[Ip-health] Dutch Council for Public Health calls for strong action against high medicines pricing

Ellen 't Hoen ellenthoen at medicineslawandpolicy.net
Sat Nov 11 03:20:46 PST 2017

Dear IP-Health readers,

See below the press release and the direct link to the report of the Dutch Council for Public Health and Society (an official advisory body established by the Dutch Government in 2015) which has published its recommendations to tackle the vicious circle of high medicines pricing and non-access conducive innovation incentives. The report was presented to the new Minister of Health Mr Bruins this week.

Their recommendation to the government to make use of compulsory licensing is making headlines as we speak. The report mentions the need to ensure that the power to invoke a compulsory licence resides with the Minister of Health (currently this is the Minister of economic Affairs). It also recommends to allow patients to import lower priced medicines for personal use.  

The report  goes to the root of the matter when it discusses the need for changes in the current pharmaceutical innovation system, to make it more efficient, and to address the shortcomings of monopoly based incentive mechanisms for the development of new medicines. It recommends, among other things,  taking on the development cost of new medicines directly so high prices are not needed to recoup development costs. This speaks to delinkage models of innovation. It also recommends to strengthen negotiation position of publicly funded researchers to ensure socially responsible licensing when knowledge and IP, developed with public financing, is transferred to the commercial sector. 

The Council recommends taking action at EU level such as lifting data exclusivity barriers to effective use of compulsory licensing by EU member states, addressing the abuse of orphan drug legislation and using of competition law to address abuse of monopoly power by companies. Some of this is under way see for example: http://www.consilium.europa.eu/en/press/press-releases/2016/06/17-epsco-conclusions-balance-pharmaceutical-system/ <http://www.consilium.europa.eu/en/press/press-releases/2016/06/17-epsco-conclusions-balance-pharmaceutical-system/> (For more details on data exclusivity in the EU see: https://joppp.biomedcentral.com/articles/10.1186/s40545-017-0107-9 <https://joppp.biomedcentral.com/articles/10.1186/s40545-017-0107-9>)

The report recognises that some of the actions it recommend will require international and / or European collaboration.

The report comes in the wake of former Ministers Schippers (Health) and  Ploumen’s (Foreign Trade and Development Cooperation) statements in the Lancet about access to essential medicines and innovation at the occasion of the publication of the report of the Lancet Commission on Essential Medicines (full report here: http://www.thelancet.com/commissions/essential-medicines <http://www.thelancet.com/commissions/essential-medicines>)  where they said:  
“We cannot achieve any real progress without acknowledging that the current patent-based business model and the way we apply international patent rules need to change. The system is broken.… Patent and intellectual property exclusivities are the only cornerstone of the current model. Companies can ask the price they like. This will no longer do. We need to develop alternative business models. And if public money is used for the development of new medicines, agreement upfront is needed about what this public investment will mean for the final price. We believe that companies must provide full transparency regarding the costs of research and development (R&D). (See for full statement: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(16)31905-5/fulltext)

I have described here only a few highlights and background that may be of interest to IP-Health readers. You can download the full report in English here:
Development of new medicines. Better, faster, cheaper <https://www.raadrvs.nl/uploads/docs/Recommendation_Development_of_New_Medicines.pdf>
Kind regards,

Ellen ’t Hoen
Ellen ’t Hoen, LLM | Medicines Law & Policy
www.medicineslawandpolicy.org <http://www.medicineslawandpolicy.org/>

phone: +31 (0) 6 375 30 700
e-mail: ellenthoen at medicineslawandpolicy.net <mailto:ellenthoen at medicineslawandpolicy.net>
skype: efmthoen
My book: goo.gl/wcvAgh <https://goo.gl/wcvAgh>

Development of new medicines. Better, faster, cheaper

The governmental authorities need a different approach to pharmaceuticals manufacturers. If they are not prepared to ask a socially acceptable price for their products in negotiations, the authorities will have to make use of the options that national and international regulations offer for making the medicine available for patients nonetheless. Examples of these last resort options are tackling the misuse of positions of power by the manufacturers, encouraging pharmacy preparation, allowing patients to order medicines themselves via the Internet on a doctor’s prescription, and granting compulsory licences.
Enforcing socially acceptable pricing will encourage the commercial sector to develop medicines better, faster and more cheaply. They will in particular be forced to reduce the high probability of failures in the development of new medicines. That is stated in the recommendations entitled “Development of new medicines – better, faster, cheaper” that the Council for Public Health and Society (Raad voor Volksgezondheid en Samenleving, RVS) handed over today to the Dutch Minister for Medical Care, Mr Bruins.

“A situation has arisen in the Netherlands that is impacting negatively on both society and the individual patients,” says Pauline Meurs, chair of the RVS. “The high prices are partially the consequence of an inefficient development process. The costs of failures are set off against the price of the medication that does reach the market. Another factor is the market power of the pharmaceutical companies and the limited counterweight provided by government, hospitals and health insurers.” Throw the duty of care that is widely accepted in this country into the mix and it becomes all but impossible not to give a medicine a licence. We are aiming to use these recommendations to show that it can be done differently, in the current international context as well. The Netherlands can lead the way in this.”

Reducing the risk of failure 
The high prices of medicinal products are to a significant extent the consequence of inefficient development processes. An average of nine out of ten potential new medicines drop out during the costly clinical trials. There are too few stimuli for both scientists and pharmaceuticals companies to make efforts to reduce the development costs, in particular the risk of failures. It is currently too easy for companies to set off the costs of these failures in the price of a medicine that does make it to the market. In addition, lower development costs do not necessarily lead to lower prices in the current situation. Two reasons why the governmental authorities must tackle excessively high prices. The quality of the clinical trials also leaves a lot to be desired. There is a task here for the authorities in encouraging reliable and efficient clinical research. The authorities must also provide further stimuli for new forms of medicine development in the country. In addition, direct input from patients in the development of medicines can yield better results and lower risks of failure. If we are able to work together in the Netherlands, we will be able to show that medicines can indeed be developed better, faster and more cheaply.

Tackling excessively high prices
In order to obtain lower prices, the negotiating power of the authorities has to be increased. If the price of a new medicine is too high and price negotiations fail, then the authorities must make use of the available legal instruments such as compulsory licences. The governmental authorities could also permit patients to order cheaper medicines on a doctor’s prescription, for instance abroad through the Internet and have them delivered at home. Pharmacy preparation must also be encouraged. In addition, the governmental authorities can tackle the manufacturers’ abuse of their position of power. This not only provides a stimulus for more efficient development of new medicines, but at the same time also keeps care affordable.

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