What is the impact and will drug prices rise or fall?
Medicine prices in Greece are set by international reference pricing (IRP). IRP is the process of using the prices in other countries to set the price of the drug. Greece has used IRP for many years to determine the price of new products entering the market. Historically, the price has been calculated based on an average basket of the lowest three ex-factory prices from the 28 EU member states.
However, the Greek government has put forward proposals to update the IRP methodology and basket of countries. These changes include:
- Prices will only be considered within the 19 eurozone countries
- A price must be available in a minimum of 3 eurozone country
- The Greek ex-factory price is an average of the 2 lowest different eurozone countries price
- International reference pricing will occur once a year.
What are the benefits of this new approach?
Firstly, by using eurozone countries, it removes exchange rate fluctuations. The new approach also means that ex-factory prices may rise (although the net prices will remain the same) or fall, which is accepted by the Greek authorities. Selecting the lowest 2 different prices may be beneficial if there are multiple markets with the same price. For existing products, these will be subject to a 10% increase or decrease a year until they are aligned with the new IRP methodology.
Overall, the changes to the IRP rules are broadly positive and should provide manufacturers more certainty and consistency in setting the ex-manufacturer pharmaceutical price in Greece for new molecular entities.