Lars Holger Ehlers1,2, Morten B Jensen3,4, Henrik Schack5. 1. Nordic Institute of Health Economics, Aarhus, Denmark. lars@nih-economics.dk. 2. Danish Center for Healthcare Improvements, Faculty of Social Sciences and Faculty of Health Sciences, Aalborg University, Aalborg, Denmark. lars@nih-economics.dk. 3. Danish Center for Healthcare Improvements, Faculty of Social Sciences and Faculty of Health Sciences, Aalborg University, Aalborg, Denmark. 4. Department of Economics and Business Economics, Aarhus University, Aarhus, Denmark. 5. Department of Health Science and Technology, Aalborg University, Aalborg, Denmark.
Abstract
BACKGROUND: Competitive tenders on pharmaceuticals are one of the most effective cost-containment instruments in healthcare systems. Its effectiveness has been demonstrated, among other things, in markets for generic medicine and biosimilars. In Denmark, an internationally unique model for competitive tenders on analogue substitutable pharmaceuticals has been developed and implemented for all public hospitals. METHODS: We obtained data on all analogue competitive tenders carried out by the Danish Medicines Council from its foundation on January 1, 2017, to October 9, 2020. We calculated univariate descriptive statistics, pairwise correlations and made a multiple regression analysis on tender savings. RESULTS: Average annual saving on hospital pharmaceutical purchase prices was 44.1% ranging from 0.4% to 92.8% between therapeutic areas and areas of indication. There was a significant positive correlation between tender savings and the number of competitors participating in the tender, and a significant negative correlation between tender savings and the number of days since market authorization. CONCLUSIONS: This study finds analogue tenders to be similar in effect and mechanism to competitive tenders in markets for generic medicine and biosimilars. It supports the increasing number of empirical findings that competitive tendering has a high potential to generate substantial savings on healthcare budgets.
BACKGROUND: Competitive tenders on pharmaceuticals are one of the most effective cost-containment instruments in healthcare systems. Its effectiveness has been demonstrated, among other things, in markets for generic medicine and biosimilars. In Denmark, an internationally unique model for competitive tenders on analogue substitutable pharmaceuticals has been developed and implemented for all public hospitals. METHODS: We obtained data on all analogue competitive tenders carried out by the Danish Medicines Council from its foundation on January 1, 2017, to October 9, 2020. We calculated univariate descriptive statistics, pairwise correlations and made a multiple regression analysis on tender savings. RESULTS: Average annual saving on hospital pharmaceutical purchase prices was 44.1% ranging from 0.4% to 92.8% between therapeutic areas and areas of indication. There was a significant positive correlation between tender savings and the number of competitors participating in the tender, and a significant negative correlation between tender savings and the number of days since market authorization. CONCLUSIONS: This study finds analogue tenders to be similar in effect and mechanism to competitive tenders in markets for generic medicine and biosimilars. It supports the increasing number of empirical findings that competitive tendering has a high potential to generate substantial savings on healthcare budgets.
Keywords:
Analogue competition healthcare cost; Competitive tenders on pharmaceuticals; Cost-containment; Managing access to medicine; Public procurement; Tender system
Authors: Elisabeth Christensen; Niels Christian Hirsch; Jonas Valbjørn Andersen; Lars Holger Ehlers Journal: Health Policy Date: 2022-06-01 Impact factor: 3.255