Ensuring lower Medicine Prices through the revised pricing criteria

By Dr. Rana Abu Failat / Pricing Department /

JFDA

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Pricing Phenomenon is not an easy one.

It needs :

1. Good negotiations.

2. Reliable Data .

3. Access to this reliable data .

4. Transparent regulations.

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In the past the drug was registered and priced by the technical committee at the same time .

The pricing committee is responsible for pricing of drugs since 5/2002 .

In 29th Jan 2004 Pricing regulations were first announced in the official gazette

In 9th May 2007 , an amendment to these regulations was made .

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Article 2 & 3:

Due to National agreements between Jordan and European Union as well as EFTA Countries the customs duties have been reduced from 5% to 0% (0 % applied since Jan 2006) . Resulting in a decrease in the calculated Jordanian public price.

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Germany has been replaced by Belgium in the median Countries as Belgium has lower, more reasonable prices And access to its prices is available .

In 2004 Prices of all Registered Drugs in Jordan have been revised in comparison with their export price to Saudi Arabia and country of origin.

Article 4:

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Article 5-d :

Provided that the requested price does not exceed 80% of the price of the Originator Drug when registered and priced initially or upon re-pricing it by virtue of Article (15) whichever is less or 80% of the current price whichever is less .

As the Originator price may decrease due a decrease in its price in the country of origin or may be registered in S.A with lower prices or due to resourcing .

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Article 7 :

Prices of different concentrations will be computed according to article 4 & 5 as well as drugs containing more than one active ingredient .

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Article 8 :

For the purpose of pricing of different pack sizes the price to the Jordanian public is determined by the lowest price that results from :

A. The price resulting from applying article 2 of this criteria .B. The price resulting from applying article 3 of this criteria.C. The price computed from the ratio between the price of the two pack sizes

in the country of origin if available or in one of the median countriesD. The export price to the Saudi market if registered there E. The price computed from that of the smallest registered pack size by

adding or removing a percentage according to the following schedule:(provided that the new pack is enough for the course of treatment)

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Pack Size % to be added or removed

2 folds 5%

3 folds 6%

4 folds 7%

5 folds 8%

6 folds 8%

7 folds 9%

8 folds 9%

9 folds 10%

10 folds 10%

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Article 9 :

Relocating the manufacturing site of a registered drug from a country to another has been considered as Reregistration, hence its price in the median countries should be submitted .

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Article 10 :

For the purpose of implementing article 4 or article 5 in respect of the drug produced under license or produced contractually at a local factory, the price submitted by the factory shall be considered to be the price of the country of origin only if the local factory is performing one manufacturing step at least in the manufacturing process .

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Article 11-b :

The director general’s decision, recommending a price lower than initially requested or after the objection, shall be considered inoperative if the applicant for registration does not accept it within three months from the date of notification thereof .

* It was Six months in the former regulations

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Article 14:• The Director General, by a recommendation from the Committee, is

entitled to cancel the registration of a drug or prohibit its re-registration except after one year from its cancellation in the event of committing the following breaches:

• If it becomes apparent that its pricing was done on the basis of false information submitted by the manufacturing company or the agent.

• If the price to the Public in the Country of Origin is reduced and such reduction was not reflected on the selling price to the Jordanian Public, and the manufacturing company or its agent did not notify the Committee within a period not exceeding four months from the date of the reduction.

• If the manufacturing company or its agents did not submit the export price to Saudi Arabia within four months from its pricing there, unless a document from the pricing concerned party in Saudi Arabia is submitted proving that the drug is not being marketed there.

A suggestion to levy from the agent the difference in price if he did not notify the pricing committee with the decrease within 4 months from the date of reduction.

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Article 15 :

The registration of the drug shall be cancelled if the applicant does not accept the price recommended by the Committee initially or after objection within six months from being notified of the price.

It was omitted from the pricing regulations so that to import the drug by parallel import and for data protection .

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Article 16 :

Upon the reduction of prices of the originator drug to the Jordanian Public, the prices of all registered generic drugs shall be reduced except for reductions resulting from the variation of the rates of exchange or on the basis of a request from the manufacturing company of the underlying drug only after the originator drug has been actually imported with the reduced price or upon reregistration of the generic drug whichever is first .

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Article 17 :

The pharmacist responsible for the drug store shall submit:A. A certificate duly legalized from the party responsible for

pricing in the Country of Origin or the approved country for the purpose of registering the drug, showing the selling prices structure of the public, the pharmacy, the wholesaler and the ex-factory in addition to the Value Added Tax if existing there .For countries for which an access to their web site is available , the price certificate is accepted if issued by the manufacturing company .

B. A certificate from the manufacturing company showing the drug selling price in the countries mentioned in Article (4) Clause (c and d) together with the prices structure in those countries.

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Article 21 :

The issuance date of the prices certificates when submitted must not be beyond12 months from the date thereof.

In order that the price certificate will not be expired by the time the price of the drug will be determined by the pricing committee.

* It was 9 months in the former regulations

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Drug Pack Size Type Previous Price (JD)

Reduced Price ( JD)

% of reduction

Zovirax 25 Originator 36.610 20.500 - 43.7585

Supraviran 25 Generic 24.900 16.230 - 34.9238

Virpes 30 Generic 24.000 18.370 - 23.4583

Virustat 30 Generic 24.000 18.370 - 23.4583

Duvimex 25 Generic 26.320 16.470 - 37.424

Acyclovir 200mg Tablets

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Ranitidine 150mg TabletDrug Pack Size Type Previous Price

(JD)Reduced Price ( JD)

% of reduction

Zantac 20 Originator 6.610 4.850 - 26.626

Antagonin 20 Generic 5.000 3.880 - 22.4

Ranid 20 Generic 5.290 3.880 - 26.6541

Peptidine 20 Generic 4.500 3.880 - 13.777

Peptac 20 Generic 4.500 3.880 13.777

Ranidin 20 Generic 4.500 3.880 13.777

Nadine 20 Generic 4.500 3.880 13.777

Rolam 20 Generic 5.000 3.880 - 22.4

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Simvastatin 10mg&20mgDrug Pack Size Type Previous Price

(JD)Reduced Price ( JD)

% of reduction

Zocor 10mg 30 Originator 12.740 10.890 - 14.5212

Losterol 10mg 30 Generic 10.190 8.220 - 19.3327

Simvatin 10mg 30 Generic 10.190 8.220 - 19.3327

Simver 10mg 30 Generic 10.190 8.220 - 19.3327

Sivacor 10mg 30 Generic 10.190 8.220 - 19.3327

Zocr 20mg 30 Originator 20.110 19.710 - 1.989

Simvatin 20mg 30 Generic 16.090 14.880 - 7.5202

Simver 20mg 30 Generic 15.000 14.880 - 0.8

Sivacor 20mg 30 Generic 16.090 14.880 - 7.5202

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Drug Pack Size Type Previous Price (JD)

Reduced Price ( JD)

% of reduction

Glucophage 500mg 50 Originator 4.350 3.450 - 20.6897

Glucophage 850mg 30 Originator 4.460 3.450 - 22.6457

Glucophage 1g 30 Originator 5.27 4.15 - 21.2524

Metformin Tablets

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Thanks All

For your good listening.

THE CRITERIA AND STANDARDS RELATED TO

DRUGS PRICING, REPRICING AND OBJECTIONS

TO PRICING DECISIONS

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Article 1:

The following words wherever they appear shall have the meaning designated thereto unless the text indicates otherwise:

The Administration: The Food and Drug

Administration.

The Director General: The Director General of the Food

and Drug Administration.

The Committee: Drugs Pricing Committee

The Head of the Committee: The Head of the Drugs Pricing

Committee.

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If the goods are on CIF basis, the drug price to the Jordanian Public is computed from the cost price on the basis of the factory-listed price in the invoice issued from the party designated to issue invoices by adding to it customs duties, bank’s charges, insurance, clearing and inland transportation (plus the profits of the drug store and pharmacy and their administrative costs), but if the basis of shipment is FOB, the shipping costs shall be added to the above.

Article 2:

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Article 3 :

The drug price to the Jordanian Public is computed from the cost of the imported drug on the basis of the selling price to the public in the Country of Origin after deducting the Value Added Tax there, if applicable, and after deducting the profits of wholesalers and retailers there, adding the shipping costs, bank’s expenses and charges, insurance clearing and inland transportation (plus the profits of the drug store and pharmacy and their administrative costs).

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Article 4 :The price of a new drug to the Jordanian Public is determined as a result of applying

any of the following mechanisms whichever is less:A. The price computed from applying Article (2) mentioned above.B. The price computed from applying Article (3) mentioned above.C. The median price resulting from the prices of the public in the following

European Countries: Britain, France, Spain, Italy, Germany, Greece and the Netherlands computed from applying Article (3) of this Regime. In the event that it is not priced in all of those countries, the median price where available in these countries is computed provided the number thereof is not less than three countries.

D. The price computed from the export price to the Saudi Market, as for the un- registered drugs in Saudi Arabia, its price in Jordan shall be reviewed upon its registration there. The agent is committed to provide the Administration with the export price to Saudi Arabia within a period not exceeding four months from the date of pricing it there.

E. If the drug is registered and priced in the Country of Origin only and the application of Clause (c) of this article becomes impracticable, then it shall be priced on the basis of the drug prices having close chemical composition and/or therapeutic effect provided that the extent of this resemblance shall be determined by the Committee for registering New Drugs through Specimen No. (1) approved for such purpose.

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Article 5 :

The price to the Jordanian Public for a drug having a registered equivalent is determined by the lowest price resulting from the application of any of the following mechanisms:

a) The price computed from applying Article (2) of this Regime.b) The price computed from applying Article (3) of this Regime.c) The export price to the Saudi Market, and if it is not registered

there, its pricing shall be reviewed upon its registration and the agent is committed to provide the Administration with the price within a period not exceeding three months .

d) Provided that the asking price does not exceed 80% of the price of the underlying drug when registered and priced initially or upon re-pricing it by virtue of Article (15) whichever is less

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Article 6 :

For the purposes of implementing Articles (2 & 3) of these Criteria, the Director General shall form a Committee from persons of specialty to design a computation method, detailed cost schedules and rates of profits and to refer it to the higher commission of drugs and pharmacology.

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Article 7 :

With due observance to clause (d) of Article (5):a) The price of a registered drug of a new

concentration shall be determined by applying the same rate implemented in the Country of Origin upon the submission of the application.

b) The rate applicable on the underlying drug shall be adopted as a highest level to compute the new concentration of the drugs that have a registered equivalent.

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Article 8 :

For the purpose of (pricing) the large containers, the drugs are divided into categories and the schedule determined by the Higher Committee shall be adopted for the purpose of pricing the different containers of those categories

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Article 9:

When relocating the manufacturing site of a registered drug from a country to another, or that which is contractually produced in another country, the price to the Jordanian Public is determined by the lowest price that results from:

a) The current price to the Jordanian Public.b) The price resulting from applying Article (2) of these

Criteria.c) The price resulting from applying Article (3) of these

Criteria in both countries or in any of them if it is being sold in only one of them

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Article 10 :

For the purpose of implementing Article (4) or Article (5) in respect of the drug produced under license or produced contractually at a local factory, the price submitted by the factory shall be considered to be the price of the Country of Origin.

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Article 11 :

a) The applicant is entitled to object to the decision of pricing of the Director General within thirty days from the date of notification of the decision, the Director General refers the objection to the Drug Pricing Committee to study it and to give its recommendation thereto within thirty days from the date of its referral, then the Director General’s decision in that regard is final.

b) The Director General’s decision, recommending a price lower than initially requested or after the objection, shall be considered inoperative if the applicant for registration does not accept it within six months from the date of notification thereof.

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Article 12 :

If the pricing is done based on clause (b) of Article (15) of the Drugs and Pharmacology Act, the drug’s price shall be reviewed upon the registration of an equivalent thereof.

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Article 13 :

1. The foreign currency exchange rate shall be approved in a schedule issued by the Director General within the first week of July of each year based on the average exchange rate during June of the same year and in accordance with the exchange rates published by the Central Bank of Jordan.

2. The exchange rates determined in the said schedule shall be revised if a variation arises in the actual exchange rates for a percentage in excess of 5% and such variation continues for three consecutive months, the day that follows the expiry of the 3-month-period shall be adopted as a basis to compute the new average rate of exchange and to observe the percentage of the variation.

3. In the event that the determined price is altered as a result of an increase or reduction, the new price shall be the determined one for the remainder of the year, unless there is another variation in the price in accordance with the stipulation of Clause (b above), it shall be computed from the average rates of exchange within the last month of the 3-month-period that involved the variation.

4. The Administration shall issue the price lists within one month from the date of issuing the schedule of prices by the Director General.

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Article 14 :

The Director General, by a recommendation from the Committee, is entitled to cancel the registration of a drug or prohibit its re-registration except after one year from its cancellation in the event of committing the following breaches:

a) If it becomes apparent that its pricing was done on the basis of false information submitted by the manufacturing company or the agent.

b) If the price to the Public in the Country of Origin is reduced and such reduction was not reflected on the selling price to the Jordanian Public, and the manufacturing company or its agent did not notify the Committee within a period not exceeding four months from the date of the reduction.

c) If the manufacturing company or its agents did not submit the export price to Saudi Arabia within four months from its pricing there, unless a document from the pricing concerned party in Saudi Arabia is submitted proving that the drug is not being marketed there.

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Article 15 :

The registration of the drug shall be cancelled if the applicant does not accept the price recommended by the Committee initially or after objection within six months from being notified of the price.

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Article 16 :

When implementing Clauses (a & b) of this Article, due observance should be given not to exceed the previously determined price.

a) The pricing Committee must revise the prices of the new drugs (of new chemical composition) after two years of its registration and in accordance with the approved pricing Criteria.

b) The Pricing Committee must revise the prices of all registered drugs upon the renewal of its registration and in accordance with the approved pricing Criteria.

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Article 17 :

Upon the reduction of prices of the underlying drug to the Jordanian Public, the prices of all registered generic drugs shall be reduced except for reductions resulting from the variation of the rates of exchange or on the basis of a request from the manufacturing company of the underlying drug.

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Article 18 :

The pharmacist responsible for the drug store shall submit:

a) A certificate duly legalized from the party responsible for pricing in the Country of Origin or the approved country for the purpose of registering the drug, showing the selling prices structure of the public, the pharmacy, the wholesaler and the ex-factory in addition to the Value Added Tax if existing there.

b) A certificate from the manufacturing company showing the drug selling price in the countries mentioned in Article (4) Clause (c and d) together with the prices structure in those countries.

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Article 19 :

The technical manager of the local factory shall submit a letter showing the requested selling price to the Jordanian Public.

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Article 20 :

Wherever a request for a public price of a country is mentioned according to the determined Criteria, the Pharmacist responsible for the drug store shall submit the selling prices structure of the public, the pharmacy, the wholesaler and the ex-factory in addition to the Value Added Tax if existing.

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Article 21 :

The issuance date of the prices certificates when submitted must not be beyond 9 months from the date thereof.

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Article 23 :

1. The Director General shall issue a list of the drugs that can be sold Over the Counter (OTC).

2. The drug prices mentioned in Item (1) shall be floated in accordance with instructions determined by the Board of the Administration.

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