Jul 29 / 2019
Latest News / Editorial/ Health

Pharmaceutical firms resist Malta-led proposal for increased transparency

“Pharmaceutical companies at odds with price transparency”

Pharmaceutical firms are resisting a Malta-led proposal that aims to bring about better transparency when it comes to the prices of medicines purchases by EU health gatekeepers.

The Health Minister, Chris Fearne, who is leading the discussions known as the Valletta Declaration, said the pharmaceutical companies were at odds with price transparency “because it will weaken their position of strength when negotiating”.
Ten EU countries have so far signed the declaration, representing some 160 million citizens.

As it stands, medicine contracts between pharma companies and individual countries do not allow the purchasing authorities to divulge the prices they are paying. This puts pharmaceutical companies at an advantage as they know the price offered to each country, while the health authorities are in the dark.

Chris Fearne, Minister of Health for Malta

“This puts health authorities at a disadvantage when negotiating. Pharma companies invariably tell all the different countries that their (secret) price is ‘the best’. This is manifestly impossible,” a spokesperson for Mr Fearne’s ministry explained. “Additionally, at the moment, while the big pharma companies have amalgamated, procurement authorities remain fragmented. Price transparency is the first step that will allow member states to start negotiating and procuring medicines jointly.”

In 2017, when Malta held the presidency of the Council of the European Union, a number of member states – now totalling 10 – came together to sign the Valletta Declaration. The goal is to ensure that new medicines entering the market are available to all at sustainable prices.

Earlier this month, the supposed Valletta group – consisting of Portugal, Spain, Italy, Malta, Croatia, Greece, Cyprus, Romania, Slovenia and Ireland and led by Mr Fearne – met in Malta to begin discussing the matter further.

However, last week the European Federation of Pharmaceutical Industries and Associations (EFPIA), that represents the European pharmaceutical industry, pushed back on the price-sharing proposal, arguing it could reduce access to medicines.

Among other things, the EFPIA argued that this would scale back rebates on drug prices that are negotiated confidentially.
“Malta believes that transparency of prices between the countries, who are ready to participate in the sharing of prices between themselves, would increase the negotiating power of the countries concerned when they are negotiating prices of individual products with the industry on a national level,” the ministry spokesperson said.

She continued: “The current situation is that nationally published prices are not the actual prices (they do not reflect discounts and other negotiated terms) and the actual price being paid by each country remains secret to all other countries.

“If countries within the Valletta Declaration agree to share actual prices of medicines between themselves, then they would be in a stronger position to negotiate the prices for specific medicinal products for their respective national health systems.”

The transparency model will be discussed further during the next Valletta Declaration meeting in Rome come September with the aim of pressing the issue before the EU Health Ministers Council.

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