Government Regulation of Drug Prices will Increase in Both Mature and Emerging Markets, Including Markets that Traditionally Play a Limited Role in Pharmaceutical Pricing

BURLINGTON, Mass., Dec. 8, 2010 /PRNewswire/ -- Decision Resources, one of the world's leading research and advisory firms for pharmaceutical and healthcare issues, finds that the pharmaceutical industry must prepare itself for an increasingly draconian drug pricing environment. While governments in most of the world's developed economies already regulate the prices of most prescription drugs, their control over prices will tighten in the future. According to Decision Resources' new Industry Report, Pharmaceutical Pricing and Reimbursement: Key Facts in Mature and Emerging Markets, even some of the countries that traditionally play a limited role in price setting are poised to introduce stricter controls on pharmaceutical pricing in the future.

The German and United Kingdom governments, which have generally allowed manufacturers relative freedom to set the prices of new drugs, plan to introduce value-based pricing. The United States will continue to allow free pricing of pharmaceuticals, but recently enacted healthcare reform legislation will increase Medicaid rebates and require manufacturers to offer a 50 percent discount on drugs prescribed in the Medicare coverage gap.

"Increased pricing control efforts are not limited to mature markets—governments in emerging markets will also intensify their efforts," said Neil Grubert, M.A., director of pricing and reimbursement research at Decision Resources. "Governments in emerging markets will pay close attention to how proposed prices in their countries compare with prices in other major markets and may demand that manufacturers offer them prices that are lower than those in advanced economies."

The report also finds that substantial budget deficits will force many governments around the world to intensify their efforts to curb spending on healthcare services. Although prescription drugs typically account for only ten to 20 percent of total healthcare expenditures, governments can be expected to focus their cost-containment strategies disproportionately on the pharmaceutical industry.

"Increasingly, payers will limit the most generous reimbursement terms to drugs that have clear evidence of superiority over established therapies. Drugs that lack proof of innovation will be subject to reimbursement restrictions, unless manufacturers offer prices that are in line with, or below, the prices of competing medicines that are already on the market," said Grubert.

About this Industry Report

Pharmaceutical Pricing and Reimbursement: Key Facts in Mature and Emerging Markets provides a concise overview of the essential elements of pharmaceutical pricing and reimbursement in 14 markets across the globe. For each of these countries, Decision Resources reviews key factors in market access, including health insurance, pharmaceutical pricing, reimbursement, cost containment, and health technology assessment. In addition, Decision Resources assesses the international outlook and implications for the pharmaceutical industry.

About Decision Resources

Decision Resources (www.decisionresources.com) is a world leader in market research publications, advisory services and consulting designed to help clients shape strategy, allocate resources and master their chosen markets. Decision Resources is a Decision Resources, Inc. company.

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SOURCE Decision Resources