European Outpatient Medication Price Comparison

This summary is based on the report ‘international price comparison 2019’ from the Swedish health care monitoring agency tlv: https://www.tlv.se/download/18.680e93a217022fbb562e8f50/1581682728977/international_price_comparison_2019.pdf

“It’s the economy, stupid!”

Outline

1. the Swedish medication policy c.f. 19 EU countries — bilateral comparison
2. health insurance system of the 19 EU countries — — cross-section comparison
3. Calibration due to economic reasons, e.g., exchange rates

Quotes:

This report is part of TLV’s mandate to monitor developments in the Swedish pharmaceutical market from an international perspective.

For the analysis, TLV uses price and sales statistics from IQVIA.

The report is based on national prices at the pharmacy purchasing price (AIP) level. Only public prices are included in the comparison since only these can be collected in a standardised manner.

For comparison, a three-year rolling average is applied to the exchange rate for each quarter.

Part of TLV’s mandate is to shed light on Sweden’s pharmaceutical prices over their life cycle. This year’s results are in line with previous years’ analyses. New pharmaceuticals are priced in line with the average for the countries in the study. When products have been on the market for 5 to 15 years, Sweden’s prices are relatively higher than the average. This is because prices in other countries drop during this period, while Sweden’s set prices remain largely unchanged. When the patent runs out after about 15 years, and generic competition usually arises, Sweden’s pharmaceutical prices drop clearly below the average.

For pharmaceuticals exposed to competition, the possibility to adjust prices are greater as a result of the design of Sweden’s product-of-the-month system.

Part of TLV’s mandate is to shed light on Sweden’s pharmaceutical prices over their life cycle.

When the patent runs out after about 15 years, and generic competition usually arises, Sweden’s pharmaceutical prices drop clearly below the average.

AIP — Pharmacy purchase price –the pharmacy operator’s purchase price in SEK. Set by TLV.

Bilateral price index — the same product needs to be available in Sweden and in one of the comparison countries to be included in the price index against that country.

Cross-sectional price index — the same product needs to be available in several countries to be included in any of the countries’ price indices. The threshold, referred to as degree of matching, has been set at 40 percent in those cases where cross-sectional indices are used. This means that a pharmaceutical (substance, 11 (90) dosage form and strength) needs to be available in at least eight other countries in addition to Sweden. In those countries that do not have one year’s worth of sales of a pharmaceutical that is available in Sweden, Swedish prices are used instead.

The pharmaceuticals market

Players in EU:

In the following discussion, I will only address outpatient care.

Pricing Models:

1. Alternative method to international reference pricing
2. International reference pricing (IRP)

Check this Figure 23 — — how would the result be if being divided by the minimum wage?