High-income countries ranked by drug spending - correct answer #1 US, Canada, Japan, France
Of high income countries, the US spends the greatest percentage of its medical spending on drugs T/F - correct answer FALSE, Korea...
High-income countries ranked by drug spending - correct answer #1 US, Canada,
Japan, France
Of high income countries, the US spends the greatest percentage of its medical spending on drugs T/F -
correct answer FALSE, Korea does, we are seventh
What has driven higher drug spending in the US healthcare market? - correct answer
Higher prices and greater usage of new more expensive drugs, but not an increase in prescriptions
(Germany, Japan, UK, Spain, and Canada all have a higher prescription quantity index)
What are the two ways that drugs obtain approval in Europe? - correct answer
European Medicine Agencies, Mutual Recognition Procedure (one company's FDA-like entity evaluates
it). Moral of the story: approval and negotiation is decentralized and occurs in each country
What are the 6 major pharmaceutical spending control strategies in Europe to reduce prices and restrict
the use of new expensive drugs? - correct answer Internal (within a country)
reference pricing, external (to other countries) reference pricing, cost effectiveness analysis (CEA), pay-
for-performance = risk sharing, physicians fixed budget per patient (capitation), parallel importing =
trade
What is the main difference between how drug prices are set in the US and how they are set in Europe?
- correct answer In the US the prices of drugs are set in the market, while in Europe
drug companies must negotiate with one entity (the government) which gives European countries
leverage as they can just say f*** your drug
Internal reference pricing - correct answer drugs are clustered by compound
(branded and generics), all drugs within a class (statins), or all drugs that treat the same condition
How does internal reference pricing work? - correct answer All private health
insurers pay the same price, the price of the least expensive drug in a cluster. If a company charges more
than the reference price, the patient pays the balance. Firms are hesitant to charge more than the
reference price (Lipitor's market share fell a lot when it did)
, Describe the 2011 German law put in place that requires the government to negotiate directly with
firms - correct answer The government chooses a competitor, and gives the new
drug a grade based on how big of an improvement it is over the compared standard. The bigger the
improvement the higher the premium they can charge. Once this has been determined, this is the price
that all health insurers in Germany will pay for the drug. A few firms have decided not to do business in
Germany due to external referencing in other countries (Germany is referenced by 19 other countries)
How does Canada determine what price it will pay for drugs? - correct answer They
base the price of their drug off the median price of the same drug or similar drug's prices in seven
specific countries (France, Italy, and Spain also use external reference pricing similar to this)
How does external pricing change negotiations? - correct answer It links markets
and tends to equalize prices, regardless of willingness or ability to pay for drugs (erodes price
discrimination)
ICER - correct answer Change in cost/Change in health
What is the body that assigns treatments with ICER values in the UK? - correct answer
The UK National Institute for Health and Care Excellence (NICE)
Benefits of cost effectiveness analysis pricing? - correct answer It allows countries
to receive the greatest health benefit on a limited budget by only promoting health services with small
ICERs, also creates credible negotiating power
Downsides of cost effectiveness analysis pricing? - correct answer Countries that do
this often see later launch dates, because launching a drug at a low price in one country can undermine
the price in others (because of external reference pricing)
Some examples of pay-for-performance pricing - correct answer UK: multiple
schlerosis drugs: patient outcomes will be monitored and drug companies will repay the government if
effectiveness targets are not met. Velcade has a similar deal.
Italy: Nexavar, Sutent: drug company receives full price only if the patients respond to these kidney
cancer drugs
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