OBJECTIVES : In countries where drug prices are negotiated at the national level, international reference pricing (IRP) often plays an important role. Each country utilizes the IRP in different ways, either when negotiating the price or if an agreement cannot be reached between parties. Countries will typically publish general IRP rules; however, the real-world IRP implementation is more nuanced. This paper aims to explore the role of IRP in real practice within various countries and determine nuances behind its impact on price references during negotiations.

METHODS : Using both new drug launches and drugs going through price re-negotiations, this research explores how France, Italy, Spain, UK, and Canada use IRP during negotiations, to what extent are they able to reference list and net price, visibility they have on access agreements and role played by the regional and local price dynamics in the referenced countries. Germany was used as a benchmark to determine the ability of countries to see its list and net prices. Qualitative interviews (n=7) were conducted through teleconference with payers that have extensive experience and knowledge in pricing within their respective country.

RESULTS : The way countries use IRP in price negotiations varies dramatically. Most countries do not account for IRP in a set formula, but in a more informal and nuanced manner. Although payers can surprisingly determine the net price and confidential discounts informally, the impact on price negotiations are not certain. Discounts at the local level are unknown. Once a product has negotiated a price, price changes in the reference countries are not monitored unless there is a significant change in price.

CONCLUSIONS : The IRP becomes the benchmark during list price negotiations in most countries. Although taking confidential price discounts does not affect the IRP, some countries may be able to informally learn of such discounts, but not at the local level.