OBJECTIVES: In Portugal, the medicines’ approved prices are Public Prices (PPs) that include distribution margins. These margins are regressive and divided into six different tiers according to the medicine’s Ex-Factory Price (EFP). The margins have a fixed fee and a variable part depending on each tier. The objectives of this analysis are to demonstrate that it is possible to maximize the EFP with simultaneous benefit to the payers (NHS and patients) and to determine the magnitude of this maximization.

METHODS: We simulated a sequence of 10,000 conversions of PPs into EFPs, from 0.01€ to 100.00€, and analysed the resulting EFPs. Using INFARMED’s database (June 2018) we then identified medicines for which the EFP was not maximized and calculated the potential loss of revenue.

RESULTS: From our analysis, we noted there are ranges of PPs, at the beginning of tiers 2 to 6, which generate EFPs inferior than those obtained from the highest PP of the previous tier. We call these prices range “shadow zones” of PPs. For example, a PP of 10.00€ (tier 3) generates an EFP of 6.42€, while a PP of 9.97€ (tier 2) generates an EFP of 7.00€. So, it is possible to maximize the EFP of a medicine, by reducing its PP to the highest PP from the previous tier, therefore avoiding these “shadow zones”. We found 168 product presentations that fall into the “shadow zones”, out of the 10,422 total presentations available in the Portuguese market. This means that 1.6% of all products have a non-maximized EFP. In some cases, the loss of revenue reaches 3.22€ per pack.

CONCLUSIONS: Our analysis demonstrates that, in Portugal, a rigorous management of prices can maximize some medicines’ EFPs, bringing more efficiency to the system: better EFPs to pharmaceutical companies and fewer costs for the NHS and the patients.