BRUSSELS, April 21 (APM) - "Headroom for improvement exists" in the controversial but widespread practice of external reference pricing (ERP) of pharmaceuticals, according to a review by the largely secretive European collaborative database on drug prices, Euripid.
In an unaccustomed foray into the public domain, Euripid is releasing an outline of how national authorities can make best use of ERP.
ERP - where an authority fixes its prices in relation to prices charged in other countries - requires that authorities treat it with due respect, it says in a document listing best practices.
"It would be wrong to conclude that ERP is a simple exercise," it warns, citing the "high degree of complexity", the technical capacity for data management and analysis, and the "crucial" access to reliable and up-to-date price information.
"The efficiency of ERP is strongly related to dedication and competencies of the staff in charge of the system and the available resources," it says.
The best practices manual says ERP "is most appropriate for pricing of on-patent medicines or medicines without generic alternatives on the market," it concludes.
"An application to off-patent medicines is possible but a demanding task in terms of time and design," it adds.
Other best practices Euripid identifies include clear statements by policy makers of the objectives of their chosen pricing system, and how it aims to balance conflicting priorities - such as cost-containment, patient access and reward for innovation.
It also urges that the objectives and methods of pricing systems should be clearly stated and periodically reviewed.
One of its central findings is that governments should resist doing deals with drug firms that allow a discount against the official price on condition that confidentiality over the level of discount is maintained.
This practice - commonly known as differential pricing, and which is antithetical to ERP - damages governments' overall capacity to get the best price, it warns. "Competent authorities should think if weakening their negotiation position is worth the price."
Instead, authorities "should promote transparency by sharing health and medicines information."
Euripid is a voluntary grouping of 27 European countries that have been quietly sharing pricing information for more than a decade.
It claims its database has more than 10 million official price references for different packages, doses and brand names, which participating countries can access to make cross-border price comparisons to assist their national pricing decisions.
It currently benefits from a €300,000 grant that the EU's health programme has allocated to support a three-year project to improve the database and its use.
It is improving its methodologies for price comparisons and revising the online accessibility of the database - although that will remain strictly private to the participating authorities.
The best practice manual just agreed is an intermediate step in the improvement project, which is due to finish in July next year, with a guidance document addressed to member states on a coordinated approach to ERP.
Euripid discussed its good practices draft in April, and the text will now be used as a basis for the upcoming guidance.
According to Stanislav Primozic, Euripid chair and deputy director of Slovenia's medicines agency, the aim is to optimise the service so that national authorities can get "the reliable information they need to set prices and reimbursement levels."
The guidance document "will help to avoid or mitigate potential negative impact for patient access to medicines because of unskilled use of external reference pricing policy."
The document does not enter deeply into the controversy over the merits of ERP - a practice that has repeatedly been hotly contested by the research-based drug industry for focusing on cost rather than on value to patients, and which also came in for some criticism as being counterproductive in an EU-funded report late in 2015.
But Euripid does briefly question those suggestions. "There is no indication from literature that well-managed ERP systems with clear-cut and workable rules, that are embedded in the national health care and pharmaceutical policy framework, yield non-manageable negative aspects on the affordability of medicines to patients," it says.
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