PDG62 THE CONTINUUM OF INTERNATIONAL REFERENCE PRICING USE IN LATIN AMERICA: A QUALITATIVE ANALYSIS

Abstract

As new governments embark on ambitious healthcare reform in Latin America, international reference pricing (IRP) continues to be explored as a policy tool to control pharmaceutical prices. This analysis sought to characterize the degree of formality of IRP application in key Latin America countries, as well as the specific settings in which it is used, to understand whether core archetypes are emerging. Both peer-reviewed and grey literature on use of IRP in Latin America were consulted, alongside a qualitative review of relevant legislation in the second quarter of 2019. This was complemented by semi-structured, in-depth interviews with regulators, payers, and industry representatives in each country. Amongst countries identified as applying IRP formally, Brazil and Ecuador use it for price setting of new drugs and those deemed strategic, respectively, in the private sector, whilst Colombia applies it to cap prices of existing drugs with the highest budget impact and associated with a so-called declaration of public interest. Brazil is unique in applying IRP to new biosimilars. Among countries found to adopt IRP informally, in Mexico, the mechanism operates via an opaque voluntary agreement that sets list prices of patented drugs in the private sector, while the Chilean public procurement agency CENABAST has started resorting to it as part of negotiations mainly for high-cost, single-source pharmaceuticals. Albeit case-dependent, Brazil also employs IRP informally to facilitate negotiations for single-source drugs, ineligible for public sector tendering. Latin American governments are increasingly relying on IRP as a cost-containment measure, even if not enshrined formally in legislation. Countries make very different uses of IRP, reflecting the varied levels of out-of-pocket expenditure, diversity of healthcare systems and policy objectives across the region. Additional research is required to understand the impact of these measures on pharmaceutical expenditure, as well as patient access to new therapies.