Europe's Transparency Directive Revisited

Dec 01, 2011

The European Union's so-called Transparency Directive is edging slowly closer to revision, with an initial draft of the proposed changes now moving through confidential internal consultation among senior officials prior to a public launch, possibly by the time you read this.

The "transparency"—the directive brought about over health authorities' pricing and reimbursement procedures—was so specific as to be virtually counter-productive. By focusing on deadlines for decision-making, with merely some passing genuflection to clarity of criteria, the directive has had the effect of limiting discussion largely to a question of numbers, such as "Was a pricing decision reached in the prescribed 90 days or not?" In reality, it offered only a semblance of openness, and it ignored the real questions underlying national policies on pricing and reimbursement.

This was convenient for governments, which were determined to preserve their national autonomy. But it has been increasingly inconvenient for the pharmaceutical industry, which has found that the generous timelines the directive established are widely ignored by national authorities, and with almost total impunity. As to any prospect of seeing timelines shortened so as to speed new products to market and to patients, the outlook is currently far from auspicious.

The limited scope of the directive has proved even more inconvenient. Companies operate now in an environment vastly more complicated than a quarter-century ago, when the legislation was drafted. Industry wants a discussion about more than timelines. But sophisticated discussion of tradeoffs between innovative medicines and overall healthcare costs is not even allowed for by the directive. This leaves the industry often at the mercy of autocratic—and even idiosyncratic—national decisions.

Angling for an Edge

Some of the current inputs into the discussions about revising the directive demonstrate the persistence of these distinct agendas. Several national authorities have been exploiting the opportunity to entrench their positions still further—not merely focusing on the numbers game, but even arguing that the numbers game as laid down in the 1980s is too strict for them and that they should be given even longer to make their decisions.

The Italian regulatory authority, for instance, admits that the pricing and reimbursement procedures can extend to 307 days for new chemical entities—compared to the maximum laid down in the directive of 180 days. Overall, it says, in a plea for longer rather than shorter deadlines, "time limits should take into account problems related to the complexity of the emerging situation with medicines."

The French authorities, rarely famous for generosity towards the innovative industry, are unflinching in their defense of the status quo. "The timelines are appropriate and their reduction would be highly prejudicial to the quality of the evaluation," they say. Their position is reinforced by the views of the highly influential French mutual insurance organizations, which say with equal directness that it is essential to "maintain the current time limits for evaluation of reimbursement and pricing."

Poland, a relative newcomer to the EU, is characteristically blunt in its observations: "Time limits should be extended due to the broad and time-consuming health technology assessment important for the final decision."

Directive Cheat Sheet
The European Social Insurance Platform, representing a number of the organizations that fund national health systems, also wants more time to make decisions. "For advanced therapies and personalized medicines it should be possible to request an extension (2 x 60 days) to the decision-making period," it argues. "In cases of extraordinary workload, the period for processing new applications should be eligible for extension by an additional 60 days," it adds. Too short a time for pricing decisions would risk authorities being obliged to make premature decisions to grant manufacturers' bids, with a cost to health systems that would "amount to recurrent costs of hundreds of millions of euros per year," it warns.