PHP8 ATC Classification and Its Role in Pricing Policies

Abstract

Originally intended for drug utilization studies, ATC classification is now increasingly used worldwide as a tool for controlling prices of pharmaceutical products. This research looked at how select markets within Europe and Latin America have incorporated ATC classification into their pricing policies to drive down prices of similar drugs. The research was conducted through in-depth secondary analysis and primary research. National and regional level payers from 10 countries within Europe and Latin America were interviewed using structured discussion guides to explore the role of ATC classification in their respective countries. ATC classification is used in varying degrees to inform the pricing and reimbursement decision-making within the 10 countries that were included in the study (EU5, Sweden, Denmark, Mexico, Brazil and Argentina). In countries such as Italy and Spain, ATC 3rd and 4th level classification is an important determinant of reimbursement status of drugs for many chronic diseases. In Germany and Denmark, price comparators for a new drug are sometimes chosen from within the 4th level ATC classification. There are exceptions to this when it comes to biologics, innovative products and orphan drugs. In Latin America, ATC classification plays a less influential role in pricing and reimbursement and is mostly used in organisation of drug lists on the national formulary. ATC classification plays a significant role in many countries in Europe as a tool for supporting pricing and reimbursement decisions. Often overlooked, ATC classification is an important consideration for pharmaceutical companies at launch when determining the price of drugs.