An update on the use of therapeutic reference pricing

An update on the use of therapeutic reference pricing

Tim Wilsdon
Life Sciences | Pharmaceuticals

Pfizer commissioned CRA International to review the impact of therapeutic reference pricing and the impact it had had on incentives to innovate. Therapeutic Reference Pricing (TRP) involves grouping products together for the purpose of reimbursement decisions; it does not require all products in a cluster to be based on the same active ingredient, but it does require that the products are judged to be similar. We concluded that TRP could harm the incentives to innovate. We found that “the mechanisms that make TRP most attractive as a means of achieving cost savings (in particular, the inclusion of generics with branded patented products and adding new patented products to existing clusters) are also the areas that are the most challenging for innovation. Therefore, if widely adopted, there is a considerable risk that this would significantly deter innovative activity, which evidence suggests by its very nature consists for the most part of multiple incremental steps.”

Over the last three years, TRP has remained one of the most contentious issues in the pricing and reimbursement of pharmaceutical products in Europe. Recently, Pfizer asked CRA to look back on this assessment and see how the use of TRP had evolved.

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