Country Report: Belgium - Pharmaceutical Executive

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Country Report: Belgium

Pharmaceutical Executive


Fragmentation


From left: Tom Heyman, Managing Director & Chairman of the Board of Janssen; Sonja Willems, Managing Director of Janssen, Benelux
Belgium is characterized by cultural and political fragmentation. Each of its regional areas (Brussels, Flanders and Wallonia) has its own executive and legislative powers. Although this can encourage local specialization and better allocation of state resources, it generally leads to regional inefficiencies and inconsistencies and increases the cost and complexity of doing business in Belgium.

"In a country of about 11 million inhabitants, Belgium has more ministers than Germany or France," jests Albert Maudens, general manager of Biocodex. "This highly fragmented structure makes it difficult to speak of opportunities as it inflates our business expenses, among others. Every important decision that needs to be made, requires that all the various governments and authorities come together to discuss the matter at hand which makes for a very time-consuming and counterproductive process. For instance, drug costs and hospital expenses are decided on a federal level while costs related to elderly care centers are decided at a regional level. All this makes new developments in Belgium lengthy and difficult."

Despite these challenges, Maudens suggests that implementing a flexible and adaptive business model can help to overcome this issue and still remain profitable. "We were able to grow our revenues from €2 to €10 million (USD 2.7 to 13.4 million) over the last decade and we continue to see strong results."

...AND THE UNANTICIPATED

Generics

Considering the Belgian government's determination to balance its healthcare budgets and the capacity of generics to create savings for healthcare systems, one might assume that generics enjoy a strong position in the market. Belgium, however, has among the smallest generic drug market shares in Europe by both volume and value.

Joris Van Assche, managing director at FeBelGen, Belgium's generic drug association, puts the situation into perspective. "In 2011 we launched 20 new generic molecules on the Belgian market, representing savings of €66 million (USD 88.3 million) per year for the Belgian State, but only obtained an average of 5% market share for these generic molecules in 2012 (FeBelGen estimate as of June 2012). Cheap prescriptions have stagnated 50% in Belgium since 2010. In the meantime, no less than 40 new generic molecules have been launched!"

In terms of savings, Pascale Engelen, managing director of Mylan which boasts a 20% generic drug market share in Belgium, elaborates on the potential savings that generics can provide. "Since 2001, generic drugs have been able to create savings of €3.2 billion (USD 4.3 billion) for the healthcare budget." Along with these gigantic savings, Van Assche highlights that generic companies also offer valuable contributions to the economy in that about 50% of generics sold in Belgium are produced locally.

Van Assche explains that the root cause for the low penetration of generics relates to the fact that there is no real policy or long-term vision to incentivize the use of generics.

According to Carlo Ciapparelli, general manager of IMS Health, one way the government can realize further cost savings is to allow generics to realize their fullest potential in order to ease the burden on healthcare budgets. "This has to be compensated via an efficient reimbursement system that recognizes innovation and assigns the right prices to drugs," he says. "In this respect, Belgium has been standing still, not addressing one issue or the other. The real solution here cannot be found in placing further pressure on the R&D-based industry or in delaying reimbursement decisions. These are all very shortsighted 'solutions' to a very real problem. The focus should be in stimulating the right generic business."

Belgium's authorities seem to be responding to these concerns according to Annabelle Bruyndonckx, counsel at Baker & McKenzie. "The authorities have recently introduced a number of new measures designed to promote the increased use of generics throughout the healthcare system." Earlier in 2012, she explains, "the authorities introduced a new law that further encourages the prescription of generic drugs. With this new measure physicians are still endowed with the freedom to prescribe what they feel is most appropriate but at the same time pharmacists have the right to substitute prescribed antibiotics and antimycotics with other cheaper medicinal products."


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Source: Pharmaceutical Executive,
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