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Pharmaceutical Pricing Policies in a Global Market

image of Pharmaceutical Pricing Policies in a Global Market

Pharmaceutical policy making raises particular challenges in reconciling key objectives for health policy, such as ensuring affordable access to the latest effective drugs, with other important policy considerations, such as providing support to a valuable national industry. Unusually among health policy issues, it also raises international considerations that further complicate decision making, particularly as the nature and extent of such considerations are not well understood.

This report assesses how pharmaceutical pricing and reimbursement policies have contributed to the achievement of certain health policy objectives. It examines the national and transnational effects of these policies, in particular, their implications for the availability of medicines in other countries, the prices of these medicines, and innovation in the pharmaceutical sector.

This publication presents an analysis of comparative price levels, making use of a unique dataset to construct the most comprehensive pan-OECD pharmaceutical price index to date. It also draws upon original case studies of pharmaceutical pricing and reimbursement policies in six OECD countries to provide specific examples of the impacts of policies on health system performance.

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Conclusions

The OECD project on pharmaceutical pricing policy has taken a close look at the evolving market for pharmaceutical products and the ways in which pricing policies serve to shape that market, yielding a number of conclusions. As tools for meeting a range of pharmaceutical policy objectives, the approaches most widely used in OECD countries to arrive at prices for pharmaceuticals – external and internal price referencing – are problematic in a number of respects. International price benchmarking (or external referencing) is readily gameable by the pharmaceutical industry and – by reducing firms’ willingness to price to market – contributes to access and affordability problems in the lower-income OECD countries, some of which spend close to a third of their health-care resources on pharmaceuticals.

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