The prices of our products reflect the value they deliver to patients as well as broader society. We price our products responsibly and work to prevent costs from becoming a barrier to treatment. In doing so, we strive to deliver on our steadfast commitment to providing the broadest possible patient access. We also continue to invest in meaningful scientific innovation to address the high number of unmet medical needs still faced by many patients and their caregivers. Therefore, we adapt the prices of our medicines in different geographic and socioeconomic segments according to people’s ability to pay.
We acknowledge the affordability challenges many healthcare systems face amid growing financial pressures. We recognize the unique characteristics of each health system and adapt our pricing based on local market considerations, including unmet medical and treatment needs, health system capacity, infrastructure, socioeconomic standards as well as affordability within the respective healthcare system and the ability of patients to pay. We apply intra-country and inter-country equitable pricing approaches to all our brands.
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 annual price analyses to validate price thresholds and provide guidance on local pricing to our subsidiaries for the following year. We aim to ensure that they meet patient access needs by taking a consistent, data-driven approach.
To increase the availability, accessibility and affordability of our medicines in Africa, Asia, Latin America, and the Middle East, we have adopted a new systematic approach known as the SHAPE program. This will enable us to address these access barriers for underserved patient populations in low- and middle-income countries.
Additionally, we support innovative risk-sharing agreements and are working to improve data efficiency in health systems to help distribute funds and resources more optimally.
Roles and responsibilities
Our Global Value Demonstration, Market Access & Pricing (GVAP) unit, formerly called GMAP, reporting directly to a member of our Healthcare Executive Committee, evaluates market launch prices in coordination with the respective franchises. In addition, the GVAP unit systematically evaluates our medicine portfolios and applies equal access initiatives to them. 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 Charter on Access to Health in Developing Countries 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 comply with 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 2023, we continued to implement and maintain innovative risk-sharing agreements (RSAs) that provide immediate access to Mavenclad® for patients with multiple sclerosis (MS). We broadened access to this medicine through specific agreements in eligible countries across Europe, Latin America and the Middle East including Argentina, Hungary, Kuwait, South Africa and the United Arab Emirates.
Programs for low- and middle-income countries
We have set ambitious goals for our SHAPE program to improve access to our medicines for underserved patient populations in low- and middle-income countries. The program covers both existing and upcoming products, focusing on therapeutic areas such as head and neck, colorectal and bladder cancers as well as thyroid disorders.
In 2023 we served more than 57 million patients in low- and middle-income countries with our healthcare portfolio. Boosted by our SHAPE program, we aim to reach 80 million patients per year by 2030. As of 2023, 15 pilots have been initiated in countries such as Argentina, Brazil, Egypt, Indonesia, and Mexico as well as several countries of Central America.
Tenders constitute a significant percentage of our global sales and are a crucial growth driver for our established portfolio. We participate in government tenders for products used in public hospitals serving low-income patients, often in low- and middle-income countries.
For some of our existing high-quality products, we offer second brands at affordable prices, particularly in countries with a large percentage of low-income patients.
Patient access programs (PAPs) are self-sustaining commercial programs that provide registered medicinal products for underserved populations. They primarily seek to address affordability challenges. We operate PAPs in several countries.