Shining a light on pricing
Few industries are as systemically inefficient as healthcare. So the news that people are finally comparing prices charged by medtech companies across different European countries is very welcome indeed, as is the news that the European Commission is about to start an investigation into fraud and mispricing within healthcare services.
It’s ridiculous that medtech pricing across Europe can vary by such enormous amounts. This is partly because healthcare is so constrained by national borders and procurement is so fragmented. Medtech companies tell us that the price differences reflect their cost of sales, which varies from country to country. There may be some truth to this, but overall it is unconvincing when these companies are employing vast sales forces to push high-margin products onto doctors on an individual basis.
It is also clear that pricing is becoming flatter. We believe that all of the big diagnostic lab groups have struck Pan-European deals, for instance, and there is a lot of parallel importing. Purch AB’s initiative is also good news, along with the Pan-European eCommerce platform developed by GHX Europe, now 18-24 months away from release.
We need to get control of these issues now. The European Commission reckons that mispricing of services (which you could call fraud, if you were feeling uncharitable) accounts for 3-8% of the EU’s entire health budget. We suspect that the real figure is at the top of that range.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
