Can a medical need clause help manage the growing costs of prescription drugs in the EU?

Abstract

Innovation in the development of new drugs has to balance the needs of health actors and administrators, the pharmaceutical industry and patients. Differing perspectives on what constitutes an innovation, where research and development should be directed and how new drugs should be evaluated and priced cause ongoing tensions within the regulatory framework. In the current climate, where Europe's health systems face rising demand for health services and increasingly restricted resources, the efficiency of pharmaceutical regulation and drug development is under even greater scrutiny. How can regulation foster innovation and industry growth while also serving the public health needs of society, and what is the EU's role in pursuing this objective? Drawing on a provision which formerly existed in Norwegian pharmaceutical legislation, this article explores the potential of a medical need clause (MNC) in addressing these issues. In restricting market authorisations to those drugs that offer an added therapeutic value, might a MNC foster innovation and spending efficiency in Europe's health systems?

Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks

“…An exemplary case is the thalidomide drug disaster that took place between 1958 and 1962. [ 24 ; 71 ; 74 ] This drug for morning sickness resulted in malformations in the extremities (phocomelia syndrome) of thousands of babies born to women who had taken thalidomide during pregnancy. [ 71 ] Regulatory reaction to drug safety alerts often involves the introduction of more stringent regulations requiring more safety and efficacy studies, which leads to more dropouts in the development process and an increase in invested time and costs.…”

“…Companies want to make the highest possible profits in each country by differentiating prices,[ 40 ] but they also want their prices to be similar across countries and close to competitors to reduce the incentive for parallel importation. [ 24 ; 101 ; 102 ] Governments worldwide want innovative new drugs to be available as quickly as possible, so their population can profit from them. High drug prices may incentivize companies to develop and launch their new drugs faster.…”

“…Governments and health insurers are struggling with the dramatic increase in costs of new medications. [ 7 ; 24 – 26 ] In December 2015, the US Senate issued a warning report on Sovaldi’s escalating drug price and its impact on the US health care system. The committee report said the Gilead Sciences pharmaceutical company had set the price as a benchmark to “raise the price floor” for its future hepatitis C-drugs like Harvoni, thus knowingly reducing the number of eligible patients for these superior treatments to cure HCV.…”

“…On average, countries in the Organization for Economic Co-operation and Development (OECD) spend 17% of their health care budgets on pharmaceuticals;[ 24 ; 33 ] in some countries, this is even more. [ 25 ; 34 ] For low- and middle-income countries (LMIC), drug expenditure can be a critical public health problem[ 35 – 38 ] with some drugs out of reach for even well-insured patients.…”

“…[ 25 ; 34 ] For low- and middle-income countries (LMIC), drug expenditure can be a critical public health problem[ 35 – 38 ] with some drugs out of reach for even well-insured patients. [ 26 ; 39 ] In some cases, to prevent striking increases in premiums or taxes, regulators are forced to limit access to healthcare,[ 13 ; 24 ; 40 – 42 ] which leaves patients without the best treatments. [ 43 ] Of concern, is that the pharmaceutical industry might be tempted to view these high-priced models as the direction for future drug pricing of new drugs that impact larger populations[ 13 ; 44 – 46 ].…”