Belgium's statin stalemate

Aug 11, 2009

If you instinctively rush to help a blind man across the street, you'd better make sure first that it is where he wants to go. The real world can all too often make nonsense of the best intentions.

Belgium has just offered a compelling demonstration of how a good idea can go wrong. Last year it introduced an experimental new system designed to cut the public health bill for one of the most widely prescribed class of drugs in the country, statins. The idea was to boost the consumption of generic competitors to Lipitor, Crestor and Zocor, and thus to save the country money.

The result has been disastrously the opposite of what was hoped for. The system has drastically brought down the price of generics, but has had no effect whatever on the market share of the originator products, which continue to dominate the medicine chests of the 900,000 patients prescribed these products — close to one in every ten of the country's population.

Worse, in bringing down the prices of generics without any corresponding increase in their market share, it has reduced many of Belgium's generic suppliers to the brink of ruin, claims Joris Van Assche, president of the country's association of generic firms. In support of his claim, he waves figures indicating that between late 2007 and early 2009, Lipitor has continued to bring in about €25 million a quarter, Crestor has steadily increased sales from €10 to €12 million, and only Zocor has slightly dipped from €5 million to about €3 million. Meanwhile, sales of generic simvastatins have dropped from about €7 million to under €5 million.

There has been some slight uptick in volume sales of the generics — from around 25 million tablets a quarter to just under 30 million. But volume sales of Lipitor and Zocor have remained stable, and Crestor's have actually risen by 50%. The problem springs from the complexity of the Belgian health system. Without wearying summertime readers with the intricate details of this new Byzantium, it is easy to identify two clear impediments to deeper penetration of generics. One is that doctors have no incentive to prescribe them; the other is that pharmacists have no incentive to dispense them.

Of course Van Assche is urging the government to make adaptations to the system that would persuade a shift in prescribing and dispensing behaviour. And in return, he is holding out the prospect of generic companies doing direct deals with the healthcare system, in a series of comfortable negotiating meetings, to supply products at prices as much as 80% below the brand leaders.

Unintended consequences may result from this stratagem, however. The health minister in Belgium's newly-appointed government is already preparing her own proposals for the autumn — and these are likely to take the form of cutting reimbursement levels to the price of the lowest generic on offer. This is closer to the system in the neighbouring Netherlands — and there, claims Van Assche, the system has led to catastrophic effects on supply, with products being pulled off the market because they are no longer profitable, and widespread availability problems.

Helping a blind man on the pavement edge is a relatively simple matter. Either he wants to cross the road, or he doesn't. Creating mechanisms that will keep drug costs under control without distorting medicines supply is altogether more challenging — and is not going to be achieved by blundering wildly from one experiment to another in distinct elements of the healthcare system.

As in so many other ways, Belgium is a microcosm of Europe, and attaining the delicate balance that is required in the economic regulation of medicines needs a great deal more reasoned reflection and co-ordinated action — otherwise the whole EU medicines industry may find itself on the wrong side of the road too.

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