EU health ministers took reluctant steps last Friday (17 June) to address the rising price of medicines.

The ongoing economic crisis, an ageing population, and new health threats, have put member states’ public health systems under unprecedented strain.

EU consumers are now faced with major challenges such as drug shortages, and accessibility problems.

Unaffordable

Health ministers recognized that in many cases, there was a market failure where patient access to effective and affordable essential medicines is endangered by “very high and unsustainable price levels, market withdrawal of products that are out-of-patent, or when new products are not introduced to national markets for business economic strategies and that individual governments have sometimes limited influence in such circumstances”.

Member states have the full competence to decide which medicinal products are reimbursed and at what price, while the European Commission is exclusively responsible for the competition of medicinal products on the EU market. But, EU ministers expressed concerns that the existing complex system of pricing might not be balanced and that “it may not always promote the best possible outcome for patients and society”.

According to the European Consumer Organization (BEUC), expensive medicines (i.e. effective treatments for hepatitis C, rare diseases and some cancers) threaten to erode European health budgets.

In addition, a number of cost-saving policies in member states have shifted the financial burden of medicines to consumers. “This move is one of the reasons why Spanish households now pay 58% more for their medicines in than in 2010. 39% of Portuguese consumers could not afford a medicine they needed in 2014,” the BEUC recently noted in a statement.

Ilaria Passarani, head of the Food & Health Department at the BEUC, told euractiv.com: “We have heard too many cases of drug prices skyrocketing overnight to consumers’ detriment. The Council has rightly demanded that competition authorities keep scrutinising cases of excessive pricing to ensure the drug market remains healthy and competitive.”

Voluntary cooperation

EU health ministers urged member states to seek voluntary cooperation between each other in order to achieve higher affordability and better access.

The ministers said that member states could explore possible strategies on joint price negotiations “in coalitions” and urged them to increase the exchange of information in the pre-launch phase.

In addition, together with the European Commission, member states were urged to explore new solutions for the market failure, especially in small markets, “when established products become unavailable or new products are not introduced to national markets, for example for business economic reasons”.

It was also decided that in every rotating EU presidency, an informal meeting of relevant representatives from member states should take place, in order to discuss developments in the pharmaceutical sector.

Paying twice for the same medicine

However, EURACTIV has learnt that the initial draft conclusions provided that a fair share of the return on investment of publicly funded research on innovative medicinal products “should be factored back into the public health system to avoid that tax payers pay twice for the same medicinal product”.

But EU health ministers amended the wording in the final conclusions, saying that this share should instead be re-invested in further research.

“In those cases where public investment has played a major role in the development of certain innovative medicinal products, a fair share of the return on investment in such products should preferably be used for further innovative research in the public health interest for example through agreements made on benefit sharing during the research phase,” the conclusions read.

The BEUC claims that when public money is behind drug research and development, consumers should also have a return, such as lower drug prices, not just the companies.

Passarani stressed that public and private research priorities should be defined according to public health needs.

The BEUC is concerned that the priorities of the largest EU public-private partnership for the development of medicines (the “Innovative Medicines Initiative”) are so far focused on less than half of areas of medical needs identified by the World Health Organization.

“We are concerned that governments and consumers will have to pay twice to access most products born of this partnership: the first time as the public’s contribution to the European Commission research and again through the healthcare system in order to purchase the medicine,” Passarani noted.

Commission to focus on competition

The European Council called the executive to issue a report on recent competition cases following the pharma sector inquiry of 2008/2009.

The ministers urged the European Commission to closely cooperate with national competitions authorities to identify potential cases of market abuse, excessive pricing, as well as other market restrictions specifically relevant to pharmaceutical companies operating within the EU.

In addition, the Commission will need to review current EU legislative instruments and related incentives intended to facilitate investment in the development of medicinal products, and the marketing authorization of medicinal products, as well as the impact of EU legislative instruments on the innovation and availability of medicines.

Industry satisfied

Richard Bergström, director general at the European Federation of Pharmaceutical Industries and Associations (EFPIA), expressed his satisfaction with the Council’s conclusion that it is member states’ competence and responsibility to decide which medicinal products are reimbursed and at what price.

He also recognised that Europe’s healthcare systems faced unprecedented challenges.

“In that context, we understand the desire of member states to learn from each other, share information and cooperate on issues relating to the long-term sustainability of healthcare systems. For example, adoption of pan-European Relative Efficacy Assessment can support faster, more efficient decision-making,” Bergström told EURACTIV.

Future pricing

Referring to the future, he noted that the industry could contribute to more sustainable healthcare systems by developing new pricing models, such as outcomes-based, or value-based contracts.

“This has started in a number of countries and requires partnering with patients, healthcare providers, payers and industry to create real breakthrough,” he said, emphasisng the importance of a continuing open and constructive multi-stakeholder dialogue between the pharmaceutical industry, patient organisations and other stakeholders.