Table 3.

Benefits and risks relating to tendering for off-patent pharmaceuticals in Europe and other developed healthcare systems. Summary of the published information

Source	Geography	Benefit	Risk
[7]	EU Member States and EEA countries	Positive experiences with tendering in hospital settings Lower prices for the medicines Increased transparency relating to the use of public funds	Forecasting the necessary quantity of the products to be tendered is difficult High level of expertise and resources required for an effective tendering process
[12]	The Netherlands, Germany	Appointing preferred providers through a tender process in combination with rebate policies led to significant cost savings Short-term benefits to health insurance were identified	Risk of monopsony formation across insurers Lack of evidence about the long-term implications of such policies on overall economic and health outcomes for the patients
[17, 23]	The Netherlands, Germany	Significant reduction in prices	Markets are very challenging for manufacturers: (1) Prices were reduced to marginal cost; (2) Price reductions and the increased implementation of rebate contracts provoked changes in business models and overall market structure; (3) Several manufacturers have diversified their portfolio to stay on the market
[31]	Germany	Preferred supplier contracts are a powerful strategic instrument for Gx manufacturers	Manufacturers of branded products appear to be more vulnerable to tendering
[24]	New Zealand	Achieved major savings and cost control Among lowest pharmaceutical prices worldwide	Anti-competitive sole-supply monopoly for selected supplier Grouping of patented medicines with Gx within therapeutic subgroups eroded intellectual property Restricted access to effective medicines owing to the strong financial imperatives, increased occurrence of drug supply issues Compromised quality of care as a result of extensive substitution and switching policies Compromised quality of the products because of lowest-price prioritization
[25]	New Zealand	After 3 years, the annual savings were NZ$7.84 million to NZ$13.45 million (2003–2004 to 2005–2006) Growth in in-patient hospital pharmaceutical expenditure slowed in the first year	Growth in in-patient hospital pharmaceutical expenditure was higher than the growth in total hospital pharmaceutical expenditure Availability problems with new contract items (‘out-of-stocks’; products perceived as inferior)
[26]	Serbia	Tender achieved 4.6%= and 17.2% cost savings vs. the minimal tender price and the free-market price	Drug tender was resource consuming, laborious, and risky Did not provide a fair balance between domestic and foreign manufacturers
[8]	EU	May lead to short-term price reductions	Negative impact on patient healthcare quality, government budgets, Gx industry sustainability, and the capacity to continue to supply affordable prices
[32]	Europe	Gx pricing policies supported effect	Offset of savings by prescribing of medicines with a similar therapeutic indication that did not fall under the tendering procedure (‘re-allocation of demand’) Short-term absences of some medicines because of logistic shortages in Germany Reduction in pharmaceutical investments (negative impact on employment and income taxes)
[6]	Europe	Potential for savings	Variety of shortcomings
[33]	Europe		For Gx, internal or external reference pricing, tendering as well as price capping may affect drug shortages
[27]	Canada	May lead to major savings for off-patent drugs	Reduced redundancy abetted shortages Less patent litigation by Gx companies delayed availability of lower cost Gx Less manufacturing of Gx drugs in Canada (closure of some Gx manufacturing Less competition in Gx markets in Canada Less pharmacy service by Gx suppliers Lower profitability and closure of pharmacies
[30]	Italy	The higher the competition, the higher was the price reduction (about 10% per additional competitor)
[28]	Cyprus	60.6% value reduction and 39.39% mean price reduction were achieved with tendering systems Gx saw the greatest reduction both in value (94.8%) and in mean price (62.97%)
[20, 21]	Cyprus	Statistically significant long-term price reduction, superior to reduction reached with official external price referencing scheme
[13]	Belgium, Denmark, The Netherlands	Tendering can contribute to cost containment for off-patent medicines	Possibly leading to availability limitations (drug shortages)
[29]	Europe (Germany, The Netherlands)	Tendering works in the short term to reduce prices for off-patent pharmaceuticals in the European in-patient and ambulant sector	Long-term impact and low-price sustainability have not yet been analyzed Potential risk: reduced competition owing to market withdrawal of manufacturers

EEA European Economic Area, EU European Union, Gx generics