1.
WHAT CAN
WE DO TO ENSURE THAT PATIENTS HAVE THE MEDICINES THEY NEED?
Good
afternoon ladies and gentlemen. I’d like to thank the organizers for inviting
me to this important meeting.
2.
Here in
Bulgaria, in many European Member States, and in many parts of the world,
thousands of people suffer and die prematurely because they do not have access
to the medicines they need.
The
balance between the interests of pharmaceutical companies and the interests of
patients and the population has been broken. We are paying exaggerated prices
for medicines whose production cost (including R & D) is much lower. This
is unfair.
Abusive
prices are the main cause of the problem of access to medicines because
patients and health services cannot afford them. If that is the main cause,
then, to ensure that patients have the medicines they need, we have to take
actions to solve this situation. Step by step. “Stepka pu stepka”.
3.
The
first step is to know the numbers. We have to size the problem. And, having the
numbers clear, negotiate according to actual costs of production.
In the
current system, the price we pay for “new” brand drugs has to cover
manufacturing costs, research costs, and a business profit margin.
When the
patent for medicines expires, generics can be made. In this case, the price we
pay covers manufacturing costs and a business profit.
In 2016,
we paid a total of 165 billion euros in medicines (Ex Factory Price) in the
European Union. If we had paid all the medicines at generic prices we would
have spent only 65 billion euros.
It means
that we have paid an "indirect tax" to laboratories to finance
research that amounts to around 100 billion euros.
However,
of this 100 billion euros raised to pay for the research through the patents
and data exclusivity system, they have only spent 26 billion euros for that
purpose. The rest, 74 billion euros, are unjustified profits, above the
reasonable. This is the negotiating margin that governments have to set lower
prices.
Part of
these profits are used to buy-back shares (raising the price of shares and the
remuneration of executives), raises in dividends, oversized marketing expenses,
acquisitions of other companies, mergers, etc. etc. Different ways to
"create value for its shareholders" at the expense of higher prices
for patients and health systems.
It is
worth to mention a statment made by the Director General of WHO last week:
“We must not tolerate systems
that put the protection of intellectual property ahead of the protection of
health. Patients must always come before patents.”
The
companies, logically, do not want to focus the debate on prices and create
other frameworks for discussion: Prices are expensive because it must be like that.
Do not discuss the prices. We will help you in ways to pay for them. We will
negotiate spending caps, rebates, discounts, payment for results, risk-sharing,
etc. We will ask you 10,000 euros for a medicine that costs 100 euros, but we
will make you a discount of, let’s say, 30%, etc. etc. The current framework is
the "price for value", but prohibiting competition at the same time.
4.
Sarah
Garner, and other colleagues, from WHO, warned that “In the end, there is no
value in a medicine that is too expensive and sits on the shelf”.
5.
Let's
suppose that governments have done the numbers and know the barganinig margin.
However, they often feel that they do not have enough strength to negotiate
with an industry that is very powerful and has enormous capacity for pressure
(30 billion euros per year to be spend in marketing).
That is
the reason why, while the monopoly system continues, governments must increase
their bargaining power in various ways:
-
Uniting forces of several countries, for example, improving price transparency
and undertaking joint purchases
-Strengthening
the regulation to apply compulsory license in case of abusive prices, and using
it when necessary (recently the minister of health of the Netherlands talked
about this possibility; the Expert Panel of the European Commission has also
suggested this action)
-Support
non-profit initiatives to manufacture generic and / or innovative medicines to
face speculative prices (see the experience of DNDi, or the initiative by
Non-profit catholic Hospital Organizations of the USA).
-Reinforcing
the Health Technologies Assessment, guaranteeing the independence of the
Agencies, so that it does not occur as in the European Medicines Agency whose
financing is for the most part from the industry. And, of course, changing this
situation for the EMA.
6.
In
addition, governments may take other measures:
-Guarantee
a fair public return on public investment in research, both at European and
national level.
7.
-Increase
direct public spending on R & D, financed by a discount of 10% -20% on current
total sales, around 16 to 33 billion euros, which companies allocate to
marketing, with profits supposedly intended to fund research. These types of
discounts have been adopted by the EU Member States during the economic crisis
and could now be adopted to deal with this "structural crisis". This
could be an important step to delink R&D from prices and to reach an
international covenant on R&D for medicines.
8.
-Governments
can also fight against violations of competition, denouncing application of
abusive prices to competition authorities, denouncing limitation of markets,
and denouncing application of differential prices and confidential agreements
systematically imposed by companies.
Likewise,
governments must fight against the formation of cartels, both between generic
companies and between originator companies.
9.
- On the
other hand, governments and the EU can stimulate the introduction of generic
and biosimilar medicines; and improve access to medicines by reducing
co-payments, ensuring public financing of all essential medicines.
10.
-Finally,
governments have to improve information systems to monitor the problems of
access to medicines, and also the problems of “excess” (over-prescription, over
use, adverse drug reactions, etc. And they have to disseminate this information
to the public. Transparency is a key tool for change.
…
Dear
colleagues. These are just some of the actions that, in my view, we can take to
ensure that patients have the medicines they need.
11.
Some
time ago, when I came to Bulgaria in 1996, I used to recite a poem by Nicomedes
Santacruz: “I have faith in the future, because the man of tomorrow will enjoy
healthy life, forged in the dark present ...”
“Aз вяра
в бъдещето, защото утрешния човек ще се радва на здрав живот...”
I still
have faith in the future, but to win a better future we have a lot of work to
do. And we have to work together.
Thank
you very much for your attention.
Dr
Fernando Lamata,
Sofia 6
March 2018
References
(1)
EFPIA (2017) The Pharmaceutical Industry in Figures. Key
Data 2017.
(2)
Garner S, Rintoul A, Hill S (2018). Value-Based Pricing:
L’Enfant Terrible? PharmacoEconomics (2018) 36:5-6
(3)
Hill A, Barber M, Gotham D (2018). Estimated costs of
production and potential prices for the WHO Essential Medicines List. BMJ
Global Health 2018; 3:e000571. doi:10.1136/bmjgh-2017-000571
(4)
EXPH (Expert Panel on effective ways of investing in
health) (2018). Opinion on innovative payment models for high-cost innovative
medicines. 17.1.2018
(5)
European Commision. Antitrust in Aspen case. http://europa.eu/rapid/press-release_IP-17-1323_en.htm
(6)
European Court of Justice . Case Avastin / Lucentis http://curia.europa.eu/juris/document/document.jsf?text=&docid=198644&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1173429
(7)
Baker D (2005) Bird Flu Fears: is there a better way to
develop drugs? CEPR, Issue Brief, october 2005. “Drug prices would fall by
close to 70 percent if they were sold in competitive market”.
(8)
Lamata F, Gálvez, Pita-Barros P, Sánchez-Caro J,
Puigventós F. Medicamentos, ¿derecho humano o negocio? Díaz de Santos, 2017,
Madrid.
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