Our plan - Health Action International

What next? Three Steps To Towards Transparent and Fair Medicine Prices

With the price of new medicines in the Netherlands reaching unsustainable levels, the time has come to take practical and effective actions that will bring about fair and transparent medicine prices.

The key to achieving this goal is to demand greater levels of transparency within the pharmaceutical industry. In an open and democratic society, the price we pay for our medicines should be public information and companies should be open about their true research and development (R&D) costs, including how much of these costs were funded by taxpayers.

Here’s how we can make it happen:

1. Make medicine prices public information

Making the real price paid for medicines publicly available will create a level playing field between governments and hospitals buying the medicines and the industry. To achieve this goal, we must:

  • Ensure that the European Union Pricing Database (Euripid) is publicly accessible and contains real and up to date pricing information—including discounts and rebates.

  • Mandate the sharing of real purchase prices paid, including discounts and rebates, within the Dutch Health System (by the government, hospitals and health insurers).

The lack of transparency on the actual prices paid by different procurers within the Netherlands and between the Netherlands and other EU Member States makes any effective and fair price negotiations with industry impossible. Without greater transparency, it’s like negotiating with a blindfold on.

Without knowing what rebates and discounts others have received, buyers are not empowered in price negotiations with the pharmaceutical industry about the price of new medicines.

2. Demand transparency of the true cost of R&D of new medicines

  • Demand full transparency of actual R&D costs from the pharmaceutical industry by, for example, making such disclosure a pre-condition for reimbursement.

  • If they acted together, The Netherlands together with other EU Member States, could pressure the industry to become more transparent.

The real costs of R&D remain unknown, but the pharmaceutical industry frequently give these costs as reasons for charging exorbitant prices when a new medicine comes onto the market. Estimates from the industry and independent analysts vary greatly. According to the pharmaceutical industry, it costs US$1.2–2.6 billion to bring a new medicine to market. However, the Drugs for Neglected Diseases initiative (DNDi), a non-profit organisation that develops new medicines, says it costs much less—€100–150 million, excluding in-kind contributions from partners.

3. Let’s stop paying twice—we must track and trace public funding of R&D

  • Demand greater transparency and better tracking of public funding in R&D in The Netherlands and the European Union. 

    • This includes not just research grants, but also indirect subsidies, such as research infrastructure, tax credits and other incentives.

  • Ensure that biomedical innovation that is partially or full-funded by public money results in medicines that are appropriate, affordable and accessible at prices that reflect the public contribution.

    • To achieve this, The Netherlands and the EU need to attach conditions to public funding of biomedical R&D.

About 80% of all funds for basic research for medicines and about 30–40% of all global R&D for health is publicly funded. However, more accurate tracking of public funding of biomedical R&D is essential to ensuring a proper reflection of the share of public funding received in the price of medicines developed down the line. Currently, European taxpayers pay multiple times for their medicines (funding and infrastructure for early research, as well as clinical trials, various tax and other incentives, and price monopolies with limited to no price regulation).






Showing 2 reactions

Please check your e-mail for a link to activate your account.
  • Brieuc-Yves Cadat-Lampe
    followed this page 2017-03-17 10:45:23 +0100
  • Manuel Martin
    commented 2017-03-07 14:56:54 +0100
    Great, common sense campaign!