The EU clashes with Big Pharma over the price of drugs
European Union reforms aim to get new drugs to patients faster and cheaper, but this is against the interests of Big Pharma. As a result, drug price negotiations are becoming even more complex.
Soaring medical costs are weighing on global budgets as world leaders seek to contain inflation, yet price pressures are straining Europe's supply of cheaper, off-patent medicines. The issue is particularly sensitive in Europe, as demand for healthcare exceeds expectations and the war in Ukraine continues to drive up the prices of everything from energy to consumer goods.
The EU clashes with Big Pharma: why?
The reform project includes changes in the legislation of the European Union (EU) pharmaceutical industry. The plan is to shorten the period during which drug companies can sell their brand-name drugs without competition.
At present, companies that create newly formulated medicines can market them for ten years without fear of biosimilar medicines entering the market.
Ed: The patent of a drug is the exclusive trademark of the pharmaceutical manufacturer. The patent of a drug lasts 20 years (Legge Cee 1768 of 1992) and throughout this period, the pharmaceutical company that developed the drug can market it "exclusively". The patent does not necessarily correspond with the placing on the market which can take place even many years later. In fact, in the case of drugs, placing them on the market is regulated by an administrative procedure which has the purpose of assessing safety and efficacy. Taking into account that it takes at least 10-12 years for a new medicine to arrive on the pharmacy counter, this means that the company has only 8 left to repay 20 (overall). For this reason, the "certificate of supplementary protection” which is the title by virtue of which the duration of the patent exclusivity is extended for a period not exceeding 5 years
The EU wants to shorten this period by two years. This would mean that cheaper drugs will be on the market sooner and therefore accessible to a larger population.
In fact, once a drug's patent expires, many pharmaceutical companies offer generic versions, which can then reduce the price down to 80-90%. Thus, less competition often allows for price increases, but also carries a higher risk of drug shortages.
European citizens need access to innovative and affordable healthcare products and services. Effective competition means that companies that manufacture pharmaceuticals, medical devices, or other health-related products and services compete with each other based on the quality and price of their products and services. As a result, companies are incentivized to invest in the development of new treatments and to charge more competitive prices.
When those circumstances prevail, the citizens win. On the other hand Big Pharma perceives the news in different way. He says Europe already lags behind the US and China in research and development of new drugs. The envisaged amendments are also criticized by Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations, who underlined that the reform of the legislation will cause enormous damage to the competitiveness of the European pharmaceutical industry.
While Roche and Novartis executives said this week they want authorities to see health as an investment rather than a cost. However, it's not as if all hope is lost for the pharmaceutical industry. There are still two months left to officially submit the legislative changes for approval, considering that it spends more than €40 million every year to influence EU policies, employing around 220 lobbyists.