PharmExec Blog

Europe: Is National Drug Pricing Freedom Nearing its Expiry Date?

By Reflector, Brussels correspondent.

For more than fifty years the basic European Union rules about medicines have been clear. Each member country is free to decide the prices that medicines are sold at in its territory, and what reimbursement should be provided for it. But an observer of the European Parliament discussions in February wouldn’t think so, listening to the discussions on the current attempt to update the EU’s so-called “transparency” rules on drug pricing and reimbursement.

Even allowing for political passion, it is, on the face of it, inexplicable that Alda Sousa, a left-wing Portuguese MEP, should insist that greater transparency is needed because “we should know what we are paying for and why.”  He went on: “Manufacturers should not be allowed to impose prices unilaterally,” adding, “we will seek to underline member states’ powers.” A Polish right-wing MEP, Zbigniew Ziobro, criticised drug firms for “abusing the situation by driving prices higher in some countries and trying to influence pricing authorities.”

They must know — or certainly should know — that the debate related only to technical aspects of price and reimbursement decisions, and not to the decisions themselves. So why should they waste their energies inveighing against what they see as misdeeds in entirely different terrain?

It was to little avail that French centre-right MEP Françoise Grossetête sought to remind her colleagues that the legislation under discussion had “no impact on sovereignty,” and was directed only at “removing red tape.” Even her centre-right colleague Miroslav Mikolasik, from Slovakia, chose to insist that “protecting human life must be the foremost consideration, and all barriers to access must be removed” — even if this meant EU-level intervention to require standardization of prices across Europe.

Cynics might be tempted to conclude that interventions in European Parliament debates are much more about theatre than plot, and that MEPs have long shown a lamentable tendency to play to the gallery rather than to follow logic. Those even more cynical might advance a theory that some MEPs are simply too lazy or stupid to grasp what is under discussion, and that their interventions are accordingly mis-spoken.

But there is another dynamic at play here, too, which even the cynics may find difficult to dismiss.

Underlying the calls for cheaper drugs, wider access, and tighter controls on the drug industry is a new momentum that comes not just from those automatically hostile to drug firms, but from a still more influential community: Europe’s ministers of finance and economic affairs. These fresh and even more formidable pressures are evident in a strategy document released by the European Commission in February, entitled “Investing in Health.” It aims to draw conclusions by the end of 2013 on “responses to health system challenges, in particular in relation to integrated care and the use of pharmaceuticals,” with special emphasis on “measuring and monitoring the effectiveness of health investments.”

To support these processes, the Commission is setting up a multisectoral, independent expert panel to advise on effective ways of investing in health. It has commissioned studies on forecasting EU pharmaceutical expenditure, external reference pricing of medicinal products, reimbursement systems of medicinal products, the economics of primary healthcare financing, and the evaluation of public-private partnerships in healthcare delivery. The results of most of these studies, which are being financed by the EU programme on health, are expected to become available in the course of 2014, says the Commission document.

This review outranks the debates on the merely administrative questions envisaged in the update of the transparency rules. It is part of a broader consideration of health in the context of the EU’s recovery plan for jobs and growth, and takes its strength from new EU powers over national budgets, ceded as part of the escape plan in response to the sovereign debt crisis. It is full of predictions of sharply-reduced drug spending and ever-more rigorous product assessment in terms of outcomes and utility. The hitherto sacrosanct national prerogatives over drug pricing and reimbursement decisions are, by implication, falling under the same EU shadow that has in recent months imposed unprecedented limits on what were equally sacrosanct national prerogatives over setting national budget priorities and macro-economic strategy.

So, paradoxically, the apparently marginal contributions to the European Parliament debate on the transparency rules may prove to have caught the spirit of the age more sharply than the remarks of those who stuck more closely to the plot. All that sovereignty in drug pricing that is prized by member states could, after half a century, be entering its final days.

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