Novartis' Gilenya: Navigating the Interplay Between Drug Innovation, Pricing, and Reimbursement in Different Countries' Health Care Systems

By Robert Chess, Jason Luther
2014 | Case No. E489 | Length 24 pgs.
International healthcare and reimbursement systems underwent a radical transformation in the 2000s, resulting from growing financial pressures incited by economic depression and a steady rise in healthcare spending. This phenomenon was most pronounced in the United States, where the health-spending share of GDP rose from five percent in 1960 to 17.9 percent in 2011. In Organization for Economic Co-operation and Development (OECD) countries on average, healthcare spending as a percentage of GDP grew from four percent to 9.6 percent over the same period. Although specifics varied by country, the systemic evolution of international healthcare and reimbursement standards was characterized by two main trends–a shift toward value-based pricing; and more stringent reimbursement standards for new drug evaluations. With this in mind, each country developed its own methods and decision-making processes for reimbursing companies looking to penetrate its market with new innovations. The United Kingdom, Germany, and Japan exemplified this dynamic.

Learning Objective

The purpose of this case is to provide an overview of the reimbursement landscapes in the UK, Germany, and Japan. Understanding these landscapes is necessary for innovators when deciding where and when to launch new products and services, as well as how to price and whether or not to adopt worldwide or country-specific pricing strategies. The case also provides insight into how the design of healthcare incentives affects the behavior of physicians and pharmaceutical companies and how reimbursement systems affect innovation and patient access.
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