ABSTRACT
This chapter discusses global biopharmaceutical pricing regulation, as well as the methods involved in defining biopharmaceutical prices, and achieving reimbursement in an ever more regulated and restricted healthcare environment. Factors driving lower product pricing are competitive alternatives, disease–patient–prescriber characteristics, economies of scale, the biopharma’s cost differentiation, prescription regulation, loss of patent protection, and marketing monopoly. Free pricing is an incentive for higher research and development (R&D) costs, leading to national industry innovation; allows US biopharmaceutical enterprises to focus on the largest pharmaceutical market in the world with strong patent protection and recuperate a vast proportion of R&D costs, before reaching other markets. The European commission has reported that EU member states adopt a long list of practices that affect pricing decisions. As an emerging phenomenon, biopharmaceuticals can be priced at a conditional pricing, for example, higher priced if efficacy endpoints are observed in practice. Understanding the dynamics of prescription use is of critical importance to developing an optimal pricing strategy.
