THE UPS AND DOWNS OF CIPM PRICE REVISIONS
The Spanish healthcare system is notorious for being cost-conscious. With COVID-19 acting as a major setback in terms of budget allocation and public debt (1), this could have consequential knock-on effects on Spain’s willingness to pay for drugs. One mechanism that allows them to exercise their predisposition to implement budget control is drug pricing.
How are drugs in Spain priced?
The Comisión Interministerial de Precios de Medicamentos y Productos Sanitarios (CIPM) is the pricing committee under the Ministry of Health (MoH) responsible for pricing drugs in Spain. Following a drug’s positive assessment for reimbursement by the MoH, the CIPM sets maximum ex-factory prices based on value assessments, then publishes these prices. Moreover, the CIPM employs reference pricing – a system that allows them to annually exert downward pressure on groupings of drugs based on their active ingredient or their INN. Through this, all drug prices in a reference grouping are recalculated downwards. These measures also apply to generics that contain the same active ingredient.
Whilst they have a set criteria for funding medicinal products, their pricing reports are not public leading to accusations for a lack of transparency with the existence of seemingly arbitrary price reviews and price reductions.
Ultimately, these pricing controls have led the CIPM to be viewed as a harsh institution. However, our review of the CIPM pricing revisions demonstrates that pricing increases do happen (2), which led us to explore further.
What happens in the CIPM’s price revisions?
To investigate these concepts further, we accomplished an analysis of CIPM pricing revisions from 30th May 2019 to 7th April 2021 (2).
The CIPM executed price revisions through stock keeping units (SKUs), which refer to the specific price increase or decrease of every unit. Thus, single drug would have several SKUs if manufactured and reimbursed for a variety of dosages. During this time frame, the CIPM published 71 SKU price increases and 54 SKU decreases. This fact alone is surprising, considering that increases in SKU price were not expected of the CIPM.
Upon closer analysis, we ordered all the drugs according to their ex-factory SKU price to establish whether there was a relationship between baseline price level and the likelihood of a price increase of decrease. All drugs under the lower quartile had experienced a price increase, while the third quartile exhibited the most price decreases.
Number of price increases and decreases per quartile baseline SKU price from May 2019-April 2021
Why are there so many price decreases in the €22.40-33.00 range?
It is imperative to comprehend what led to the bulk of price decreases in the third quartile, and what could have motivated the sudden fall of multiple products.
Number of price increases and decreases per CIPM price revision
The decreases in SKU prices in the third quartile are accredited to the pricing report published in February 2020 (3), with 45 drug decreases for asthma and pulmonary disease.
What was the justification given for the price decreases?
The Minister of Health Salvador Illa in the Health Commission held in February of last year specifically stated drugs for asthma and COPD as an example of how the ”new pharmaceutical policy strategy” and the latest framework agreement has saved approximately €30 million (4).
On the report, the specific reason provided for every SKU decreases in price was the same across the board – Article 96.2 (3). Under this article, price is modified by ”changes in economic, technical, health circumstances, or in assessment of its therapeutic utility”. Whilst this reasoning appears vague, we are aware of the larger economic incentive in place.
What does this mean for future price revisions?
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