The EU pharma reform underway matters to consumers and member states. It is a crucial piece of legislation which touches upon the requirements for approving new medicines, the period during which a medicine has no competition from rival producers, and supply-related obligations for manufacturers.
For years, problems have been piling up. Now is the moment to rebalance things away from pharma companies and more towards consumers and patients, but also health systems.
The European Commission’s proposal published in April 2023 includes some good steps in that direction, but consumers have higher expectations. While some political groups in the European Parliament tried, intense lobbying from the pharmaceutical industry to some extent blunted their intentions. Member States, who will now adopt their position on this reform before the final negotiations between the EU institutions happen, must get things right for consumers. They have one chance.
Consumers face barriers when trying to access the medicines they need
The societal implications of the current gaps in the pharmaceutical system are serious. One such example is medicine shortages. They are on the rise. Supply disruptions affect the most essential products such as antibiotics for children, which went missing in many pharmacies two winters ago. Surveys carried out by BEUC members show that medicine shortages often affect a person’s health, which was the case for between a third and a half of consumers across the five countries surveyed who suffered from a medicine shortage.
In addition, the high prices of new medicine exacerbate health inequalities in Europe, as public health systems struggle to pay for them. As a result, a cancer treatment might be reimbursed in one Member State but is out of reach to patients in the neighbouring country. And all this whilst the pharmaceutical industry makes billions. Focus groups commissioned by BEUC show that consumers do not approve of excessive pharma profits, and even less when the public sector has contributed to develop the medicine.
The way forward for member states
To fix these problems, we need an ambitious, pro-consumer EU pharma reform. This is all the more important if we look at projections for the future: the OECD has already projected that health spending will rise from 7% of GDP in 2000 to 11.2% in 2040, outstripping expected economic growth. To safeguard the financial sustainability of our public health systems, and help people live longer and healthier lives, this is what Member States must get right for consumers in the EU’s pharma reform.
Strike a better balance between incentives for innovation and competition
Today, in Europe pharmaceutical companies can get excessively long periods of exclusivity for a new medicine they have developed. Long monopolies and high medicine prices end up over-rewarding the industry. Shortening some of these exclusivity periods would allow earlier patient access to cheaper generics and create savings for healthcare systems.
However, the European Parliament failed to shorten the period of ‘data protection’ for new medicines. Under its proposal, companies would get 7.5 years of protection, which is very close to today’s 8 years, but that could also go up to 8.5 years. Member States should support the Commission’s proposal to set the baseline at 6 years, and must avoid going beyond today’s protection period.
We need more competition, not less.
In addition, Member States should ensure the legislation leads to more transparency on research and development (R&D) costs, so we can know how much it has really cost a company to develop a medicine and what share of that investment was actually provided by governments.
Introduce robust measures to prevent shortages
At present, pharmaceutical companies are not required by EU law to develop medicine shortage prevention plans, undermining their obligation to ensure continued supplies.
Both the European Commission and the European Parliament agree that prevention plans should be in place for all medicines. The Parliament went a step further by stressing that the prevention plans for critical medicines should be submitted proactively with the authorities. Member States must support this position, as well as the requirement for companies to notify shortages much earlier than they do today and be transparent about the reasons behind a shortage.
One way in which the Council should strengthen the text is by including in its position an obligation for companies to keep a minimum safety stock of two months. Such stocks act as a ‘cushion’, mitigating the impact of supply disruptions on consumers. These measures should go together with dissuasive sanctions to encourage compliance.
Support the development of new antibiotics in fairer ways
To tackle the lack of commercial interest from companies in developing certain antibiotics, the Commission proposed a system of ‘transferable exclusivity vouchers’. We are alarmed at this, as it would have the knock-on effect of delaying access to generics for other medicines.
The European Parliament retains the system of vouchers, but with some caveats and alternative measures.
The Council should walk away from the vouchers and support the alternative and fairer funding mechanisms endorsed by the Parliament.
Of course, some governments will be reticent to do much which antagonises the pharma companies operating in their country. EU competitiveness is the new term that is branded about in every major speech on the EU nowadays. But member states should remember that tensions in their public health budgets and systems will only grow if they don’t do more to tackle medicine shortages and high prices. Member States must ensure this EU pharma reform must result in tangible benefits for consumers across the EU. We have provided what are some of the leads to do that.