by Richard Staines at ISPOR
AMSTERDAM, Nov 10 (APM) - Pan-EU drug pricing and parallel trade is reducing access to new drugs in low-income Eastern European countries, and EU free-trade laws must be relaxed to allow companies to lower prices in these markets without fear of stocks being re-sold in rich members states, a conference has heard.
Speaking at the International Society for Pharmacoeconomics and Research (ISPOR) conference in Amsterdam, Zoltan Kalo, professor of health economics at Eotvos Lorand University, in Budapest, said the EU needed a way to allow differential pricing based on countries' ability to pay without the risk of parallel trade.
While parallel trade was unrestricted, companies would reference the price of drugs in the most expensive countries as a device to remove the incentive for parallel trade and a relaxation of free trade laws in the case of medicines was the way to reconcile these two barriers to access in poorer countries, he argued in an early presentation at the Amsterdam event.
Reference pricing systems that use decisions by high-income countries to help decide prices in low income states has created a “price corridor” that means drugs are becoming too expensive for financially challenged health systems in the east, he stressed.
“Differential pricing could improve access,” said Kalo, arguing that free trade rules allowing drugs to be legally sold on to higher-priced countries should be relaxed to preserve the integrity of health systems.
He also called for reforms among Eastern European countries, such as a reference price system that takes account of wider developments in EU economies that may artificially drive down prices.
Countries such as Greece, which has had to cut prices radically due to austerity measures, should be “outside the reference system,” said Kalo.
A common response to the budgetary challenges caused by newly approved medicines is for payers to use various devices to delay pricing and reimbursement decisions, said Kalo.
For example: “They (the country) wait for pricing and reimbursement decisions to be made in three, five or 10 other countries. This delays access to many new drugs,” he said.
Other responses to the challenge of funding expensive drugs are to limit the volumes of the drugs made available once reimbursement prices have been decided, he told ISPOR delegates.
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