UK OHE Views P-Is, Economic Evaluation

The UK pharmaceutical industry-backed Office of Health Economics hasrecently published two new studies. The first, Trade and Price Differentials for Pharmaceuticals: Policy Options, is written by Patricia Danzon, Professor of Health Care Systems and Insurance at the Wharton School, USA, and a member of the working party set up by European Industry Commissioner Martin Bangemann to examine solutions to the problem of parallel trade in medicines.

She says that if parallel importing pushes companies to move to uniform pricing across markets, the adverse impact could be reduced through rebates paid directly to government payors in countries with low willingness or ability to pay. Also, international price comparisons should be designed to achieve price differentials that are roughly consistent with appropriate contributions to the global joint costs of R&D. Her main conclusions are that:

- if drug product costs are measured in discounted present value at launch, R&D accounts for roughly 30% of the total;