title: Impact of external price referencing on medicine prices - a price comparison among 14 European countries.
abstract: OBJECTIVE
  This study aims to examine the impact of external price referencing (EPR) on on-patent medicine prices, adjusting for other factors that may affect price levels such as sales volume, exchange rates, gross domestic product (GDP) per capita, total pharmaceutical expenditure (TPE), and size of the pharmaceutical industry.
  
  
  METHODS
  Price data of 14 on-patent products, in 14 European countries in 2007 and 2008 were obtained from the Pharmaceutical Price Information Service of the Austrian Health Institute. Based on the unit ex-factory prices in EURO, scaled ranks per country and per product were calculated. For the regression analysis the scaled ranks per country and product were weighted; each country had the same sum of weights but within a country the weights were proportional to its sales volume in the year (data obtained from IMS Health). Taking the scaled ranks, several statistical analyses were performed by using the program "R", including a multiple regression analysis (including variables such as GDP per capita and national industry size).
  
  
  RESULTS
  This study showed that on average EPR as a pricing policy leads to lower prices. However, the large variation in price levels among countries using EPR confirmed that the price level is not only driven by EPR. The unadjusted linear regression model confirms that applying EPR in a country is associated with a lower scaled weighted rank (p=0.002). This interaction persisted after inclusion of total pharmaceutical expenditure per capita and GDP per capita in the final model.
  
  
  CONCLUSIONS
  The study showed that for patented products, prices are in general lower in case the country applied EPR. Nevertheless substantial price differences among countries that apply EPR could be identified. Possible explanations could be found through a correlation between pharmaceutical industry and the scaled price ranks. In conclusion, we found that implementing external reference pricing could lead to lower prices.
authors.affiliation: WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Health Economics Department, Gesundheit Österreich GmbH / Austrian Health Institute, Vienna, Austria ; WHO Collaborating Centre for Pharmacoepidemiology and Pharmaceutical Policy, Division of Pharmacoepidemiology and Clinical Pharmacology, Utrecht Institute for Pharmaceutical Sciences, Utrecht, the Netherlands.
authors.forename: Christine
authors.initials: C
authors.lastname: Leopold
authors.forename: Aukje Katja
authors.initials: AK
authors.lastname: Mantel-Teeuwisse
authors.forename: Leonhard
authors.initials: L
authors.lastname: Seyfang
authors.forename: Sabine
authors.initials: S
authors.lastname: Vogler
authors.forename: Kees
authors.initials: K
authors.lastname: de Joncheere
authors.forename: Richard Ogilvie
authors.initials: RO
authors.lastname: Laing
authors.forename: Hubert
authors.initials: H
authors.lastname: Leufkens
keywords: Europe; external price referencing; medicines; prices; pricing policy