Spain is a well-developed pharmaceutical market due to the availability of numerous innovative therapies covered under the country’s universal health care policy. Budget pressures have resulted in a bigger role for regions in health financing, and impacted price negotiation and risk sharing between the Spanish authorities and companies. Unclear guidelines are confusing to manufacturers, including one that involves an internal review of price classifications for more than 14,500 off-patent medicines annually.
Spain’s Payer Stakeholders
The government is the primary payer stakeholder, and the National Health Service oversees new drug approvals via the National Agency of Medicines and Medical Devices. The Directorate General for Pharmacy and Health Care Products makes decisions about prices.
Unique to Spain is the role of the 17 regional Autonomous Communities, an administrative division that sits above the provincial level but below the national level. Each Autonomous Community determines its own budget and reimbursement guidelines. Supporting the costs of treatments approved at the national level is a major responsibility for the regional payer authorities. This is important, because, although a drug can be approved nationally, each Autonomous Community has the authority to decide if it will be distributed regionally.
The Interministerial Drug Pricing Commission (La Comisión Interministerial de Precios de los Medicamentos, or CIPM) is the entity that determines drug pricing at the national level. It is led by the Ministry of Health in collaboration with other departments, such as the Ministry of Finance. Although the CIPM is a state entity, the fact that the Autonomous Communities are ultimately responsible for facing the cost of medicines means that they have gained influence in the CIPM decision-making in recent years. While some years ago only three Autonomous Communities participated on a rotating basis, now all 17 of them participate.
Important Points to Keep in Mind
The Directorate General for Pharmacy and Health Care Products can take up to six months to act on a company’s dossier for product pricing and reimbursement. In the two-step evaluation process, the Directorate committee determines whether the medicine belongs on the “positive list” or the “negative list.”
Criteria for Positive List
- Manufacturer’s pricing proposal
- R&D costs
- Cost comparison with other products in Spain (cost per day)
- Price of the product in other EU countries
If a product ends up on the “negative list,” the manufacturer is free to set its own price…and kiss its reimbursement chances goodbye. On the other hand, for products on the “positive list,” the committee sets a price in each drug category. The process of making this internal determination is not transparent.
Is This Really “Positive?”
A simple listing on the “positive list” does not guarantee a favorable price point for a company’s product. In fact, nearly all new price determinations in Spain today (80 percent) are based on external reference pricing for innovative products.
While reference pricing is common across Europe, it is not always clear in Spain which country’s price is to be used as the reference price. The committee may decide based on the lowest available price in the EU.
If a similar comparator exists on the Spanish market at the time of a pricing decision, the authorities will use “internal reference pricing.” This means a competing product’s price inside Spain serves as the reference price.
Considerations For a Premium Price
- Prove added therapeutic value over the existing medicine
- Enter into a risk-sharing agreement with the committee
- Negotiate bulk purchases
Implications for Industry
Spain has experienced a rapid transformation in drug pricing and reimbursement over the past years. Even after a reimbursable price is achieved, you may still be subject to cost and demand containment measures before your product reaches the patient. The right preparation and strategies are essential at each of these points along the way.
Companies must also be prepared to engage decision makers at the national level and among Autonomous Community stakeholders. Each region can vary greatly by culture, population and budget.
A clear understanding at the community level is critical, and companies benefit from regional market access, stakeholder engagement and communications expertise to stay on top of all the new developments.
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