PharmExec Blog

Seeing Through the EU Transparency Directive

Reflector outlines why the EU’s so-called “transparency directive”
has not set th
e industry on fire.EU-flag2

For such a big subject, it is receiving little public attention. No matter how much pharma executives eulogise the heady prospects for personalised medicine or the protean potential of pharmacogenomics, everything all comes down, at the end of the day, to money. So when the European Union opens up the Pandora’s box of its rules on pricing and reimbursement of drugs— the so-called “transparency directive”—you might expect a tidal wave of high-profile comment.

Yet no major debate has exploded across Europe, despite the consultation that the EU launched in March on how those rules might be tweaked to fit the 21st century. One reason may be battle fatigue. Certainly the drug industry has taken a battering in terms of recent pricing and reimbursement decisions in nearly every country across the continent. And the announcement of a lengthy bureaucratic consultation process on EU rules does not amount to a promise of instant salvation. Also, the ambition of the transparency directive is limited. Its essential purpose is not to guarantee that drug firms get decent prices but to oblige the member states to provide clarity on their national procedures and criteria, and to observe time limits for reaching decisions.

Another possible reason for the low-key response is that the initiative springs from the much-criticized European commissioner responsible for industry, Italy’s Antonio Tajani, a man widely perceived as overpromoted and underachieving. Many in the pharmaceutical industry are hesitant about engaging too closely in any of his projects.

However, whether the pharma industry in Europe chooses to trumpet its views or not on the transparency directive, the consultation is going ahead, and a brief glance at the substance is not altogether out of place.

The consultation itself consists of a lengthy series of detailed questions on discrimination between domestic and imported products, speed and transparency of pricing and reimbursement decisions, availability of legal remedies, effectiveness of sanctions for non-compliance by national authorities, access to medicines for patients, and the competitiveness of the pharmaceutical industry. This is not the place to rehearse them—the consultation is available here:

But the impression given by the questionnaire is not entirely neutral. It makes a reference, for instance, to the pharmaceutical sector inquiry of 2008, which the innovative industry still feels was an unwarranted intrusion into the world of patent licensing, driven by an ideological determination to promote generic medicines.

Similarly, the questions relating to how the EU might have a greater role in assessing incentives to increase generic use or to comply with global prescription budgets strikes an unwelcome chord with those suffering interventionist measures to massage downward the value of the pharmaceutical market. And the anodyne reference to the “considerable evolution” of national policies hardly does justice to the near-calamitous meltdown of economic conditions in many of Europe’s major drug markets.

But the clincher in industry distrust of, and distaste for, the entire exercise may well lie in the consultation’s own circumscription of its scope. “It must be emphasized that any initiative of the Commission to update the existing regulatory framework shall respect the responsibilities of the member states in the area of pricing and reimbursement,” the consultation document says.

The document loudly and clearly confirms that, “Member states are competent for the definition of their health policies and for the organization and delivery of health services and medical care. Their responsibilities include the allocation of resources assigned to healthcare.” Consequently, it goes on, “national or regional authorities have competence to determine the procedures and conditions under which medicinal products are priced and financed by their health insurance system.”

Expressed in simple terms, this is an unquestioning acceptance that the EU is largely powerless over the decisions that its member states make in this area.

Respondents are invited by the consultation “to focus their comments on aspects related to the actual objectives of the directive.” But any issues falling within the scope of national competence—such as national policies and the capacity of member states to make their own pricing and reimbursement decisions—“will not be addressed in the framework of the present initiative,” it says.

So the bottom line of the Trappist-like hesitancy to discuss the consultation may not be a conspiracy of silence, but merely a pragmatic response based on the melancholy reflection that this is no more than—to misquote a famous headline—a small earthquake in Brussels, not many changes.

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