Background: External reference pricing (ERP) is used to set pharmaceutical prices
to improve affordability, but its application may have negative consequences on patient
access—thus, equity—across countries and on global innovation. With the United States
contemplating ERP, negative effects could be magnified. Our aim: identify and quantify
some major consequences of ERP. Research design, methods: Besides relying on databases
and ERP modelling, we developed a heart failure case study. 4-step approach: 1) review
ERP policies; 2) establish worldwide “price corridor”; 3) quantify patient access
and health outcomes impact by ERP; 4) estimate ERP impact on innovation.Results: Our
ERP referencing analysis highlights its perverse effects especially in lower-income
countries. As counterstrategies to protect their revenues, manufacturers often implement
tight list price corridors or launch avoidance/delays. Consequences include suboptimal
patient access—hence, worse outcomes—illustrated by our case study: 500,000 + QALYs
health loss. Additionally, the ensuing revenue reduction would likely cause innovation
loss by one additional medicine that would have benefitted future patients.Conclusion:
This research provides key insights on potential unintentional consequences of medicine
price setting by ERP worldwide and under a new proposal for the United States. Our
results can inform stakeholder discussions to improve patient access to innovative
medicines globally.
