Annual Report 2021

Prices of medicines

To help ensure that all patients have access to the most effective medicines for their needs, we are working to prevent cost from becoming a barrier to treatment. Therefore, we adapt our medicine prices according to people’s ability to pay in different geographical or socioeconomic segments.

We are committed to fair, flexible and sustainable pricing – both within and across countries. We therefore adapt our prices based on local market considerations, such as unmet medical and treatment needs, health system capacity, infrastructure, and education standards. This approach involves working closely with governments and other stakeholders. In addition, we continuously monitor dynamic healthcare environments and markets, pricing and reimbursement systems as well as legal and regulatory guidelines, adjusting our prices as necessary.

We conduct price analyses annually to validate price thresholds and provide guidance on local pricing to our subsidiaries for the following year to ensure they meet patient access needs, taking a consistent, data-driven approach. We also make our products affordable to patients in low- and middle-income countries with an equitable value and access strategy that includes participating in government tenders, providing flexible pricing, establishing high-quality affordable brands or branded generics, and operating patient access programs.

Furthermore, we support innovative risk-sharing agreements and are working to improve data efficiency in health systems in order to achieve an optimal distribution of funds and resources.

Roles and responsibilities

Our Global Market Access and Pricing unit evaluates market launch prices in coordination with the respective franchises. The team reports directly to a member of our Healthcare Executive Committee. The GMAP unit systematically evaluates and applies our medicines portfolios for equal access initiatives. Our local affiliates are responsible for managing prices and adapting them to evolving local conditions in compliance with our pricing governance and the defined price approval process.

Our commitment: Medicine price guidelines and principles

The affordability of our health solutions is part of our broader patient value proposition. Our medicine pricing adheres to the stipulations of our overarching Access to Health Charter and is defined in detail in an internal guideline. Additionally, our Patient Access Programs Policy sets out standards for offering medicines at affordable prices.

Value-based contracting models

We are committed to advancing value-based healthcare through pricing and contracting mechanisms that fully comply with all applicable local laws and regulations. In collaboration with payers, such as health insurance companies, we have developed various product- and market-specific reimbursement and contracting models. These help to provide patients with prompt access to our innovations. In addition, we aim to pilot outcome-based contracting models in one or two markets for our fertility product portfolio by the end of 2022.

Equitable value and access approaches to serve low- and-middle-income patients

We work in close partnership with governments and other stakeholders on innovative, differential medicine pricing schemes. We developed an equitable and value access strategy and by 2023, want to test it with pilot programs for two products of our innovative product portfolio in at least two low- and middle-income countries. In addition, we supply products at affordable prices to certain countries in Africa, Asia, Latin America, and the Middle East.

Our Biopharma tender excellence initiative offers a strategic tender framework. This includes a web-based system that helps country teams increase quality and agility in tender decisions, while improving performance tracking and collaboration.

For some of our existing high-quality products, we have created second brands at affordable prices, particularly in countries with a large percentage of patients with very low incomes.

We operate patient access programs that enable us to offer certain products at affordable prices in several countries.

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