,376,26

6,13 6,05

5,89

5,4

5,6

5,8

6

6,2

6,4

2003 2004 2005 2006 2007 2008

Demand side practices

• Destination of Rebates:– R&D Investment

– Continued health training programs for health care professionals: physicians, pharmacists and nurses


professionals: physicians, pharmacists and nurses

– Health education programs for the population: rational use of antibiotics, acceptance of generic MP

– Health cohesion policies: investment on performance of non-commercial clinical trials


Documents

Mrs. Martinez Vallejo Pricing and Reimbursement in · PDF filePHARMACEUTICAL PRICING AND Dirección General de Farmacia y Productos Sanitarios 1 REIMBURSEMENT SYSTEM IN SPAIN Mercedes