Price regulation system

The main drawbacks to this price regulation system can be summed up as follows ... 

It is interesting to note that most price regulation systems for new products that are applied in the EU acknowledge either explicitly (criteria or norms... 

The implications of the differences in pharmaceutical prices between countries can be far-reaching for any health system with public funding. Let us focus our attention on two aspects. The first of these concerns the capacity of price regulation systems to guarantee low prices without causing excessive harm to incentives to innovate. The second concerns the widespread practice of using observed prices in other countries as a reference for the pricing authorization of new pharmaceuticals. 

Public Financing System or Price Regulation System ... 

Prices are regulated differently in different countries, each countiy having its own distinguishing peculiarities. Nevertheless, at the risk of oversimplifying, we will follow the classification proposed by some authors,5 which concentrates on the basic traits of each system. The reason for including this brief overview here is that the role played by economic evaluation has to be different in each of these drag price regulation systems. 

From the theoretical viewpoint it is useful to separate price regulation and control systems from public reimbursement policies for pharmaceuticals. Strictly speaking, the pharmaceutical reimbursement policies adopted by most public funders as public spending containment policies (for example, the... 

In all EU countries except Germany and Denmark, some form of regulation or intervention in the individual prices of medicines is used as the principal cost containment policy, ranging from systems that fix the price of each product to profit control systems (as in the UK). Price regulation... 

The drug price intervention system in place in Spain since 1991 is based on the fixing of the price of each product by the health authorities, calculated according to its cost . This system allows for the possibility of excluding certain products or therapeutic groups from the price intervention system. It would be desirable to apply this exclusion principle to those products that are subject to a reasonable level of competition. Briefly, the main features of the Spanish system of price regulation are as follows ... 

EFFECTS OF REGULATION SYSTEMS ON CONSUMPTION, PRICE LEVELS AND SPENDING... 

In this section we analyse the effects of price regulation and control systems in pharmaceutical markets on levels of consumption, the level and evolution of prices and levels of expenditure. 

Very strict price control systems can give rise to higher prices at the time of introduction of a new product and the weakening of potential price reductions on expiry of a product s patent (the case for 88 per cent of products in the USA). These observations support the idea that it does not appear to be at all efficient to continue with the system of product-by-product price intervention currently in force in Spain. A regulation system that gives the company flexibility of pricing and excludes products that are subject to competition would be far more recommendable.1... 

We now conclude this work by showing how differences in regulation can account for such substantial differences in competition between one country and the other. We focus our attention on three aspects first, we discuss the differences in market entry regulations, then we go on to describe the differences in price regulations, and finally, we show the differences that exist in demand-side pohdes within the respective public health systems. 

For the moment, then, it is not appropriate to talk of a world pharmaceutical market as such, as there are fragmented domestic markets corresponding to each country s geographical boundaries, each characterized by its own system of price regulation and intervention. 

The differences found in the application of different RP systems cloud the differences between a public financing system and a price-cap regulation system. An RP becomes a price cap when the decision either to include a drug within public financing or to exclude it depends on its price. The use of RP in New Zealand and Italy is a good illustration of this situation. Italy introduced a very restrictive RP system in 1996. In this case, the maximum... 

Systems with freedom of prices These are the countries in which pharmaceutical companies are free to fix the price they see fit for their medicines. This is the case in the USA and the UK. However, freedom of prices does not mean the absence of any type of regulation. Thus, in the UK the Pharmaceutical Price Regulation Scheme6 establishes limits to the return that can be obtained by the companies. Indirectly, this limits the price of the drags. 

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