Transcript Competitiveness of the European

Competitiveness of the
European-based
Pharmaceutical Industry
Prospective of a New
Member State
Imre Hollo
Deputy Secretary of State, MOH
Hungary
Multiple interests complicate policy
making in the sector
 Patients should receive safe, efficacious and
good quality drugs
 Drug costs should be under control
 Domestic pharmaceutical industry should be
strengthened
Competing Pharmaceutical Policy
Interests
Health Care Policy
Industrial Policy
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Cost containment
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Generic Promotion
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Improving prescribing
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Ensuring access
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Regulating consumer
behavior
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Safe medicines
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Intellectual property
rights protection
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Efficacious treatment
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Generating
employment
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Innovative cures
Contributing to a
positive trade balance
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Patient access to drugs
Promoting SMEs
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High quality medicines
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Promoting local R&D
Public Health
Policy
Source: Regulating Pharmaceuticals in Europe, Mossialos, et al.
The EU’s response to the challenge –
the G10 Report
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The G10 Report represents a significant achievement.
It looks at ways we can build on to improve the
competitiveness of the industry while meeting
important public and social objectives.
The Report recognizes that progress can only be made
by looking at action at both a European and a national
level and by considering competitiveness issues in the
light of achieving public health and social objectives
The G10 Process
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Diagnosis: competitiveness of EU-based
pharma industry is lagging behind the USA
The objective of the Group was to review the
extent to which current pharmaceutical, health
and enterprise policies can achieve the twin
goals of both encouraging innovation and
competitiveness and ensuring satisfactory
delivery of public health and social imperatives.
Some key recommendations of the
G10 process
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Member States and EU institutions should improve legislation or
the operation of the licensing system to improve the
introduction to the market in particular for innovative medicines
Respecting national competence, Member States should examine
the scope for improving time taken between the granting of a
marketing authorization and pricing and reimbursement
decisions
Member States explore ways of increasing generic penetration in
individual markets (including generic prescribing and dispensing).
Particular attention should be given to improved market
mechanisms in full respect of public health considerations.
Full competition should be allowed for medicines not
reimbursed by State systems or medicines sold into private
markets.
Industry focus
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Although the G10 approach attempts to balance
competing objectives, it seems to be stronger on
the industrial promotion side
Emphasis is on liberalization and on ensuring
the free movement of goods underpinning the
single market
Public reimbursement of drugs is seen as a main
engine for promoting competitiveness of the
EU-based industry
The Hungarian case
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Pharmaceutical expenditures have been rising
steadily in the past decade and consume almost
34% of total health expenditures (CZ:25%,
G:14%, F:20%)
Public pharmaceutical expenditures are also
sizable on a dollar per capita basis, as they reach
$280 calculated in PPP compared to $240 in the
UK or $266 in the Netherlands.
Public Expenditure on
Pharmaceuticals
400%
370%
340%
310%
280%
250%
Nominal
220%
Real
190%
160%
130%
100%
70%
1994.
* Forecast
1995.
1996.
1997.
1998.
1999.
2000.
2001.
2002.
2003.*
Pharmaceutical consumption per
capita (in boxes)
35
1997.
30
25
20
15
10
5
U.K.
Portugal
Hun
Germany
Danemark
Czech
Austria
0
Reasons for the high drug bill
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International experience also shows that the younger
democracies are and the less experience they have in
negotiation with the pharmaceutical industry, the faster
public expenditures devoted to drugs grow.
Increased drug consumption only partly explains the
high public pharmaceutical expenditures. The other
reason behind this phenomenon is the strong market
presence of innovative products accounting for 75% of
the domestic market.
How to stop the galloping growth?
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In light of Hungary’s goal to join the EURO zone by 2010,
galloping pharmaceutical expenditures need to be capped.
This is why the Government has launched a comprehensive reregulation of the pharmaceutical sector.
The objective is to regulate and influence both the supply and
the demand side of the market.
The main aim is to (i) reduce the currently prevailing information
asymmetry by ensuring that the right information is given to the
patients; (ii) reach a balance in terms of market share between
innovative and generic products; (iii) reduce the scope of
discretionary public policy measures and to (iv) guarantee the
financial sustainability of the market.
Is reimbursement the cure?
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Is public reimbursement the only way to further
competitiveness of the European-based pharmaceutical
industry?
Competitiveness is much more complex and depend on
several factors:
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Education and the link between education and business (e.g.
MIT, entrepreneur labs, etc.)
Tolerance, inclusion of foreigners (no free movement of
labor from the Member States the most of the EU countries)
More EU funds for research (also in the new Member States)
Pushing innovative firms to establish production/R&D
facilities
Reward only real innovation…
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A detailed study by Prescrire found:
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That only 0.3 % of the 2693 new drugs approved and
patented over the past 22 years provide a major therapeutic
advance
2.7 % provide important therapeutic benefits with certain
limitations
7.9 % have some value, but do not fundamentally change the
present therapeutic practice
16% provide minimal additional value
The rest (1584 of all new drugs) are considered
“therapeutically superfluous”
Source: Regulating Pharmaceuticals in Europe, Mossialos, et al.