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Italy plans cancer drug price cut

Published on 07/07/10 at 08:00am

Italy will cut drug prices next year as it adopts a ‘pay for performance’ approach to drug pricing.

This will see the country cutting the price of several cancer drugs in 2011 after deciding that new studies showed them to be “less effective” than the manufacturers claimed.

Speaking to the Financial Times, head of the Italian Medicines Agency Professor Guido Rasi said significant price cuts were likely next year on the first lot of drugs used in the pay for performance programme, which began in 2007.

Prof Rasi said Italy had agreed to pay for more than 25 drugs since 2007 after negotiating with manufacturers to establish “registers of patients” to track the benefits of certain products, mainly cancer drugs and biological treatments for other diseases. 

The Italian government launched the programme as a way of gaining post-marketing efficacy information to assess cost-effectiveness and efficacy. Based on its findings, the government will now re-negotiate the price with drug companies.

Drugs will be priced according to two-year studies in a phase IV setting – if this finds them to be less efficacious than the manufacturer claimed then the government will cut prices.

Initially, 20-30% may be cut off listed prices, with an agreement to either increase or decrease the prices under the new system.

The first set of studies using this system has just been completed and will be published later this year; Prof Rasi told The Financial Times that medicine prices could be further reduced by 30-40 %, depending on the outcome of the efficacy studies. 

European price cuts for pharma

This is one of a number of ways that many Euro Zone countries are seeking to curb their spiraling budget deficit. In April, Greece made a dramatic 25% cut in its drug prices, causing diabetes specialist Novo Nordisk to temporarily pull some of its insulin products from the market.

Germany and Spain have also cut their prices, with more EU countries potentially ready to follow suit under the price referencing system.

In the UK Chancellor George Osborne has vowed not to cut the NHS budget this year, but the coalition government is committed to reducing NHS spend by £15-20 billion by 2014.

The McKinsey Report, created last year under Labour but only published last month under the coalition government, recommends slashing the NHS drug bill by between 10-5% to help find the required savings.

Drug prices are particularly vulnerable to cuts because they are less politically sensitive than cutting the labour costs that represent the largest proportion of healthcare spending.

Ben Adams

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