PHP7 - External Versus Internal Reference Pricing: Strategies For Pharmaceutical Pricing In The Arab Gulf States

Abstract

To assess current strategies of external reference pricing (ERP), in comparison with various internal reference pricing (IRP) strategies, to determine the optimum strategy for pharmaceutical and health technology pricing and tender in the member states of the Cooperation Council for the Arab States of the Gulf (CCASG, formerly the Gulf Cooperation Council or GCC). The CCASG uses a joint tender process for medicines procurement and in 2013 began to impliment a policy of external reference pricing for setting of both procurement pricing of pharmaceuticals, and retail pricing within member nations. Price data on 80 select pharmaceuticals (patendted and unpatended, originator and generic) from national price lists within countries and prices from the joint tender program, will be run through 1 ERP model and 2 IRP models (Lowest Price in Therapeutic Class, and Average Price in Therapeutic Class). Final prices from each simulation will then be compared, and price differences will be calculated overall and by theraputic group. Simulation models will be constructed using Microsoft Excel and SPSS software packages. Research is currently underway. However work in this area does suggest that ERP is effective at acheiving lower tender prices (C. Leopold et al., 2012) but may have the uninted consequenses of causing international prices to converge and decrease affordability in low and middle income nations (Europe Economics, 2013). Research is Currently underway. The impact of pricing strategy can have significant consequences on affordability and access to treatment, given the increasing incidence of NCDs such as diabetes and various cancers among member nations, and the higher costs associated with patented and newly emerging treatments.