Which market is being referred to? Why do Romanians have access to new medications two years later than Germans?

The European Union places great importance on the single market, but there is a lack of unity when it comes to life-saving medicines, with each country acting independently.

Patients in the EU do not have equal access to necessary medications when fighting against illness. A physician in Romania may have to wait up to two years before being able to prescribe a modern drug that is readily available to their counterpart in Germany. For those facing a life-threatening disease like cancer, this disparity could be the difference between life and death.

Decision-makers are cognizant of the existence of this disparity based on postal codes and are seeking to address it.

Health Commissioner Stella Kyriakides stated in a speech in April that patients in larger and Western member states have a 90% access to recently approved medications. However, in smaller and Eastern member states, this percentage drops significantly to only 10%. This is deemed as unacceptable.

A high-ranking representative from the EU discussed the Commission’s plan to improve the pharmaceutical market in Europe. The primary objective is to address the problem of unequal access. The main strategy is to penalize companies that do not release their product in all 27 EU markets within two years. Failure to comply will result in earlier competition from other companies.

It is a crude tool for addressing a complex issue, according to experts. The effectiveness of this tool is still uncertain.

However, as lawmakers in the Parliament engage in lengthy debates over the specifics of the document, we analyze the major challenges to creating a more equitable market for medications.

Money

The primary factor is straightforward: Certain medications come with a high cost. Additionally, there are significant variations in economic status among the 27 member nations of the EU. For instance, Bulgaria’s GDP per capita is nearly five times lower than that of the Netherlands. This results in some countries having the ability to allocate more funds towards healthcare and pharmaceuticals than others.

A study commissioned by the industry has examined the European market for cancer medications. The Swedish Institute for Health Economics (IHE) discovered that Austria, Germany, and Switzerland were the highest spenders, allocating between €92 and €108 per person on cancer drugs. In comparison, the Czech Republic, Latvia, and Poland only spent €13-€16 per person.

Reduced expenditures result in a decrease in the number of prescribed medications. For immuno-oncology treatments, the usage in less affluent nations was only a fraction of what was seen in more affluent nations.

According to the researchers, a significant number of cancer patients in Europe, particularly in Eastern Europe, are unable to obtain affordable and effective medication.

Secret haggling

A more complex explanation is rooted in the unclear and unique manner in which medication prices are determined. In Europe, the predominant method of determining prices involves pharmaceutical companies directly bargaining with governments in a secretive manner, resulting in countries being unaware of the prices paid by others for a particular drug.

Sabine Vogler, head of the pharmacoeconomics department at the Austrian National Public Health Institute, stated that pharmaceutical companies prioritize launching new medicines in countries with higher income and willingness to pay. These countries tend to be in Europe, such as Portugal and Greece, while countries in Southern and Eastern Europe may have to wait two or three years before the medicines become available.

When introducing a new medication, corporations prioritize releasing it in the countries with the highest potential profit, usually the biggest and most affluent ones. The governments in these countries establish a publicly known reference price. However, this price is then reduced through private negotiations where a hidden discount is arranged. The cycle repeats with each subsequent country, utilizing the public reference price as a baseline.

In summary, negotiations are extended over a period of time, and nations with less desirable markets are placed at the end of the queue.

Red tape

The issue for the pharmaceutical industry is not the pursuit of money, but rather the excessive amount of documentation required to secure government reimbursement for a new drug.

“The process of applying for [negotiating a drug] is lengthy,” states a report released by the pharmaceutical industry group EFPIA, which examines the main reasons behind delays in the distribution of medications. “Each country has specific requirements, including the creation of a customized document in the local language and adherence to local regulations.”

The European Union’s Transparency Directive sets a maximum time limit of 180 days for countries to make a decision on the cost of a medication. However, in reality, there are “clock stops” that pause the countdown when regulators and government agencies request additional data from companies.

This can have a cumulative effect. An examination of the average time it takes for personalized cancer drugs to be approved for payment in five countries found that Denmark has a decision-making process of just over four months. In Poland, which has the poorest performance, it takes 30 months.

The right fix?

Several solutions are currently being implemented. The Joint Health Technology Assessment, also known as JHTA, will generate a unified evaluation of new medications for the entire European Union. This will aid countries in determining appropriate pricing, as opposed to the current process of creating separate assessments for each of the 27 member nations. The initial joint assessment is projected to be completed in 2025.

Some countries have formed regional alliances, like the Beneluxa group which includes Belgium, the Netherlands, Luxembourg, Austria, and Ireland, to collectively purchase medications. This makes it easier for drug companies to negotiate and gives the buyers more leverage.

However, the most ambitious solution so far is the pharmaceutical reform proposal by the European Commission. Given that there has been strong opposition from industry groups to the plan of implementing bloc-wide launches, European lawmakers will face a challenging task.