Comment on the implications of external price referencing of pharmaceuticals in Middle East countries

Abstract

External Price Referencing (EPR) is frequently used by countries to control pharmaceutical prices but studies to substantiate its use in the Middle East (ME) is lacking. The paper by Kalo et al set-out to fill this lacuna through three objectives: i) to document the use of EPR in 7 ME countries, ii) to assess whether pharmaceutical EPR resulted in a narrow price corridor for patented pharmaceuticals, and iii) to analyse factors influencing pharmaceutical prices. This comment discusses why the paper fell short of achieving these objectives and over-stated the results. Despite a thought-provoking contribution, objective 1 presented few new insights on EPR mechanisms, objective 2 deployed an inappropriate research design, and the policy implications of objective 3 are voided given the choice of explanatory variables.

Keywords:

• Cross-national price comparison
• external reference pricing
• Middle East countries
• pharmaceutical pricing
• price corridor for pharmaceuticals

Notes

1. GDP and population data were used from the World Bank’s Development Indicators, and the other two variables were dummy coded for all seven ME countries included in Kalo et al.