The European Commission has announced proposals to streamline and speed up national drug pricing and reimbursement decisions.
In future, it says, such decisions should be taken within 120 days for innovative medicines and just 30 days for generics; the time limit now is 180 days for both, set by the current Transparency Directive which dates back to 1989. The Commission is also calling for strong enforcement measures to ensure compliance by the member states with these new time limits - the current deadlines are frequently exceeded.
Presenting the proposal, European Commission vice president Antonio Tajani said: "we need faster decisions leading to pricing and reimbursement to maintain a dynamic pharmaceutical market and to offer citizens better access to pharmaceuticals."
"Our proposal will lead to substantial savings for public health budgets, for example by allowing earlier market entry of generic products. It also creates a more predictable environment with greater transparency for pharmaceutical companies, thus improving their competitiveness," added Mr Tajani, the European Commissioner for Industry and Entrepreneurship.
The current Transparency Directive (89/105/EEC) no longer reflects the increased complexity of European Union (EU) member states' pricing and reimbursement procedures, says the Commission. Also, in 2003 the Court of Justice of the EU ruled in its case-law that all national measures to control the prices of medicines or restrict their range must comply with the Directive, and the new proposal would adapt the Directive to reflect the Court's judgements.
The revision is a follow-up to the Commission's pharmaceutical sector inquiry of 2009, which found that delays in national pricing and reimbursement decisions could be for as long as 700 days for innovative drugs and up to 250 days for generics.
The main changes the Commission is seeking to guarantee speedier national, regional or local pricing and reimbursement decisions would set deadlines of 120 days for all medicines, except for more complex products, and 30 days for generics when the price of the reference product has already been approved or it is already included in the public health insurance system.
It also seeks to increase the Directive's effectiveness with strong measures to enforce compliance with these time limits. To deal with infringements, member states would be required to designate a body empowered to take rapid action such as: - adopting interim measures with the aim of correcting the claimed infringement or preventing "further damage;" - awarding damages to the applicant; and - imposing a penalty payment, calculated by day of delay.
The states will also be required to report regularly on their decisions and the times involved, and to address "the uncertainties related to innovative pricing and reimbursement procedures, eg, exclusion of tendering and of managed-entry agreements from the scope of application of the Directive."
The European Generic medicines Association (EGA) welcomed the proposals, saying that ending patent linkage - which links the approval of generics' pricing and reimbursement to the patent status of their originator reference products - would foster a competitive market. The proposal is in line with jurisprudence in various EU member states which have ruled against patent linkage in the pricing/reimbursement process, it adds.
The European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents the research-based companies, said the plan is a "step in the right direction" but added that further steps are needed to tackle the challenges of access to medicines, and these require a joint response from the Commission, member states and industry.
"The practice of international price referencing prevents differential pricing between markets - something that is standard in other parts of the world, where it is not only accepted but indeed welcomed that companies charge lower prices in low- and middle-income countries. In Europe too, access to medicines could be improved for patients if governments embraced differential pricing,” suggested EFPIA director general Richard Bergstrom.
In contrast, EU member states' focus on measures such as international or therapeutic reference pricing poses a threat to Europe's long-term innovative capability and hinders access to medicines - especially in times of economic crisis, he said.
"This is even more worrying if emergency price cuts under exceptional circumstances such as in Greece lead to automatic and arbitrary price cuts in 15 other member states," Mr Bergstrom warned.