UPHILL FOR THE INNOVATORS
R&D companies are equally squeezed by price pressures between generics penetration affecting reimbursement schemes and the
maximum price levels for their medicines. Introduced in 1991, the GVS system is a reimbursement price for therapeutically
interchangeable drugs. Medicines with equivalent modes of action are clustered into one group, with the average price calculated
based on comparable doses. The first price below the average is the reimbursement price. With such high generic penetration,
traditional lines for R&D companies in the Netherlands such as primary care have become relatively small. As Uloff Münster,
managing director of Merck-Serono in the Netherlands explains, "The most important step is to get to the reimbursement stage.
This is a market-specific issue because copayments are not well accepted in the Netherlands, unlike in other European countries.
If a medicine is not reimbursed in this country, the introduction of this new medicine does not make much sense."
Ferring HQ, St. Prex, Switzerland
The maximum price for pharmaceuticals in the Netherlands is determined by the average prices of comparable drugs from four
reference countries: Belgium, France, Germany, and the UK. With a reference pricing arrangement, the tenuous macroeconomic
situation sweeping Europe can have a potentially destabilizing effect on pharmaceuticals in the Netherlands. Han Brouwer,
general manager of orphan drug specialist Actelion's Dutch affiliate, explains, "We have a very tight economic situation here,
much like the rest of Europe. European Union countries that are running into financial difficulties are now cutting healthcare
costs. Because our reference pricing is based on a basket of countries, we will face price cuts due to the fact that other
countries have to decrease their healthcare prices for economic reasons. The price/quality phenomenon in the pharmaceutical
business is eroding dramatically."
A tricky road remains for the Dutch pharmaceutical industry and the Ministry of Health, Welfare, and Sport. They must soundly
manage austerity plans in the face of aging populations and rising healthcare costs while continuously incentivizing innovation
for biopharmaceutical companies. Annual spending on healthcare is forecast to reach $76.5 billion (€55.7 billion) by the end
of 2010, a 12 percent increase from 2005. In October 2010 a new conservative government came to power to manage these challenges.
The atmosphere they inherit will see total expenditure on health and welfare services rise 3.3 percent to reach €63 billion
($87 billion) in 2011, according to the Ministry of Health, Welfare and Sport. Certain austerity measures in the 2011 budget
will impact the reimbursement of certain drug classes and save approximately €32 million ($44 million) for health insurers.
FROM CRISIS SPRINGS OPPORTUNITY
Despite cost-containment measures that have been exacerbated with the greater role that health insurance companies have come
to play in the system, there are some advantages.
Erik Lommerde, General Manager, Novo Nordisk
Most immediately, it has emboldened companies, inciting some to raise their voices in defiance of reforms and motivating them
to succeed in the face of regulatory barriers. "The Dutch environment still challenges Menarini to maintain the level of investments,
hoping that access to new medicines will be more driven by the general opinion of Europe," says Dumas. "Finding the right
balance between the system's sustainability and fair prices rewarding innovation is critical and far from easy." Proudly present
in over 110 countries and initially drawn to the Netherlands in 1996 because of high-quality infrastructure, organization
of healthcare, and top-level physicians, Menarini's commitment to a vast international presence guarantees a committed fight
for its established product lines in the Netherlands.
The added layer of a payer body has also forced pharmaceutical companies to be more methodical and meticulous in presenting
the pharmacoeconomic value of their products. This has indeed penetrated the commercial mentality of Merck-Serono, a market
leader in the Netherlands through biotechnology products in fertility, neurodegenerative disorders, and oncology. According
to Münster, "The new landscape will increase the complexity of any decision-making process which already is not so easy in
this country. There are lots of bodies involved and various layers to work through in order to come to a reimbursement decision.
We as an industry, and Merck as a company, need to better understand what drives these decisions. We need to understand in
the larger sense what will make the future pharmaceutical world tick." He adds that as a result, "we will need to increase
our effort to strongly document not only the long-term clinical value of our new products, but also the pharmacoeconomic value.
It will not be enough to show only clinical data in the future."
Ultimately, the right products in niche markets will always drive growth, even in the face of cost-containment, as experienced
by Italian-based Chiesi. The Netherlands was one of Chiesi's first startup affiliates outside of Italy, according to general
manager Maurits Huigen. Established in 2007, immediately after structural reforms to the healthcare system, Chiesi doubled
its growth in the Netherlands in its first two years on the backs of products such as Foster for respiratory care; Bramitob,
a tobramycin nebulization solution for the treatment of chronic lung infections; and Curosurf for the treatment of respiratory
distress symptom in premature babies.
Dr. Bernhard Sixt, President & CEO, Agendia
More importantly, such niche market opportunities will not limit themselves to pharmaceutical companies alone. Related companies
that are able to provide improved outcomes in a cost-effective manner generally carry the potential to play an increasingly
important role under budget-tight regimes. An example as such is Netherlands-based Agendia, providing breast cancer patients
with what President and CEO Dr. Bernhard Sixt describes as "pathologyon-demand." Dubbed "cancer's crystal ball," the FDA-cleared
MammaPrint, provides physicans with a breast cancer recurrence test that will identify those patients where chemotherapy or
hormonal therapy will work. "Mamma-Print reduces the incidence of unnecessary treatment and improves the quality of treatment
for those who do need it. Medical costs are reduced, patients receive better care, and many patients are spared the unnecessary
burden of chemotherapy; it is truly a win-win-win situation," Sixt explains.