Europe’s Drug Pricing Conundrums Coming to a Head

The price of medicines is rarely out of the headlines, in Europe as in the rest of the world—but in Europe the issue is particularly convoluted. Despite the size of Europe’s aggregate drug market, it is rigidly divided across numerous countries, each with its own system for deciding on prices and reimbursement, and all responding to their own —widely diverse—public finances. Self-evidently, economic circumstances mean that Bulgaria or Albania face tougher choices than Germany or France in paying for drugs. The “unacceptable price differences between countries for the same medicines” have been flagged for debate in the European Parliament in a recently-listed motion.

What is the same, however, across Europe is that public authorities and healthcare organizations—as well as patient groups and civil society—are consistently voluble in their expressions of concern over how much pharmaceutical treatments cost. National governments are on record criticizing escalating prices and the budgetary impact of novel medicines, and some are starting to experiment with action. The so-called Beneluxa consortium of half-a-dozen mid-sized EU member countries has been forging a common front in negotiating pricing and reimbursement with individual companies—although the latest attempt by Belgium, Ireland, and the Netherlands to agree to a price with Orchard Therapeutics for its Libmeldy treatment for metachromatic leukodystrophy collapsed last month. The countries acknowledged the disappointment this implies for patients and all concerned over availability of what their statement called “this promising but extremely expensive therapy.”

Non-governmental organizations are often even more direct. The head of one of Europe’s top healthcare payers said in April that the upcoming EU legislative review “should aim to rebalance the pharma system rather than enable further breaking the bank and undermining health and social protection in Europe.” Consumer body BEUC says “prices are skyrocketing.” According to Health Action International, “economic sustainability of public health systems is increasingly threatened by excessively high prices of medicines.” And European doctors are lobbying against “ever increasing, unaffordable prices.”

Even where critics are less direct and acknowledge that a balance is needed between incentives and access, the ruling presumption is that “balance” means less power for the industry and more for public authorities. The emerging Access to Novel Medicines Platform under development by WHO’s Europe office is likely to be influenced by the Oslo Medicine Initiative that explores “a new social contract” to counter “escalating prices and budgetary impact of novel medicines.” A conference of European payers in March endorsed a plan for bringing together national pricing and reimbursement authorities with a broad range of other interests “to enable a broad discussion on the current challenges,” but the central aim is “to improve the transparency of markets for medicines.”

The mood music as the EU launches its major review of its drug legislation is of more rather than fewer constraints on pricing. This despite industry arguments that investment and innovation in Europe would suffer—along with European patients, or the warnings from Big Pharma CEOs that the US market is “highly attractive, relative to Europe.” EFPIA Director General Nathalie Moll, commenting on the envisioned changes to the rules, speculated on “whether it is naivety, blind optimism, or a more conscious decision for Europe to rely on innovation from the US and Asia.” In the UK, the industry is fighting against government plans to tighten up the complex pricing system there with an increased clawback on sales of branded medicines. Such a move would “send the worst possible signal to global investors and boardrooms at a time UK life sciences are already facing significant challenges,” said the national industry association, ABPI, evoking “economic scarring” of up to $100 billion lost to UK GDP over time, because of the impact on company investment decisions.

Meanwhile, frustration grows among the disenchanted at the inability of the EU authorities to intervene on the price at which a member state chooses for a drug to be sold or reimbursed—or even to comment on the subject. This is why, for instance, Swedish Health Minister Acko Ankarberg Johansson, the current chair of the EU health council, has convened a meeting of national ministers this month to focus on “how the EU and its member states can secure access to pharmaceutical products, both new and existing stock, in daily work”—but without mentioning prices as such.