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How does external reference pricing work in developing countries: evidence from Iran

Introduction: Governments apply different pricing policies to ensure public accessibility, availability, and affordability of medicines. In this way, external reference pricing (ERP) because of its easy implementation is used widely across countries. However, ERP is completely path dependent, and it...

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Autores principales: Babaie, Fatemeh, Motevalli, Mohammad Hossein, Mehralian, Gholamhossein, Peiravian, Farzad, Yousefi, Nazila
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Frontiers Media S.A. 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10319150/
https://www.ncbi.nlm.nih.gov/pubmed/37408767
http://dx.doi.org/10.3389/fphar.2023.1034229
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author Babaie, Fatemeh
Motevalli, Mohammad Hossein
Mehralian, Gholamhossein
Peiravian, Farzad
Yousefi, Nazila
author_facet Babaie, Fatemeh
Motevalli, Mohammad Hossein
Mehralian, Gholamhossein
Peiravian, Farzad
Yousefi, Nazila
author_sort Babaie, Fatemeh
collection PubMed
description Introduction: Governments apply different pricing policies to ensure public accessibility, availability, and affordability of medicines. In this way, external reference pricing (ERP) because of its easy implementation is used widely across countries. However, ERP is completely path dependent, and it would both bring pros and cons, related to its implementing strategy which makes understanding of its impact in different countries challenging. In this study, we examine the performance of the ERP approach in Iran as a pricing tool. Method: We conducted a cross-sectional descriptive study. Although Iran officially uses a reference country basket for ERP, in this study, we use different reference countries based on socioeconomic comparability, access to their price data, medicine pricing approaches, and pharmaceutical expenditure to examine the effect of reference countries as well as the method performance. Then, an empirical study was applied to a list of selected samples of medicines in the Iranian market to compare their price with our new reference countries. Then, we discuss the performance of ERP process based on the real prices in the Iranian pharmaceutical market. Result: The prices of 57 medicines, which contain about 69.2% of the imported Iran pharma market in value, were compared with their prices in selected reference countries. It was found that 49.1% of prices were more expensive in at least one of the reference countries, and in 21% of products, the average price in Iran was higher than the average price in reference countries. Conclusion: Achieving efficient and fair pricing of pharmaceuticals between and within countries is still a complex conceptual and policy problem that ERP in short term can handle. ERP cannot be considered a perfect tool for pricing alone, although its effectiveness is acceptable. It is expected that using other pricing methods alongside the ERP will improve patients’ access to medicines. In Iran, we use value base pricing as the main pricing method for every new molecule. Then, we use other methods such as ERP as a complementary method.
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spelling pubmed-103191502023-07-05 How does external reference pricing work in developing countries: evidence from Iran Babaie, Fatemeh Motevalli, Mohammad Hossein Mehralian, Gholamhossein Peiravian, Farzad Yousefi, Nazila Front Pharmacol Pharmacology Introduction: Governments apply different pricing policies to ensure public accessibility, availability, and affordability of medicines. In this way, external reference pricing (ERP) because of its easy implementation is used widely across countries. However, ERP is completely path dependent, and it would both bring pros and cons, related to its implementing strategy which makes understanding of its impact in different countries challenging. In this study, we examine the performance of the ERP approach in Iran as a pricing tool. Method: We conducted a cross-sectional descriptive study. Although Iran officially uses a reference country basket for ERP, in this study, we use different reference countries based on socioeconomic comparability, access to their price data, medicine pricing approaches, and pharmaceutical expenditure to examine the effect of reference countries as well as the method performance. Then, an empirical study was applied to a list of selected samples of medicines in the Iranian market to compare their price with our new reference countries. Then, we discuss the performance of ERP process based on the real prices in the Iranian pharmaceutical market. Result: The prices of 57 medicines, which contain about 69.2% of the imported Iran pharma market in value, were compared with their prices in selected reference countries. It was found that 49.1% of prices were more expensive in at least one of the reference countries, and in 21% of products, the average price in Iran was higher than the average price in reference countries. Conclusion: Achieving efficient and fair pricing of pharmaceuticals between and within countries is still a complex conceptual and policy problem that ERP in short term can handle. ERP cannot be considered a perfect tool for pricing alone, although its effectiveness is acceptable. It is expected that using other pricing methods alongside the ERP will improve patients’ access to medicines. In Iran, we use value base pricing as the main pricing method for every new molecule. Then, we use other methods such as ERP as a complementary method. Frontiers Media S.A. 2023-06-20 /pmc/articles/PMC10319150/ /pubmed/37408767 http://dx.doi.org/10.3389/fphar.2023.1034229 Text en Copyright © 2023 Babaie, Motevalli, Mehralian, Peiravian and Yousefi. https://creativecommons.org/licenses/by/4.0/This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
spellingShingle Pharmacology
Babaie, Fatemeh
Motevalli, Mohammad Hossein
Mehralian, Gholamhossein
Peiravian, Farzad
Yousefi, Nazila
How does external reference pricing work in developing countries: evidence from Iran
title How does external reference pricing work in developing countries: evidence from Iran
title_full How does external reference pricing work in developing countries: evidence from Iran
title_fullStr How does external reference pricing work in developing countries: evidence from Iran
title_full_unstemmed How does external reference pricing work in developing countries: evidence from Iran
title_short How does external reference pricing work in developing countries: evidence from Iran
title_sort how does external reference pricing work in developing countries: evidence from iran
topic Pharmacology
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10319150/
https://www.ncbi.nlm.nih.gov/pubmed/37408767
http://dx.doi.org/10.3389/fphar.2023.1034229
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