Global Legal Insights 2025

Welcome to the 2025 edition of Global Legal Insights - Pricing & Reimbursement. I hope this is a valuable resource for those seeking to navigate the ever-changing landscape for the pricing and reimbursement of medicines, with all the inherent complexity and challenges. This book contains a summary of the rules and practices in 18 jurisdictions in a wide array of geographic locations and highlights the many and varied approaches the countries have developed to control the prices and reimbursement status of vital medicines. The authors have worked hard to offer their perspectives on the most recent developments in their own jurisdictions and to explain significant changes and key trends. The authors also discuss policy issues that affect pricing and reimbursement decisions. These include efforts to address the increasing cost of healthcare delivery, the costs of research and development, and varying global strategies for balancing the financial investments needed to promote medical innovation with the high costs of making these new drugs and services broadly accessible to all who need them. Each chapter explores these topics with reference to issues that affect every jurisdiction, including global budgets, competition, fraud, and domestic and international politics. There are many challenges for both the companies that develop and market medicines and the payers that must allocate healthcare budgets and spend taxpayer money judiciously. Those budgets are becoming more and more limited, while populations are growing and becoming increasingly elderly. Many jurisdictions have faced years of austerity following the 2008 financial crisis and now face further challenges as a result of COVID-19, the war in Ukraine and the resulting inflationary pressures. From the innovative industry perspective, we have seen changes in the focus of research efforts and the nature of the medicines it develops. There has been a shift from drugs for large patient populations treated primarily by general practitioners in primary care to more specialist medicines, where treatment is either initiated or delivered in secondary hospital settings. There is a greater focus on diseases that are difficult to treat, such as cancers and neuro-degenerative, auto-immune and viral diseases. Oncology is a particular challenge, since treatment is often towards the end of a patient's life, where even a successful medicine may not save a patient, but could extend the time patients can spend with their families and loved ones. Pricing and reimbursement systems have struggled to value the precious but often poor quality life extension that these products offer. The challenges are perhaps even greater for orphan or ultra-orphan medicines that treat small patient populations with what is often an unmet clinical need. Despite the regulatory market-exclusivity protections that are used to incentivise the development of these medicines, companies will only recoup their development costs if healthcare systems can find ways of pricing and reimbursing products that are necessarily expensive. Meeting that challenge will ultimately determine whether companies continue to develop these vital products, and is often the difference between the failure or survival of the many small companies that operate in this space. These challenges and the need for new pricing and reimbursement mechanisms to address them can only become more acute as companies move into the regenerative medicine space. Gene and cell therapy products often treat tiny patient populations but - particularly for gene therapies - may offer a cure for seriously debilitating or fatal diseases. If patients are treated young, a single treatment may promise a long, healthy and fulfilled life. Companies want a return on their investment, but the high prices of these treatments - often in the millions of the relevant currency - are often out of kilter with existing mechanisms for pricing and reimbursement of even orphan medicines. The challenges are therefore many and varied and the actions payers and companies are taking to address them are equally as diverse. In many cases, there is no easy solution because of the challenges of dealing with finite healthcare budgets and the need to allocate carefully the hard-earned funds that taxpayers provide. From a pricing perspective, fewer and fewer countries offer industry freedom of pricing. Even the United States, a jurisdiction associated with industry freedom to price pharmaceuticals, has in recent years adopted the Inflation Reduction Act. This purports to give the Department of Health and Human Services ("HHS") Secretary the ability to "negotiate" the price of certain high-spend drugs, a negotiation that will most likely be very one-sided. On 12 May 2025, the Trump Administration issued an Executive Order on "Most-Favored Nation" ("MFN") Prescription Drug Pricing. The Executive Order criticises the disparity between prices paid for drug products in foreign markets and the "enormously high prices" for the same drug products in the United States. To "end global freeloading" and "inflated prices in the United States [that] fuel global innovation", the Executive Order calls for MFN pricing in the United States. It gave manufacturers 180 days to negotiate MFN drug pricing terms with the Department of HHS before the Attorney General and the Chairman of the Federal Trade Commission can bring enforcement action against manufacturers for anti-competitive practices. It instructs the HHS Secretary to propose a rulemaking plan to impose MFN pricing. Perhaps unsurprisingly, manufacturers have not made significant progress to negotiate MFN drug pricing terms. An important question remains unresolved - can the Trump Administration implement the MFN requirements without Congressional action?
Many other jurisdictions run pricing approval processes, where they seek to impose or agree a price, often on the basis of some form of health economic assessment or by reference pricing. The ways those reference pricing mechanisms work also vary. As the United States is currently considering, some are external, focusing on costs of medicines in a selected number of other jurisdictions. Others run internal reference pricing systems, where prices are set relative to other products for a particular condition. In the latter case, increased competition and the availability of generic medicines will often force prices down. Once prices are set, the next question is whether or not a product will be reimbursed. In many cases, the agreement or setting of a price will necessarily mean that reimbursement follows, but that is not always the case. An increasing number of jurisdictions are relying on health technology assessment processes to determine whether reimbursement of a product at a price is a cost-effective use of health service resources. These often rely on complex health economic evaluations, in a pure sense, where the relevant body first assesses the effectiveness of a product and then seeks to determine whether that provides value for money. A good example is the process run by the UK's National Institute for Health and Care Excellence, which relies on the health economic concept of the quality-adjusted life year to assess the cost-effectiveness of a product relative to one or more comparators. Only if the incremental cost-effectiveness ratio falls below certain financial thresholds will the product be reimbursed. Many other jurisdictions carry out similar processes, but also consider therapeutic benefit or try to factor in certain value judgments, including whether the product responds to an unmet need, whether the condition is seriously debilitating or whether the products are life-extending. Many now accept that the emergence of drugs for increasingly small patient populations and regenerative medicines now requires such value-based judgments. These are very difficult to apply in practice because these value based judgments are inevitably subjective and many health economic assessment bodies find making
them particularly challenging. They will therefore often tend to gravitate towards pure health economic assessments in situations where those assessments are simply not fit for purpose. The same could be said for health technology assessment of drugs used in combination, a feature of the treatment of many conditions, including cancers and viral diseases. Inevitably, the cost associated with the use of multiple products in combination may not be reflected in incremental clinical benefits and this means that a conclusion that the combination is a cost-effective use of health service resources becomes increasingly unlikely. Whatever the approach, these health economic assessments are often time-consuming, costly and burdensome and are typically seen in only a small number of developed countries, although there are moves towards joint health technology assessments by multiple jurisdictions. Perhaps the best and most concrete example is EU Regulation 2021/2282 on Health Technology Assessment. This legislation - passed in 2021 and effective for certain medicinal products from January 2025 - strives to strike a careful balance between the purely national competency to structure and deliver healthcare and the desire to ensure that all EU Member States have access to the results of quality health technology assessments for innovative medicines and medical devices. An EU Coordination Group will arrange for joint clinical assessments, i.e., comparative analyses of the available clinical evidence on a health technology in comparison with one or more other health technologies or existing procedures. The Coordination Group will commence assessments of new active substances for cancer therapy and new advanced-therapy medicinal products, i.e., cell therapy, gene therapy and tissue-engineered products, in January 2025; orphan medicinal products in January 2028; and all other centrally authorised products and new indications for such products from January 2030. January 2030 will also see the first health technology assessments for selected high-risk medical devices and in vitro diagnostic medical devices. The Regulation also provides for advisory joint scientific consultations between companies, the European Medicines Agency and the Coordination Group on clinical trial designs, choice of comparator, endpoints and patient populations, although these are likely to be limited by capacity constraints. The Regulation represents a significant additional step for companies seeking to launch innovative medicines in the EU. It also shows the increasing complexity and interconnectivity of value assessments - both regionally and nationally. Finally, it is an agent of change. National reimbursement systems in EU Member States will need to adapt to accommodate the Regulation and its outputs. We have seen proposals for such changes, most recently in Spain. There also appears to be a growing trend towards alignment of concepts used when determining regulatory exclusivity protections, including regulatory data market and orphan exclusivity, such as clinical need, clinical benefit and market launch, which may also play into market access decisions. On 26 April 2023, for example, the EU Commission released some proposals to amend the EU pharmaceutical laws. Innovators currently can benefit from eight years of data exclusivity, after which generic or biosimilar manufacturers may file applications, and two years of market exclusivity before they can launch ("8+2"). The Commission proposed that this should become a "6+2"-year period. The proposals also envisaged shortening the standard 10-year period of orphan exclusivity to nine years (and five years for orphan medicines approved on the basis of bibliographic data). The proposed new legislation is only part way through the legislative process, and it seems likely that the final agreed exclusivity periods will fall somewhere in between. It also seems likely that innovators will be able to claw some of these losses back if: the product gains approval of significant new indications; the product is deemed to address an unmet medical need; the innovator conducts comparative clinical trials; and/or the innovator seeks reimbursement approval or launches the product in all Member States. Linking exclusivity protections to market access efforts in Member States may mean that companies will face a choice between accepting a lower reimbursement price to launch in all markets against potential loss of exclusivity. The availability of comparative clinical trial data will also inevitably assist market access bodies' assessment of clinical benefit. The final noteworthy trend is an increased focus on steps that health services can take to manage healthcare expenditure after pricing and reimbursement procedures are completed. This has resulted in an increased use of managed access agreements, whereby companies will seek to agree the terms upon which products may be purchased and used within a healthcare system. These can be - and often are - simple financial arrangements providing for either additional discounts or rebates. Many jurisdictions are also using public procurement mechanisms as a way of forcing down prices, for example, by running competitive tender processes amongst manufacturers of reimbursed products within a particular therapeutic area. There is, however, often tension between selling products at a discount relative to a product's list price and the potential impact on pricing in other jurisdictions that use external reference pricing. The confidentiality of discount or rebate arrangements can then become paramount. Payers are well aware of this tension and we see a focus on increased transparency of net or discounted prices. A WHO Resolution on Price Transparency (available at https://apps.who.int/gb/ebwha/pdf_files/WHA72/A72_ACONF2Rev1-en.pdf ) encourages states to "take appropriate measures to publicly share information on the net prices of health products", i.e., the "amount received by manufacturers after subtraction of all rebates, discounts, and other incentives". A number of jurisdictions, such as Italy, have responded by refusing to treat the financial arrangements that they agree with companies as being confidential. In summary, pricing and reimbursement of medicines has become an increasing challenge for industry and payers, particularly in oncology, the orphan/ultra-orphan space and for innovative regenerative medicines. Payers are becoming more and more creative when seeking to achieve the right price. This publication does not claim to provide solutions to all these issues, but I hope that it would be a useful navigation tool during many products' journeys to the patients that need them.