Application of international reference pricing rules to forecast pharmaceutical launch prices in 5 European countries

Objectives To assess whether applying official International Reference Pricing (IRP) rules allows accurate prediction of pharmaceutical launch prices in Austria, Bulgaria, Croatia, The Netherlands, and North Macedonia. Methods Official pre-2019-reform IRP regulations were examined, with 1 Dutch rule further clarified via primary research. IRP rules were applied precisely to calculate the maximum price under IRP for all new chemical/molecular entities presentations first priced in each country in 2018 and customarily subject to IRP, using POLI pricing and reimbursement data for the referrer and the reference countries. Maximum allowed launch prices under IRP were calculated by using prices available for referencing 1 month before launch, the regulation-specified exchange rate and the definition of what constitutes an acceptable product for referencing. If an identical pack size/formulation was not available or multiple suitable products for referencing existed, the appropriate conversion rules were applied as stated in the IRP regulations. The actual first price was compared with the price calculated under IRP for each new chemical or molecular entity presentation, with several scenarios run to explain discrepancies. Results The mean absolute percentage error (MAPE) between the actual first price and the forecasted/IRP-based price across the sample was lowest for Bulgaria (3.04%), followed by The Netherlands (4.53%), Austria (4.91%), Croatia (9.63%), and North Macedonia (22.09%). North Macedonia’s high MAPE is because the country allows prices to exceed the IRP-based price by up to 20%. MAPE < 10% indicates outstanding model performance. Conclusions Precise IRP rules application can accurately predict launch prices in countries where IRP is binding and is the main price-setting method.