Industry submits concerns to European Council
By Ophélie Spanneut | Thursday 28 June 2012
On the eve of the European Council of 28-29 June, Andrew Witty, president of EFPIA, the European Federation of Pharmaceutical Industries and Associations, wrote to Europe’s leaders to ask for their support for pharmaceutical innovation as one of the key platforms of a growth programme for Europe.
Without such support, Europe’s competitiveness will be seriously jeopardised, warns EFPIA. It mentions the following figures: in Greece, as of 1 March 2012, hospitals and regions were paying only 1% of their bills to pharmaceutical laboratories. In Spain, at the end of December 2011, there was an outstanding debt of €6.3 billion to pharmaceutical firms.
Witty explains that a 10% reduction in the price of medicines in Greece costs the industry €299 million in that country but €799 million in Europe. When the industry agrees to temporary price cuts, as in Greece and Portugal, the other countries automatically lower their prices. This is a consequence of the principle of the international reference price for medicines, whereby a country refers to prices set in other countries when setting its own prices. EFPIA therefore asks the member states to exclude the countries under fiscal restructuring programmes from the basket of reference countries. It adds that “Europe must ensure that it does not slip into a position where it simply focuses on acquiring at the lowest possible cost”.
The assessment of medicinal products can also be a major obstacle to innovation. While recognising buyers’ right to ask questions to assess value for money, it is impossible for organisations to answer the questions of all the member states and regions. When setting prices, member states organise an assessment of costs and benefits. Ilaria Passarani of the European Consumers’ Organisation BEUC agrees that “in some member states the assessment of medical technologies and decisions on pricing and reimbursement entail a lengthy procedure that leads to unjustified delays for access to treatments”.
The pharmaceuticals industry says it spends €27.5 billion a year on research and development in Europe, provides 660,000 direct jobs and generates an EU trade surplus of €48.3 billion. But its warning to Europe’s leaders is clear. EFPA’s president writes that “investors are signalling that investment in innovation is less attractive”.