The farce of confidential drug prices (3)

 Exploring the consequences of greater price transparency on the dynamics of pharmaceutical markets

The 2018 OECD report Pharmaceutical Innovation and Access to Medicines suggested that increased price transparency could promote public accountability, while potentially delivering efficiencies to health systems by including economic considerations in coverage, treatment decisions and budget allocation. Despite this, precisely what should be made more transparent, and how greater transparency would affect the functioning of markets, have been poorly characterised. To help frame the policy debate, the OECD undertook an exploration of the potential consequences of greater price transparency on market dynamics. The work included a roundtable and a series of semi-structured interviews, with participation by 19 experts in pharmaceutical pricing, economics of pharmaceutical markets, competition, and law. With an extensive review of the current practice and relevant literature as a preface, this report presents the key findings from those consultations.

 

The farce of confidential drug prices (2)

Payers’ experiences with confidential pharmaceutical price discounts: A survey of public and statutory health systems inNorth America, Europe, and Australasia

Some months  ago I posted on confidential drug pricing. I said that this was the end of cost-effectiveness as we have known. Now a new article reflects the evidence of my words:

Confidential price discounts are now common among the ten health systems that participated in our study, though some had only recently begun to use these pricing arrangements on a routine basis. Several health systems had used a wide variety of discounting schemes in the past two years. The most frequent discount received by participating health systems was between 20% and 29% of official list prices; however, six participants reported their health system received one or more discount over the past two years that was valued at 60% or more of the list prices. On average, participants reported that confidential discounts were more common, complex, and significant for specialty pharmaceuticals than for primary care pharmaceuticals.

If confidential discounts are huge (>60%), as they are, any cost-effectiveness analysis is adhoc and its obsolescence undermines any result. This fact is the recognition that the pricing system is not working and we are under a procurement system. As I said some months ago:The time to finish such farce has come.

The farce of confidential drug prices

We are approaching the end of cost-effectiveness as we have known. If you can't use the price of the drug because it is confidential, then there is no possibility of cost-effectiveness analysis. As far as Pfizer has sued a public agency because its officials have leaked the prices, then everybody that uses such information is at risk of being sued. I had already said that some time ago, when in our country we moved to confidential prices. This trend is ridiculous, getting better discounts comes at the price of opacity. And opacity is an extraordinary arm to prevent competition and constrain prioritisation. Qui prodes? It's up to you to get the answer, for me it's clear. If money comes from taxes, the citizens have to know the final price paid. The time to finish such farce has come.

PS. On why external reference pricing is meaningless (p.36):

The practice of lowering list prices through discounts, rebates and similar financial arrangements15 between public payers and the MAH is wide-spread. 22 countries reported that discounts, rebates or similar financial arrangements (e.g. managed-entry agreements such as risk sharing schemes) – either statutory (i.e. based on a law) or confidential (based on agreements) – are in place. As will be discussed later in more detail (cf. Chapter 4.1.2), the widespread use of the discounts and similar provides financial benefits to the country using it, but the other countries referencing to that country do not benefit from the lower prices since they refer to undiscounted higher prices.

Rembrandt. Self portrait

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