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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"** 
  
*Official Journal C 014 , 16/01/2001 P. 0122 - 0132*

  

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 "Citizens' 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 demographic trends, to improved diagnostic techniques, and to advances in the field of medicine.

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, pharmaceutical 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.

1.7. The scale of the problems still needing solutions with regard to the free movement of medicinal products in the European Union became painfully clear at the Third Bangemann 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.

1.8. 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.

1.9. The ESC has already, on several occasions, expressed its unerring belief in the strategic role of the European 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 products, and the need to bring the pharmaceutical spending of the Member States under control.

1.10. Many aspects of this approach, essential for Community 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.

1.11. The tendency to preserve the status quo has a negative 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 pharmaceutical industry.

1.12. The Community and the Member States should 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.

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.

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.

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.

2.3. Therefore, genuinely innovative drugs ought to be 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.

3. The need for an innovative and competitive pharmaceutical industry

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.

3.2. Medicine has certainly played a crucial role in improving 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 specialisation;

- higher than average investment in research and development compared with other industries;

- 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 combinations of consumer, prescriber and payer;

- the capacity to use and design increasingly sophisticated and complex legislative and monitoring systems.

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.

3.4. It is important not to overlook the positive effect the 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(3), on which the ESC has already given its opinion, marked a further step towards harmonising regulatory authority procedures in the Member States. The ESC hopes that it will soon be approved, including the Committee's suggestions for making it more effective.

3.6. The competition that should govern the pharmaceuticals 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.

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:

- 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;

- creating the right climate to make new medicines genuinely available throughout the European Union;

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

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 spending than systems offering total freedom in choosing doctors and specialists for each consultation;

- average age of the population: "older" societies cost more because of the higher sickness rate;

- health needs in relation to population morbidity;

- 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;

- prescription practices.

4.2. In the past decade, all the European countries have introduced measures designed to curb pharmaceutical spending. 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 recorded 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 prescription and research decisions in order to ensure that they receive the highest possible standard of health care, without being unfairly penalised on cost grounds.

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

5. Unequal public access to medicines

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.

5.2. The Commission survey revealed an unsatisfactory 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.

5.3. The differences recorded in the various Member States 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 %.

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 systems 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 medicines 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 medicines 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.

6.2. It is worth noting that marketing approval for a new 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 enormous 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.

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.

6.7. This initiative has sparked a process which has made it 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.

7.2. It is therefore essential and a matter of urgency to create the right conditions and make the right legislative provisions to stimulate scientific research, and steer an 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(4), 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.

7.6. However, it is worth noting that research incentive 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.

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.

8. The pharmaceutical sector and EU enlargement

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.

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

10. Proposals

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 throughout the European Union;

- contribute to the appropriate use of medicines;

- develop the cost efficiency of medicine distribution systems.

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.

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.

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

Create the conditions for greater synergy between the 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).

10.3.1. Repeating a point already made in its opinion on orphan medicinal products(5), the Committee would ask the Commission to draw up a Recommendation to promote the implementation of research incentives, particularly of a fiscal nature.

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.

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

10.4.2. These initiatives could lead to practical proposals concerning:

- methodologies for assessing prescriptions and the correspondence between diagnoses and prescriptions;

- methodologies for cost benefit assessments;

- methodologies for pharmacological and clinical assessments in the field of general medicine;

- guidelines for preferred treatment of the most common illnesses in the field of general medicine;

- 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 Names), (switch from prescription only to over-the-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 accessible 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 legislation (Freedom of Information Act, Title 5, of US Code, section 552) that govern freedom of information and transparency in drug marketing authorisation procedures.

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 alternatives. 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), supplementary health insurance organisations (that contribute to reimbursement or coverage of the cost of consumers' medicines), administrative bodies and spending restrictions (substitute 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.

10.6.2. While respecting national responsibility for healthcare and the establishment of drug pricing and reimbursement 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.

10.6.3. The Commission should therefore take responsibility for transforming the existing Pharmaceutical Committee and Transparency Committee into places for genuine discussion 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).

10.6.4. The ESC recommends that, at the end of the scheduled time limit, the medicine should be marketed according to the procedures in national laws relating to reimbursement, where appropriate.

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.

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.

10.7.2. In this respect, the Committee hopes that the significant price differences still encountered in the various Member States will be realigned. Price setting for medicines is the responsibility of national governments; however, the introduction of the euro will 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. Control over promotion

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 Pharmaceutical Information Network (Eudra), and the MINE data bank for which EMEA in London is responsible, are steps in the right direction.

10.8.1. These methods must be agreed by national monitoring authorities, national pharmaceutical care financing bodies, professional associations, consumers' associations and the pharmaceutical industry.

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

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.

10.9. Improve the economic efficiency of distribution systems

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 information. 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.

10.9.2. 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 provided, and the commitment of operators to information and health protection; in other words, the value added of the service offered by the wholesaler or chemist to the "pharmaceutical system".

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 unnecessary 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. It may be useful to set up working parties to table practical suggestions for:

- 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 wholesalers 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 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 pharmaceuticals scene with great interest; there are major spurs for change here, to foster full implementation of Article 152 of the 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.

Brussels, 19 October 2000.

The President

of the Economic and Social Committee

Göke Frerichs

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

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

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

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

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

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