Opinion of the Economic and Social Committee on "The role of the European Union in promoting a pharmaceutical policy reflecting citizens' needs: improving care, boosting innovative research and controlling health spending trends"
Date: 2000-10-19
Institutions: Provisional data
Subjects: health policy, medicinal product, pharmaceutical legislation, pharmaceutical product, public health, research policy

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Opinion of the Economic and Social Committee on ‘The role of the European Union in promoting
a pharmaceutical policy reflecting citizens’ needs: improving care, boosting innovative research
and controlling health spending trends’

(2001/C 14/24)

On 23 February 1999, the Economic and Social Committee, acting under Rule 23(3) of its Rules of
Procedure, decided to draw up an opinion on the above-mentioned subject.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 19 July 2000. The rapporteur was Mr
Colombo.

At its 376th plenary session, on 19 October 2000, the Economic and Social Committee adopted the
following opinion by 81 votes to three, with seven abstentions.

1.

Introduction

1.1.
This own-initiative opinion is part of the ESC’s ‘Citi-
zens’ Europe’ initiative, and is intended to take a look at some
key aspects of pharmaceutical policy in the EU Member States.
The analysis centres on patients’ interests and expectations and
their right to a high level of healthcare, recognising the
importance of the role which drug treatment plays in modern
society.

1.2.
The EU public has firm expectations regarding access
to safe, effective and high-quality medicine and to independent
sources of information, and guaranteed rapid availability of all
the latest innovations. Recently marketed innovative medicines
must be made available to all EU citizens quickly and at
affordable prices.

1.3.
These expectations must therefore be met by making a
quantum leap in initiative in the sector, by providing a health
system which carefully analyses patients’ needs and matches
them with an efficient and effective use of pharmaceuticals.

1.4.
The Committee is aware that the financing of the
pharmaceutical market cannot be separated from the social
protection problems of the individual Member States. Social
protection systems, which on the basis of Article 152 are the
exclusive responsibility of
the Member States, are under
considerable cost pressure, owing largely to current demo-
graphic trends, to improved diagnostic techniques, and to
advances in the field of medicine.

cal spending is growing more slowly than other areas of health
spending, the Committee realises that a number of highly
innovative and expensive pharmaceutical products may well
push up Member State social protection expenditure sharply
in the very near future. Such a trend would make it difficult to
provide patients with current levels of care, at a time when the
public have ever higher expectations regarding quality of life.

1.6.
This situation must be addressed in compliance both
with Community principles, such as freedom to market and
circulate services, and with the social protection requirements
of the European public. The ESC believes that to reconcile
these aspects, the barriers hindering the completion of the
internal market for pharmaceutical products must be removed.

The scale of the problems still needing solutions with
1.7.
regard to the free movement of medicinal products in the
European Union became painfully clear at the Third Bange-
mann Round Table held in Paris in December 1998 on
prospects for Community legislation in the area. The meeting
failed to generate any agreement on how to address the issues
discussed, and it is unlikely that there will be any unilateral
action on the part of Member States or the Commission within
the terms of the Treaty. Nor was any significant progress made
in the subsequent ‘Tripartite dialogue’ meetings.

1.5.
A further objective of the opinion is to draw attention
to the growing cost of health expenditure, which in individual
Member States is posing increasing difficulties for the bodies
that finance it. Although, in some Member States, pharmaceuti-

1.8.
This stalemate is unacceptable in the context of
growing European integration. The ESC therefore calls upon
the Internal Market Council to return to the issue with greater
determination, in order to follow up its statement of 18 May
1998 and put the whole issue back on the agenda.

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The ESC has already, on several occasions, expressed
1.9.
its unerring belief
the European
in the strategic role of
pharmaceuticals sector, in terms of its growth and importance.
In its own-initiative opinion on ‘Free movement of medicines
in the European Union — Abolition of existing barriers’ (1), it
recommended an approach for gradually strengthening the
sector’s industrial presence in Europe, while standing firm on
two basic principles: rapid patient access to innovative prod-
ucts, and the need to bring the pharmaceutical spending of the
Member States under control.

1.10. Many aspects of this approach, essential for Com-
munity action, are still on the drawing board. There has been
little progress on free movement in this sector of the single
market in recent years, in spite of the fact that the Court of
Justice and, on 18 May 1998, the Internal Market Council
have both asked the Community authorities to address the
distortions caused by the differing laws in force in the
various Member States, and have supported efforts to pinpoint
practical ways of gradually deregulating the pharmaceuticals
market.

The tendency to preserve the status quo has a negative
1.11.
impact on the Commission’s work, as the way forward in
terms of legislation is often blocked. The result is unequal
access to medicines for the European public and a detrimental
effect on the competitive capacity of the European pharmaceu-
tical industry.

The Community and the Member States should
1.12.
therefore follow up the ESC’s suggestions for bringing the
industry into line by allocating responsibilities, competencies
and the related mandates and defining the necessary targets to
provide the EU public with equal access to the health
benefits that pharmaceuticals have to offer and to make the
pharmaceutical industry highly competitive.

2.2.
Treating medicine as a socially beneficial good, and
ensuring that the whole population has access to healthcare,
particularly in the form of medicine, has been the on-going
policy of European governments over the last few decades.
This principle has remained unchallenged by the most recent
strategies to improve the efficiency of public health services
and to make more room for private sector involvement in
healthcare.

Therefore, genuinely innovative drugs ought to be
2.3.
made available to the public as rapidly as possible within the
current legal deadlines, without being held up by drawn-out
price-fixing negotiations, or their use being restricted by
classification systems or ‘inserts’, with a view to ensuring that
the industry does not refuse to market a product for purely
economic reasons.

2.4. Member State public health policies cannot deny the
necessary pharmaceutical support, particularly since properly
administered drugs provide an appropriate treatment for many
illnesses and can also be a source of savings by cutting costs in
other health sectors.

2.5.
The ESC has already given a positive response to the
draft Regulation on orphan medicinal products (2), and has
suggested a number of improvements designed to extend its
scope and speed up registration procedures. The specific aim
is to meet the need to research, produce and market medicines
that best meet patients’ needs, even if this means designing a
medicine that saves just one person’s life.

1.13.
For these reasons, the present opinion addresses the
issue from a new angle, placing the needs of the public and the
extent to which the ‘pharmaceuticals system’ is able to meet
those needs at the centre of its analysis.

3.

The need for an innovative and competitive pharma-
ceutical industry

2.

The role of medicine in society

2.1. Medicine has played a central part in health care since
the earliest times. This role has become even more important
in industrial society.

3.1.
A competitive and innovative European industry would
guarantee the availability of new, more effective and safer
drugs, and would rapidly spawn undeniable benefits by
creating highly skilled employment and making a major
contribution to the trade balance. In the longer term, it would
also help to reduce healthcare expenditure, by shortening
hospital stays, and reducing dependency on imports from
other parts of the world.

(1) OJ C 97, 1.4.1996, p. 1.

(2) OJ C 101, 12.4.1999, p. 37.

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3.2. Medicine has certainly played a crucial role in improv-
ing public health in Europe, especially over the last 40 years.
The pharmaceutical industry deserves recognition for having
supplied the market with a constant stream of new products
to treat new diseases and to improve the treatment of
traditional illnesses. The process must continue, however, in a
context where companies’ economic interests and public
health requirements go hand in hand.

3.3.

Today’s pharmaceutical industry features:

— a high level of technological sophistication and specialis-

ation;

procedures in the Member States. The ESC hopes that it will
soon be approved, including the Committee’s suggestions for
making it more effective.

The competition that should govern the pharmaceut-
3.6.
icals market must not be restricted by improper use of patent
protection, or by obstacles to genuine, fair competition with
generic products. The protection of
intellectual property
afforded by patents must be safeguarded because the returns to
the inventor stimulate research and because patents publicise
knowledge and thus encourage further advances in research
by others. However, once the patent expires, there must be
genuine competition between like drugs, not least on price.

— higher than average investment in research and develop-

ment compared with other industries;

3.7.
Community intervention should therefore focus on
specific objectives designed to prevent these adverse situations
from arising. For instance, action could be pointed at:

— intricate marketing strategies reflecting the complexity
of the pharmaceutical industry, marked by substantial
information asymmetries between supply and demand,
and disorganised demand, represented by varying combi-
nations of consumer, prescriber and payer;

— encouraging increased competitiveness and competition,
and disseminating generic products, while bearing in
mind the fact that parallel imports are of more benefit to
importers than to patients and tend to create distortions
in a highly regulated market such as pharmaceuticals;

— the capacity to use and design increasingly sophisticated

and complex legislative and monitoring systems.

— creating the right climate to make new medicines genu-

inely available throughout the European Union;

The few studies available suggest, at least where the USA is
concerned, that these conditions have enabled the industry to
generate larger than average profits.

— supporting research into tropical diseases with a view to
facilitating access to medicines geared to the specific
pathologies of the developing countries.

It is important not to overlook the positive effect the
3.4.
industry has had not only on the traditional ancillary industries,
but also on the research and clinical trials conducted in
conjunction with universities and hospitals, in order to comply
with the requirements set by European law (Regulation
(CE) No 2309/93, Directive 75/318/EEC and subsequent
amendments, and Directives 93/39/EEC and 93/40/EEC).

3.5.
The draft Directive on the approximation of provisions
relating to the implementation of Good Clinical Practice in the
conduct of clinical trials on medicinal products for human
use (1), on which the ESC has already given its opinion, marked
a further step towards harmonising regulatory authority

(1) OJ C 95, 30.3.1998, p. 1.

4.

Pharmaceutical expenditure

4.1. While the relative impact of the various factors varies
enormously from one Member State to another, the chief
elements in pharmaceutical expenditure are:

— overall household income;

— the system for choosing and paying doctors, and the
expenditure constraints on doctors and patients; systems
that tie patients to one general practitioner and limit
access to specialists generate lower pharmaceutical spend-
ing than systems offering total freedom in choosing
doctors and specialists for each consultation;

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— average age of the population: ‘older’ societies cost more

because of the higher sickness rate;

— health needs in relation to population morbidity;

statutory health insurance funds and supplementary health
insurance organisations to pick up the bill, is no longer a
sustainable option. Growing difficulties in balancing national
budgets have recently been further aggravated by the need to
meet the Maastricht criteria. As a result, not one of the
Community’s Member States is in a position to allocate an
ever increasing level of resources to the pharmaceutical system.

— price regulation and reimbursement systems (although
these have been shown not to have a lasting effect on
overall pharmaceutical expenditure);

— the economic and political climate and the presence of a

strong national pharmaceutical industry;

5. Unequal public access to medicines

— prescription practices.

4.2.
In the past decade, all the European countries have
introduced measures designed to curb pharmaceutical spend-
ing. These measures, rooted more in budgetary concerns than
health requirements, have been aimed at both price levels (e.g.
freezing factory prices and reducing wholesalers’ and chemists’
margins) and reimbursement systems (e.g. fixed reimbursable
prices, reduction in the number of reimbursable products,
introduction of or increase in patient contribution, ceilings for
national, local or individual prescriber budgets).

4.3.
The increase in overall expenditure nonetheless record-
ed shows that this type of spending is impossible to control
owing to socio-economic factors, and that a set of measures
are needed that can keep sight of overall trends in the various
segments of the industry and channel demand for drugs
towards more cost-sensitive consumption.

4.4.
There is a tricky conflict of interests regardless of the
price control mechanism applied. The industry argues that
prices must finance the costs of R&D. Those involved in
financing pharmaceutical care are asked why they should pay
higher prices for a drug which though more recent is only
as safe and effective as a cheaper alternative. Consumer
organisations and the public would like more say in prescrip-
tion and research decisions in order to ensure that they receive
the highest possible standard of health care, without being
unfairly penalised on cost grounds.

This leads to an initial basic observation. Meeting
4.5.
the rising cost of pharmaceutical assistance by continually
increasing health spending, and expecting national budgets,

5.1.
The delay with which new medicines authorised under
the centralised procedure of the European Agency for the
Evaluation of Medicinal Products (EMEA) are made available
to the public in the various Member States is the subject of a
Commission study, requested by the Internal Market Council
on 18 May 1998, and presented at the EMEA London audit on
19 March 1999.

The Commission survey revealed an unsatisfactory

5.2.
situation:

— on the whole, the EMEA manages to complete evaluations
of new medicines within the time frame laid down by the
regulation;

— the same applies to the decision-making process whereby
a positive decision from the EMEA becomes an official
Commission authorisation, published in the Official
Journal (although it does not seem justifiable that the
simple conversion into a Community authorisation,
requiring no further examination of the contents of the
registration file, should take a third of the time devoted
to evaluating the technical and scientific content of
dossiers containing thousands of pages of data);

— the delay in launching products in the various Member
States once the medicinal product has been approved
appears excessively long and therefore unacceptable.

The differences recorded in the various Member States
5.3.
are considerable, varying from 90 to over 250 days. The result
is unequal access to medicines in the various Member States,
which does not make sense and is unacceptable to patients. In
certain Member States, the majority of products authorised
centrally are subsequently marketed, whereas in others, the
percentage is only 20-25 %.

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5.4.
The main reason for the varying intervals between
product authorisation and availability and for the differing
percentages actually marketed would appear to lie in the
difficulty of finding a price that is acceptable in terms of public
pharmaceutical spending and the various reimbursement sys-
tems applied by the Member States. Cyclical considerations
regarding expenditure therefore take precedence over the
prime objective of protecting public health.

5.5.
Given that it is unacceptable that it should take such
different periods of time for EU citizens to have access to one
and the same medicine, the Council and the Commission must
urgently address the problem of how to secure agreement
on arrangements for pricing medicines. The aim of these
arrangements must be to ensure comparable results, so that
like products have comparable prices. The starting point could
be to establish a European frame of reference to serve as a
guide for the Member States to gradually align the various
reimbursement systems, with regard to the specific matter of
reimbursement classification lists and also to the more general
matter of protecting rights, the aim being to secure uniform
conditions for the public, industry and the Member States.

5.6.
The varying percentage of centrally authorised medi-
cines that are placed on the market highlights an even more
alarming situation. The fact that the most innovative medicinal
products are not available throughout the EU creates divergent
levels of health care and brings the value of the European
registration system into question, undermining the credibility
of the Union and its common legislation, which has taken
years of hard work to develop.

5.7.
The ESC stresses the need for the Commission to
complete its analysis of the reasons for the delays encountered
and ensure that the delays are not partly due to companies
restricting the marketing of their products to countries with
more profitable markets. The Commission should take action
where necessary to uphold Community legislation, which
provides for marketing in all the Member States following
centralised registration.

5.8.
Centralised authorisation is aimed at enabling medi-
cines to be placed on the market in all Member States at the
same time. Unjustified economic interests cannot be tolerated
as they prejudice the all-important principle of protecting
health and the legal base of the registration system, even when
they are the result of lean public spending budgets.

6.

Pharmaceutical innovation

6.1.
Almost all the medicines introduced in the last few
decades have been the fruit of research and development
(R&D) conducted by the pharmaceuticals industry. The cost of
R&D has risen significantly in recent years: figures provided by
the industry suggest that it costs EUR 300-500 million to
bring a new molecule on to the market. These costs are
reflected in very high selling prices.

It is worth noting that marketing approval for a new
6.2.
product is not based on an assessment of the degree of
innovation, or on the therapeutic advantage compared with
existing treatments. Marketing approval for a new drug is not
therefore a sufficient indicator of degree of innovation. A
better one would be to demonstrate that, for significant patient
groups, the new drug is either more effective or safer than
existing treatments for the same symptoms.

6.3.
As yet, no European public body is responsible for
carrying out this type of analysis. As a result, it is difficult to
hold a sensible debate on the concept of innovation, as the
much coveted label ‘innovative’ can be used quite arbitrarily
and it is not possible to distinguish between a real therapeutic
benefit and a change which produces no tangible improvement
for patients. Furthermore, the fact that new but not truly
innovative medicines can sell at high prices could act as a
disincentive to the pharmaceutical industry to manage R&D
costs prudently.

6.4. Marketing approval decisions
for new medicines
should be based on quality, safety and efficacy criteria as
defined by Community legislation. Careful attention must be
given to the fact that the decision to give marketing approval
to a new medicine on the basis of its innovativeness could, in
practice, have significant and undesirable effects, such as:

— leading to monopoly control of entire areas of treatment,

with unforeseeable effects on prices;

— reducing the competitive and research capacity of small
and medium-sized companies that cannot channel enor-
mous sums of money into R&D but have to focus on
specific market segments;

— forcing companies to use their entire R&D budget on one

product.

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6.5.
The cost of clinical research has become very high,
especially for certain categories of medicine (cardiovascular,
antihypertensive and hypolipidemic drugs) that increasingly
tend to involve a high number of patients (five to ten thousand
or more). In such cases, a single clinical study can cost tens of
millions of euros. These costs are generated not only by the
complex organisation required to plan and conduct such trials,
but also by the fact that the company launching a trial meets
the full costs of patient care throughout that trial.

6.6.
The International Conference on Harmonisation of
Technical Requirements for Registration of Pharmaceuticals
for Human Use (known as ICH — International Conference
on Harmonisation) represents a major initiative that can help
reduce the costs generated by marketing authorisation systems.

This initiative has sparked a process which has made it
6.7.
possible to reduce the differences between the studies required
in the three parts of the world that represent three-quarters of
the world market and possess the most sophisticated regulation
and control systems: Japan, the United States and the European
Union.

6.8.
Clearly, in addition to significantly curbing the cost of
developing new drugs, the process launched by the ICH will
make it increasingly difficult for non-participating countries to
take decisions that vary significantly from those taken by the
authorities in the ICH countries, which are more technically
advanced and have much greater resources. The process of
harmonising benchmark standards at the highest possible level
will make survival
increasingly difficult for pharmaceutical
industries that are restricted to a local market, especially in
developing countries.

7.

Encouraging pharmaceutical research

7.1.
Up until 1990, the European pharmaceutical industry
led the world in terms of R&D and innovation. However,
Europe has gradually lost ground to the United States, which
took the lead in investments in pharmaceutical R&D in 1997.
In the 1990-1998 period, R&D investments doubled in
Europe, but tripled in the United States, largely as a result of
major investment in the biotechnology field.

approach designed to favour genuinely innovative companies.
To this end, public funds for R&D in the pharmaceutical
industry must be used more effectively, especially in the
biotechnology sector and in basic research, and efforts must
be made to build up cooperation between the private sector
and the academic world.

7.3.
As the Commission has already pointed out in its
Communication on outlines of an industrial policy for the
pharmaceutical sector in the European Community (1), and as
the ESC echoed in its last opinion on the free movement of
medicinal products in the EU, scientific research can also be
spurred by indirect means such as: certainty regarding the
legislative framework, based on the safeguarding of patent
protection, transparent procedures, coherent and consistent
national policies, guarantees that industrial requirements will
be given proper consideration, and speedy decisions and
approvals by government bodies.

7.4. Ways must be found to extend pharmaceutical research
beyond the limited remit of a few multinationals.
If the
current trend towards concentration continues, the genuine
interdependence of highly-specialised small and medium-sized
enterprises will be jeopardised and health systems may become
dependent on a few suppliers of highly innovative products,
the direct consequence of which could be an uncontrollable
pressure on prices and thus on public spending. To counter
this, in the context of the industry’s current moves towards
concentration, legislative backing must be given in order to
promote SME development
in specific highly specialised
medical fields.

7.5.
The ESC welcomes the Commission’s draft Regulation
on orphan medicinal products and its draft Directive on
clinical trials, as well as the action programmes on rare and
pollution-related diseases. All these measures encourage the
involvement of independent research centres and SMEs in
research that is extremely useful for rising to the challenge
posed by European public health.

However, it is worth noting that research incentive
7.6.
measures in the European Union have not been as effective as
their equivalents in the United States or, to a lesser extent,
Japan, where the administrative framework, incentives and
fiscal arrangements in particular have greatly encouraged
growth in research investment.

It is therefore essential and a matter of urgency to
7.2.
create the right conditions and make the right legislative
provisions to stimulate scientific research, and steer an

(1) COM(93) 718 final, 2.3.1994.

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7.7.
The ESC believes that giving a decisive boost to R&D
potential will also involve improving access to the market for
innovative medicines and countering the fragmentation of the
European market for pharmaceuticals.

conditions in certain Member States, the result of which is to
deplete resources that would be better used to benefit health
systems more generally.

8.

The pharmaceutical sector and EU enlargement

10. Proposals

8.1.
The eastern and central European countries that are to
join the EU rely on much smaller financial resources for buying
pharmaceutical products than the current Member States. The
six pre-accession States include countries whose per capita
GDP based on purchasing power parity is only 28 % of the
current EU average.

8.1.1.
The Member States and EU institutions will have to
take account of the major differences between the current and
the new members in health, intellectual property protection,
industry, and economic and social conditions. In its 1998
communication on the future development of public health
policy,
the Commission underlined the gulf between the
current Member States and the applicant countries in the area
of health.

8.1.2.
These specific issues will have to be considered when
the accession treaty is drawn up, as EU enlargement and the
challenge it poses in terms of access to healthcare were key
factors in the ‘Internal Market’ Council’s discussions on the
possible deregulation of the pharmaceuticals market.

10.1.

The following proposals aim to:

— stimulate and improve the efficiency of European R&D

to ensure access to highly innovative medicines;

— keep tabs on health and pharmaceuticals spending,
promoting preventive measures and optimum use of
drugs and ensuring a high quality service;

— ensure equal access to medicines for the public through-

out the European Union;

— contribute to the appropriate use of medicines;

— develop the cost efficiency of medicine distribution

systems.

9. Recovery of resources within the industry

9.1.
The cost of high quality pharmaceutical care, the
considerable resources needed to launch highly innovative
research, and the impossibility of continually increasing
national health budgets, demand a serious look into the
possibility of finding resources within each sector. Medicinal
expenditure should be treated as part of health expenditure,
and an assessment should therefore be made of how proper
use of drugs can cut expenditure in other parts of the health
budget. However, a campaign against waste is needed in this
sector too, so as to allocate resources as effectively as possible
in the interests of public health.

9.2.
The ESC believes the focus should be on three areas:
reducing the non-rational use of drugs, cutting down on waste
and improving the efficiency of distribution systems. In this
last area, there are still unjustifiable privileges and favourable

10.2. Evaluate the therapeutic benefit for the patient

The Committee considers that the therapeutic benefit (in terms
of effectiveness and safety) of a new medicine over an existing
one for the same condition, and its contribution to improving
quality of life, should be evaluated on the basis of scientific
criteria that have been approved by a specific Community
body. The evaluation should seek to ensure that the medicine
is prescribed and used more appropriately.

10.2.1.
Proper evaluation of the degree of real innovation
and the benefits to patients involves defining bench-mark
medicines and treatments and continually updating validated
and harmonised methodologies and guidelines. The methods
developed should take account of differing patient responses
and should be diversified so that evaluations can be conducted
using data available before marketing authorisation and also
during the marketing phase. The evaluation should, however,
be updated if new evidence emerges following wide-scale use
of the drug in the post-marketing phase.

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10.2.2.
In order to help people understand the potential of
a new medicine and how best to use it, the evaluation of
the therapeutic benefit — which under no circumstances
represents a further criterion for approval of a drug — should
be included among the information made available to the
doctor and, where appropriate, to the patient.

10.4.1.
This could be achieved by encouraging local,
national and Community-level initiatives to analyse prescrip-
tion practices and identify and promote the most effective and
economical methods of treatment.

10.3. Use public funds more effectively to support R&D

Create the conditions
synergy between the
for greater
Enterprise, Research and Information Society DGs and the
pharmaceutical industry by making more efficient and focused
use of public funds to support research activities, including
basic research, especially in the biotechnology sector, with
particular attention to preventive medicine (e.g. vaccines) and
rare diseases (orphan drugs).

10.4.2.
concerning:

These initiatives could lead to practical proposals

— methodologies for assessing prescriptions and the corre-

spondence between diagnoses and prescriptions;

— methodologies for cost benefit assessments;

10.3.1.
Repeating a point already made in its opinion on
orphan medicinal products (1), the Committee would ask the
Commission to draw up a Recommendation to promote the
implementation of research incentives, particularly of a fiscal
nature.

— methodologies for pharmacological and clinical assess-

ments in the field of general medicine;

— guidelines for preferred treatment of the most common

illnesses in the field of general medicine;

10.3.2.
Targeting public funds more towards research into
innovative products (contributing for instance to an evaluation
of the degree of real innovation before marketing) and into
new research technologies (high throughput screening, rational
drug design, genomics) would definitely be a more effective
use of tax-payers’ money.

10.4. Make appropriate use of medicines

The relationship between medical prescribing and sickness
must be tightened up so that the quantity of drugs prescribed
is in line with the actual morbidity of the population. Regional-
level control programmes are therefore needed to enable the
relevant national bodies to ensure that
the medicines in
demand are of genuine benefit to patients’ health, without
prejudice to the principle of the doctor’s freedom to prescribe
and the patient’s right to the protection of personal data.
Promoting the rational use of medicines will have a more
qualitative impact on pharmaceutical
spending, moving
beyond the limited domain of price control.

(1) Opinion on the Proposal for a European Parliament and Council
Regulation (EC) on orphan medicinal products, OJ C 101,
12.4.1999, p. 37.

— guidelines for the proper use of antibiotics, especially in

non-hospital clinical practice;

— research into a more rational classification of medicines
on the basis of
INNs (International Non-proprietary
(switch from prescription only to over-the-
Names),
counter medicines, whether or not to include drugs on
reimbursement lists or lists of medicines for hospital use
only), with proposals for amending Directive 92/26/EEC
on classification.

10.4.3.
To extend the responsibility and involvement of
health professionals and, above all, patients/consumers in the
appropriate use of drugs, the public authorities and society in
general must be more active in producing and disseminating
unbiased information about them. This means, for example,
that the information on safety and efficacity generated during
the research and development of drugs must be made access-
ible not just to the regulatory authorities but also — after
marketing authorisation has been granted and except in the
case of confidential information — to scientific institutions,
trade and consumer associations, and patients’ organisations.
This information must also be regularly updated To this end,
it may be useful to refer to the sections of Swedish or American
Information Act, Title 5, of US
legislation (Freedom of
Code, section 552) that govern freedom of information and
transparency in drug marketing authorisation procedures.

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10.4.4.
Information for doctors must be backed by steps to
educate patients on aspects such as the quality, price and
appropriate use of medicine and non-pharmacological alterna-
tives. In addition, schemes to promote informed self-care
should be developed further as a way of improving public
health and relieving pressure on health spending. The goal of
such schemes, in cooperation with doctors and pharmacists,
should be to disseminate health education and to step up
communication between the public and health professionals,
in line with a general trend for public health to improve thanks
to an increase in personal responsibility.

10.5. Promote the use of generic medicines

The ESC believes that the use of generic medicines could stem
pharmaceutical spending without reducing quality of care. For
a number of reasons (differences in prescription practice, in
reimbursement systems and in patent protection), the market
for generic medicines has developed unevenly within the
European Union. The EU should therefore work on initiatives
to promote greater use of generic medicines in all the Member
States as an alternative to products that are therapeutically
equivalent but more expensive. The Community authorities
should respond to the request
from the Internal Market
Council to address the distortions caused by the differing laws
in force in the various Member States, by supporting efforts
to pinpoint practical ways of gradually deregulating the
pharmaceuticals market.

10.5.1.
These initiatives could take the form of national
case-studies or cost-benefit studies designed to show what
practical steps could be taken to generate economic benefits
through the use of generic medicines. It should also be noted
that to ensure effective competition, a series of conditions
must be present, such as the active involvement of doctors
(prepared to prescribe using generic names and to use
substitutes), pharmacists (prepared to use substitutes), sup-
plementary health insurance organisations (that contribute to
reimbursement or coverage of the cost of consumers’ medi-
cines), administrative bodies and spending restrictions (substi-
tute lists, compulsory substitution, reimbursement limited to
the price of the most economical equivalent treatment, patient
information campaigns, patient contributions in proportion
to the cost of the medicine when there is a generic equivalent),
and patients (awareness of the cost of medicine).

10.5.2.
The Committee thinks that generic drugs can help
ensure proper price competition, making room in the public

pharmaceuticals budget to reward truly innovative medicines.
The generics market is important for many SMEs and for
multinationals that move onto the generics markets once the
patents for their main products have expired. The Committee
believes that the competition generated by development of the
generics market can stimulate innovation.

10.6. Equal access to pharmaceuticals for the European public

10.6.1.
Surveys on the availability of pharmaceuticals
approved under the centralised procedure (see paragraph 5)
have uncovered excessive delays in a number of Member States,
with product launches happening well after the deadlines fixed
by current
legislation and a low percentage of products
marketed compared with the number of authorisations
granted.

responsibility

10.6.2. While
for
respecting national
healthcare and the establishment of drug pricing and reim-
bursement systems, the ESC believes that the Commission
must act forthwith to ensure compliance with the deadlines
and arrangements laid down in the Transparency Directive
(89/105/EEC), in order to eliminate the differences in treatment
suffered by the EU public.

The Commission should therefore take responsi-
10.6.3.
bility for transforming the existing Pharmaceutical Committee
and Transparency Committee into places for genuine dis-
cussion and scrutiny of urgent national measures and practical
proposals for addressing the current differences and ensuring
that innovative medicines with therapeutic benefits (as defined
in paragraph 9.2) are made available to patients as rapidly as
possible (see Regulation (CE) No 2309/93 and Directive
89/105/EEC).

The ESC recommends that, at

10.6.4.
the
scheduled time limit, the medicine should be marketed accord-
ing to the procedures in national laws relating to reimburse-
ment, where appropriate.

the end of

10.7. Price of medicines

The Court of Justice in Luxembourg has recognised that price
control regulations are a factor that can, under certain
conditions, distort competition between the Member States,
and it has asked the Community authorities to take the
necessary measures to redress the price imbalances caused by
the differing regulations in force in the Member States.

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10.7.1.
However, despite that voice of authority and the
fact that, on 18 May 1998, the Internal Market Council backed
the gradual deregulation of the pharmaceuticals market, the
Commission and the Member States have yet to agree on
practical arrangements in this area.

guidelines for acceptable information activities. Self-regulation
by the industry must be matched by stricter application of
Directive 92/28/EEC by the national authorities; this should
also be updated in the light of the Internet.

the euro will

In this respect,

the Committee hopes that

10.7.2.
the
significant price differences still encountered in the various
Member States will be realigned. Price setting for medicines is
the
the responsibility of national governments; however,
introduction of
immediately show up the
current differences between identical specialities. A number of
countries have introduced price control measures, though
often only for prescription drugs. The evaluation methods used
often differ. The Member States must be given opportunities to
exchange views and make practical proposals to curb market
distortions and the effects of one Member State’s actions on
another, while complying with the transparency directive.

10.7.3.
It is also necessary to stress the fact that with no
practical intervention on prices, there will be greater room for
‘parallel imports’, which have now reached a significant volume
and may increase further with the expected enlargement of the
European Union to countries with much lower purchasing
power. It should be noted that parallel imports do not lead to
any significant reduction in costs for patients. They do not
create downward price convergence, but merely a flow of
drugs from lower-price countries to countries where the selling
price is higher.

10.8.3.
Uniform criteria and mechanisms will also have to
be established by the Member States to govern promotion to
the consumer. In this respect a distinction must be drawn
between prescription and self-care drugs. For the latter,
information campaigns are needed to raise awareness and
understanding among consumers of the risks and benefits of
self-care.

10.8.4.
There is an urgent need for appropriate rules and
initiatives to protect consumers from the proliferation of
websites containing uncontrolled and unreliable information,
and from the promotion and sale of drugs over the Internet.
The ‘cyberletters’ initiative launched by the American FDA and
the WHO’s guidelines are interesting examples. The EU
should follow these examples and promote public information
campaigns in order to inform the public of both the benefits
and also the risks of using the Internet when seeking answers
to health questions. The brochure entitled ‘Enjoy the Internet
but don’t risk your health’, issued by the Standing Committee
of European Doctors and the Pharmaceutical Group of the EU,
is a noteworthy initiative in this regard.

10.8. Control over promotion

10.9. Improve the economic efficiency of distribution systems

Appropriate methods must be found to provide prescribers
and consumers with a sufficient level of scientific information,
without crossing into the territory of commercial promotion.
This should apply equally to the most widely-used medicines
and over-the-counter drugs. The European Community Pharm-
aceutical Information Network (Eudra), and the MINE data
bank for which EMEA in London is responsible, are steps in
the right direction.

10.9.1.
The ESC gives due importance to the fundamental
role played by the distribution sector in ensuring, throughout
the distribution network,
that medicines are stored and
supplied in optimum conditions and are readily available to
patients, and in providing accurate health and drug infor-
mation. The role of pharmacies as a health centre for the
public should be stepped up, so as to make full use of the
existing efficient network.

10.8.1.
These methods must be agreed by national monitor-
ing authorities, national pharmaceutical care financing bodies,
professional associations, consumers’ associations and the
pharmaceutical industry.

The results could be used to draw up codes of good
10.8.2.
conduct (based on the WHO document Ethical Criteria for
Medicinal Drug Promotion), or specific local restrictions or

10.9.2.
However, the Committee also believes that a fresh
look should be taken at the current systems for establishing
profit margins in drug distribution, so as to bring them into
line with the real contribution made to the product value
chain. Pricing systems should be linked to the unit price of a
product, and also to total volumes, additional services pro-
vided, and the commitment of operators to information and
in other words, the value added of the
health protection;
service offered by the wholesaler or chemist to the ‘pharmaceu-
tical system’.

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10.9.3.
In the Committee’s view, new alternative sales
channels for some types of medicine must not be ruled out.
The EU must equip itself with appropriate tools for tackling
the issues raised by electronic commerce. The sale of medicines
to consumers over the Internet could expose them to unnecess-
ary risks.

As has already been pointed out, medical care needs to be
backed up by special safety standards, which are not always
met in the case of the purchase of medicines over the Internet.

10.9.4.
practical suggestions for:

It may be useful to set up working parties to table

— drawing up a list of drugs, which, given their low risk
profile, could be made available over the counter at shops
other than pharmacies,

— devising guidelines for determining payments to whole-
salers and pharmacists, ensuring that payment is less
rigidly linked to the price of the drugs.

10.10. Monitoring

All rules have a limited shelf-life. Systems adapt to situations
and operators locate weak points. Appropriate mechanisms
must be established at both EU and national level to monitor
trends in the consumption and use of drugs, as well as their

Brussels, 19 October 2000.

availability and accessibility. This will enable rules to be
adjusted when they become obsolete or have undesired effects.

11. Final comments and suggestions

11.1.
The Committee is pleased that many of the points
made in the present opinion were echoed by speakers at the
Lisbon conference on pharmaceuticals and public health, held
on 11 and 12 April 2000, and more particularly in the paper
presented by the Working Group on Pharmaceuticals and
Public Health, High Level Committee on Health; this body was
appointed by the Health Ministers of the Member States to
advise the Commission departments on public health issues.

11.2.
The Committee is aware that the present opinion
could have looked at many further aspects of pharmaceutical
policy, rather than focusing on the patient. It reserves the right
to give further consideration to these matters in the future and
it is monitoring developments on the health and pharmaceut-
icals scene with great interest; there are major spurs for change
implementation of Article 152 of the
here, to foster full
Amsterdam Treaty.

11.3.
The Committee therefore hopes that the Commission
and the High Level Committee on Health will develop more
regular and collaborative relations with it, and will use any
contributions it may make to the analysis of the impact which
these changes will have on the various stakeholders and on
civil society in general.

The President

of the Economic and Social Committee

Göke FRERICHS