Drug pricing and transparency in Europe and the United States: what is it and how does it work?

ABSTRACT

Introduction

As drug prices are viewed to be opaque, there have been increasing societal demands on policy and decision makers to implement initiatives that promote drug price transparency.

Areas covered

This Perspective discusses what drug price transparency is and how it works in theory and in practice.

Expert opinion

Transparency on drug prices may target payers, patients and health care professionals; and may relate to prices at each stage in a drug’s distribution system. Although proponents claim that drug price transparency will reduce prices and increase patient access, others expect the opposite effect. Nevertheless, a number of international organizations, countries and consumer groups have taken steps to enhance drug price transparency. This has occurred despite a lack of theoretical clarity and of evidence about its likely impact. Policy and decision makers need to consider how payers and pharmaceutical companies are likely to react to drug price transparency and need to be aware that transparency may produce different effects depending on the country to which it is applied. Even though we believe that full drug price transparency is elusive, various incremental measures can be taken to move toward it.

KEYWORDS:

• Access
• drug prices
• impact
• market dynamics
• policy
• transparency

Article highlights

• Demands for drug price transparency have increased over time and various initiatives have been implemented to support it.

• Stakeholders may have a different understanding of what drug price transparency means, but it generally relates to partial or full disclosure on net prices of drugs and their components.

• Measures to promote drug price transparency can serve different objectives, can involve different stakeholders, and may differ in the level of information disclosed.

• From a theoretical and evidence perspective, there is uncertainty about how drug price transparency may affect market dynamics.

• Policy and decision makers also need to consider the implications of drug price transparency for the operation of managed entry agreements and international reference pricing.

Declaration of interest

The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

Reviewer disclosures

Peer reviewers on this manuscript have no relevant financial or other relationships to disclose.

Additional information

Funding

This paper was not funded.