(from E-drug – Wilbert Bannenberg)
Fair Pricing Forum 2017 in the media:
Fair Pricing Forum Background Note
Society relies on the pharmaceutical industry to develop and manufacture essential medicines. Universal Health Coverage hinges on the availability of quality-assured, effective and affordable medicines in sufficient quantities. Although the pharmaceutical industry has delivered a number of effective medicines that could help address some major public health challenges, we currently face a global pricing crisis hampering access to these new medicines in many parts of the world. For example, medicines such as direct-acting antivirals for hepatitis C and some cancer treatments are challenging the sustainability of health systems even in high- and middle-income countries. At the same time, some key essential medicines, such as benzathine penicillini or methotrexate for cancer,ii are disappearing from global markets due, in part, to heavily reduced prices that no longer present sufficient commercial incentives for manufacturers to supply them.
Medicines pricing has been the subject of heated global debate for some years, calling in question current pricing strategies as well as predominant research and development financing models. The time is therefore ripe to explore approaches to ensure that medicines pricing can better respond to public health needs and priorities. To do that, much more information is needed about what drives price setting strategies for new medicines, as well as what the market needs to do to retain essential medicines at prices that ensure quality products and a viable commercial model.
Discussion to date, including in the report of the UN High-Level Panel on Access to Medicines,iii has focused on the effect of research and development costs on prices and, therefore, the need to both delink these two issues and to substantially increase public R&D financial investment to reduce prices through “push” incentives. Unfortunately, there is insufficient published information about the effect of investment strategies and hedge funds on price setting for new medicines, even though evidence shows that financial markets and shareholder expectations are driving drug prices up, especially for products with limited markets.iv The influence of financial markets on the price of essential medicines must therefore become part of the discussion. None of the current policies used for price setting consider shareholder expectations and what could be an acceptable return on investment in the way that is practised in other innovative manufacturing sectors.
There is also little published information about the production costs of some off-patent essential medicines, and there are increasing reports of quality problems with some generic drugs.v Are global procurement processes starting to push prices to below what is actually reasonable? Anecdotes from generic manufacturers suggest that prices paid might not even cover costs of production, particularly for products with limited markets. We need to understand these issues if we are to advance the 2030 agenda and expand access to medical products.
In trying to address the problem of unsustainable prices, countries are now starting to collaborate on global solutions. For example, the Netherlands and Belgium supported a process in 2016 to define scenarios for new systems for ensuring development of needed new medicines. Four scenarios were identified: needs-oriented public-private partnerships; a state sponsored, not-for-profit drug development track; a multinational fund for paying for patents of promising products so that they can be further developed; and a scenario in which the public sector takes over drug development and the private sector’s role becomes that of a contractor to manufacture products that the international community wants.vi
The challenge with all of these options is that there is no clarity on how the global community could start implementing them. Disease-specific, public-private partnerships, such as the Drugs for Neglected Diseases initiative (DNDi) and Medicines for Malaria Venture (MMV), among others, have changed the landscape of availability and access to new medicines for neglected tropical diseases and malaria, respectively. But how best to harness international collaboration for a broader range of new and old essential medicines is uncertain.
We need new creative collective thinking to get us to access for all in 2030. To start the process, WHO and the Dutch Government Ministry of Health, Welfare and Sport have agreed to co-host the Fair Pricing Forum.
The main objective of the Forum is to discuss options for a fairer pricing system that is sustainable for both health systems and research-based and generic pharmaceutical industries. The Forum will be looking for answers to three main questions: What can governments do to ensure fairer medicines prices and greater access? What can industry do? How can WHO support the process?
All relevant stakeholders, including representatives from the pharmaceutical industry and relevant non-governmental and patient organizations, will have a chance to share their experiences with current pricing strategies and to discuss how to achieve fairer prices in the long term.
Possible solutions that will be discussed include: developing alternative approaches for R&D and business models for innovation; facilitating collaboration among payers by expanding current networks to include other relevant stakeholders and countries; increasing exchange of information, for example to assess the value of new products; promoting transparency of prices paid, research and development costs, production costs, and profit margins.
i Taylor MM, Nurse-Findlay S, Zhang X, et al. Estimating benzathine penicillin need for the treatment of pregnant women diagnosed with syphilis during antenatal care in high-morbidity countries. PLoS One 2016; 11: e0159483.
ii Bauters T, Claus BO, Norga K, et al. Chemotherapy drug shortages in paediatric oncology: a 14-year single-centre experience in Belgium. J Oncol Pharm Pract 2015; published online Oct 6. DOI:10.1177/1078155215610915.
iii UN Secretary-General and Co-Chairs of the High-Level Panel. The United Nations Secretary-General’s High-Level Panel on Access to Medicines Report: promoting innovation and access to health technologies. 2016. http://www.unsgaccessmeds.org/final-report/ (accessed Sept 26, 2016).
iv Cohen D, Raftery J. Paying twice: questions over high cost of cystic fibrosis drug developed with charitable funding. BMJ 2014; 348: g1445
v WHO. Full list of WHO medical product alerts. 2016. http://www.who.int/ medicines/publications/drugalerts/en/ (accessed Oct 17, 2016).
vi Vandenbroeck P, Raeymakers P, Wickert R, et al. Future scenarios about drug development and drug pricing. 2016. https://kce.fgov.be/sites/default/files/page_documents/KCE_271_Drug__Pricing_Report.pdf. 2016
(accessed Sept 20, 2016).