Specific Challenges in Europe

1
Specific Challenges in Europe

• David Brickwood, PhD
• Vice President, International Government Affairs
  - Europe

2
EU Commissions Reflection on a new EU Health
Strategy

• Back at forefront of the worlds health research
  and technology
• Equal access to affordable, high-quality health
  care
• Backed by clear and reliable information on
  health, illness and treatment options

3
EU Health Strategy

• Should
• Focus on chronic illness, not just on lifestyle
  and prevention
• Assess treatment options on benefits, not just
  economic impact
• Be an advocate of state-of-the-art treatment
• Invest in research
• Develop better medicines for children

4
Chapter 2Good Health as a shared responsibility

• Better informed citizens and patients

5
Our Goal Health for the public good

• Informed opinion and active co-operation on the
  part of the public are of the utmost importance
  in the improvement of health of the people.

World Health Organization Preamble to the
Constitution
6
The Expert Evidence for Information to Patients

• A University of Cambridge Informed Patient Study
  presented evidence that informed patients are
• less anxious
• treatment starts earlier
• more satisfied and litigate less
• Follow advice better
• Lower risk interventions are selected
• Health care costs drop through more
  self-management and a more efficient use of
  resources

7
The industry wishes to be an active partner
EFPIA has developed guiding principles for
informed patients

• Enhanced access to health and medicines
  information is needed for all patients and
  citizens in Europe.
• Quality medicines information from multiple
  sources should be promulgated.
• Opportunities for internet access to medicines
  information should be enhanced.
• Regulatory developments should build on current
  best practice in Europe.
• A comprehensive information strategy that will
  truly benefit patients and citizens in Europe
  should be developed.

8
Chapter 3Health Generates Wealth

• Health expenditure is an investment, not a cost

9
Commerce Department Study OECD Price Controls

• Mandated by Medicare Modernization Act of 2003
• Study released December 2004
• Purpose
• Identify foreign price controls on
  pharmaceuticals in OECD countries
• Estimate effects on US consumers, global RD,
  generic competition, and pricing

10
OECD GOVERNMENTS EMPLOY A RANGE OF INTERVENTIONS
TO CONTROL DRUG COST
Price controls
Volume controls
Spending controls
x

• Profit controls
• Revenue controls
• Physician Rx budgets
• Physician healthcare budgets

• Cost plus pricing
• Pharmacoeconomic criteria
• Molecule/class reference pricing
• Cross-country reference pricing
• Mandatory rebates
• Price cuts/price freezes
• Co-payments/co-insurance
• Generic substitution incentives

• Marketing spend limits
• Product volume caps
• Prescribing guidelines
• Positive/negative lists
• Formularies
• Parallel import dispensing targets/incentives

Supply
Demand
Note Molecule/class reference pricing
pricing/reimbursement the same for drugs with
same active ingredient or therapeutic benefit
Mandatory rebates one-off discounts or
voluntary contributions to budget deficits
Positive lists similar to formularies
formularies can be used to steer prescribing
among reimbursable drugs
11
Commerce Department Study Findings

• Catalogues broad range of price control and
  related practices in 11 key OECD markets
• Finds that the negative impact is significant
• Industry revenues suppressed, reducing global RD
  by 5-8 billion annually (11-16 cut)
• Lowered global RD means 3-4 fewer new drugs
  developed each year
• Use of generics is suppressed, and generics too
  expensive. Savings if generics reduced to free
  market levels -- 5-30 billion enough to
  offset pricing innovative drugs at free market
  levels
• US consumers would benefit from elimination of
  foreign price controls in the long run, as a
  result of greater competition.

12
Fourth hurdle determines market access

• Future implementation
• Germany
• Hungary
• Czech Republic
• Greece
• Spain(?)

• Current standard
• England Wales (NICE)
• The Netherlands
• Finland
• Denmark
• Sweden
• Norway
• Switzerland
• Portugal
• Baltic states
• Italy (?)
• France (?)

13
Health Technology Assessments (HTAs)Key
Principles

• Speed up access
• Cover totality of healthcare
• Encourage equality of access
• Independent evaluators
• Decisions based on science, not cost-drivers

• Product specificities prevail, not class effect
  conclusion
• Transparency / consultation
• Data beyond RCTs accepted
• Industry as a legitimate partner
• Local decisions base

14
Parallel Trade

• 4.3bn (2002 ex factory prices)

Market Share
Source EFPIA The Pharmaceutical Industry in
Figures 2004
15
Parallel Trade LSE Conclusions

• Modest savings to health insurance organisations
  through direct (price) effects
• No intra-or inter-country competition effects
• Some benefits to pharmacies
• Zero or, at best, marginal benefits to patients
• Most pecuniary benefits accrue to parallel
  importers
• Loss to industry (producer) surplus
• http//www.lse.ac.uk/collections/pressAndInformati
  onOffice/newsAndEvents/archives/2003/Panos_researc
  h.htm

16
Patient Access Delays Significant delays in drug
access due to policies related to pricing and/or
reimbursement
2190 days
For Poland, the true delay could not be
calculated as no new innovative products have
been reimbursed for the past six years
Average time delay between marketing
authorisation and effective market access all
products Blue bars represent time period 2 (31
Dec 99 31 Dec 03)
17
Contribution from Healthcare Industry

• Driver of employment and investment