• Sustainability
  • DE&I
  • Pandemic
  • Finance
  • Legal
  • Technology
  • Regulatory
  • Global
  • Pricing
  • Strategy
  • R&D/Clinical Trials
  • Opinion
  • Executive Roundtable
  • Sales & Marketing
  • Executive Profiles
  • Leadership
  • Market Access
  • Patient Engagement
  • Supply Chain
  • Industry Trends

A Storm in a Brussels Teacup Could Threaten Drug-Pricing Waters

Pharmaceutical ExecutivePharmaceutical Executive-06-01-2022
Volume 42
Issue 6

Group’s ideas to change EU pricing rules draw captive audience.

Over the past 18 months, a worthy but obscure group of Europeans have labored diligently over a self-appointed task in the face of almost universal indifference and even occasional ridicule. But suddenly, their work has assumed a new and potentially dramatic significance for the pharmaceutical industry.

The group is the Conference on the Future of the European Union (CoFoE), and its recently adopted recommendations, recondite though many of them are, have caught the attention of many national governments in Europe. One of the recommendations could, if developed into legislation, drive a coach and horses through the established models of drug pricing in Europe. The group wants to see changes to the EU treaty to give new competences to the EU in health policy.

The report calls explicitly for equal conditions, universal access, and rights in healthcare for EU citizens, and for the EU to lead the change. According to CoFoE, treatments and medicines across the EU must be “of equal quality and of fair local cost, including through tackling existing fragmentation of the internal market.” It also wants to ensure that public health resources “are not drained by profit-oriented health operators with little-to-no regard for the general interest.” And for good measure, it adds, “Medicines should be universally available, including in poorer countries.”

This might have been no more than a well-meaning theoretical discussion, since the underlying ideas have been circulating widely for decades without shifting the way business is done in Europe, or the way that access is governed by national rules on national prices and reimbursement of medicines. The EU treaty is drawn up in such a way that member states remain free to do almost whatever they want—or can—in terms of fixing drug prices, and the international drug industry has long profited from the ability to divide and rule Europe in this respect, since it is negotiating one-on-one with individual countries rather than the bloc as a whole.

This may be changing. Not only has CoFoE proposed modifying the treaty to give the EU more say in health matters, but key figures and institutions in the European context have grasped with enthusiasm at the idea of a more EU-influenced health policy. European Commission President Ursula von der Leyen told the European Parliament, “Europe should also play a greater role in health.” The parliament’s institutional affairs committee has already come out in favor of a list of treaty amendments it is aiming to propose, with an upgrade of EU competence for health and healthcare high on the list. Some members of the European parliament want joint purchasing across the EU for all drugs, to drive down prices. According to Véronique Trillet-Lenoir, a French MEP and practicing oncologist, “We could find a common evaluation of what the value of a medicine is. When you negotiate as 27, you are stronger. Once you have decided a common price, you can still decide the reimbursement level country by country.”

The CoFoE proposals ran into early trouble with a group of member states who pushed back against the idea of shifting more power to the center in Europe and rejected the call for in-depth consideration of the ideas. But that was quickly neutralized when a still-more influential group of member states—including Germany, Belgium, Italy, the Netherlands, and Spain—retaliated with a ringing endorsement of continuing discussion on the central themes proposed. And in mid-May, German Chancellor Olaf Scholz told the German parliament that his government was not opposed to treaty change.

A game-changer in this has been the COVID-19 crisis, during which the EU conducted its first joint-purchasing program with companies—initially for vaccines and subsequently for therapeutics. It has demonstrated to many both the desirability and feasibility of common action. Similarly, COVID led to the creation of a centralized European emergency health authority known as HERA to centralize planning and response to health challenges. In parallel, another game-changer has been the Russian invasion of Ukraine, which has brought Europe and the West together on many points where intra-EU dissension flourished in less-threatening times.

None of this directly means a change to centralized and harmonized rules for fixing drug prices, but against the background of a growing chorus of concern among member states, patient groups, health insurers, and healthcare professionals about what are seen as excessive and even extravagant prices charged by an overpowerful drug industry, the stage is set for action on a scale seen as unimaginable only three years ago.

Reflector is Pharmaceutical Executive’s correspondent in Brussels.