OBJECTIVES: Estimates of global price elasticities of demand (PED) have identified demand for pharmaceutical products to be relatively insensitive to list price changes. Despite this, medications face simultaneous factors that drive differential price changes, and that could affect uptake. Across Europe, drugs typically encounter a highly competitive environment, resulting in the introduction of policy measures to control excessive drug pricing – such as value-based pricing (VBP). Meanwhile in the USA, interest in VBP is increasing as a way to manage rising prescription drug costs. This study aimed to compare factors that influence PED and VBP across Europe and the USA.

METHODS: A targeted literature review was used to retrieve studies estimating PED scores in order to evaluate price elasticity in healthcare. A systematic analysis was performed to identify value elements for VBP; analysis included the following regions: France, Germany, Italy, Spain, UK, as well as the USA. Value elements were defined as factors used for drug pricing and that may benefit stakeholders such as payers, healthcare professionals (HCPs) and patients.

RESULTS: Insights confirm that PED remains relatively inelastic, though several value elements can influence market dynamics. The competitive environment and the subsequent impact on drug substitution/formulary inclusion were identified as common in Europe, whilst clinical factors relating to the product were common to both Europe and the USA. Use of VBP agreements, such as price-volume and coverage with evidence development, were more widely implemented in Europe versus the USA.

CONCLUSIONS: Drug pricing in Europe is tightly controlled compared with the USA. Uptake of drug products appear to be sensitive to value elements relating to cost, including the use of VBP agreements, budget impact, and clinical data. Clinical guidance such as formulary inclusion and payer/hospital prescribing policies are considered most effective in driving demand and uptake.