Putting patients at the forefront

Date: 20/07/05

Two MEPs discuss ways to improve the regulatory framework for Europe's pharmaceuticals industry.

Governments need to look again at systems that reward drugs companies for 'Me-Too' medicines that offer little added value, says Dorette Corbey.

The consumption of medicines is peaking and profit rates of the pharmaceutical industry are high. This is good for business and indicates no need for additional legislation. But a closer look reveals that compared to the US and Japan, the European pharmaceutical industry lacks innovation and needs a real boost to regain competitiveness. Can legislation provide the solution?

Unfortunately the need for medicines and the supply available are often not well matched. Among the diseases lacking sufficient medicinal treatment are neglected and infectious diseases (examples are malaria, tuberculosis, influenza, HIV/Aids etc). The World Health Organisation (WHO) also records gaps in medicines available for children and the elderly, chronic diseases (like ischemic heart disease and stroke), and certain high burden diseases.

The gaps between need and supply would appear easy to explain. Developing newmedicines is risky and expensive. The R&D costs of a new drug are estimated by industry to be about $800 million ($660m). As a consequence, companies concentrate on profitable diseases to hedge their bets and to secure ongoing investment in innovation. As a result, 'non profitable patients' lack access to affordable drugs or, as is often the case, the drug for their disease has never even been developed.

Some of this market failure has been addressed. Incentives have been established to develop medicines for rare diseases and new legislation to reward research into children's medicines is currently on the European political agenda. But is it really necessary to spend taxpayers' money on an industry that already enjoys profit rates three times higher than the average of all industry? I believe not. And yet there are more questions to ask. Are average R&D costs really $800 million per product, or are they perhaps substantially lower? A little transparency in this area would help. And why are marketing budgets in many pharmaceutical companies higher then R&D spending? In answering these questions it may turn out that market failure is relative. The pharmaceutical industry has engaged in an intensely profit-oriented strategy which has delivered many useful new drugs. But it has also produced many 'Me-Too' drugs (medicines with little added value) that require intense marketing to harvest profits.

But who is to blame? An industry cannot be blamed for making profits.

Indeed, one must look for the root causes in legislation, government behaviour and reimbursement systems that have led industry into the choices they have made. Governments often negotiate on the price of medicines with little or no insight into the real costs and benefits, or the real added value involved. This lends evidence to a serious lack of public expertise. As such, it is government failure that induces industry to invest ever more in Me-Too drugs and excessive marketing, and increasingly less in innovation to develop medicines for diseases that currently lack treatment.

So the question is not "How much EU regulation does the pharmaceutical industry need?" The question is how to create better regulation and better policies that involve the public interest.

Where to start? Both government and industry should engage in a joint effort to close the existing gaps in public health and to avoid future mismatches between need and supply. Next, member states should abandon outdated policies. They should stop spoiling the industry with overgenerous prices and insist on true innovation with added therapeutic value.

The EU must be careful to avoid setting well-meaning but misguided precedents: it must abstain from granting disproportionate market protection to reward research into children's medicines.

And finally, heavy spending on marketing must be discouraged by providing independent comparisons of medicinal therapies to doctors and patients.

• Dutch Socialist MEP Dorette Corbey is a member of the Parliament's committee on the environment, public health and food safety.

The R&D industry and generic manufacturers have to co-exist to ensure the well-being of all of the EU's patients, says Adamos Adamou.

The commitment made by member states and the European Commission under the Lisbon Agenda to move Europe towards a knowledge-based economy could be an important guiding principle in dealing with research & development in the pharmaceutical and biotech industry. In Europe, R&D investment grew around 260% in 1990-2003. The corresponding increase in the US was more than 400%.

There are several areas that are considered of critical importance for achieving innovation in the pharmaceutical industry while at the same time taking into consideration society's limited wealth and ethical aspects.

One of the key areas of discussion is intellectual property rights, which are criticised for providing the industry with monopolies. A patent is granted if a medicine is a novelty, industrially applicable and provides a therapeutic progress. A patent grant also requires disclosure and publication of information about the medicine and encourages the continuation of scientific discovery and stimulates competition and many inventions. By preventing others from manufacturing and selling the compound for a certain timeframe, it offers commercial reward for the investment made to develop the medicine and invites further research into new compounds. This does not mean that there is no room for improvement on intellectual property rights, but the system in place provides a framework upon which the whole sector is operating successfully.

Therefore, discussions on better regulations should focus on areas which currently deserve higher priority.

But in a price-sensitive environment, and with increasingly older patients, there is a need for more medicine with proven efficacy. The generics industry has a role to play here. The R&D industry and the generics industry have to co-exist for the well-being of all.

This is one of the main challenges that Europe faces today: on the one hand to secure development on new disease areas and at the same time respond to society's demographic changes.

Clear criteria for economic assessment of new technologies coming from the pharmaceutical industry will also have to be set up. While the pharmaceutical industry prefers free market-based pricing practices, this approach is not shared by governments. That is why transparent and benefit-centred processes should be introduced. An agreement on the definition of "value" of a medicine should be decided between governments and the pharmaceutical industry. It should be decided that the payer should not be the evaluator as well. Patients should be involved and a continuous inflow of data and information about new medicines after their initial approval should become a routine practice. Most importantly the positive evaluations of a pharmaceutical product by the authorities have to be implemented at the earliest.

Another issue to be considered is patients' access to information. Currently, the determining factor for access to information on a treatment independently from the prescribing doctor is the ability to understand English. As a result there is a huge inequality throughout the EU since not all citizens have this ability. So called e-health might play an important role but better regulation with respect to patient information means finding the right balance between consumer protection and free availability of medical information.

With respect to these challenges that the European public health is confronted with, such as an ageing society and inequalities in the provision of healthcare, better regulations are the means to help improve the current situation and prepare the ground for successful operations for the whole science-based sector in Europe.

All parties involved in the provision of healthcare have to work together in order to produce the best possible solution for patients - because at the end of the day, it is the patient who will benefit or suffer, according to the system the regulatory environment shapes.

• Cypriot MEP Adamos Adamou of the European United Left (EUL/NGL) group is a member of the Parliament's committee on environment, public health and food safety.

Two MEPs discuss ways to improve the regulatory framework for Europe's pharmaceuticals industry.