[Ip-health] The crisis forces Spain to radically cut price of patented drugs for public health system

david at davidhammerstein.org david at davidhammerstein.org
Fri May 14 00:02:01 PDT 2010

The Spanish Government has challenged the price of patented medicines  
as it has taken a number of major steps announced this week to reduce  
the pharmaceutical expenditure of the public health system (23%).    
The new measures together with Spanish regional policies announced  
last March will mean savings of between 4 and 5 billion euros and a  
major reduction in the Spanish public debt that has been an important  
factor in shaking the confidence of world financial markets.  Last  
Tuesday President Obama personally called Spanish President Zapatero  
to request major austerity measures in Spain in order to avoid a  
domino effect of the Greek debt crisis.  The Spanish budget cuts have  
also been a condition demanded by the European Union.

The Spanish Health Ministry has unilaterally decided to substantially  
reduce the price of medicines that have already been patented 7, 8, 9  
or 10 years, considering that this amount of time has already given  
the Pharma industry enough market margin to recover its investment.   
The industry representatives like Lily have heavily criticized the  
measures saying that they will force job losses and reduce R and D.  
The price the State pays for generic drugs has also been reduced by 25%.

These Spanish measures that affect patented drugs create an  
interesting precedent for many other issues related to the global  
access to medicine in the South. It should also be noted that the EU  
Council under Spanish Presidency has just released an official EU  
position on Global Health that calls for al de-linking R and D costs  
from drug prices.


David Hammerstein, TACD, Brussels

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