OBJECTIVES: The goal of external reference pricing (ERP), or international reference pricing (IRP), is to set the price of a drug in a given country in reference to a panel price in other countries. A price decrease in a country referenced by others - usually to control public health spending - leads to additional losses in turnover in other markets. Furthermore, the price decreases could also degrade the trade balance of the reference country if the products are exported. This study measured the impact of French medication price reductions on pharmaceutical turnover in France and ten other European countries. A more specific secondary analysis was made on products which are manufactured in France and exported to the analyzed countries.

METHODS: Twelve products and ten countries applying ERP were considered. Price decreases were considered for each product in all countries from 2012 to 2017. Only decreases in foreign countries that could be directly attributed to an ERP logic decrease in France were selected. The total loss of turnover for the entire period was calculated for France and the other countries by applying these price reductions to the sales volumes.

RESULTS: Quantitatively, this study demonstrates that a euro of sales decrease in France leads to a decrease of € 0.46 in the selected countries. This effect is amplified for products exported from France, the induced decline of which is € 0.81.

CONCLUSIONS: A strong correlation between price decreases in France and the countries considered has been shown. The consequences of this mechanism on European subsidiaries sales and on the value of French exports are signficant. However, these results are exploratory and should be taken with caution. They should be verified with other samples of products and / or countries.