MEPs Slate EU Industry Practices In Report On Barriers To Medicines Access

In the latest salvo in the battle to improve access to medicines, a powerful committee of European Parliament members or MEPs has called on the EU institutions to take action against what it says are the key factors hindering access: high drug prices, misuse of intellectual property, and strategies to delay generic entry.

In a strongly worded draft report on “EU options for improving access to medicines,” ENVI, the committee on the environment, public health and food safety, says that most new medicines are not “genuine innovation” but often simply “me-too” or “evergreened” products that do not meet real clinical needs. Prices are generally negotiated on a confidential basis, do not reflect the “high level of public funds” that are ploughed into industry R&D, and are becoming “unaffordable” for many patients, it says.

Moreover, the industry’s research priorities are “profit-oriented rather than patient-oriented”, its interests favor “short trials and fast access to market,” and it has “misused and abused” the intellectual property system to delay generic competition.

Presenting the report at an Oct. 12 press conference in Brussels, ENVI’s rapporteur, Spanish socialist MEP Soledad Cabezón Ruiz, said that while the pharmaceutical industry “may consider itself a victim as it is being scrutinized at the present time,” and companies may feel threatened by the entry of generics, it is still “the second most competitive industry” in the EU.

Moreover, she said, the medicines market is “not a conventional one, it cannot be considered as just any market for consumer goods, because what is at stake here is the member states’ duty to protect the fundamental right to health, and what this means is that there must be regulation of the market so that EU patients are at the heart of that market.”

Calling for a new EU-wide policy to address the situation, Cabezón said it was true that the member states had a role to play in the establishment of prices and in reimbursement systems, but “the European Commission also has a key role to play as it authorizes medicines… and it is the one with the largest amount of money available for research purposes. It must exert a coordinating role in this new medicines policy. Ours is a political role and therefore it must be worked out through debate,” she declared.

The European pharmaceutical industry federation, EFPIA, said it welcomed the recognition that the pharmaceutical industry was one of the most competitive industries in Europe but stressed that safeguarding the benefits of its contribution to the European economy through job creation and R&D investment required a strong intellectual property framework.

Efpia said it was important to have an “open, constructive, multi-stakeholder dialogue, involving, among others, the pharmaceutical industry, patient organizations and legislators” aimed at addressing the report’s recommendations.

The civil society organization, Health Action International, agreed with the concerns raised in the report, saying that too many newly approved drugs were “me-toos” with no real added value, and that different kinds of innovation models were needed.

Ancel.la Santos Quintano, HAI’s policy advisor on the rational use and good governance of medicines, told the Pink Sheet the report contained “many, many positive points,” although she expressed concern that it might be “watered down” by industry lobbying. She noted that “more and more voices” were raising concerns over the current R&D model, “not only from civil society but now also from governments and politicians. The message is being heard and embraced by those who have to take the decisions.”

Keeping Up The Momentum

The ENVI report is an “own-initiative” one, which as its name implies means that parliament has taken it upon itself to express its views on a particular topic. Own-initiative reports also often pave the way for new legislation. In this case, ENVI is calling for new laws on issues such as pricing and reimbursement transparency and on a European health technology assessment system.

The arguments over issues such as the transparency of R&D costs and the use of patents and other IP instruments are not exactly novel, but they add momentum to other EU and international initiatives aimed at addressing the factors that determine access to medicines.

Earlier this year, for example, the European Commission announced that it was planning to examine the effects of incentives such as patent term extensions and market exclusivity on innovation and access. This is turn was driven by concerns expressed by the Council of the EU (representing member state ministers) over the “imbalance” between marketing approvals and pro-innovation measures, and national approaches to pricing and reimbursement. (Also see "NGOs Urge EU Ministers To Resist 'Industry Pressure' and Reform RnD Model, Raise Regulatory Standards" - Pink Sheet, 6 Jun, 2016.) The commission has also taken action against companies entering into “pay-for-delay” agreements to keep generics off the market. (Also see "EU Pay-For-Delay Ruling Against Lundbeck Sends Signal To Others, Including UK Competition Body" - Pink Sheet, 13 Sep, 2016.)

On a wider scale, ENVI’s conclusions chime with the recent report by the UN High Level Panel on access to medicines, which among other things said that R&D costs should be made more transparency and also delinked from end prices, and recommended wider use of mechanisms like compulsory licensing. (Also see "UN Panel Report: Positions Still Polarized Over Medicines Access Barriers" - Pink Sheet, 19 Sep, 2016.)

“Companies choose their markets according to the highest price that the buyer is willing to pay”

No Holds Barred

ENVI pulls no punches in its assessment of how industry practices affect medicines access in Europe. It says that companies base their research priorities on the size of the market, set the price based on the market value, and choose the market “according to the highest price that the buyer is willing to pay and on the greatest financial gain possible.”

“This practice,” it says, “has called into question the sustainability of health care systems and provoked a reaction from health care authorities, which are advocating the rebalancing of public and private interests.”

As for IP issues, the committee says that the system currently allows companies to make “small changes” to a product in order to “extend the protection of the drug to the detriment of the search for new products,” while incentives offered for R&D into rare diseases have led to “more medicines being authorized with no evidence-based added value or proven efficacy but which are normally accompanied by high prices.”

Moreover, “misusing and abusing the system of intellectual property leads to a large number of litigation cases which delay a generic drug’s entry onto the market, as well as many strategies and ploys whereby companies reach agreements aimed at achieving this purpose.”

It says the individual member states and the Commission have taken only “timid measures without any kind of coordination, which has fragmented the market even more and generated inequality in access to medicines for European citizens. Likewise, they have missed the opportunity to achieve greater efficiency.”

Having been in place for four decades, the system needs to be reviewed to “strike a balance between public and private interests, the sustainability of healthcare systems and the right everyone has to health protection, guaranteeing research incentives as well as individuals’ interests and their right to better health care standards,” the report declares.

Recommendations

A whole range of recommendations is put forward and Cabezón summed these up at the press conference. She said it was “necessary to increase the quality of innovation. Obviously we require added value, compared with the best possible alternative, and this has to be a criterion to establish classification on the basis of innovation.” In Germany, for example, “if a medicine has no added value it won’t be accepted,” she observed.

It was also important to continue to assess the impact of IP on the number and quality of innovations, as well as “how IP behaves when it comes to competition with other industries like the generics industry,” Cabezón said.

On the pricing and reimbursement front, she said it was necessary to introduce economic, cost-effectiveness, social and ethical criteria into decision-making, and to harmonize those criteria across the EU. She stressed that the committee was not seeking price harmonization, but “what we do want is harmonization of criteria and assessment processes, so that the member states have the necessary tools to carry out their negotiations on an equal footing with the pharmaceutical industry.”

To this end, Cabezón said, a new directive on transparency of pricing and reimbursement systems was needed. Just how realistic a prospect this might be is open to debate though – she did not mention that efforts to approve a new directive to replace the current one, dating from 1989, collapsed in 2014 because no agreement could be reached among the member states.

In an effort to ensure that research priorities are aligned with real clinical needs, Cabezón said that available resources should be coordinated through a European research fund to which the pharmaceutical industry would contribute “on the basis of corporate social responsibility.” This platform would not just coordinate funding, she suggested, but would also establish research priorities. “There should be a clear criterion for assessing quality, making sure that priorities are met when it comes to innovative medicines.”

Other recommendations in the report include a clearer definition of “abuse of a dominant position” and “excessive pricing,”, as well as the need to look at how the flexibilities in the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement are being applied in the EU, how supply chains are working to avoid drug shortages, and whether a public database of drug prices should be set up.