EU Parliament demands clarity in public funding of drugs R+D

The MEPs call for greater clarity on R&D costs, including the share of publicly-funded research, and on the marketing of medicines in order for patients not to pay twice for the same medicine. [Michael Ken/Flickr]

A European Parliament resolution adopted yesterday (2 March) called for transparency and clarity of public funding on research and development of new drugs, claiming that in such cases public investment should be reflected in the price of drugs.

Hit hard by austerity, the health systems of member states are under huge pressure. The aging population, the alarming burden of chronic illnesses, and the high cost of developing new technologies all add to rising pharmaceutical expenses for EU member states.

EU countries have the sole responsibility to decide which drugs they reimburse, and at what price. The European Commission has exclusive responsibility for authorising medicinal products that are placed on the EU market.

Lawmakers warn EU pharma industry about drug pricing

Pressure is mounting on pharmaceutical companies to reconsider the way they do business by refocusing their efforts on meeting patient needs and health outcomes rather than their own profits.

Eurosceptics vote against

The Parliament yesterday adopted a report calling for improved access to medicines and recognised that a number of vital drugs were overpriced due to abuse of patent rules by pharmaceutical companies as well as the imbalance in the price negotiations among the pharma industry about the individual member states.

The text was approved by 568 votes to 30, with 52 abstentions. The Eurosceptic political groups Europe of Freedom and Direct Democracy (EFDD), European Conservatives and Reformists (ECR) and Europe of Nations and Freedom (ENF) either abstained or voted against the pro-patient resolution.

Spanish social democrat MEP Soledad Cabezon Ruiz (S&D), who drafted the resolution, stressed that public health systems in Europe were a key part of the identity of the EU and in order to preserve it, access to medicines must be guaranteed.

“In order to achieve that, we need to rebalance the negotiating power of EU member states compared to that of the pharmaceutical industry,” the socialist politician noted.

“The industry must be competitive when it comes to producing quality innovation, while at the same time responding to patients’ needs with medicines which are safe, effective and accessible”, she insisted.

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Patient groups and the pharmaceutical sector agree that access to medicines needs to be improved – but the way to do it seems to divide them. EURACTIV.com reports from Sofia.

Where is public money going?

According to the report, over the past few decades, drug prices have become unaffordable for many EU citizens, putting at risk the sustainability of national health care systems at the same time.

“To strike a better balance between EU countries’ public health interests and those of the pharmaceutical industry, it calls for measures to improve the traceability of R&D costs, public funding, and marketing expenditure,” the report notes, stressing that the high level of public funds used for R&D is not reflected in the pricing of medicines.

Particularly, the MEPs call for greater clarity on R&D costs, including the share of publicly-funded research, and on the marketing of medicines in order for patients not to pay twice for the same medicine.

In June 2016, EU health ministers stressed that when 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.

However, euractiv.com 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 taxpayers 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 reinvested in further research.

Strengthening the member states

In June’s conclusions, the EU health ministers also recognised 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”.

In addition, the ministers urged member states to seek voluntary cooperation between each other in order to increase their bargaining power and achieve higher affordability and better access.

Bulgarian health minister: Drugs availability part of regional cooperation

Bulgaria and Romania will soon sign an intergovernmental agreement to jointly negotiate the pricing and availability of medicines with pharmaceutical companies, Bulgarian Health Minister Petar Moskov said in an interview with EURACTIV.com.

“We would like to see more transparency in the way the pharmaceutical companies negotiate with the purchasing authorities,” Health Minister of Malta Chris Fearne recently told EURACTIV in an interview.

He explained that at the moment, individual member states and purchasing authorities are more or less not allowed to share the prices they get among themselves.

“I think this is keeping prices high and there is a move even within the different member states to start talking about how we can introduce measures to make negotiations more transparent, something that might bring prices down and therefore make medicines more accessible to patients,” the Maltese minister noted.

Health minister: Drugs pricing will top Malta’s EU presidency

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In their resolution, the MEPs urged the Council and the Commission to strengthen the negotiating capacity of member states in order to ensure affordable access to medicines across the EU.

“The growth in pharmaceutical spending and the clear asymmetry between pharmaceutical companies and member states in negotiating capacity and pricing information calls for further European cooperation and new policy measures at both EU and national levels […] new legislation is needed to ensure the full transparency and effective controls of the procedures used to determine the prices and reimbursement of medicinal products in the member states,” the Parliament said.

Industry reaction

Reacting to the report, EUCOPE, which represents pharmaceutical and biotech SMEs across the EU, stressed that the Parliament’s decision to disregard differential pricing as a solution to improve patient access whilst safeguarding innovation was “unfortunate”.

Dr Alexander Natz, secretary general at EUCOPE, said that the report recognised that the pharmaceutical sector was a key industrial pillar and driving force for job creation, and SMEs in particular play a crucial role in improving access to medicines at the EU level.

“We urge for caution as to an increased use of International Reference Pricing, which ignores country-specific circumstances within the EU and subsequently bears negative impacts on patient access to innovative medicines,” he warned.

“In fact, this practice as well as the re-assessment of criteria already evaluated by the EMA by national authorities can ultimately exacerbate the delays rightly identified by the European Parliament, between marketing authorisation and subsequent pricing and reimbursement decisions,” he added.

Yannis Natsis from the European Public Health Alliance commented: “This position of the European Parliament demonstrates clearly that political discussion of how to tackle the unjustifiably high prices of medicines is here to stay. We particularly welcome the Parliament’s calls for proper enforcement of competition rules in the pharmaceutical sector, as drug manufacturers may profit from the absence of the forces of robust competition, leading to higher prices and cutting some patients off from treatment.”

Commenting on the report, MEP and shadow rapporteur Margrete Auken from the Greens-European Free Alliance (Greens-EFA) group, said, “We have to make sure that all patients have access to the drugs they need. Often, people cannot access life-saving drugs due to prices inflated not by research and development costs, but by abuse of patent law and by pharmaceutical firms buying up patents to turn a quick profit”.

“These problems are compounded by the negotiating advantage of big pharmaceutical companies, which put national health authorities at a major disadvantage. The market for medicines is not working today. The public sector often pays twice for new medicines and the pharmaceutical sector charges exorbitant prices, of which a large amount goes to marketing and lobbying rather than research and development,” she added.

In June 2016, EU health ministers stressed that patient access to effective and affordable essential medicines was 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.

EU health ministers confront crisis in affordability of medicines

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

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