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Talkin’ About a Resolution: Issues in the Push for Greater Transparency of Medicine Prices

Author

Listed:
  • Brendan Shaw

    () (University of New South Wales
    Shawview Consulting)

  • Jorge Mestre-Ferrandiz

    (Independent Economics Consultant
    Universidad Carlos III)

Abstract

At the 2019 World Health Assembly, a significant new resolution was agreed by most countries to start publicly sharing information on the real net prices they pay for medicines in their health systems. The resolution also includes provisions for countries to support other transparency activities. However, an additional proposal to require pharmaceutical companies to submit information on their internal sales figures, internal research and development costs, clinical trial costs and marketing costs for each individual medicine as a condition of registration, and for governments to publish this, was not agreed. Pressure for coordinated international action to increase the transparency of medicine prices and costs has been building for some time, as confidential discounts and rebates on prices of medicines are common. We argue that while it is possible that stakeholders may benefit to some extent from greater transparency on prices, several important policy and economic issues need to be carefully considered. Such transparency, combined with widespread use of international reference pricing, might undermine companies’ differential pricing strategies, which are important in fostering wider access to medicines in low- and middle-income countries in particular, noting that access to medicines issues can occur in high-income countries as well. Moreover, there is a further risk that these types of proposals will lead to price fixing, less competition and higher prices than might otherwise be the case. The lack of any commitments in the resolution to greater transparency in payer decision-making processes also risks undermining the credibility of the resolution. The resolution and further transparency measures could have the potential to undermine patient access to medicines in the developing world, lead to higher prices in some markets and compromise long-term development of new medicines for future generations.

Suggested Citation

  • Brendan Shaw & Jorge Mestre-Ferrandiz, 2020. "Talkin’ About a Resolution: Issues in the Push for Greater Transparency of Medicine Prices," PharmacoEconomics, Springer, vol. 38(2), pages 125-134, February.
  • Handle: RePEc:spr:pharme:v:38:y:2020:i:2:d:10.1007_s40273-019-00877-3
    DOI: 10.1007/s40273-019-00877-3
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    References listed on IDEAS

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    3. Berdud, M. & Chalkidou, K. & Dean, E. & Ferraro, J. & Garrison, L. & Nemzoff, C. & Towse, A., 2019. "The Future of Global Health Procurement: Issues around Pricing Transparency," Research Papers 002150, Office of Health Economics.
    4. Mikel Berdud & Kalipso Chalkidou & Emma Dean & Jimena Ferraro & Lou Garrison & Cassandra Nemzoff & Adrian Towse, 2019. "The Future of Global Health Procurement: Issues around Pricing Transparency," Working Papers 507, Center for Global Development.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Jacoline Bouvy’s journal round-up for 2nd March 2020
      by Jacoline Bouvy in The Academic Health Economists' Blog on 2020-03-02 12:00:00

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