International Reference Pricing

International Reference Pricing is a complex issue faced by Pharmaceutical companies which has a large effect on a drug’s lifecycle. The price for a drug is often set by referencing the price of a similar drug in various countries. In a reference pricing system, equivalent medicines are put together in a reference group which are defined by either active substance, pharmacological class, or therapeutic class. This system puts pressure on pharmaceutical companies to compete with the reference priced product but also reduces competition.

An optimal price management strategy for a marketed product must constantly look at pricing trends of competing products within the market. Access to authentic, current, and historical prices for competing products empowers companies with the information necessary to ensure that their own strategies are headed in the right direction and allows them to make adjustments when necessary. They also need to monitor responses by competitors to price actions taken for their own products. In addition, competitor drug pricing data is needed for a multitude of modeling exercises such as pharmaco-economic and budget impact exercises.

International Reference Pricing best practices allow pharmaceutical companies to:

  • Assist in defining an optimal global pricing strategy through the identification of pricing trends for competing products in key markets
  • Stay ahead of austerity measures across key markets by tracking changes such as price cuts, margin changes and more
  • Maintain the most current, as well as historical, exchange rates to facilitate conversions to standard currencies

For more information please visit http://www.alscg.com/products/global-pricing-reimbursement-market-access/priceright-global-lifecycle-price-management.

Porsche to Pharma – Price Harmonization across GCC

Just as Porsche standardized price levels across the GCC (Gulf Central Committee) a few years ago, Pharma is now following suite.

In July 2005, the health ministers from the six GCC member states, (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), approved the Price Harmonization Process, a mechanism to align pharmaceutical prices across the region. The process, initiated in 2013, aimed to align the Cost, Insurance and Freight (CIF) price of all presentations marketed in the GCC countries.

What are the Possible Repercussions of the Price Harmonization Process?

At present, there are significant differences in medicine prices across the GCC countries and the likely impact of the harmonization process is predicted to effect the majority of products with substantial price reductions expected across therapy areas. If we look at the potential impact on Glivec 100mg as an example, the probable effect of price harmonization could mean reductions of 5% in UAE and 34.65% in Kuwait.¹

Could the Price Harmonization Process Impact other Non-GCC Countries?

The Price Harmonization Process could potentially have an effect on other countries which take into reference the GCC countries when International Price Referencing.

Each of the GCC countries has a different regulatory timeline and process; if the registration process therefore were to start at the same time in all the GCC countries, the new product would have a different launch date in each market and the launch price in the 1st market may be reduced if one of the other GCC markets launches at a lower price.

In summary, the Price Harmonization Process is expected to result in significant price reductions for medicines across GCC countries. The importance of optimal product launch sequencing will become increasingly important to bear in mind when launching a new product in these markets.

For more information on Alliance’s global pricing intelligence service, please see our Pricentric product page.

  1. Source: Pricentric™ data – April 2014 prices

Alliance Life Sciences Launches New Pricentric™ Portal: Robust Data Services Application Synthesizes Competitive Global Pharmaceutical Pricing and Reimbursement Data

Alliance Life Sciences is pleased to announce the launch of a new portal for Pricentric™, a comprehensive data services product that integrates competitive pharmaceutical pricing and reimbursement data from multiple global markets. We are offering a free trial of the new portal at: pricentric.alscg.com/demo

“Pricentric™ enables our customers to stay ahead of austerity measures across key markets by tracking changes, such as price cuts, margin changes and more,” says Preeti Patel, Vice President, Consulting Services, ALSCG. “This reliable, fully customizable offering – the first of its size and scope — is designed to meet customer needs, providing data coverage spanning over 80 countries, and enabling easy treatment cost comparisons and reimbursement levels for key products by indication or country.”

Pricentric™ provides a robust data source with standardized naming conventions that enable users to easily compare product prices.  Data is standardized using Alliance’s proprietary product classification system to enable easy cross-country comparison at the product and pack level.

Pricentric™ features include:

  • Full range of reimbursement information, including status, prescribing      restrictions, rates and co-payment prices
  • The most current, and historical, exchange rates to facilitate conversions to      standard currencies
  • Flexible data delivery options enable access via PRICENTRIC™ portal, Microsoft or Excel

“Pricentric™ helps users to define an optimal global pricing strategy through the identification of pricing trends in key markets, and monitor responses by competitors to price actions taken for the company’s own products,” adds Patel.  “A team of dedicated experts is available to help with interpreting data, and users can access analysis and modeling exercises, such as pharmaco-economical modeling, analysis, and hospital pay or budget impact, to assist decision-making processes.”

Highlights from the 2014 Pharma Pricing & Market Access Outlook Conference in London

by Patricia Ladrón de Guevara

UK – Update on VBP

Paul Catchpole announced that the Value Base Pricing implementation has been delayed until late 2014.

It was announced that the VBP scheme is going to include an annual cap on economic growth of each medicine. If the pharmaceutical company exceeds the growth agreed, a rebate of the amount exceed will have to be paid back – this amount will be visible to the public!

Referring to NICE, it was said that NICE will be a body to evaluate reimbursement not pricing. It was explained that NICE will not negotiate, publicly set or indicate prices.  The threshold will remain at the same level. NICE will evaluate Value Based Assessments from autumn 2014.

Germany – AMNOG Analysis

Dr. Meriem Bouslouk gave a rundown of recent news on the AMNOG situation expressing that the market launch and early benefit assessment run in parallel with AMNOG. The mandatory rebate of 16% was reduced to 6% the 1st of January of 2014 and will be increased to 7% the 1st of April pf 2014.

France – Medico-Economic Assessment

Professor Jean–Luc Harousseau talked about the pricing process in France.

It was explained that the drugs in France are priced in accordance to the ASMR classification. If the drug is classified in class ASMR I and II: the price will be based on IPR If the drug is classified in class ASMR III and IV: the price approved will be similar to the comparator. If the drug is classified in class ASMR V: the price approved will be cheaper than the comparator and the product will not be reimbursed.

Netherlands – Temporary Reimbursement

Martin van der Graff introduced a very important concept to bear in mind in Netherlands when launching a product in Netherlands, Temporary Reimbursement. It was explained that if you achieve all the criteria for temporary reimbursement in Netherlands, you can launch the product and negotiate the price afterwards.

Italy – Algorithm to Define Innovation

Dr Giovanni Tafuri explained the changes introduced in the evaluation system in Italy.

It was announced that currently in Italy, there is a possibility of quick access ie launch the product before starting the reimbursement process with free pricing.

There are 3 groups of medicines with a faster negotiation process: orphan drugs, hospital only use medicines and medicines of great therapeutic and social relevance.

One very important feature to highlight about the Italian System is that Dr Giovanni talked about the development of an algorithm to define innovation which is due to be completed in 2015.

Canada – Attractive Pharmaceutical Market

Neil Palmer showed the market figures for the healthcare system in Canada.

It was explained the Patented Medicine Prices Review Board (PMPRB) role: the primarily role of this board is price fixing but is not involved in reimbursement decisions. The classification system is similar to the ASMR rating in France. Also, although price setting is a central decision, reimbursement is solely decided at provincial level.

An IMPORTANT NOTE about the future – Canada is considering extending the basket of reference countries (consult Pricentric for more information)

Greece – Reactivated the Approval of New Drugs

Penny Retsa recalled to the audience that Greece has not approved new drugs in the last 2 years. However, she announced that the Ministry of Health in Greece has reactivated the approval of new drugs from the beginning of 2014.

She highlighted that in the price bulletin that has just been published there are new drug approvals for the first time in 2 years.

The Conclusions of the Conference were:

Due to the limited healthcare resources across the countries, Governments are trying to establish new legislations and rules to ensure that the resources are allocated to the most cost-effective treatment. This is resulting in ever-changing price and reimbursement legislation. For further information contact Patricia at: pricentric@alscg.com

International Reference Pricing: Why It’s Essential to Your Success

There has been a lot of focus on international reference pricing in the pharmaceutical industry lately. The goal, of course, being to benchmark yourself against competitive products to ensure that you can obtain the highest amount of market share in any given country.

Access to authentic current, and historical, prices for competing products empowers companies with the information necessary to ensure that their own strategies are headed in the right direction and allows them to make adjustments when necessary.

They may also monitor responses by competitors to price actions taken for their own products. In addition, a multitude of modeling exercises such as pharmaco-economic modeling, analogue analysis, and budget impact modeling, often require competitor drug pricing data.

To give you the bigger picture, access to competitor pricing data is essential for:

  • Defining an optimal pricing strategy
  • Evaluating pricing trends of competing products
  • Monitoring responses by competitors to price actions taken for the company’s own products
  • Modeling exercises such as pharmaco-economic modeling, analogue analysis, and hospital or payer budget impact modeling
  • Tracking austerity measures; impact at country level ie price cuts, margin changes
  • Tracking reimbursement decisions and prescribing restrictions
  • Monitoring pricing policies and trends in key markets/therapy areas

For more information, take a look at our international reference pricing products.

Alliance Reports Record Growth in 2013: Revenue Up More than 20 Percent Over 2012, 100 Percent Growth Since 2010, Continued Profitability

Alliance Life Sciences reports record revenues in 2013, and a three-year compound annual growth rate of over 20 percent that has led to revenues nearly doubling from 2010.

“Throughout 2013, we delivered a strong line-up of services and solutions which translate into over 20 percent growth for our third straight year,” says Alan Crowther, CEO, ALSCG. “Also, our addition of Jason Watters as an experienced industry chief financial officer will help lay the foundation for continued growth.”

Watters joined ALSCG after serving as chief financial officer at McKinsey’s IT Solutions division, where he oversaw part of that division’s growth from inception to almost $200 million in revenues in five years. He brings considerable experience in high-growth consulting and IT solution environments.

In addition, ALSCG had record bookings in December 2013 and January 2014, positioning the company for another record year in 2014.

Watters states, “Based on industry trends in Life Sciences, and the growing demand for our unique mix of services, we expect over 20 percent growth in 2014 and 2015. We forecast that the firm will have grown almost 200 percent since 2010 by the end of 2015.”

Not only is ALSCG growing revenues at a significant rate, but also the firm experienced a number of major successes:

  • Three of the Top 10 Pharmaceutical Companies adopted ALSCG’s PriceRight™ global pricing solutions
  • Four of the Top 10 Pharmaceutical Companies used or renewed ALSCG’s PRICENTRIC™ global pricing data services
  • Seven successful “go-lives” at clients with Revenue Contract Management suite implementations

Crowther adds, “Our tremendous success and growth in a short time reflects the strengths of our strategy, our close relationships with our customers, and the efforts of our professionals around the globe. Building upon this momentum, we will continue to offer customers the management, technology and software products they need to solve business problems, maximize revenue and achieve optimal pricing in an outcomes-based world.”

NJBIZ Ranks Alliance Life Sciences in Top 10 Among Technology Consultant Service Companies in New Jersey

Alliance Life Sciences has been ranked number eight among New Jersey’s technology consultant service companies by NJBIZ’s Annual Book of Lists 2014, an influential source of information for business-to-business professionals in New Jersey.

“This ranking reflects our continued growth, our record 2013 year, the quality of our employees and their dedicated approach to serving our customers,” says Alan Crowther, CEO, ALSCG.  “We are honored to be recognized by the highly respected and influential NJBIZ, and applaud their focus on critical business issues.”

ALSCG serves over 40 of the largest pharmaceutical and medical device companies, including 8 of the top-10 largest pharmaceutical manufacturers, enabling them to focus on continued investments in patient health and well-being by helping them receive fair value for their products with an integrated portfolio of services:

  • Management Consulting
  • Technology Integration
  • Solutions and Data Services

ALSCG has many specialized offerings with top strategic positions in the industry, and delivers these services with expertise across the following domains:

  • Global Pricing, Reimbursement and Market Access
  • Contract Strategy, Operations and Compliance
  • Commercial Operations and Analytics

Crowther adds, “ALSCG helps its customers maximize revenue and optimize pricing in an outcomes-based world. We employ hundreds of professionals around the globe who help firms obtain the best value for their critical healthcare initiatives. This distinction helps bring attention to our leading set of offerings and set the stage for our customers’, and our, continued success.”

Global Lifecycle Price Management – A 360 Degree Approach

When launching a new product, companies are often met with a series of challenges. Any error or miscalculation could end up costing your company a significant amount of market share. One of the biggest hurdles to overcome is pricing. Finding a price that is both competitive in the global market, as well as profitable, can be more difficult than companies realize. The key is having access to accurate and current prices of the competition, while at the same time being able to set and maintain effective prices with minimal manual upkeep. Another concern with global lifecycle price management is price erosion with products that have been on the market for a longer period of time.

For example, according to a study by the EPP (European Pricing Platform), 42% of organizations are operating on the most basic level pricing maturity. Approximately 48% are functioning on a higher level, having the right prices on the right products to the right people, but still aren’t fully integrating the commercial process of alignment with marketing and sales. While this second tier is more desirable than the first, it is still far from optimal.

Global lifecycle price management issues can typically be broken down in 3 subcategories.

Product Launch Challenges

These issues can be some of the toughest to deal with when launching a new product. An effective launch starts by determining the best country sequence in which to launch your product, where a mere 1% in price difference can end up costing millions of dollars in net present value, or NPV. Managing all the details and data for launch planning is also critical, especially in knowing the effect they have on pricing. Also, you must take into account the need for change as the project develops, and often times manage this with changing parameters, to keep pace with the project evolution.

Price Maintenance & Compliance Challenges

The next obstacle is maintaining the strength of products that are already on the market. As conditions change, so too must the price on a product. This helps to avoid price erosion, which can cost millions of dollars every year. Here you must also be able to quickly and accurately check reference prices, which is a crucial step in being able to set an effective price in any country. This is a highly effective way to protect your company from any errors in government price publications, as well as to assist in generating accurate reports.

Loss-Of-Exclusivity & Mature Products

When managing older products, the key is to be able to monitor and manage with minimal manual effort and resources. Once a product launch is successful to the point of near self-sufficiency, it’s time to move on to the next project. Having to divert resources to an old project means diverting time and energy away from new ventures, and this can be costly in the long run. Your business must be equipped with the right tools. Software that can efficiently predict the potential impact of price erosion means adjustments can be made before they end up becoming costly issues.

Prevention is Key

What it all comes down to is the proper amount of preparation. By planning ahead and exercising the proper caution and forethought, charting a course to success is easier than one might think.

In the study conducted by the EPP, 88% of organizations declared intention to invest in pricing software for reasons such as, price monitoring, reporting, price guidance and deal making. Alliance Life Sciences specializes in helping life sciences companies operate at peak efficiency with a full suite of global lifecycle price management software designed and developed to aid in managing your business and making sure you hit the right price for maximum profit.

For more information, an on-demand webinar is available on market access operational excellence. http://youtu.be/KEg55rrBfh0

Video Series on Pricing & Market Access Issues in Pharma

Sophie Murdoch, VP of Consulting Services for ALSCG, is featured in a 3-part video series from Health Network Communications on Pricing & Market Access Issues in Pharma. The videos answer key questions that pharma manufacturers are facing today:

  • How are global austerity measures impacting pharma?
  • How can the industry work with payers to ensure that the best treatments get to patients?
  • What developments do you foresee over the next 12 months that will impact pharmaceutical uptake?

Watch the videos below!