9 European pharmaceutical competitiveness
| (24720)
11165/03
COM(03) 383
| Commission Communication: "A stronger European-based pharmaceutical industry for the benefit of the patient — A call for action."
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| Legal base | — |
| Document originated | 1 July 2003
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| Deposited in Parliament | 10 July 2003
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| Department | Health |
| Basis of consideration | EM of 22 July 2003
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| Previous Committee Report | None
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| Discussed in Council | 22-23 September 2003
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 According to the Commission, the European Council has identified
the pharmaceutical industry as one of the sectors which can make
a major contribution to the Community's strategic goal of building
a competitive and dynamic knowledge-based economy, as a consequence
of its capacity to generate wealth and high-quality employment,
whilst at the same time being a central component of healthcare
systems. However, it points out that a report it commissioned
in 2001 concluded that Europe is lagging behind in its ability
to generate and sustain innovation, due to a number of structural
weaknesses, notably insufficiently competitive markets, and the
lack of an integrated approach to research and development, coupled
with a weak growth in expenditure. The Commission therefore says
that, despite the progress which has been made in establishing
Community marketing authorisation procedures and a European Medicines
Evaluation Agency (EMEA), further steps are needed, and it has
sought in this Communication to develop under five main headings
the recommendations of a High Level Group (G10), which it set
up to look at innovation and the provision of medicines.
The current document
Achieving real and lasting benefits to patients
9.2 The Communication says that this is a key objective, and
that factors such as the increasing availability of health care
information, the development of the patient as a partner in decision-making,
and the increasing mobility of people, goods and services in Europe
mean that the way in which people interact with health case services
needs to be re-thought. In particular, it suggests that it is
important to strengthen the quality and availability of patient
information, and to focus both on the relative effectiveness of
medicines and on improving pharamacovigilance systems so as to
ensure their safety.
9.3 It suggests a number of key tasks, as follows.
Improving patient information
9.4 The Commission intends to ensure that non-prescription
medicines continue to be advertised in an honest and truthful
way, whilst maintaining a prohibition on advertising prescription
medicines to the public, and to use the European Patients Forum
as a means of considering patients' needs.
Strengthening the role of patients in public decision-making
9.5 In addition to the establishment of the European
Patients Forum in February 2003, the Commission points out that
it set up a couple of years earlier a European Health Forum to
bring together interested parties to discuss common issues. It
says that patients groups can play a strong role in this, and
that it therefore intends to encourage them to take forward the
defining of patients' needs for information. In addition, funding
would be provided to encourage networking activities by patients
and other public health groups.
Relative effectiveness
9.6 The Commission says that this concept has two
components — added therapeutic value and cost effectiveness
— and suggests that it is an increasing feature of Member
States' evaluation of health technologies. It says that its aim
is to provide a forum for Member States to share ideas on how
these measures can be operated effectively and quickly, particularly
in relation to pricing and reimbursement decisions by health authorities.
It also intends to develop further projects to strengthen evaluation
of added therapeutic value.
Pharmacovigilance
9.7 The Commission comments that a strong pharmacovigilance
system is vital for patient safety, and that, although national
systems have proved their worth, there is a strong case for strengthening
the co-ordination of these activities, with an enhanced role for
the EMEA.
DEVELOPING A COMPETITIVE EUROPEAN-BASED INDUSTRY
9.8 The Commission has identified the following key
issues in this area.
Updating the regulatory structure
9.9 The Commission notes that significant progress
has already been made following the establishment of the EMEA
in 1995, and that proposals are on the table to speed up both
the centralised and decentralised (mutual recognition) authorisation
procedures.
Access to innovative medicines
9.10 The Communication notes that G10 identified
this as a critical issue, bearing in mind industry's need to meet
the development costs of new medicines by marketing these as soon
as they are licensed. It says that, in co-operation with the EMEA,
the Commission is aiming at a more transparent approach to medicines
assessment, that support for the development of innovative medicines
will come from the Sixth Framework Programme for Research, and
that the Council has agreed measures to harmonise data exclusivity,
which the Communication suggests is a key factor. It also points
out the importance of the increased use of telematics as a means
of speeding up the regulatory process.
Timing of reimbursement and pricing negotiations
9.11 The Communication notes that there is a wide
variety of pricing and reimbursement schemes within the Community
as healthcare systems have developed in different ways over time,
but it suggests that, with healthcare costs rising in all Member
States, the focus should be on securing the most effective treatment
for the patient within an efficient healthcare system.
Promoting market integration and ways to control
expenditure
9.12 The Commission notes that control of healthcare
expenditure is a national competence, and that ex-factory and
retail prices diverge widely between Member States, disparities
which it says enlargement will increase further. In view of this,
it says that it is important to introduce alternative ways of
regulating pharmaceutical-related healthcare expenditure, in order
to ensure the smooth functioning of the internal market, and to
reduce the time between a product being authorised and the pricing
decisions needed to put it on the market. It says that one option
to be explored is that of letting manufacturers set the prices
of new products, whilst negotiating appropriate safeguards, with
the aim of encouraging a single EU ex-factory price.
Competition for medicines not purchased or reimbursed
for by the State
9.13 The Communication argues that more efficient
market mechanisms for non-reimbursed medicines would provide more
patient choice at a more affordable cost, but that, in so far
as different prices are set for medicines which are sold to the
private and public sectors, there must be full compliance with
Community competition rules. In particular, it says that different
pricing must not lead to the implementation of dual pricing systems
aimed at impeding parallel trade, and it says the Commission fully
supports the G10's conclusion that medicines which are neither
purchased nor reimbursed for by the State should, as a matter
of principle, be open to full competition.
Competitive generic market
9.14 The Communication says that although the penetration
of generic medicines varies enormously between Member States,
depending on national pricing and reimbursement criteria, prescribing
and dispensing practice, and incentives to encourage their use,
the sector overall within the Community is strong. However, it
adds that increased use of generic medicines is an important factor
in containing the costs of healthcare, but that their use must
be balanced with sufficient incentives to develop innovative products;
on these it identifies intellectual property rights as a major
factor.
Competitive non-prescription market
9.15 The Commission notes that non-prescription medicines
now make up nearly 20% of the total pharmaceutical market in Europe,
and that the development of this market, with due consideration
to their safety and affordability, can bring significant benefits
in terms of greater accessibility for patients and the saving
of professional time. However, it also notes that there are inconsistencies
between Member States in the products which may be classified
as non-prescription, and that this needs to be addressed in line
with the principles of the single market. It also notes that
reclassification will be encouraged by the recent decision to
allow a two-year exclusivity period where significant clinical
data has been provided.
STRENGTHENING THE COMMUNITY'S SCIENCE BASE
9.16 The Communication says that pharmaceutical research
is essential to improve the quality and effectiveness of healthcare,
but that the fragmented nature of Europe's research systems hinders
its ability to compete with the United States, and also leads
to a loss of highly-skilled scientists. It also notes that G10
identified the key barrier as being the lack of widespread scientific
collaboration across national borders and between public and privately
funded research, and that biotechnology is a crucial area.
9.17 The measures it suggests to address these problems
include the establishment of "virtual" health institutes,
an increase in Community funding of European research, implementation
of the Life Science and Biotechnology Action Plan, the setting
up of a European Centre for Disease Prevention and Control, and
the facilitating of clinical trials for products with a potentially
limited market outlet.
MEDICINES IN AN ENLARGED COMMUNITY
9.18 The Communication notes the major challenges
and opportunities arising from enlargement, and in particular
the need to integrate the generally less well-funded systems and
poorer health situation of the new Member States into the present
Community. It also highlights the different level of intellectual
property protection, and price levels, which it says could lead
to an increase in parallel imports. As a consequence, parallel
importers have to notify the relevant competent authority that
they have informed the patent holder if they apply for a parallel
import authorisation.
MEMBER STATES LEARNING FROM EACH OTHER
9.19 The Communication notes that the G10 Group recommended
that a set of Community indicators should be developed to measure
progress in the industry's competitiveness, and its contribution
to social and public health objectives, which in turn requires
access to high-quality data. In the case of competitiveness,
the Commission suggests that that these indicators should cover
supply, the demand and regulatory framework, industry outputs,
and macro-economic factors, whilst, in the case of public health,
it says that the development of a set of indicators presents a
number of challenges, not least in isolating the contribution
of the pharmaceutical industry from other factors. The Commission
says that it is actively pursuing ways to develop robust and easily
understandable indicators.
The Government's view
9.20 In his Explanatory Memorandum of 22 July 2003,
the Parliamentary Under-Secretary of State for Health at the Department
of Health (Lord Warner) points out that the UK played a key part
in the G10 process, and that many of that Group's recommendations
in areas such as developing a competitive European-based industry
represent current UK policy. As regards other aspects of the
Communication, he notes that much of the work relating to patients'
benefits would come under the Commission's own Public Health Programme;
that, although the initiatives proposed for strengthening the
science base are of varying merit, the UK attaches the greatest
importance to this issue, and would want to be involved; and that
much of the contents of the Communication on medicines in the
enlarged Community consists of implementing measures contained
in the accession treaties.
Conclusion
9.21 Though this document deals with an important
subject, many of the areas covered have been, or will be, considered
in their own right in specific proposals, and it does not appear
to put forward any radical or controversial suggestions. Consequently,
although we think it right to draw it to the attention of the
House, we see no reason to withhold clearance.
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