Pharmaceutical Pricing and Reimbursement in Spain, 2008

In recent years, Spain has rapidly increased its spending on healthcare, and pharmaceuticals account for a larger share of healthcare expenditures in Spain than in most other European countries. However, Spanish drug prices are among the lowest in Europe and have been eroded by repeated mandatory price cuts. In addition, the government’s strategy of promoting generics, imposing reference prices on off-patent drugs, and limiting price premiums to the most innovative drugs will present significant challenges to the pharmaceutical industry.

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- As a result of its generally low pharmaceutical prices, Spain is a major source of parallel exports to other European countries. How has the Spanish government responded to this trade? What measures have drug manufacturers taken to combat parallel exports?
- Spanish drug prices are among the lowest in Europe. How do prices in Spain compare with U.S. and European average prices? Which drugs are more expensive in Spain than in the United States?
- Reference pricing has become the mainstay of the Spanish government’s pharmaceutical cost-containment strategy. How extensive is the Spanish reference pricing system? What changes has the government introduced in recent months? How do pharmacists and physicians view reference pricing? How can manufacturers delay this cost control?
- The government is dissatisfied with the persistent underdevelopment of the Spanish generics market. What measures have been introduced to stimulate greater use of generics? How do physicians, pharmacists, and patients regard generic drugs?
- Health technology assessment (HTA) is not well established in Spain. What steps have some autonomous communities taken to promote HTA? How will HTA play an important role in the future pricing and reimbursement of new medicines in Spain?

Scope

- Organization and funding of the healthcare system: spending on healthcare as a percentage of gross domestic product (GDP); pharmaceuticals’ share of healthcare expenditures; relative importance of public and private health insurance; decentralization of responsibility for healthcare.
- Drug prices in Spain: comparison of launch prices in Spain and other European markets; detailed analysis of Spanish prices of 155 leading biologics and small-molecule as a percentage of U.S. and average European prices.
- Price setting and reimbursement: procedure for setting drug prices; reimbursement decision making process.
- Cost-containment measures: negative lists; reference pricing; price cuts; sales tax; prescribing controls; patient co payments; prior authorization; measures to promote greater use of generics.
- Hospital reimbursement: pricing; cost-containment; hospital formularies.
- Health technology assessment: regional initiatives; new national committee to assess the therapeutic utility and cost-effectiveness of new drugs as the basis for pricing and reimbursement decisions for new drugs.
- Outlook for the Spanish pharmaceutical market: differences in sales growth rates according to drug price; recent slowdown in pharmaceutical expenditures; increasing emphasis on pharmaceutical innovation; decentralization of healthcare policy.
- National Pricing and Reimbursement Series: This report is part of the National Pricing and Reimbursement Series: Around the world, the market success of branded drugs is influenced by changes in healthcare systems and the growing role of cost-conscious payers. The National Pricing and Reimbursement Series analyzes the evolving pricing and reimbursement environment in seven major markets (the United States, France, Germany, Italy, Spain, the United Kingdom, and Japan) and assesses the impact of key changes on pharmaceutical and biotechnology companies. SHOW LESS READ MORE >

Executive Summary 5
Strategic Considerations 5
Stakeholder Implications 5
Overview 6

Organization and Funding of the Spanish Healthcare System 6
Pharmaceutical Prices in Spain 7
Pricing and Reimbursement of Outpatient Medicines 15
Price Setting 15
Price Markups 17
Reimbursement of Outpatient Medicines 18

Cost-Containment Measures 19
Negative Lists 19
Reference Pricing 19
Introduction of Reference Pricing 19
Suspension and Overhaul of the Reference Pricing System 20
Potential Five-Year Exemption 21
Further Reference Pricing Modifi cations 22
Industry Response 22
Price Cuts 23
Sales Tax 23
Prescribing Controls 23
Patient Copayments 24
Prior Authorization 24
Promoting Greater Use of Generics 25
Government Measures to Stimulate Greater Use of Generics 26
Widespread Acceptance of Generics 26
Exclusion from Substitution 27

Reimbursement of Hospital Medicines 27
Cost-Containment 27
Hospital Formularies 28
Health Technology Assessment 29
Outlook for the Spanish Pharmaceutical Market 30

List of Tables
1 Multilateral Comparison of Average Ex-Manufacturer Prices of Branded Medicines in Select Markets as a Percentage of U K Average Ex-Manufacturer Prices, 1992-2004 7
2 Average Prices of Innovative Medicines in 15 European Countries as a Percentage of
Average Spanish Prices 9
3 Spanish Prices of Best-Selling Drugs as a Percentage of U S and European Average Prices, 2006 10
4 Prices of Leading Biologics in the Major Markets as a Percentage of U S Prices, 2006 16
5 Select Drugs Excluded From Generics Substitution 28
6 Key Trends in the Spanish Prescription Drug Market: Implications for the Pharmaceutical Industry 30

List of Figures
1 Average Prices of Leading Biologics, Small-Molecule Drugs, and Pharmaceuticals Overall
in the Major Markets as a Percentage of U S Prices, 2006 15
2 February 2007 Pricing of Drugs Subjected to Reference Pricing Effective March 1, 2007 21
3 Contribution of Changes in Prescribing Volume, Drug Price, and Product Mix to Overall
Pharmaceutical Sales Trends, 2001-2007 24
4 Spanish Pharmaceutical Market Trends by Product Price Range, 2001-2006 31

Sidebars
Combating Parallel Trade—A Contentious Issue in Spain 8
The Spanish Market for Multisource Pharmaceuticals: A Complex Picture 25
Court Ruling Strengthens Intellectual Property Protection 27

- Administración General del Estado (State General Administration)
- Agencia Española de Medicamentos y Productos Sanitarios (AEMPS; Spanish Agency for Medicines and Medical Devices)
- Asociación Española de fabricantes de Sustancias y Especialidades farmacéuticas Genéricas (AESEG; Spanish Association of Manufacturers of Generic Pharmaceutical Substances and Products)
- Centro Andaluz de Documentación e Información de Medicamentos (CADIME; Andalusian Center for Pharmaceutical Documentation and Information)
- Centro Vasco de Información de Medicamentos (CEVIME; Basque Center for Medicines Information)
- Comisión Interministerial de Precios de los Medicamentos (CIPM; Interdepartmental Committee on Pharmaceutical Prices)
- Comisión Nacional para el Uso Racional del Medicamento (CNURM; National Commission for the Rational Use of Medicines)
- Comité de Evaluación de Nuevos Medicamentos (CANM; Committee for the Evaluation of New Medicines)
- Dirección General de Farmacia y Productos Sanitarios (DGFPS; General Directorate of Pharmacy and Health Products)
- European Association of Euro-Pharmaceutical Companies (EAEPC)
- European Association of Hospital Pharmacists (EAHP)
- European Commission
- Farmaindustria
- Federación Empresarial de Farmacéuticos Españoles (FEFE; Business Federation of Spanish Pharmacists)
- IMS Health
- Instituto Nacional de Gestión Sanitaria (National Institute for Healthcare Management)
- Instituto Nacional de la Salud (INSALUD; National Health Institute)
- Janssen-Cilag
- Eli Lilly
- Kern Pharma
- Laboratorios Alter
- Laboratorios Cinfa
- Merck Sharp & Dohme
- Pfizer
- Ratiopharm
- Sanofi -Aventis
- Sigma Dos
- Subdirección General de Economía del Medicamento y Productos Sanitarios (SGEMPS; General Subdirectorate of Pharmaceutical and Health Product Economics)