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First Results of Multi-Country Cooperation on Medicine Price Negotiations

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First Results of Multi-Country Cooperation on Medicine Price Negotiations BENELUXA: First results of multi-country cooperation on medicine price negotiations Reflection Paper September 2017 The European Public Health Alliance (AISBL) has received funding from the European Union, in the framework of the Health Programme. Sole responsibility for the content displayed within this document lies with EPHA and the Executive Agency is not responsible for any use that may be made of the information contained therein. Transparency Register Number: 18941013532-08 By Yannis Natsis, Policy Manager for Universal Access and Afordable Medicines UNIVERSAL ACCESS AND AFFORDABLE MEDICINES | EPHA 1 BENELUXA: FIRST RESULTS OF MULTI-COUNTRY COOPERATION ON MEDICINE PRICE NEGOTIATIONS Executive summary In 2015, the Dutch and Belgian Ministers of Health signed a historic declaration of intent to jointly negotiate with the pharmaceutical sector on the price and reimbursement of some medicines. Since then, the cooperation has been joined by Luxembourg and Austria, with several more governments expressing an interest. This intergovernmental cooperation on medicines is unprecedented in Europe. Until now, each national government negotiated with pharmaceutical companies on a bilateral basis. The European Public Health Alliance (EPHA) has followed this development with great interest. The information asymmetry between the pharmaceutical industry as the vendor and national governments as buyers is assumed to have contributed to the rise in medicine prices to today’s unsustainable levels. As a consequence, access to medicines is no longer only an issue for developing countries. High prices are now also a barrier to accessing medicines for patients and health systems in some of the richest countries in the world. Could the new cooperations between national governments - not only “Beneluxa” but also the Valletta Declaration and other country groupings - go some way to redressing the balance? This paper tells the story so far of this innovative cooperation and summarises the irst results announced by the participating governments. ■ Sovaldi, the wake-up call Europe has evolved over the past three years. The brief history of this voluntary Beneluxa was born after irst discussions took intergovernmental cooperation speaks place between Health Ministers Edith Schippers volumes about the current state of play and (Netherlands) and Maggie De Block (Belgium) how far the debate on access to medicines in in December 2014. That was almost a year after UNIVERSAL ACCESS AND AFFORDABLE MEDICINES | EPHA 2 the launch, by American manufacturer Gilead, requirements, meaning easier marketing of Sovaldi, a highly efective new treatment authorization and faster time-to-market, to against Hepatitis C. Sovaldi’s price tag made encourage research and development of new headlines around the world and put the issue treatments for rare diseases. of high medicine prices on the agenda of journalists and politicians in Europe. Ministers THE COUNCIL CONCLUSIONS ON of health realised that Sovaldi was only the tip STRENGTHENING THE BALANCE IN THE PHARMACEUTICAL SYSTEMS IN THE EU of the iceberg, and that many more products AND ITS MEMBER STATES agreed in June across therapeutic areas with equally high or 2016, among other initiatives, mandated even higher price tags than Sovaldi were on the European Commission to conduct an evidence-based analysis of the their way. A few months later, in April 2015 the impact of the IP incentives on innovation, two Ministers signed¹ a declaration of intent availability, accessibility and afordability of new medicines and set out a road-map to jointly negotiate with the pharmaceutical for the collaboration among EU countries sector on pricing and reimbursement, starting who wish to jointly tackle the issue of with “orphan” drugs i.e. treatments for rare expensive medicines. diseases. Source: http://www.consilium.europa.eu/en/press/ press-releases/2016/06/17-epsco-conclusions- balance-pharmaceutical-system/ ORPHAN DRUGS: a pharmaceutical product that has been developed speciically to treat a rare medical condition. Manufacturers often receive These products have grabbed Ministers’ incentives - such as patent protections attention as an increasing number of “orphan” and regulatory lexibilities and drugs have become blockbuster products advantages - to encourage development of drugs for rare diseases. with disproportionately high volumes of sales, although they are supposed to be for rare Source: http://www.eurordis.org/sites/default/iles/ diseases, and attract the highest prices on the market. Additionally, the pharmaceutical The fact that orphan medicinal products were industry continues to lobby hard for further identiied as a priority area is no coincidence. incentives and watering down of requirements The groundbreaking² June 2016 EU Health in the name of accelerating access. Today, Ministers’ Council Conclusions³ relect a almost half⁵ of all new medicines approved by suspicion among governments that inancial the U.S. Food and Drug Administration (FDA) and other incentives put in place⁴ by EU or the European Medicines Agency (EMA)⁶ are legislators in the early 2000s, are increasingly presented as orphans. In other words, what was being abused by the pharmaceutical industry. supposed to be the exception, and therefore These incentives mainly take the form of requiring incentivisation, is becoming the longer patent protection and lower evidentiary unintended rule. The so-called “orphanisation” 1. http://www.deblock.belgium.be/fr/remboursement-des-m%C3%A9dicaments-orphelins-les-pays-bas-et-la- belgique-n%C3%A9gocient-ensemble-avec-le 2. https://www.ip-watch.org/2016/07/05/the-dutch-pharma-policy-a-groundbreaking-presidency/ 3. http://www.consilium.europa.eu/en/press/press-releases/2016/06/17-epsco-conclusions-balance- pharmaceutical-system/ 4. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:018:0001:0005:en:PDF 5. https://www.statnews.com/pharmalot/2017/02/10/grassley-orphan-drugs/ 6. http://www.ema.europa.eu/docs/en_GB/document_library/Other/2015/04/WC500185766.pdf Almost half of all new medicines approved by the FDA or the EMA are presented as orphans. What used to be the exception, and therefore requiring incentivisation, is now becoming the unintended rule. UNIVERSAL ACCESS AND AFFORDABLE MEDICINES | EPHA 3 of the pharmaceutical regulation goes hand wealthy EU country not known for facing in hand with the consolidation of the “niche- serious access to medicines challenges, in buster” pharmaceutical business model. As June 2016. While Beneluxa was evolving a result, the market is being looded with so- other groups of EU member states moved in called orphan drugs at unhealthily high prices, similar ways; Bulgaria and Romania signed¹⁰ straining health systems. At the same time, a cooperation agreement while Southern- the innovative value of these new medicines Mediterranean member states moved in the may be questionable, due to the very limited same direction. evidence required for their approval. Why does this matter? NICHE-BUSTER BUSINESS MODEL: Some initial observations on the “birth” of Drug prescription is combined with Beneluxa: genetic testing to identify patients who might beneit from a particular course of • The proposal was conceived at the highest treatment, developing the possibility for political level due to the realization that more personalised forms of treatment. At the heart of the nichebuster model the pharmaceutical companies’ business lie lucrative incentives introduced to strategies and pricing practices pose a encourage the production of “orphan” drugs. serious threat to the sustainability and survival of their national health systems. Source: http://www.pharmavoice.com/article/2010- It was not born of pressure from public 09-nichebusters-vs-blockbusters opinion in these relatively wealthy countries where access to new medicines has not From BE-NE to BENELUXA historically been a challenge. That said, it The announcement of the partnership between is noteworthy that the rationing of the most the Netherlands and Belgium was a historic expensive treatments has also become step. It signaled that even the wealthiest EU reality in the richer countries; member states felt they needed to increase • There is a notable contrast between their bargaining power in price negotiations Beneluxa countries, which at present with drug manufacturers. The Dutch-Belgian face relatively minor access to medicines plan foresees four areas of collaboration⁷: challenges, and other EU countries where a) joint horizon scanning, fully-ledged access to medicines crises b) joint Health Technology Assessments (HTA), have been around for years. c) exchange of strategic information, • It is possible for other countries to join the d) joint price negotiations (though not joint group; procurement). • The four areas of collaboration are broad and far-reaching; Luxembourg joined⁸ in September 2015 • Whilst the cooperation prioritises orphan followed by the addition of Austria⁹, another products due to their paralysing prices, the 7. http://www.beneluxa.org/en/collaboration 8. http://www.deblock.belgium.be/fr/grand-duchy-luxemburg-joins-belgium-netherlands-initiative-orphan-drugs 9. http://www.chronicle.lu/categoriesluxembourgpolitics/item/17622-austria-joins-benelux-countries- collaboration-to-lower-orphan-drugs-prices 10. http://www.nineoclock.ro/romania-and-bulgaria-agreement-on-the-patients-access-to-medicines/ UNIVERSAL ACCESS AND AFFORDABLE MEDICINES | EPHA 4 collaboration is not limited to them. pharmaceutical sector.
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