Emerging Markets Physician and Payer Forum

November 2010

Pharmaceutical Pricing and Reimbursement: Key Facts in Mature and Emerging Markets

Report Authors
Neil Grubert, M.A.


Pharma companies, brace yourselves for a more draconian pricing environment. This outcome is inevitable in the mature markets of North America, Western Europe, and Japan, upon which the international pharmaceutical industry has long depended for sustained sales growth. With increasing cost-containment pressures now stifling these markets, multinational pharmaceutical companies are understandably exploring the potential of new markets—notably, the fast-growing emerging markets (especially Brazil, Russia, India, China, and Mexico). Even in these high-growth-potential markets, however, governments are moving to contain costs. More than ever before, commercial success will depend on securing the most favorable market access conditions. Therefore, companies need to understand the challenges in each country of bringing a new drug to market. This report provides a concise overview of the essential elements of pharmaceutical pricing and reimbursement in 14 markets across the globe. For each of these countries, we review the provision of health insurance, pharmaceutical pricing, reimbursement, cost containment, and health technology assessment. In addition, we assess the international outlook and implications for the pharmaceutical industry.

Questions Answered in This Report:

  *   Healthcare payers around the world vary enormously in their approaches to pharmaceutical price setting. What are the key elements of the pricing process in each market? Which markets are most liberal or most restrictive with regard to pharmaceutical pricing? What impact does the pricing process have on speed of market access? What are the ramifications of recent initiatives, such as plans by the German and U.K. governments to introduce value-based pricing?

  *   Generous reimbursement is increasingly critical to a new drug’s commercial prospects. Which bodies are responsible for making coverage decisions? What factors are most influential in determining reimbursement? What new strategies are manufacturers exploring to secure reimbursement of costly drugs?

  *   Payers in all markets are intensifying their efforts to contain pharmaceutical costs. What are the most common approaches to cost-containment? Which groups are the main targets of cost-cutting measures?

  *   Demand for generic drugs is growing in all countries. How do market trends vary by country? What are payers in mature markets doing to promote greater use of generics? What role will generics play in the development of emerging markets?

  *   The use of health technology assessment (HTA) is on the increase. Which markets already make extensive use of HTA and which are beginning to adopt this discipline? What methods are commonly used? When do reimbursement authorities generally conduct HTA? What are the prospects for international collaboration? What are the implications of a prospective overhaul of one of the world’s most influential HTA organizations?

  *   For the foreseeable future, emerging markets are likely to grow much faster than mature markets. What demographic trends are evident in mature and emerging markets, and what impact will that have on pharmaceutical companies? What challenges will pharmaceutical companies face in mature markets? What are the main opportunities and hazards in emerging markets?


Markets covered: United States, Canada, Mexico, Brazil, France, Germany, Italy, Spain, United Kingdom, Russia, Japan, China, India, Australia.

Pharmaceutical pricing: general price-setting procedures; renewal of pricing; pricing revisions.

Reimbursement: negotiation of reimbursement with principal private and public health insurance programs.

Cost-containment: price cuts/freezes; sales growth limits; reference pricing; waiver of copayments for low-priced drugs; maximum reimbursement sums for some new drugs; mandatory rebates; voluntary rebates; risk-sharing agreements; cost-sharing contracts; negative list; positive list; dereimbursement of certain drugs; controls on detailing visits; prescribing restrictions; prescribing budgets/audits; prescribing guidelines; prior authorization; measures to promote generic prescribing; generics substitution; therapeutic substitution; parallel imports; multitier formularies; copayments; coinsurance.

Health technology assessment (HTA): use of HTA in reimbursement decision making; increasing use of health economic evaluation and comparative effectiveness research.

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Mentioned in this report:

  • - Agência Nacional de Vigilância Sanitária (ANVISA; National Health Surveillance Agency)
  • - Agency for Healthcare Research and Quality (AHRQ)
  • - Agenzia Italiana del Farmaco (AIFA; Italian Medicines Agency)
  • - Association of the British Pharmaceutical Industry (ABPI)
  • - Blue Cross and Blue Shield Association (BCBSA)
  • - Bundesverband der Pharmazeutischen Industrie (BPI; Federal Association of the Pharmaceutical Industry)
  • - Câmara de Regulação do Mercado de Medicamentos (CMED; Pharmaceutical Market Regulation Council)
  • - Canadian Agency for Drugs and Technologies in Health (CADTH)
  • - Canadian Expert Drug Advisory Committee (CEDAC)
  • - Canadian Institute for Health Information (CIHI)
  • - Centers for Medicare & Medicaid Services (CMS)
  • - Comisión Interministerial de Precios de los Medicamentos (CIPM; Interdepartmental Committee on Pharmaceutical Prices)
  • - Comisión Nacional para el Uso Racional del Medicamento (CNURM; National Commission for the Rational Use of Medicines)
  • - Comitato Tecnico Scientifico (CTS; Scientific and Technical Committee)
  • - Comité Economique des Produits de Santé (CEPS; Economic Committee for Healthcare Products)
  • - Commission de la Transparence (CT; Transparency Commission)
  • - Commission Evaluation Economique et de Santé Publique (CEESP; Commission for Economic Evaluation and Public Health)
  • - Dirección General de Farmacia y Productos Sanitarios (DGFPS; General Directorate of Pharmacy and Health Products)
  • - European Federation of Pharmaceutical Industries and Associations (EFPIA)
  • - Federal Antimonopoly Service
  • - Federation of Pharmaceutical Manufacturers’ Associations of Japan (FPMAJ)
  • - Fundaçao Oswaldo Cruz (Fiocruz; Oswaldo Cruz Foundation)
  • - Gemeinsamer Bundesausschuß der Ärzte, Zahnärzte, Krankenhäuser und Krankenkassen (GBA; Joint Federal Committee of Physicians, Dentists, Hospitals, and Health Insurance Funds)
  • - Haute Autorité de Santé (HAS; National Health Authority)
  • - Health Research & Educational Trust (HRET)
  • - Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG; Institute for Quality and Efficiency in the Health Care System)
  • - Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estad (ISSSTE; State Employees’ Institute for Security and Social Services)
  • - Instituto Mexicano del Seguro Social (IMSS; Mexican Social Security Institute)
  • - International Monetary Fund
  • - Kaiser Family Foundation (KFF)
  • - Medicare Australia
  • - National Development and Reform Commission (NDRC)
  • - National Institute for Health and Clinical Excellence (NICE)
  • - National Pharmaceutical Pricing Authority (NPPA)
  • - Osservatorio Nazionale sull’Impiego dei Medicinali (OsMed; National Observatory on the Use of Medicines)
  • - Patented Medicine Prices Review Board (PMPRB)
  • - Pharmaceutical Benefits Advisory Committee (PBAC)
  • - Pharmaceutical Benefits Pricing Authority (PBPA)
  • - Pharmacy Benefit Management Institute (PBMI)
  • - ProGenerika
  • - Régie de l’assurance maladie du Québec (RAMQ; Quebec Health Insurance Authority)

  • - Roszdravnadzor (Federal Service on Surveillance in Healthcare and Social Development)
  • - Servicio de Inspección (Inspection Service)
  • - Subdirección General de Economía del Medicamento y Productos Sanitarios (SGEMPS; General Subdirectorate of Pharmaceutical and Health Product Economics)
  • - Technology Evaluation Center (TEC)
  • - Therapeutic Goods Administration (TGA)
  • - U.S. Census Bureau
  • - Ufficio Prezzi e Rimborso (UPR; Office of Pricing and Reimbursement)
  • - Union Nationale des Caisses d’Assurance-Maladie (UNCAM; National Union of Health Insurance Funds)
  • - Yakka Santei Soshiki (Drug Pricing Organization [DPO])
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