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Health-economic benchmarking of hospital drugs

Photo: dkbilleder
Commissioned by the Danish Ministry of Health and Prevention, COWI made a benchmark analysis of various drug pricing systems and of price level variations in six selected countries.

Acting on increases in hospital drug costs, the Danish Ministry of Health and Prevention ordered an analysis of pricing systems, price mechanisms and prices of selected pharmaceuticals in Denmark, Norway, UK, Sweden, Germany and the Netherlands.

COWI analysed and compared prices and costs of selected groups of pharmaceuticals, which were either characterised by rapid growth in costs or by a certain expenditure level.

Price variations in the selected countries

COWI analysed the impact on hospital drug prices of legislation/regulation, purchasing systems and technical control mechanisms. Price differentials across 39 selected pharmaceuticals allowed for comparison of international data with Danish data.

The analysis found that hospital drugs are cheapest in Norway and in the UK.

Norway and the UK are the only countries without a free hospital drug pricing system. Norway has a system of ceiling pricing, and the UK uses an indirect pricing system based on profit caps.

It was found that list prices were significantly lower in Norway and the UK than in Denmark.

Qualitative and quantitative methods

Data from the selected countries was collected during country visits. During visits, key staff working with hospital drugs were interviewed and asked to fill in questionnaires.

COWI also approached representatives of public health authorities, national drug agencies and joint purchasing organisations.

In Denmark, meetings were held with representatives of Amgros (a county-owned company which purchases pharmaceuticals for all public hospitals in Denmark).

Further, COWI liaised closely with the ministry and the ministerial task group requiring the analysis for budget negotiations on the economy of regions and municipalities.

Findings

The analysis found that hospital drug prices are lowest in Norway and in the UK both in terms of official list prices and actual, traded prices.

Considering, however, the discounts obtained, Danish prices are in line with Norwegian prices and nearly equal to UK prices. 

In terms of actual, agreed prices, the analysis of available data found that hospital drug prices in Denmark are slightly lower than in Sweden and Germany.

This indicates that the Norwegian system of ceiling pricing and the UK profit cap scheme contribute towards lowering the starting point for discount negotiations.

LAST UPDATED: 04.11.2017