Table 1 Examples of Price Volume Agreements (PVAs)/budget impact schemes in Australia and Europe

Australia

PVAs have been in place for a number of years in Australia with price reductions if sales exclude pre-agreed volumes as well as rebate arrangements if costs exceed a subsidised cap or threshold

More than 50 such 'risk sharing' arrangements have been instigated to date

Belgium

A payback mechanism has existed since 2002, with the regulation written into the legislation

Originally, each pharmaceutical company paid an advanced percentage of their sales based on anticipated expenditure and the previous year's sales

Refunds were subsequently adjusted based on real expenditure, with pharmaceutical companies and insurers making up part (65%) of any realized excess

In 2006, the payback system for exceeding expenditure was replaced by a "Provision fund" system where a fund of € 100 mn was created through advances paid by pharmaceutical companies, with companies covering 75% of any over run

Additional refunds are requested during the financial year if €100 mn is insufficient

Estonia

PVAs are administered by the Ministry of Social Affairs. They are valid for a minimum of one year, and are obligatory for all pharmaceuticals in the reimbursement system (positive list) else products will be 100% co-pay

Pharmaceutical companies are required to state the rationale behind requested prices and volumes. If the Ministry still feels suggested prices are too high, products are not reimbursed and/or delisted

If agreed volumes are exceeded, negotiations take place between the Ministry of Social Affairs and the pharmaceutical company to determine the rationale and course of action. Agreed actions may include lowering reimbursed prices

No action is a possibility if excessive volumes could not have been foreseen by Ministry personnel and they now believe higher volumes should be funded

France

Two schemes exist in France. These include a payback mechanism for excessive sales by therapeutic class and are based on pharmaceutical company’s agreed turnover with annual financial adjustments. They also include regular price reviews based on the average daily costs, the average dose or the total number of units established at the time of reimbursement. Payback mechanisms per class are not the same each year

Previous payback schemes have included 65% covered by all companies marketing the drugs in the class and 35% by companies whose sales exceed agreed thresholds

New drugs with an ASMR I are exempt from such agreements for 36 months after launch, ASMR II for 24 months, ASMR III for 24 months at a level of 50% and ASMR IV at a level of 25% for 24 months.

Generic are totally exempt

Since 2008 orphan drugs are no longer automatically exempt with total sales of €815 mn in 2008 and growing rapidly, and are now subject to specific agreements with payback mechanisms for sales above agreed levels. There were two schemes in 2008; the first involved Naglazyme^® - for the treatment for mucopolysaccharide type VI disease - and the second involved Soliris^® - for the treatment of paroxysmal nocturnal haemoglobinuria

In 2004, total rebates amounted to €670 mn - some 3% of total pharmaceutical expenditure. Rebates were €260 mn in 2008.

Germany

Several rebate contracts and other mechanisms exist between the Sickness Funds and pharmaceutical companies to accelerate access and/or enhance market penetration of certain drugs where there are concerns with their value. This includes the so called target agreements

Current schemes include the insulin analogues, olanzapine, risperidone, clopidogrel, zolendronate (Aclasta^®), mycophenolic acid (Myfortic^®), everolimus(Certican^®), and cyclosporine (Sandimmun^®)

There is though typically secrecy between the Sickness Funds and the Pharmaceutical companies concerning crucial issues such as the actual scope, measurements and time frames, which can cause problems for the State Physician Associations

Hungary

A general payback scheme has been in operation since 2003 based on individual products as well as total pharmaceutical expenditure

Since January 2007, pricing criteria for pharmaceuticals is regulated by law with only limited exceptions

Under the scheme, companies must pay the Ministry 12% of their total reimbursed sales each year. If this is insufficient to cover the agreed budget overspend, companies must pay additional monies according to an agreed formula. For the first 9% of any overspend for a given class, the social health insurance and pharmaceutical companies share the cost of the additional overspend, with pharmaceutical companies paying a greater percentage. If the overspend exceeds 9% of the agreed budget, pharmaceutical companies cover all the additional costs themselves

Rebates are based on the individual company's share of reimbursed sales for the class. Alongside this, there is also a payback scheme for certain target pharmaceuticals. Depending on the individual contract, there are also yearly (or monthly) refunds based on reimbursed sales. There is a sliding scale, with 100% rebates for any over budget expenditure above agreed limits for the product

The payback in 2006 was 22.5 billion HUF (€90 mn - 5.69% of the budget)

Italy

Compensation schemes exist where there is excessive prescribing and costs of pharmaceuticals above agreed limits. Current limits for pharmaceutical expenditure in primary care are 14% of total NHS expenditure and 2.4% of total NHS expenditure in hospital care

Rebates amounted to €773 mn in 2005

Lithuania

PVA schemes are administered by the State Patient Fund under the Ministry of Health

From 2008, such schemes are obligatory for all new pharmaceuticals that will increase the Statutory Health Insurance drug budget compared with current treatment approaches for the target patient population. Once instigated, PVA scheme are currently valid for a minimum of three years

If agreed sales volume (expenditure) exceeds the agreed target, pharmaceutical companies must refund all the difference

Portugal

Since 1997, there have been 4 rebate agreements to limit reimbursed pharmaceutical expenditure signed between the Ministry of Health and the Portuguese Pharmaceutical Industry Association (first time the industry association has been involved)

The agreement, signed in February 2006, included both ambulatory care and in-patient hospital expenditure following the instigation of formal Pricing and Reimbursement for hospital products (prior to this just ambulatory care). Hospital products were included for the first time as many new expensive medicines are being launched in hospital

The agreement ran from 2006 to 2009. Under this agreement, no growth was permitted in ambulatory care pharmaceutical expenditure in 2006 vs. 2005, with only a nominal growth rate in 2007 vs.2006. The rate depended on the actual increase in GDP for that year. The growth rate for in-patient drugs was limited to 4% in 2006 vs. 2005. There are exceptions though for new in-patient drugs for cancer and HIV as well as potentially single agents in other disease areas depending on the circumstances. Before this agreement, pharmaceutical companies negotiated directly with hospitals

In case of any over budget, companies provide refunds equal to 69.6% of the increase up to maximum of € 35 mn in 2006 and € 45 mn in 2007. Part of this refund is diverted to a special fund supporting research