OBJECTIVES:

International Reference Pricing (IRP) is a common mechanism used by payers worldwide to set and manage medicine prices. The study objective is to determine whether countries apply formal IRP rules, investigate any differences across regions and verify if the medicine price has any correlation to the application of an IRP rule.

METHODS:

Leveraging real world data from GPI pulse®, we selected Eribulin, Dapagliflozin and Dornase alfa which represent low to high price bands across France, Germany, Netherlands, Switzerland, Jordan, Lebanon, Canada, Brazil and Japan. Launch prices were analysed against projected prices simulated by the application of formal IRP rule. Post AMNOG prices in Germany and historical exchange rate fluctuations were taken into consideration. The analysis investigated two key areas: 1. % differential between the simulated price at launch using IRP and the real price at launch 2. Correlation between the application of IRP rules against the country, region, and medicine price.

RESULTS:

The analysis shows that Middle Eastern countries are less likely to exercise IRP rules when launching a medicine while Brazil, Canada and Japan are likely to apply IRP depending on the price of the medicine. European countries tested in the study are most likely to apply IRP rules consistently with no dependency on the medicine price. It is worthwhile noting that for value driven countries such as France and Germany, the application of IRP was directly linked to HTA assessment outcome.

CONCLUSIONS:

Although countries may define IRP rules as formal, there is significant variability in the application of the rule leading to inconsistency across countries. Factors correlating to the application of a rule include to the region, price of medicine and value assessment. A careful review of country nuances is important and should be taken into consideration when considering the commercial impact during launch and revenue forecasting.