September, 2009 - SUPPORT Summary of a systematic review | print this article |
Pharmaceutical pricing and purchasing policies are used to determine or affect the prices that are paid for drugs. Examples are price controls, maximum prices, price negotiations, reference pricing, index pricing and volume-based pricing policies. This review found evidence for reference pricing and index pricing. In reference drug pricing, which is a reimbursment tool, a reference drug is chosen amongst drugs that are considered as therapeutically similar, and the price of the reference drug is reimbursed. For drugs that are more expensive than the reference drug, the patient has to pay the expenses above the reference price. An index price is the maximum refundable price to pharmacies for drugs within an index group. An index group consists of therapeutically interchangeable drugs. The price is refunded independent of which drug is dispensed.
Large amounts of health care money are spent on drugs and these amounts are increasing. These increases put pressure on policy makers and insurers to control drug expenditures and to do so without causing adverse effects on health or increasing health care utilisation or other costs. Pharmaceutical pricing and purchasing policies intend to determine or affect the prices that are paid for drugs. They can be targeted at different components of drug prices – such as wholesale prices, retail prices, drug taxes and reimbursement prices. These policies can have an impact on drug expenditures in two main ways – directly, through price changes, and indirectly, through drug use changes related to the price changes. This summary shows evidence related with reference pricing and index pricing.
Review Objective: To determine the effects of pharmaceutical pricing and purchasing policies on drug use, healthcare utilisation, health outcomes and costs (expenditures). | ||
What the review authors searched for | What the review authors found | |
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Interventions | Randomised controlled trials (RCT), non-randomised controlled trials (CCT), con-trolled repeated measures studies (CRM), interrupted time series analyses (ITS) and controlled before-after studies (CBA) of policies on price and purchasing that de-termine or are intended to affect the price that is paid for drugs |
11 studies were found. Some of them had more than one design i.e. different designs for different out-comes 7 ITS 1 ITS/CBA/CRM 1 CRM/RM 2 CBA/RM This review found evidence for reference pricing (10 studies) and index pricing (1 study). |
Participants | Health care consumers and providers |
In all the Canadian studies the patients were Pharmacare beneficiaries: senior citizens aged 65 years and older. The other studies included all beneficiaries of national drug insurance plans, including vulnerable groups of people from all ages. |
Settings | Large jurisdiction or system of care. Juris-dictions could be regional, national or in-ternational. Studies within organisations, such as health maintenance organisations were included if the organisation was multi-sited and served a large population. |
The reference pricing studies: Canada (6), USA (1), Australia (1), |
Outcomes | Drug use (prescribed, dispensed or actual-ly used), Healthcare utilisation, Health out-comes, Costs (expenditures), including drug costs and prices, other health care costs and policy administration costs. | Seven studies reported a single effect measure (one outcome) and four did not specify a primary out-come. None of the studies presented data on all out-comes and none reported administration costs |
Date of most recent search: October 2005 | ||
Limitations: This review has minor limitations. |
Aaserud M, Dahlgren AT, Kösters JP, Oxman AD, Ramsay C, Sturm H. Pharmaceutical policies: effects of reference pricing, other pricing, and purchasing policies. Cochrane Database of Systematic Reviews 2006, Issue 2. Art. No.: CD005979. DOI: 10.1002/14651858.CD005979. See in Pubmed
This review includes 11 studies evaluating the effects of pharmaceutical pricing and purchasing policies. All of them were done in developed countries (Canada, USA, Australia, Germany, Sweden and Norway). None of the studies presented data on all outcomes. The studies provided data on drug use (7 studies), drug expenditures from a drug insurer’s perspective (5), drug prices (3), health outcomes (2), and health care utilisation (4). None of the studies reported effects on patient drug expenditures or other costs (either intervention costs or those in other parts of the health service).
Ten out of the 11 studies in the review evaluated this intervention.
Outcomes | Impact | No of Participants (studies) |
Quality of the evidence (GRADE) |
Drug use: Reference Drug |
Use of reference drug increased by 60 to 196% immediately after a transition period following the introduction of the policy. At follow up (6 months to a year) the relative increase of the drug was larger in one study and smaller in two. |
(4 studies) |
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Drug use: Cost share drug |
Use of cost share drug decreased immediately by 19 to 42%. In 1 out of 3 studies that provided data at 6 months, a larger reduction was observed. |
(4 studies) |
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Total use of drugs | The effect was smaller and not consistent (-9% to +11%). | (2 studies) | |
Drug expenditures | There was a trend towards an immediate reduction in expenditures for the drug in the reference group targeted (ranging from -5% to 50%) | (4 studies) | |
Drug prices | A reduction in drug prices was shown ranging from 11% to 26% for different reference drug groups. | (2 studies) | |
Health outcomes and health care utilisation | There were no significant differences in any of the health outcomes and health care utilisation measured. | (4 studies) | |
p: p-value GRADE: GRADE Working Group grades of evidence (see above and last page) |
This review identified one study from Norway evaluating this intervention.
Index pricing |
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Patient or population: No specific information provided Settings: Norway, national public drug insurance Intervention: Index pricing on six groups of active substances Comparison: No index pricing |
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Outcomes | Impact | No of Participants (studies) |
Quality of the evidence (GRADE) |
Comments |
Drug use: |
Use of generic drug increased by 114% (immediate) and 55% (six months) after a transition period following the introduction of the index pricing system |
(1 study) |
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The effects on use of drugs in the index pricing groups were not analyzed appropriately in the study´s report. Results from reanalysis by reviewers |
Drug use: Brand Drug |
Use of brand drug decreased, relatively, by 29 % (immediate) and 43% (after six months) |
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Drug prices | Generic and brand drug prices were both reduced but the latter was not statically significant. Generic drug prices were reduced more (relatively) than the brand drugs. Long-term effects were slightly larger than the short-term effects (-5.3% vs. -4.0% for generic drugs; -1.1% vs. -0.8% for brand drugs) | (1 study) | The reduction in brand drug prices was not statistically significant | |
p: p-value GRADE: GRADE Working Group grades of evidence (see above and last page |
Findings | Interpretation* |
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APPLICABILITY | |
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Applicability of these interventions to low and middle-income country settings depends on several factors such as:
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EQUITY | |
Overall, the targeted population was the beneficiaries of national health insurance plans. However the included studies provided little data regarding differential effects of the interventions for disadvantaged populations within the studied beneficiaries. |
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ECONOMIC CONSIDERATIONS | |
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MONITORING & EVALUATION | |
Evaluations in the majority of included studies focus on relatively short term outcomes |
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*Judgements made by the authors of this summary, not necessarily those of the review authors, based on the findings of the review and consultation with researchers and policymakers in low and middle-income countries. For additional details about how these judgements were made see: http://supportsummaries.org/support-summaries/how-support-summaries-are-prepared/ |
Related literature
Austvoll-Dahlgren A, Aaserud M, Vist G, Ramsay C, Oxman AD, Sturm H, Kösters JP, Vernby , Å. Pharmaceutical policies: effects of cap and co-payment on rational drug use. Cochrane Database of Systematic Reviews: Reviews 2008 Issue 1
Sturm Heidrun, Austvoll-Dahlgren Astrid AA, Aaserud Morten, Oxman Andrew D, Ramsay Craig, Vernby Åsa, Kösters Jan Peter. Pharmaceutical policies: effects of financial incentives for prescribers. Cochrane Database of Systematic Re-views: Reviews 2007 Issue 3
Aaserud M, Dahlgren AT, Sturm H, Kösters JP, Hill S, Furberg CD, Grilli R, Henry DA, Oxman AD, Ramsay C, Ross-Degnan D, Soumerai SB. Pharmaceutical poli-cies: effects on rational drug use, an overview of 13 reviews (protocol). Cochrane Database of Systematic Reviews: 2006 Issue 2
This summary was prepared by
Gabriel Bastías & Gabriel Rada, School of Medicine, Pontificia Universidad Católi-ca de Chile, Chile
Conflict of interest
None declared. For details, see conflicts of interest
Acknowledgements
This summary has been peer reviewed by: Morten Aaserud, Norway; Sabine Vogler, Austria; Anban Pillay, South Africa; Esperança Sevene, Alda do Rosário Elias Mariano and Julie Cliff, Mozambique.
This summary should be cited as
Bastías G, Rada G. Do pharmaceutical pricing and purchasing policies have ef-fects on drug use, health care utilisation, health outcomes and costs? A SUPPORT Summary of a systematic review. September 2009.