Simone Ghislandi

Effects of Reference Pricing in Pharmaceutical Markets

This work aims to provide a systematic and updated survey of original scientific studies on the effect of the introduction of reference pricing (RP) policies in Organisation for Economic Co-operation and Development (OECD) countries. We searched PubMed, EconLit and Web of Knowledge for articles on RP. We reviewed studies that met the inclusion criteria established in the search strategy. From a total of 468 references, we selected the 35 that met all of the inclusion criteria.Some common themes emerged in the literature. The first was that RP was generally associated with a decrease in the prices of the drugs subject to the policy. In particular, price drops seem to have been experienced in virtually every country that implemented a generic RP (GRP) policy. A GRP policy applies only to products with expired patents and generic competition, and clusters drugs according to chemical equivalence (same form and active compound). More significant price decreases were observed in the sub-markets in which drugs were already facing generic competition prior to RP. Price drops varied widely according to the amount of generic competition and industrial strategies: brand-named drugs originally priced above RP values decreased their prices to a greater extent. A second common theme was that both therapeutic RP (TRP) and GRP have been associated with significant and consistent savings in the first years of application. A third general result is that generic market shares significantly increased whenever the firms producing brand-named drugs did not adopt one of the following strategies: lowering prices to RP values; launching new dosages and/or formulations; or marketing substitute drugs still under patent protection. Finally, concerning TRP, although more evidence is needed, studies based on a large number of patient-level observations showed no association between the RP policy and health outcomes.

Diffusion of medical technology: The role of financing

In the last decade the pace of innovation in medical technology has accelerated: hence the need to better identify and understand the real forces behind the adoption and diffusion of medical technology innovations in clinical practice. Among these forces, financial incentives may be expected to play a major role. The purpose of this paper was to assess the influence of financing mechanisms for new medical devices and correlated procedures on their diffusion. The analysis was carried out in the Italian inpatient cardiovascular area and applied to drug eluting stents over the period 2003-07. The papers main hypothesis, that higher levels of reimbursement encourage technology diffusion, was rejected. So was the hypothesis that private hospitals may be more sensitive to tariff levels than public hospitals. A statistically significant difference was found only between hospitals that are funded on a Diagnosis-Related Groups (DRGs) basis and those that are not, with the former showing higher levels of technology diffusion. These results warn policy makers against excessive reliance on specific reimbursement fee changes as a way of steering provider behaviour.

Effects of the economic crisis on smoking prevalence and number of smokers in the USA

Objective Scanty and controversial information is available on the impact of macroeconomic fluctuations on smoking behaviour. No study has quantified the effects of fiscal crises on smoking prevalence. This study aimed to investigate the effects of the 2007–2008 economic crisis on smoking prevalence and number of smokers in the USA. Methods Using data from the repeated Behavioural Risk Factor Surveillance System (BRFSS) surveys in pre-crisis (2005–2007) and post-crisis (2009–2010) periods on a total of 1 981 607 US adults, we separated the expected (after allowance for the demographic growth of the US population, secular smoking prevalence trends and changes in sociodemographic characteristics) from the unexpected (assumed attributable to the economic crisis) changes in the number of smokers across different employment statuses. Results Joinpoint regression analysis revealed no significant changes in smoking prevalence trends over the period 2005–2010. The crisis resulted in an increase in the number of smokers in the US by 0.6 million. This is largely due to an unexpected decrease of 1.7 million smokers among employed and an increase of 2.4 million smokers among unemployed individuals, whose smoking prevalence also remains extremely high in the post-crisis period (32.6%). Conclusions The 2008 financial crisis had a weak effect on smoking prevalence. The pro-cyclical relationship (ie, the crisis results in a lower number of smokers) found among the employed is offset by the counter-cyclical relationship (ie, the crisis results in a higher number of smokers) found among unemployed individuals. Public health interventions should specifically target those in unemployment, particularly in hard times.

Regional tenders on biosimilars in Italy: An empirical analysis of awarded prices

OBJECTIVE The goal of the present study is to assess the awarded prices and thus the real level of competition the regional tenders referring to biosimilars in Italy achieved. METHODS We conducted a web-based analysis to collect detailed information on regional biosimilar tenders, up to December 2012. We identified 191 lots referring to the three off-patent biologicals (somatropin, epoetin and filgrastim) mentioned in the 24 tenders that took place during the study period (2008-2012). A multiple linear regression analysis was conducted to assess the relationship between prices awarded (dependent variable) and potentially explanatory variables (base quantities, bioagent, number of competitors, purchasing region and time). RESULTS While the price of somatropin stayed steady, those of filgrastim and epoetin dropped steeply. The mean number of competitors was lowest for somatropin and highest for filgrastim. One additional competitor was associated with about a 10% reduction in the price on average. The benefits of having many competitors did not fade with increasing numbers of companies. DISCUSSION Our analysis confirms the theory that worthwhile savings can be generated in tenders, once the bid is designed in such a way that competition can produce its effects, i.e. allowing more than one manufacturer to tender. However, most of the Italian regional tenders on off-patent bioagents do not seem to exploit potential competition to the full.

Adaptation to poverty in long-run panel data

We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 45,800 individuals living in Germany from 1992 to 2011 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any causes of poverty entry which are unambiguously associated with adaptation to poverty.

ROLL-YOUR-OWN CIGARETTES IN EUROPE: USE, WEIGHT AND IMPLICATIONS FOR FISCAL POLICIES

Excise duties on roll-your-own (RYO) tobacco, which are generally based on RYO cigarettes containing 1 g of tobacco, are lower than duties on factory-made (FM) cigarettes. This provides a price incentive for smokers to switch to RYO, the use of which is increasing across Europe. To effectively approximate duties on the two types of products, accurate data on the weight of RYO cigarettes are required. We provide updated information on RYO use and RYO cigarette weight across Europe. From a representative face-to-face survey conducted in 2010 in 18 European countries (Albania, Austria, Bulgaria, Czech Republic, Croatia, England, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Poland, Portugal, Romania, Spain and Sweden), we considered data from 5158 current smokers aged 15 years or above, with available information on daily consumption of FM and RYO cigarettes separately. In Europe, 10.4% of current smokers (12.9% of men and 7.5% of women) were ‘predominant’ RYO users (i.e. >50% of cigarettes smoked). This proportion was highest in England (27.3%), France (16.5%) and Finland (13.6%). The median weight of one RYO cigarette is 0.75 g (based on 192 smokers consuming exclusively RYO cigarettes). The proportion of RYO smokers is substantial in several European countries. Our finding on the weight of RYO cigarettes is consistent with the scientific literature and industry documents showing that the weight of RYO cigarettes is substantially lower than that of FM ones. Basing excise duties on RYO on an average cigarette weight of 0.75 g rather than 1 g would help increase the excise levels to those on FM cigarettes.

Is EQ-5D a valid measure of HRQoL in patients with movement disorders?

We assessed the descriptive part of the EQ-5D system in rehabilitation patients with validity severe moving disorders and compared it with the FIM and the SF-36 Health Survey in a sample of 60 patients. We analyzed the EQ-5D convergent validity and the correlations between EQ-5D scores and a clinical variables. The internal validity of the EQ-5D instrument proved good. Moreover, the EQ-5D discriminated symptom severity as scored by the FIM and the SF-36 correspondent subscales. We analyzed the sensitivity of the EQ-5D only with respect to the ability of patients to move with or without a wheelchair. Most patients considered “moving a wheelchair” as a good way of “getting about.” This investigation can be considered a pilot study on the performance of the EQ-5D in a group of pathologies involving various degrees of movement disorders. The findings show possible problems of misinterpretation in the levels of the mobility dimension.

Competition and the Reference Pricing Scheme for Pharmaceuticals

By introducing n (>1) firms with infinite cross-price elasticity (i.e. generic drugs), we explore the effects of competition on the optimal pricing strategies under a Reference Pricing Scheme (RPS). A two-stage model repeated infinite number of times is presented. When stage 1 is competitive, the equilibrium in pure strategies exists and is efficient only if the reference price (R) does not depend on the price of the branded product. When generics collude, the way R is designed is crucial for both the stability of the cartel among generics and the collusive prices in equilibrium. An optimally designed RPS must set R as a function only of the infinitely elastic side of the market and should provide the right incentives for competition.

Poverty Profiles and Well-Being: Panel Evidence from Germany

We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 49,000 individuals living in Germany from 1992 to 2012 to uncover three empirical relationships. First, life satisfaction falls with both the incidence and intensity of contemporaneous poverty. Second, poverty scars: those who have been poor in the past report lower life satisfaction today, even when out of poverty. Last, the order of poverty spells matters: for a given number of years in poverty, satisfaction is lower when the years are linked together. As such, poverty persistence reduces well-being. These effects differ by population subgroups.

The Economic Crisis and Acute Myocardial Infarction: New Evidence Using Hospital-Level Data

Objective This research sought to assess whether and to what extent the ongoing economic crisis in Italy impacted hospitalizations, in-hospital mortality and expenditures associated with acute myocardial infarction (AMI). Methods The data were obtained from the hospital discharge database of the Italian Health Ministry and aggregated at the hospital level. Each hospital (n = 549) was observed for 4 years and was geographically located within a “Sistema Locale del Lavoro” (SLL, i.e., clusters of neighboring towns with a common economic structure). For each SLL, the intensity of the crisis was determined, defined as the 2012–2008 increase in the area-specific unemployment rate. A difference-in-differences (DiD) approach was employed to compare the increases in AMI-related outcomes across different quintiles of crisis intensity. Results Hospitals located in areas with the highest intensity of crisis (in the fifth quintile) had an increase of approximately 30 AMI cases annually (approximately 13%) compared with hospitals in area with lower crisis intensities (p<0.001). A significant increase in total hospital days was observed (13%, p<0.001) in addition to in-hospital mortality (17%, p<0.001). As a consequence, an increase of around €350.000 was incurred in annual hospital expenditures for AMI (approximately 36%, p<0.001). Conclusions More attention should be given to the increase in health needs associated with the financial crisis. Policies aimed to contrast unemployment in the community by keeping and reintegrating workers in jobs could also have positive impacts on adverse health outcomes, especially in areas of high crisis intensity.