Wide variation in cancer drug pricing

Wide variation in cancer drug pricing

A comparison of cancer drug pricing in 18 countries, including New Zealand and Australia, has revealed a wide variation in prices.

The survey looked at the prices of 31 cancer drugs in high income countries in Europe and Australasia, and was published recently in The Lancet Oncology.

“The findings are intended to provide evidence to help policy-makers decide whether further policy measures related to drug prices are needed,” says lead author, Dr Zaheer Ud-Din-Babar from the University of Auckland’s School of Pharmacy.

“Cancer drugs challenge health-care systems because of their high prices,” he says. “We found that in Austria, Denmark, Finland, Germany, Italy, Norway, Sweden and the United Kingdom – price information was available for all but one drug surveyed, whereas this price data was restricted in some other countries, especially in New Zealand and Portugal.

The price database in New Zealand only contained funded drugs - data were not available for the prices of ten authorised but not (yet) funded drugs in New Zealand. In Portugal, price data of drugs used in hospitals was not published from mid-2012 onwards.

“The difference in drug prices between the highest priced country and the lowest priced country varied between 28 percent and 388 percent,” Dr Zaheer Ud-Din-Babar says. “A few drugs had lower outliers, especially Greek and UK prices, and upper outliers (particularly prices in Switzerland, Germany, and Sweden).

“Overall, Greek prices ranked at a low level, whereas Sweden, Switzerland, and Germany showed price data in comparably high ranges.”

Information about drug price information was scarce and not transparent due to confidential discounts and similar arrangements (such as managed-entry agreements).

“As policy-makers cannot consider such agreements because they are confidential, they risk overpaying when setting prices through external price referencing,” says Dr Babar. “Our study supports those policy-makers and researchers that call for higher price transparency.“

The study results suggested that prices for cancer drugs vary across Europe, Australia, and New Zealand. Prices in Sweden, Switzerland, and Germany ranked high, and prices in Mediterranean countries such as Portugal, Spain, and especially Greece and the UK were at the lower end.

“The inaccessibility of confidential, discounted prices is a limitation of our study, and it is also a major shortcoming in pricing for public payers,” says Dr Babar. “Many European countries, and, to some extent Australia, apply the policy of external price referencing - using the prices of a drug in one or several countries to derive a benchmark or reference price for the purposes of setting or negotiating the price.

“Even if payers might be able to achieve lower prices in follow-up reimbursement negotiations, the initial price comparison is done based on list prices, and so payers risk overpaying,” he says. “As well, the low list price level caused by the external price referencing method might lead to delays, and even non-availability, of drugs in the market.

“This might be because manufacturers are incentivised to launch these drugs in high-priced countries first and defer market entry in the lower priced countries, so they will not be obliged to negatively affect the international reference price.”

ENDS

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