Pricing & Market Access
Market access and price reimbursements have grown in importance over the last decade due to increasingly expensive drugs entering
the market, coupled with enormous pressures on governments to cut their healthcare costs. Belgium is no exception since these
elements have led to the emergence of an uncertain market environment. In this context, Mark Connolly, managing director of
Boehringer Ingelheim said that despite their understanding of the challenges faced by the Belgian government "the first word
that came to mind when reflecting on the current market environment in Belgium was unpredictability. This makes planning a
From left: Alain Moureau, General Manager of World Courier; Noël Foucart, Global Marketing Director of World Courier
These views are shared by Patricia Lanssiers, managing director of Eli Lilly and vice president of the board at pharma.be,
the general association of the pharmaceutical industry. "As innovators in the pharmaceutical industry, we would like to see
a system that is more predictable and sustainable. We would like to serve the patients and help to increase the quality of
public health through the innovative drugs we develop. Clearly, doing so requires significant and long term investments. However,
given the current environment's unpredictability, and the fact that drug development takes on average ten years of research
and development, we are facing some risks and uncertainties.
"In my capacity as the vice chairman of pharma.be, we are working on a long-term agreement with the health authorities to
agree on certain principles that are essential for the sustainability of the Belgian system. Likewise, we are jointly working
with the government authorities on finding the solutions to keep the healthcare budget in control. After all, innovative pharmaceutical
companies help to support the economy by providing high employment levels and investments while allowing patients to gain
access to the latest drugs."
Investment in research is vital for the success of any pharmaceutical sector. As a hub for R&D activities, Belgian pharma
companies re-invested a remarkable 52% of their turnover into R&D activities in 2011 according to pharma.be. This is in sharp
contrast to the global average reinvestment rate of 17%. However, pricing reimbursements in Belgium, or the lack thereof,
represent one of the key obstacles that diminishes the industry's capacity to reinvest in R&D. Reimbursement is a collective
concern in Belgium's industry.
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A key factor behind these low prices can be traced to the reference pricing system in Belgium which was first introduced in
2001. Vlad Hogenhuis, managing director at Merck Sharp & Dohme (MSD) explains that "fundamentally, a reference pricing system
makes a lot of sense for a consuming country that imports more medicines than it exports. However, for a country that is a
net exporter of medicines, the exporting countries often form the base price of the country that receives the medicine. Therefore,
if our prices are lowered significantly, that can be considered to be a good thing from the perspective of the healthcare
budget. However, from the perspective of pharmaceutical companies located in an exporting country, this is abysmal. Illustratively,
as Belgium adopts the reference pricing system, the healthcare budget can save €1 (USD 1.34) per product, for instance, while
at the same time there could very well be a loss of €20 (USD 26.8) or more, for example, on pharmaceutical companies' balance
sheets. This magnified loss will be a result of losses arising from the erosion of R&D budgets and investments in new drugs
SMB Laboratories’ manufacturing site in Marche-En-Famenne, Belgium
Leo Neels enthusiastically shares these thoughts. "Such a system is the most unintelligent, unproductive and shortsighted
measure that Belgium can adopt. Effectively, this pricing system serves to drive the prices of drugs to lower levels, limiting
the resources available for further investments in growth, R&D and in new innovative products," he explains.
Vlad Hogenhuis, Former Managing Director of MSD
In anticipation of the far-reaching ripple effects of such measures, Hogenhuis clarifies that "access to innovation is critical
to sustain the investments stemming from the pharmaceutical industry in any given country. With the increasing trends of globalization,
there are a number of competing countries, such as India and China, which are becoming increasingly attractive destinations
of investment. Once these investments are channeled there, I believe that it will be near impossible for Belgium or other
EU countries to reverse the trend and bring them back."
In proposing a solution, Jean-Christophe Bencteux, general manager of Amgen, maintains that "it is critical that Belgium become
aligned with other European countries with respect to the international reference pricing system. Considering most countries
within Europe calculate their prices with reference to each other, one can easily see how this can create a downward spiral,
pushing prices to increasingly lower levels which is by no means a sustainable measure."
Jean-Christophe Bencteux, General Manager of Amgen
Looking further into the future, Bencteux refers to having to manage the current price levels and difficult cost containment
measures. "These measures are sometimes highly disproportional and simply unfair," he says. "At one end of the spectrum,
the pharmaceutical industry faces higher taxes and, at the other, gradually eroding patent protections. All these measures
together can pose a serious threat to the sustainability of the industry. The authorities must understand that the development
of new products is a long-term investment and that return on investment is a principle driver of our business. We have the
innovative products, we know where we intend to go but we have to manage this unpredictability. A constructive dialogue with
the authorities is therefore a prerequisite for success."
In terms of market access, "Belgium has always been a challenging destination for market access, and this is a trend we are
seeing across many European countries," says Chris Juliam, managing director of Takeda.
Jan Hendrickx, general manager of Sanofi Benelux, agrees that "unfortunately, it is no secret that Belgium is among the slowest
countries in the EU to provide innovative drugs with market access. Although we recognize that the budget must be kept in
balance and that everyone must contribute in one way or another, we are convinced that this should not be done on behalf of
new innovative drugs or solutions. They must realize that such innovations will ultimately contribute towards mending the
economy and improving people's well-being. There is much room for improvement with regards to overregulating procedures to
improve market access for new innovative drugs in Belgium."
In addition to irregular market access processes, Omer Saka of Deloitte explains how this is a two-sided issue. "The biggest
challenge at this point is the lack of standardized approaches both by the payers and the life sciences companies." To help
overcome this issue, Saka proposes that "pharmaceutical companies in Europe must focus on conveying the value of their products
clearly to payer agencies. In addition to this, they must also think and act like a partner to the authorities – not as an
industrial partner that creates jobs – but rather a partner that actually provides healthcare solutions."
This view is echoed by Tom Heyman, managing director and chairman of the management board at Janssen Pharmaceutica. "Whether
of not at we like it or not, it is not just about the patients anymore. We have to be able to demonstrate through studies,
as well as through solid relationships with authorities, that we can help authorities manage their budgets together with providing
better solutions for patients."
Despite these challenges, Patricia Lanssiers asserts that "there is a healthy level of dialogue and understanding with
the authorities and we are making progress on reaching solutions that are mutually beneficial for both parties."
The collective efforts of the pharmaceutical association and its members seem to have paid off. In October 2012 the industry
was given a breath of fresh air when pharma.be announced that it had finally reached a long-term framework, or "stability
pact" with the Ministry of Health and Social Affairs. that "this agreement recognizes the role of the innovative industry
in Belgium and clearly outlines that during any future budgetary discussions, the industry will act as the preferred partner
in the discussion process, allowing us to contribute in evaluating any proposed policies." "What we have on paper today is
translated into reality in the near future," he adds.
Tarja Stenvall maintains that the agreement "demonstrates the government's appetite to support and safeguard the industry
as well as to boost its capacity to innovate. I believe the pact also exhibits the authorities' acknowledgment of the fact
that they cannot tackle the industry's challenges on their own and are therefore becoming increasingly open to new suggestions
and ideas. Although overcoming these challenges will be no easy feat, it is certainly an encouraging sign from the authorities.
Nonetheless, only time will tell what influence the pact will have on the healthcare and pharma industry as a whole."
"It is evident that the pharma industry does have a voice in the decision making process today." However, she maintains
that the industry's capacity to innovate "will help to determine exactly how strong this voice is and whether we could do