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Table 1 Simulation scenarios—assumptions of changes in the EPR methodology

From: Impact of changes in the methodology of external price referencing on medicine prices: discrete-event simulation

Scenario name

Simulated parameter

Assumed change in the design of the EPR methodology

Base case

For all included countries, the EPR methodology as in place in 2015 was considered. Included parameters: reference countries, the calculation method to determine the EPR benchmark price, the consideration of statutory discounts (i.e. outlined in legislation) and of commercially negotiated discounts, weighting of price data in other countries by volume data and/or by purchasing power parities, and the frequency of revisions of prices based on the review of the prices in the reference countries

Strategic basket

Reference countries

It was assumed that all included countries would have four reference countries: Germany, Italy, Finland and Portugal (this assumed country basket represented a mix of high-, middle- and low-priced countries)

Large basket

Reference countries

It was assumed that all included countries would have a basket of 30 reference countries (i.e. reference countries would be all other countries out of the group of the 28 EU Member States and the three EFTA countries Norway, Iceland and Switzerland)

Lowest price

Calculation method

It was assumed that all included countries would reference to the reference country with the lowest price

Statutory discounts

Discounts

It was assumed that all included countries would consider the statutory manufacturer discounts in Germany, Greece and Ireland (the amount of statutory discounts that pharmaceutical companies have to grant the public payers are outlined and published in legislation in Germany and Greece and in a framework agreement in Ireland)

Statutory and commercial discounts

Discounts

It was assumed that all included countries would consider the statutory manufacturer discounts in Germany, Greece and Ireland and an additional assumed 20% (confidential) discount on the referenced prices in five large economies (Germany, France, Italy, the Netherlands, Spain and UK)

PPP

Income adjustment

It was assumed that all included countries would weight the price data of the reference countries by Purchasing Power Parities (PPP)

Bi-annual revisions

Revision frequency

It was assumed that all included countries would review the price data of the reference countries every 6 months and would subsequently adjust appropriately the medicine prices in the own country