Pricing and reimbursement in Europe: will containment win over cost-effecitveness

As European governments struggle to provide patients with adequate medical cover without plunging into debt, the focus on rising drug costs has intensified. To maximize profit in a market where payers, ie, the National Health Service, are increasingly focused on containing costs, pharmaceutical developers should look firstly to better differentiate their drugs against competitors and, secondly, use pharmacoeconomic and budget-impact analysis to justify formulary access and a high reimbursement level, according to a new report by independent market analyst Datamonitor.

Across Europe, health care is becoming increasingly expensive. Even though drugs make up a relatively small percentage of overall health care spending, they are a highly visible target, the report points out.

As a result, rising drug costs are being increasingly singled out for budgetary cutbacks by health care providers. Governments are the leading health care provider and, as a result, the monopsonistic nature of the European health care market means that they are powerful drug purchasers with significant leverage.