Smarter development, stronger negotiation

The governmental authorities need a different approach to pharmaceuticals manufacturers. If they are not prepared to ask a socially acceptable price for their products in negotiations, the authorities will have to make use of the options that national and international regulations offer for making the medicine available for patients nonetheless. Examples of these last resort options are tackling the misuse of positions of power by the manufacturers, encouraging pharmacy preparation, allowing patients to order medicines themselves via the Internet on a doctor’s prescription, and granting compulsory licences.

Enforcing socially acceptable pricing will encourage the commercial sector to develop medicines better, faster and more cheaply. They will in particular be forced to reduce the high probability of failures in the development of new medicines. That is stated in the recommendations entitled “Development of new medicines – better, faster, cheaper” that the Council for Public Health and Society (Raad voor Volksgezondheid en Samenleving, RVS) handed over today to the Dutch Minister for Medical Care, Mr Bruins.

“A situation has arisen in the Netherlands that is impacting negatively on both society and the individual patients,” says Pauline Meurs, chair of the RVS. “The high prices are partially the consequence of an inefficient development process. The costs of failures are set off against the price of the medication that does reach the market. Another factor is the market power of the pharmaceutical companies and the limited counterweight provided by government, hospitals and health insurers.” Throw the duty of care that is widely accepted in this country into the mix and it becomes all but impossible not to give a medicine a licence. We are aiming to use these recommendations to show that it can be done differently, in the current international context as well. The Netherlands can lead the way in this.”

Reducing the risk of failure

The high prices of medicinal products are to a significant extent the consequence of inefficient development processes. An average of nine out of ten potential new medicines drop out during the costly clinical trials. There are too few stimuli for both scientists and pharmaceuticals companies to make efforts to reduce the development costs, in particular the risk of failures. It is currently too easy for companies to set off the costs of these failures in the price of a medicine that does make it to the market. In addition, lower development costs do not necessarily lead to lower prices in the current situation. Two reasons why the governmental authorities must tackle excessively high prices. The quality of the clinical trials also leaves a lot to be desired. There is a task here for the authorities in encouraging reliable and efficient clinical research. The authorities must also provide further stimuli for new forms of medicine development in the country. In addition, direct input from patients in the development of medicines can yield better results and lower risks of failure. If we are able to work together in the Netherlands, we will be able to show that medicines can indeed be developed better, faster and more cheaply.

Tackling excessively high prices

In order to obtain lower prices, the negotiating power of the authorities has to be increased. If the price of a new medicine is too high and price negotiations fail, then the authorities must make use of the available legal instruments such as compulsory licences. The governmental authorities could also permit patients to order cheaper medicines on a doctor’s prescription, for instance abroad through the Internet and have them delivered at home. Pharmacy preparation must also be encouraged. In addition, the governmental authorities can tackle the manufacturers’ abuse of their position of power. This not only provides a stimulus for more efficient development of new medicines, but at the same time also keeps care affordable.