The Potential IMPACT of External Reference Pricing Rules on Selected Drug Prices in China
Author(s)
Gu S1, Wilson L1, Ladrón de Guevara P2, Atanasov P3
1Amaris, Shanghai, China, 2Amaris, Barcelona, Spain, 3Amaris, Barcelona, B, Spain
OBJECTIVES External reference pricing (ERP) is a price regulation tool widely used by policy makers worldwide to contain healthcare expenditure. The National Healthcare Security Administration (NHSA) in China started to implement ERP analysis in 2019 for medicines that went through the national reimbursement drug list (NRDL) negotiation. However, the country basket and the formulas used were not officially regulated and it remains unclear if the same rules will be used in 2020. We aim to assess the potential price reduction for two non-reimbursed medicines (PD-1 inhibitors) depending on the rules to be used. METHODS We gathered current listed Opdivo® and Keytruda® pricing information globally. Ten scenarios were simulated depending on (1) The formula used: Average or lowest price for the basket (2) The country basket: Scenario 1: eleven countries in different regions; Scenario 2: China neighboring countries; Scenario 3: same reference basket as Taiwan; Scenario 4: Commonwealth founder countries; Scenario 5: France, Germany, Italy, Spain and UK. RESULTS Prices in China are already low in comparison to other countries and large price reductions due to ERP are not expected. If the formula used to calculate the price is the average, the current prices in China for Opdivo® and Keytruda® are already lower in all scenarios. Nevertheless, if the formula used is the lowest price, it could cause a price reduction of 14.77% for Opdivo® (Scenario 1) and 7.15 % for Keytruda® (Scenario 4). CONCLUSIONS Across all scenarios, the pricing consequences were similar and the price reduction was due to the formula used and not the reference basket. If the NHSA continues to use ERP as a price-control mechanism to set the starting price point for the NDRL negotiations, the consequences for prices will differ largely depending on the formula used.
Conference/Value in Health Info
2020-09, ISPOR Asia Pacific 2020, Seoul, South Korea
Value in Health Regional, Volume 22S (September 2020)
Code
PNS9
Topic
Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes, Procurement Systems, Public Spending & National Health Expenditures, Reimbursement & Access Policy
Disease
Drugs