By: Katrina Perehudoff, Global Health Unit Department of Health Sciences, UMCG Groningen, firstname.lastname@example.org
Excessively high prices of innovative medicines threaten patient access and health system sustainability in developing and industrialised countries alike. The Organisation for Economic Co-operation and Development (OECD) has launched a new initiative to facilitate high-level dialogue between stakeholders on access to innovative medicines and the sustainability of prices. On April 30, 2017, members of the GHLG Research Centre and the Global Health Unit in the Dept. of Health Sciences at the University Medical Centre Groningen responded to OECD’s online consultation for sustainable access to innovative medicines. Below are excerpts from our response.
What are the causes of high prices?
A proliferation of incentives based on market exclusivity (patents, supplementary protection certificate, orphan drug legislation, data exclusivity) has enabled pharmaceutical manufacturers to command high prices, jeopardising universal access to innovative medicines. Company behaviour to market drugs for narrow indications has resulted in smaller patient groups, or exploitative dominant market positions, limiting negotiating power and leading to price gouging. (1) (2)
Health systems often have neither the capacity nor strong enough institutions to rigorously assess such medicines, and frequently lack proper regulation over the control of prices. (3) Underdeveloped/ill-equipped government pricing and reimbursement mechanisms have not kept up pace with the development of innovative medicines for small patient populations. Decision-makers have failed to capitalise on governments’ negotiating power as large volume purchasers. Some governments are reluctant to issue licenses when patent monopolies are abused. Patient access schemes (i.e. managed entry, pay per performance, etc.) promoted by the pharmaceutical industry can stimulate the consumption of medicines of unproven benefit and offer neither long-term solutions for access nor sustainability.
These measures result in unaffordable essential medicines, which often leads to rationing or delayed access (4) and the triggering of domestic litigation for patient access, drawing criticism from physicians, specialists, and consumers. The crisis in access led regulators in Italy to condone oversees purchasing and importing of lower-priced medicines.
Which measures can ensure access to innovative medicines while maintaining financial sustainability of health systems? First, governments should embrace their legal obligation and moral responsibility to realise universal access to medicines of proven therapeutic value. The limited health impacts of many medicines do not justify their expense; however, real innovations that offer health benefits, as a matter of principle, cannot be withheld from patients in need. OECD nations should:
1. Advance a global R&D framework to set R&D priorities and a strategy to ensure both innovation and access, including by delinking medicine prices from R&D costs. OECD governments are urged to demonstrate the political will to advance a global R&D framework to address public health challenges and respect human rights imperatives for universal access.
2. Optimise government regulation to achieve equitable and efficient spending to a maximum of available public resources (i.e. adequate domestic financing and international aid for medicines; regulate pooled funding, price control, IP management). This requires OECD governments to:
- Ensure adequate funding for the purchase of essential medicines for countries that lack the purchasing power to do so.
- Increase competition and negotiating power, and control medicine prices through law, policy, international cooperation, and technical assistance. This includes abandoning the IP maximalist policies advanced by a number of OECD countries vis-a-vis developing-country trading partners;
- Manage IP for single-sourced medicines, including through the use of TRIPS Flexibilities and the creation of an essential medicines patent pool;
- Monitor prices and affordability domestically, and in the context of aid to developing countries;
- Ensure the transparency of prices and R&D costs;
- Better stewardship of government-funded innovations to prevent the public from paying twice for innovation (i.e. through tax contributions and paying the high price).
3. Fairly and equitably allocate resources as required by human rights law to provide universal access to innovative medicines according to objective and transparent criteria (i.e. evidence-based medicines prioritisation including through HTA). OECD governments should:
- Ensure the careful and objective selection and prioritisation of medicines in universal benefits packages;
- Avoid creating ad-hoc, earmarked funds for expensive, innovative medicines and instead seek structural, long-term solutions to bring prices down. Resulting savings should be spent on R&D activities;
- Apply a human rights-based approach, consistent with international law, to ensure equality, non-discrimination, and attention to those who are more vulnerable to access policies.
The complete response written by ’t Hoen E., Perehudoff K., Moye Holz D., Gispen M.-E., Toebes B., and Hogerzeil H., can be found here.