Are high medicine prices a major risk for European healthcare? As people live longer lives, they often have greater healthcare needs. Some analysts argue that the rise of healthcare expenditure is linked to the increasing need for new medicines (not to mention the expensive pharmaceutical research that goes into producing them).
On 28 November 2018, the Brussels-based think tank Friends of Europe held a debate as part of their Health and Wellbeing programme, looking at the impact of medicine prices on the sustainability of healthcare in Europe. The audience at the event took part in an Oxford Union style ‘for’ and ‘against’ debate between Thomas Allvin, Executive Director for Strategy and Healthcare Systems at the European Federation of Pharmaceutical Industries Association (EFPIA), and Jo De Cock, CEO of the Belgian National Institute for Health and Disability Insurance (INAMI).
Audience members were polled at the beginning and end of the Sustainability of Healthcare event, debating the motion: ‘This House believes that the price of medicines is not a major risk for health systems’. The pre-debate vote showed 39% in favour, but after each speaker made their case and took questions, 62% supported it.
That’s what they think in Brussels, but what do our readers think? We had a comment sent in from Mac, who simply doesn’t understand why medicines should be so expensive. He wonder if there are ways to bring the price down.
To get a response, we put Mac’s comment to Yannis Natsis, Policy Manager for Universal Access & Affordable Medicines at the European Public Health Alliance (EPHA). Why does he think medicines are so expensive?
Well, it’s very simple, because the R&D system – the way that medicines are produced and marketed – is profit driven. So, there are commercial interests that drive the agenda, both the research and development agenda, but also the marketing and business strategies of pharmaceutical companies. Europe can do a lot, and governments need to realise that they do have a lot of leverage, and they need to make the most of the tools that they have at their disposal in order to increase the leverage in the negotiations with the pharmaceutical companies.
To get another perspective, we also put the same comment to Adrian van den Hoven, Director General of Medicines for Europe. What would he say to Mac’s comment?
I guess the first important thing to establish is that it’s true that the overall costs of all the medicines consumed by all 500 million Europeans is increasing, because of the fact that the demand for medicines is increasing. As the population gets older, the amount of medicines consumed also goes up – there’s a direct relationship between age and increase in the consumption of medicine. Europe can’t escape from that, and since medicines are subsidised to a certain degree in most European countries, as a result there’s a greater cost demand due to the increase in consumption.
The second point: as to whether the cost of individual medicines are going up, I think that’s highly variable, actually. There are some medicines that are very expensive – particularly new medicines for rare diseases or for subsets of diseases. However, when it comes to the mass medicines that most people consume – and 67% of the medicines consumed in Europe are generic medicines – they’re very inexpensive, in fact, and amongst the lowest prices in the world. So, there I think it’s just a balancing act.
The real question I think a lot of people have is: ‘Why are some of these rare medicines so expensive?’ And that’s, I guess, because they have a high development cost and a small number of patients or consumers, so as a result the cost per treatment goes up massively. The big question people have, I believe, is will the investment in these medicines for rare conditions, or subsets of cancers, let’s say, impact the availability of the wide range of medicines that the rest of the population needs. I think that’s really what the fundamental question is.
Next up, we had a comment from Jim, who argued that we will “probably always need large transnational, complex, and profit driven drug companies to research and produce medicines, but we need to look critically at how they work, and the context in which they work, and of course we should not exclude other models in proper cases”.
Would Yannis Natsis agree with Jim’s analysis?
Yes, I would say I agree. Pharmaceutical companies are an important actor, but they shouldn’t be allowed to monopolise the game. We need public health leadership in order to regain control of the game, to be very simple. We need to have the state resetting the balance. It is all about setting a new equilibrium, for the very simple reason that the business interests of pharmaceutical companies are rarely aligned with public interests.
So, I would reply saying that yes, we do need companies, but by no means would I accept – as a European citizen – that a patient in any EU Member State is held hostage to a business or marketing strategy of a company. This is unethical, immoral, and unjustifiable because, at the end of the day, money going from us taxpayers, to private companies. So, this is why the pharmaceutical companies – although, I mean, I think they are in an identity crisis, and sometimes you hear from pharmaceutical executives that they think they are like any other industry, but at the same time they are not like any other industry. A cancer treatment is not like buying an iPhone; it’s not a matter of choice, it’s a matter of life and death.
How would Adrian van den Hoven respond to Jim? Would he agree?
Well, what I agree with is that I believe the private sector is very efficient at developing commercialised research. I totally agree that the public sector plays a fundamental role in basic research, in advancing the basic science and knowledge of diseases, and that has huge value. However, when it comes to bringing that research and translating it into a product – a device, or a medicine, or a combination of the two – the private sector has traditionally been much more efficient in that.
Where I would disagree with Jim when he says that only large multinational corporations can do this. That’s inaccurate. In fact, a lot of the beginnings of the commercial aspect of the research are done by small biotech or chemical start-up companies, and they take a huge risk to develop the first stages of the commercial product. And it’s mostly towards the end of the commercial development, around phase 2 or 3, that you see the big multinational corporations step in, buy that development, and take it through.
So, what I think could be reflected upon is why do these smaller companies face so much difficulty getting through the whole regulatory process to develop a product from the initial stages to the final stages and even to commercialisation. Why are the barriers so high at the end of the process that it’s mostly large multinational corporations that are able to do this? Why is there not more flexibility in the system, both in the final stage of regulatory procedure, but also in the initial stages of commercialisation and providing patient access? Why are the barriers so high? If you could lessen some of those barriers you would see more small companies go all the way through and sell their products themselves, and you would have a more dynamic market that would probably also be more dynamic in terms of pricing.
Finally, we had a comment sent in from Jenny, who says that paying for medicine if you’re wealthy is an inconvenience but paying for medicine when you’re poor means having to choose between eating, keeping warm, or paying the rent. Given Jenny’s comment, should medicine prices be linked to what you earn?
How would Yannis Natsis react?
No, I would say that – especially in Europe, where in recent years we have seen, even in the wealthiest Member States of Western Europe, even in the wealthiest of EU Member States, I would say from Cyprus all the way to Denmark, with the introduction of some very expensive new treatments we saw governments having no choice but to ration the treatments, which shows a) the severity of the challenges that healthcare systems across the continent face simply because of these unjustifiably high prices charged by the pharmaceutical companies, and the second element is that access to medicines, even in Europe – of course in the US it’s also a fully fledged crisis – but even in Europe it is becoming a social cohesion and a social justice issue.
So, I think that in 2019, in Europe, again, especially in the business sector which is a huge transfer of vast amounts of money from us, the public, to private corporations, I think it is completely unjustifiable and there, in recent years – since 2015-2016 – we have very loud and clear messages coming from numerous governments, even from the wealthiest Member States, including the Netherlands, Belgium, Italy, Spain, let alone poorer or medium-sized Member States of the European Union, where we have the government sending a signal to the CEOs of companies saying that the game is over, that the business model is no longer either sustainable or acceptable.
What would Adrian van den Hoven say to Jenny?
Well, I would say, unfortunately Jenny is not alone in Europe in being confronted with sometimes having to make a choice between taking her medicine and putting food on the table, or taking care of her family, or whatever financial obligations she might have. That’s obviously a very difficult personal situation for her and for the other patients in Europe who are confronted with that challenge. But I would say from a systemic point of view it’s really, really bad for public finances.
That might sound surprising to you, but in fact it’s true; because of the fact that patients like Jenny – and there are many, many others across Europe – are making these choices not to take their medicine because they basically can’t afford it, it makes the management of their disease worse (and I’m assuming she has a chronic disease). This means the disease gets worse, and Jenny and other patients like her who cannot take their medicine, they end up in the hospital, consuming many, many more public health service resources as a result of their inability to manage their condition. So, it’s not just bad for her, it’s bad for the health system, it’s bad for taxes, for social security taxes, etc., because it’s going to end up costing more money…
Should medicine prices be linked to what you earn? Why is medicine so expensive? Are there ways to bring the price down? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!