Determinants of price negotiations for new drugs. The experience of the Italian Medicines Agency.

The aim of this paper is to investigate the determinants of the difference between the price proposal submitted by the industry and the final negotiated price. We used Italy as a case-study. Data were gathered through the information system used by Italian Medicines Agency. The time-frame for this analysis is 2013-2017. Factors influencing the delta price were analyzed through a regression analysis. 44 orphan drugs and 89 new other molecular entities obtained reimbursement in the last five years. Following the negotiation process, prices were lowered by 25.1% and 28.6% on average for orphan drugs and other molecules respectively. The price reduction was higher for innovative drugs (-32.2%). Statistically significant determinants associated to higher price reduction were: i) the implementation of a product specific monitoring registry, ii) the negotiation of a financial-based Managed Entry Agreement, iii) a target population larger than 20,000 patients, iv) an expected National Health Service expenditure larger than €200 million. The impact of some variables on the delta price was predictable (e.g. for drugs with an expected higher budget impact and a larger population target), others were more surprising (e.g. a significant price reduction for "innovative" drugs). The implementation of financial-based agreements, which often rely on confidential arrangements, was one of the determinants with higher impact on price reduction.

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