Are the EU member states heading for increased P&R transparency and potential centralised drug procurement? A number of recent initiatives seem to indicate this is the direction of travel.
In October 2014, the EU Member States and Commission voted in favour of joint procurement for pharmaceuticals (Decision 1082/2013/EU: Art. 5), whilst on 1st December 2014 the Council of the European Union approved the “Conclusions on innovation for the benefit of the patients” which included provisions for “initiatives for exchange of information and collaboration in the field of pricing and reimbursement facilitated by the European Commission”.
The price controversy surrounding Sovaldi (sofosbuvir), Gilead Sciences’ breakthrough Hepatitis C drug, has been a great example of how EU cooperation in data sharing has increased recently. The high cost of the treatment (~€49 000/treatment) and the potentially huge patient population is a significant concern to payers. Faced with this, the French government convened a meeting of EU member states in July 2014 to share drug pricing information on Sovaldi. It then utilised this information within its pricing negotiations, with the French Health Ministry announcing in November 2014 that the Sovaldi price in France was the cheapest in the EU at €13 667 per 28 pack.
Similarly, Portugal’s Infarmed proposed, in co-operation with other EU states, that the new joint procurement agreement should be used to procure Sovaldi across the whole of the EU. A number of smaller EU countries were in favour of this, as it would reduce their acquisition costs by being part of a larger buying group. As yet this initiative has not translated into action, but it demonstrates that payers are seeking new approaches to reduce their pharmaceutical budget.
For a number of years the EU has been seeking ways of sharing and rationalising pharmaceutical HTA assessments and pricing data (e.g. EUnetHTA and the Pharmaceutical Pricing and Reimbursement Policies (PPRI)). The recent financial crisis and austerity drive have only hasten the implication of these measures. It appears that Sovaldi has been the “wrong product in the wrong place at the wrong time” given its controversial price level that has acted as a new stimulus for payers across the EU to try these new EU procedures to reduce their pharmaceutical drug budgets.
So what does this mean for EU pharmaceutical pricing in the future?
In the short term, the current situation is unlikely to change, with individual governments still making the final P&R decisions and sharing P&R information on an informal basis. However, given that the EU procurement decision has been passed and Portugal has already expressed an interest in using it, it is likely that joint procurement will be used in the near future. The question is what will the trigger be – will this be the “next Sovaldi”, another financial crisis or an unknown factor?
There will be an increased sharing of pricing information both formally and informally between governmental health institutions, particularly for high cost medicines. This has been a trend over recent years which is expected to continue and may have significant impact on international reference pricing and country launch sequences if net prices are known. Yet the EU is still a long way from a comparable situation to the Gulf Cooperation Council (GCC), which is currently harmonising CIF (equivalent to Wholesaler purchase prices) prices between its six Middle East markets.
In summary, the direction of travel is clear at the policy level, with the EU member states favouring sharing of pricing information and the principles of joint pharmaceutical procurement. However, only tentative steps have been made into turning these initiatives into practice. Fundamentally, pricing decisions will remain the responsibility of individual EU states, although it is likely their price awareness of other markets will increase over time, increasing the pressure on Pharma companies.