EU outlines its plan to equalize drug access and lower prices
A molecular biologist examines wastewater samples for pathogens in the safety laboratory at the Max Delbrück Center for Molecular Medicine in Mitte.
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The European Union on Wednesday launched its long-awaited overhaul of existing pharmaceutical legislation, reflecting the bloc’s biggest shake-up of laws governing the industry in decades.
The European Commission, the EU’s executive arm, says the reforms will make the industry more agile as well as making medicines “more available, accessible and affordable.”
One of the EU’s key aims is to deliver more timely and equitable patient access to medicines across the 27-nation bloc.
It takes patients in Germany roughly 133 days to access new medicines, versus 899 days for patients in Romania, according to the European Federation of Pharmaceutical Industries and Associations. The group also found 92% of “innovative medicines” were available in Germany, compared with 30% in smaller and Eastern European EU member states.
The proposal reduces the exclusivity period given to newly-developed drugs entering the market from 10 years to eight. Companies can extend it up to 10 years if they launch the drug in all 27 EU member states within two years.
One side-effect — a positive one for consumers — would be a drop in the drugs’ price at an earlier time.
However, pharmaceutical firms and lobby groups say the move could hamper innovation and the overall availability of drugs.
They argue the measures may prove tricky and costly for companies, which may decide not to develop or launch new medicines within the EU at all, putting the bloc behind the U.S. and China.
The head of German biotech firm Bayer’s pharmaceutical division, Stefan Oelrich, told Reuters last week the changes could have a “catastrophic impact” as companies drop development projects.
A Bayer spokesperson on Wednesday told CNBC the industry’s views were reflected by EFPIA, the trade group for the European research-based pharmaceutical industry.
Nathalie Moll, director general of EFPIA, said the group and its members supported the aims of the strategy, but that the proposal “manages to undermine research and development in Europe while failing to address access to medicines for patients.”
Moll said the measures set an “impossible target for companies.”
The majority of access delays happen after companies have filed for pricing and reimbursement and are waiting on external decisions, she added.
GSK boss Emma Walmsley said on an earnings call Wednesday that the EU must “regulate for growth and competitiveness” because pharma companies “have choices on where our capital and resources are focused,” Reuters reported.
The German government has also warned of risks to innovation.
Big changes
A two year reduction in exclusivity could have a big impact on some businesses, particularly if it’s a rare drug, Arpita Singhal, managing director for healthcare and life sciences at Alvarez and Marsal, told CNBC ahead of the proposal release.
A lot of value could come in those final two years because that’s the point at which the drug has increased its reach, she said.
“In this market, your competition doesn’t necessarily have to be better than you to kill you off. It just needs to be good enough for the treatment and at a lower price,” Singhal said.
Going beyond the biggest markets to negotiate across so many countries at an early stage will have a significant impact on business plans, she added — though Singhal noted the legislation could be a success if the conditions are defined clearly.
Roland Wiring, a lawyer at CMS specializing in life sciences, agreed it would represent a very significant industry change, but warned that many firms are still struggling with supply issues and other challenges.
“It increases the risk to firms to launch in so many markets which each involve their own negotiations, so it’s possible they could choose to go somewhere else. For medium-sized companies especially, they’ll have to decide, do we go to the U.S. or wait until we are ready to launch in all of the EU?”
Monique Goyens, director general of the European Consumer Organisation, said the proposal was “good news” as it “could make it easier for patients to get earlier access to cheaper generic medicines.”
But Goyen criticized some of the detail, adding that “creating exclusivity vouchers, which would give a pharma company that develops a new antibiotic the possibility to extend its exclusivity period on another medicine of its choice, undermines the reform’s other gains. There are fairer ways to develop new antibiotics.”
Debate over the legislative changes could now rumble on for months or even years.
The proposal also includes reforms aimed at speeding up the time it takes for new drugs to be approved and prevent shortages but streamlining regulatory processes.
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