Olivier LAUREAU President Fondation Servier & Groupe Servier
On April 26th, the European Commission released its long-awaited review of the rules framing the pharmaceutical legislation. While highly anticipated, with objectives behind which every stakeholder can rally, the proposals risk undermining the very same objectives it wants to fulfill. To gain a better understanding of the issues underlying the current proposal, you can read here the press release from the European Federation of Pharmaceutical Industries and Associations and below, the tribune written by Servier’s President, Olivier Laureau.
Article first published on June 21st on LinkedIn.
“I want you to look at ways to help ensure Europe has the supply of affordable medicines to meet its needs. In doing so, you should support the European pharmaceutical industry to ensure that it remains an innovator and world leader […] The mission outlined above is not exhaustive or prescriptive. Other opportunities and challenges will no doubt appear over the course of the next five years.” [1]
When she composed Stella Kyriakides’ mission letter, Ursula von der Leyen could scarcely have imagined the scale of the challenge about to appear over the horizon. Just a couple of months later, the world was engulfed in one of the biggest and most widespread health crises it had ever faced, changing the way we look at health.
COVID-19 exposed many flaws and weaknesses in our global health system, forcing us in Europe as in the world over, to rethink basics such as how we can and should approach health. The buzz words independency, sovereignty and strategic autonomy entered our lexicon.
A sovereign health policy clearly relies on both the ability to foster innovation to answer patients’ needs and to ensure those medicines are available. To meet this dual objective, a region such as the European Union needs to be competitive and attractive. It must give itself the means to support an industry that will innovate, that will answer patients’ needs and that will, in the end, be ready, willing and able to supply those life-saving medicines.
The way ahead in health
A clear opportunity to learn from the COVID-19 crisis and shape Europe’s future health ecosystem came about with the publication on April 26th of the Commission’s long-awaited review of the EU’s legal and regulatory framework for the pharmaceutical industry. On presenting its proposals, the Commission insisted they would tackle both the triple A’s – access, affordability and availability-, and the triple C’s – competitiveness, compliance and combating AMR.
We at Servier strongly support the review’s objectives, notably ensuring access to medicines for patients while preserving the industry’s competitiveness. If the recipe to achieve those objectives is highly complex, relying on a globalized world, with investments and interconnections worldwide, two main ingredients are essential.
First, intellectual property and data protection are key components of such competitiveness. They answer to the specificities of the pharmaceutical industry by providing a long-term and stable perspective in a process strewn with pitfalls. It is paramount to preserve clear and predictable incentives to reward the lengthy, complex and costly process of researching a new molecule, which can span decades, with new medicines taking on average 12 to 17 years to gain market approval, while costs have risen from an average of 1.3bn USD in 2013 to 2.3bn USD in 2020[2] or almost doubling in just seven years.
Therefore, incentives cannot be conditioned by external, uncertain factors beyond industry’s control. Making added years of RDP[3] dependent on the launch of medicines in all Member States within a two-year timeframe falls under this category, as pricing and reimbursement decisions emerge from national negotiations in which industry is but one participant. Furthermore, fulfilling additional obligations should be stimulated not by taking away current incentives but by rewarding the extra burden companies must shoulder to meet new requirements. A framework genuinely favoring innovation should take on board the industry’s commitment to file for pricing and reimbursement in all Member States within the specified two-year timeframe and grant additional years of RDP for doing so.
Second, market access conditions are essential to drive innovation and support availability of medicines. At Servier, we wholeheartedly support the Commission’s objective of ensuring access to medicines throughout all of Europe. This, however, cannot be solved from a European perspective only. Market access conditions are specific to each country, and while some processes are common in the EU, pricing and reimbursement procedures are, ultimately, national. There can be common or joint approaches for countries with a similar market access archetype and for that, the pharmaceutical industry has worked on a European Based Tiered Pricing approach (link toward EFPIA paper). However, market access conditions are key drivers of the competitiveness of the European market and beyond, and this critical element cannot be ignored, nor can it be met by imposing additional obligations on the pharmaceutical industry. The main solutions are through national measures, ensuring adequate budget resources and a strong health system are in place. The European Union can accompany this move but cannot solve the issues on its own.
To strike the right balance, policymakers will need to adopt a holistic approach, bearing in mind the entire surrounding ecosystem. We cannot keep looking at each individual issue in a silo, working on improving competitiveness via an industrial strategy while at the same time undermining it by creating additional hurdles for the pharmaceutical industry.
If we don’t want Europe to become a second-tier region, it is time to stop talking about the competitiveness of the pharmaceutical industry and start acting on it! Only by putting in place a balanced system will we manage to close the gap with other regions. It is our collective responsibility to ensure that innovative, safe and effective medicines are still being developed in Europe so that patients can benefit from the treatments they need. In this endeavor, Servier stands ready to act alongside the rest of the pharmaceutical industry.
[1] Mission letter to Stella Kyriakides, December 2019
[2] Deloitte Centre for Health Solutions, Seize the digital momentum: Measuring the return from pharmaceutical innovation 2022
[3] Regulatory Data Protection (RDP) is a protection period on the data generated during the clinical research period to gain a marketing authorization.