The way the price and reimbursement of medicines are determined varies a lot between countries. In some countries price and reimbursement are the result of negotiations between the pharmaceutical manufacturer and the government; in other countries negotiations involve insurance companies or intermediaries purchasing medicines on behalf of their customers. And in some countries governments make bulk purchases of medicine through so-called tender orders, an auction-like process to which several companies are invited to submit their best bid.
When we determine how to price our medicines we consider a number of factors – primarily what medical need the product meets for clinicians and patients, and how the clinical profile of the drug compares with other treatments for the same condition. Other factors include the level of development of the local economy and the pricing and reimbursement systems in the country.
In the world’s poorest countries, we have made a special commitment to improving access to quality treatments for patients. We guarantee that we will provide low-priced human insulin to Least Developed Countries (LDCs) as defined by the UN and to other low-income countries as defined by the World Bank as well as selected organisations providing relief in humanitarian situations. Our guarantee entails that we will provide the human insulin needed at a guaranteed ceiling price which will not exceed 20% of the human insulin list prices in the Western world*. The ceiling price for 2017 is set at 4.00 US dollars per vial (=10-15 cents per day).
We believe new outcomes-based pricing models will contribute to better evaluation of the true value of medicines. While the models may be different from one disease area to another, and may be more difficult to implement in some areas than others, they should be based on the following principles:
Novo Nordisk is committed to driving initiatives aimed at finding innovative, outcomes-based pricing models in close collaboration with other key stakeholders.
* EU, Switzerland, Norway, US, Canada and Japan