Ten Best Practices to Ensure Transparency in Medicine Pricing: A Pathway to Affordable Healthcare
By Baha'a Al Armouti
Jun 17, 2023
Pricing transparency of medicines is an increasingly pressing issue globally. It has significant implications for healthcare affordability, equity, and access. Here are some best practices procedures that could be employed to ensure pricing transparency:
Public Reporting of Drug Prices: Countries should mandate the public reporting of prices paid by various purchasers for each medicine. This includes government programs, private insurers, and patients. Pharmaceutical companies should also disclose the prices at which they sell medicines to wholesalers and pharmacies.
Transparency in Pricing Process: There should be clarity on how drug prices are set, including the cost of research and development, manufacturing, marketing, and distribution. Pharmaceutical companies should also disclose any public subsidies or tax credits they receive.
Pharmacoeconomic Evaluation: This involves assessing the cost-effectiveness of medicines. Countries should require manufacturers to provide evidence of a drug's additional benefit compared to existing treatments as part of the price setting process.
Public Reporting of Research and Development Costs: Pharmaceutical companies should disclose the costs of researching and developing new drugs, including costs for clinical trials.
Regulate Pharmaceutical Advertising: Misleading advertising can lead to the overuse of expensive medicines. Regulation can help ensure that promotional activities don't influence drug prices unfairly.
External Reference Pricing (ERP): ERP refers to the practice of using the price of a medicine in one or several countries to derive a benchmark or reference price for the purposes of setting or negotiating the price of the product in a given country.
Internal Reference Pricing (IRP): This refers to the comparison of prices of different brands of the same medicine within a country, allowing authorities to set a benchmark price.
Health Technology Assessment (HTA): HTA is a multidisciplinary process that summarizes information about the medical, social, economic and ethical issues related to the use of a health technology in a systematic, transparent, unbiased, robust manner, to inform policy decision making.
Collect and Share Information: Governments should collect and share data on pharmaceutical sales, prices, and utilization, and make this data publicly available.
Strengthen Generic and Biosimilar Markets: Policies should encourage competition from generic and biosimilar medicines, which can help to lower prices.
Implementing these procedures can make the pricing process more transparent, fair, and in the best interests of public health. However, it requires collective efforts from governments, pharmaceutical companies, healthcare providers, insurers, and patients.
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