Holy Surge of Enthusiasm!

Jun 30, 2011

If you want to know what the Vatican is thinking, a pontifical high mass is a good place to start. If you want to know what the European pharmaceutical industry is thinking, you can do worse than attend its equivalent—the annual meeting of Europe's main drug industry association, the European Federation of Pharmaceutical Industries and Associations (EFPIA).

This year's ceremony, in mid-June, offered some fashionable displays of ecumenism: a desire to bridge divisions, to collaborate, to work together. "Europe's public health challenges can be solved only through sustainable partnership," EFPIA trumpeted, even before its meeting had gotten under way.

The federation's president, Glaxo SmithKline CEO Andrew Witty, pledged to "continue listening to patients, customers, and other stakeholders and work in partnership with them to find solutions to the challenges facing Europe." The declarations of a firm purpose of amendment from the European industry's high priest were backed up, as outward signs of inward grace, with a volley of leadership statements on ethics and trust, and with a tightening up of the industry's own limitations on samples for healthcare professionals and funding for patient associations.

Other virtues that the industry paraded included joint actions with European regulatory authorities on everything from new pricing methodologies to seeking innovative responses to the challenges of an ageing society. The new definitions of saintliness envisage new approaches to drug development: "We have to rethink our business model in the way we operate," says Witty, "a different relationship which does not try to force-fit the same model, the same economic structure." It is important now, says EFPIA, that the industry works closely with the authorities in Brussels and across the member states. "New thinking, new mindsets, and new partnerships will be essential," added EFPIA's new director-general, Richard Bergström.

John Dalli, Europe's health commissioner, was a willing concelebrant of the service: "Let me stress that I consider the pharmaceutical industry to be a crucial partner in providing European patients with access to safe and effective medicines," he intoned in a speech to EFPIA members. "We need to work closely together to face the many challenges that lie ahead and to prepare the groundwork for a successful and sustainable future," his litany continued; it is critical, he says, speaking of new partnerships, "that all voices are heard and taken into account."

A New Tune

The pharma industry's Damascene conversion to cooperation may in part be pure altruism, but there are some strong practical incentives for the European drug industry to start singing from a different hymn book too. Over recent months the debate on healthcare among European governments has become increasingly focused on keeping a tight rein on expenditures—with frequent evocations of the growing burden of medicine costs. In the face of this irresistible force (since national authorities continue to control the purse-strings of drug spending in Europe), the drug industry is recognizing that it can no longer rely on what it has for years regarded as a clinching argument in its dealings with governments: that industry research imperatives require decent prices for drugs. Such an approach has for years been the immoveable element in pharmaceutical companies' strategic approach to the organizations that decide what industry can charge. But times have changed, public spending constraints are much tougher, and the industry knows there is no point in advancing its chin to meet the outstretched fist of national pricing and reimbursement authorities.

The June council of European Union health ministers ended with a tirade against overpriced drugs, unleashed by the current council president. Miklós Réthelyi, Hungarian minister for national resources, who chaired the meeting, highlighted the importance of "cost-efficient use of medicines." It will be necessary, he says, "to impose controls on expenditure on medicines." He insisted that contracts will have to be signed on prices and volumes, and prescriptions will have to be regulated. The meeting took note of actions by member states that "include the regulation of the pharmaceutical sector." This angle of attack is becoming the norm in the EU, as a followup to extensive council debates last year on healthcare that produced highly critical reports on the cost of medicines.

As a consequence, industry is shifting its arguments away from the need for drug sales to fund the research cycle, and is putting its faith in a more comprehensive view of the overall healthcare scene. It is trying to build a new niche for itself in this broader context, profiling itself as a generator of savings in the total healthcare budget through its delivery of products that prevent disease, reduce hospitalization, or that offer cheaper alternatives to surgery and other therapy options. Success in this revised strategy depends on winning friends not just among the authorities that handle drug budgets, but among the authorities that handle the entire healthcare budget. Hence the surge of enthusiasm for new partnerships.