Pharmaceutical pricing during a recession
In the first webinar of our Expert Insights series, a panel of payers and industry representatives discussed the impact of the inevitable future global economic recession on pharmaceutical pricing, reimbursement and market access.
A deep global economic recession is expected
As the world continues its battle against the COVID-19 pandemic, there has been worldwide praise for healthcare workers for their bravery and commitment to treating patients with COVID-19. It would be unimaginable in the current scenario for governments to reduce investment in hospitals or the number of healthcare workers. This suggests that governments would have to look elsewhere to recoup costs, particularly by lowering drug prices and medical devices.
Twenty-two countries reported a lowering of drug and medical device prices during the previous recession,1 and it is expected that the number will be much higher this time around. With a deep economic recession expected in the coming months, how do we achieve optimal pharmaceutical pricing and market access for a new pharmaceutical product in these trying times?
The impact of COVID-19 on pharmaceutical pricing
The COVID-19 pandemic is likely to affect pharmaceutical pricing. All three webinar panellists (Jaime Espin, Anusha Patel and Bertrand Tardivel) expect the COVID-19-induced recession to lead to lower prices for new drug entrants, and stricter price controls and/or mandatory reductions in pharmaceutical pricing.
The panellists also advise caution for new entrants into market spaces where there are already existing cost-effective treatments.
“If there are new entrants into a market space where there is an existing treatment, they must show a clear additional therapeutic benefit to warrant a different price. If this additional benefit does not exist, it is likely that they will be priced similarly to the current options to provide greater variety in the market and to keep the assessment simple and more time-efficient,” Espin advised the panel.
The impact of COVID-19 on market access activities
Some market access activities have already been affected by the COVID-19 pandemic. For example, disruptions in HTA assessment activities, which are likely to continue for the foreseeable future.
Other activities that have been or are expected to be affected include:
- EMA approvals and reimbursement decisions
- Longer-term cost-effectiveness and budget impact models
- Outcome- and indication-based agreements are expected to be more commonplace, and the capping of individual drug budgets
How can the industry adapt to mitigate these impacts?
The continuation of market access is essential to protecting the pharmaceutical economy and to provide the funds necessary to create and produce the next cycle of innovative medicines. When discussing strategies to mitigate the impact of COVID-19 on pharmaceutical pricing and market access activities, some of the key takeaways include:
- Adapting to working on a virtual platform
- Having patience
- Prioritising assets
- Focusing on reasonable pharmaceutical pricing
The COVID-19 pandemic is likely to cause a deep global economic recession, which will have a big impact on pharmaceutical pricing in the short and long term. For more insights from the webinar discussion, and more in-depth recommendations on how to price a pharmaceutical product during a global economic recession, download our white paper: How to Price a Pharmaceutical Product during a Global Economic Recession.
 Thomson, S., Figueras, J., Evetovits, T., Jowett, M., Mladovsky, P., Maresso, A., Cylus, J., Karanikolos, M. and Kluge, M., (2015). Economic crisis, health systems and health in Europe: impact and implications for policy [online]. Berkshire: Open University Press. [Viewed 13 October 2020]. Available from: https://www.euro.who.int/__data/assets/pdf_file/0008/289610/Economic-Crisis-Health-Systems-Health-Europe-Impact-implications-policy.pdf?ua=1