Günter Verheugen<br> Vice-President of the European Commission responsible for Enterprise and Industry<br>Delivering better information, better access and better prices<br> Pharmaceutical Forum<br>Brussels, 29 September 2006<br>

SPEECH/06/547

Günter Verheugen

Vice-President of the European Commission responsible for Enterprise and Industry



Delivering better information, better access and better prices

Pharmaceutical Forum
Brussels, 29 September 2006

Ladies and Gentlemen, I would like to welcome you to the first meeting of the Pharmaceutical Forum.

This Forum builds on the old G10 Medicines process. The G10 highlighted the importance of the pharmaceutical industry to achieving our public health goals. This was an important step.

Today, we go further than recommendations developed by a limited high level advisory group. The particular characteristic of the Forum is that it brings together all Member States, the European Parliament and a broad range of stakeholders.

We do this because important G10 issues remain unsolved on which the only way forward is close cooperation of all those around the table today. Information to patients, price and reimbursement as well as added therapeutic value are areas, where isolated action by any of us is doomed to fail.

And let me be very frank: We cannot afford to fail. The industry is facing a number of serious challenges, matched only by those facing public health. The time has passed that Europe was the pharmacy of the world. True, our industry still has an inherent strength. But we are losing competitive ground to the United States and, increasingly, to China, India, Singapore and others. There are many worrying signals. Let me mention just two:

• First, the widening gap in pharmaceutical research: Over the last 15 years investment in pharmaceutical R&D has been growing in the US significantly and consistently faster than in Europe^[1].
• Second, the development of key medicines: In the past, Europe was leading in developing the most successful breakthrough pharmaceuticals. This trend has reversed. In 2004, two thirds of the 30 top selling medicines in the world were developed in the USA^[2].

We need to respond to these challenges and I hope that today's discussion will pave the way for solutions. Our ambition must be equal to the challenges. What we need today is a clear political commitment from all around the table to fully support the Forum. And we should be impatient to achieve rapid and concrete progress in the months to come. Otherwise, Ladies and Gentlemen, there is a high risk that this Forum will fail – to the detriment of our patients, our industry and our health care systems.

Information to Patients

The first topic, on which our citizens expect us to deliver, is information to patients.

The current situation is unsatisfactory, and in my view even unacceptable. If you can speak English and use a computer, you already have as much information on pharmaceuticals as you could possibly want. What you get however are often Internet sites of dubious quality or even sources from outside the EU offering promotional material rather than information. If by contrast you don't speak English and cannot use a computer, the information available to you is very limited.

In our efforts to improve the information on pharmaceuticals as well as on diseases in general, we have to bear in mind some key aspects:

• First, patients and consumers have a legitimate right to information. This right does not, and must not, extend to advertising.
• Second, we need better informed patients. This would help ensure a more rational use of medicines which could save health care systems millions of euros each year.
• Third, we should strive for equal access to information. Computer literacy and linguistic skills should not privilege some patients over others.
• We need to decide at what level information is best provided - at a national or European level. In my view Member States are in the best position to develop information to take account of local traditions, health care systems and languages. At the European level we can define, and design, the framework of controls governing information to ensure they are applied equally across Europe. We can also facilitate access to information.
• Last but not least we need to consider how to create confidence of citizens, regulators and health professionals in the quality of any information provided by industry.

To address these aspects, the legal framework from the early 1990s is not fully appropriate any more. On medicines, advertising to the public is only permitted for self-medication medicines and completely prohibited for prescription medicines. For those medicines, even information is highly restricted. Information on diseases by contrast is much less regulated.

I regret that in 2004 the Commission's last attempt to modernise the legislation failed. But I am the first to admit that mistakes have been made.

The Commission is now called upon to present a report to the Council and the European Parliament next year. This is an excellent chance to put forward a new framework for information to patients. The report will take account of the discussions in the Forum. And we will also consult the public before the end of the year to ensure that everyone has an opportunity to contribute.

A potential source of information is the industry which has the knowledge, skills and resources to provide, at least, basic information. National and European regulatory authorities already depend on the industry to provide information for leaflets, labels and national databases. There is no reason why we should not build on this.

I strongly believe that industry should have the right to produce non-promotional information for patients about their own medicines and diseases and to publish it. This information should comply with strictly defined rules. It could be provided on a self-regulatory basis but subject to a robust system of control and quality assurance without creating a big bureaucracy.

Pricing and Reimbursement

Let me now turn to pricing and reimbursement.

The starting point of our reflections must be to discuss the fundamental objective of our pricing and reimbursement policies. Do they aim exclusively at cost-containing of the health care budget? If so, there is not much for us to discuss. In my view however, the ambition of our price and reimbursement policies must be to provide optimal service to our patients. Good policies give patients equitable access to the treatment they need and take into account the innovation and added value of medicines.

Do not get me wrong. The objective is not to spend more, but to spend more intelligently. Pricing and Reimbursement systems have to allocate our limited resources effectively and free them up to pay for the much-needed innovation of tomorrow. What is needed is a long-term approach, rather than short-term budget fixes.

To get there, we do not need new legislation from Brussels. The way forward is very simple: We need to learn from each other how to do better. Not more and not less.

Five main themes have emerged from the preparatory discussion and have to be addressed in the Forum:

• First, the diversity in pricing, reimbursement and cost containment models within Europe reflects national health systems. This means that we have a broad but very fragmented experience around the table. We must build on these experiences to develop more shared insights on the most valuable of these practices.
• Second, it has become clear that patients over Europe have very unequal access to medicines. This may be for understandable business or regulatory reasons. Nevertheless, I believe that this situation is not acceptable. The Commission is committed to help find solutions, working with Member States, patients and other stakeholders.
• Third, trade and distribution has been raised as a third area including the topic of parallel trade. For some importing Member States, this is a valuable way of cost containment. Some exporting Member States have reported problems with stock-rupture and, more importantly, upward price pressures. I believe that this is a complex issue but one we cannot ignore.
• Fourth, Member States have made a call for improved networking and exchange of data regarding pricing of medicines. Transparency of data is a valuable tool when taking decisions on pricing. However, for Member States to get these data they also need to provide them. And in this respect we have a very good tool, in the form of the Transparency Directive. I have, therefore, asked my services to take this up at the forthcoming Transparency Committee.
• Last not least, a taskforce has been set up to define the value of innovation. A difficult exercise as this can vary depending on your perspective as a patient, payer, company etc. But we need a clearer view on what is valuable innovation, both for Member States to allocate resources effectively and for industry to work on the health-solutions needed.

I expect the working group on pricing to deliver a toolbox of concrete measures and options which can be picked up by Member States when addressing all these challenges. I look forward to a first proposal at the next meeting of this Forum.

Ladies and gentlemen there is much to discuss. We have a Progress Report which summarises the work of the Working Groups to date and points to issues that have yet to be tackled. It should form the basis of our discussion today. I hope that we will be able to agree to adopt the Report at the end of the meeting so that the working parties can start on the substantive work.

^[1] By 4.6 times in USA compared to 2.8 in Europe. Source: EFPIA
^[2] In 2004. Source: IMS Health.