In the Editorial published on 27 July 2016 (1), Mazzucato raises the fundamental questions of why medicines are so expensive, what is the right price to pay for a particular drug, and how this should be determined. In particular, she reminds us that “drug pricing must be completely transparent, so that governments can negotiate for better value on behalf of their populations”. But the leading regulatory agencies seem to stay away from pricing issues. Mazzucato notes that the US government never exercised its right to cap the prices of drugs that are developed via largely publicly funded research (2). Also, the European Medicines Agency (EMA) does not take decisions on the price or availability of medicines (3), since decisions about price and reimbursement take place at the level of each Member State.
Currently, most pharmaceutical companies tend to set prices that reflect “what the market bears”, or what one is willing to pay for a product, rather than the “just price” (4). Prices may be disproportionately high, to the point that some EMA-approved drugs will not be reimbursed under national assurance schemes, or they will be subject to strict eligibility criteria. We concur with Mazzucato that “realizing that government has power to actively shape and create markets, and not just remain on the sidelines fixing broken ones, especially in the area of health that is heavily subsidized by the public, is the first important step to reaching a better deal”.
With specific reference to the accessibility of innovative medicines in Middle-Income Countries (MIC), we had previously suggested that when discussing the clinical development plan of a potentially life-saving drug, regulatory agencies should require an “ethical clause” that binds the marketing authorization holders to register it in all MIC involved in the trials and to make it available at tiered prices (5). The case of innovative medicines for hepatitis C now shows that high prices pose a problem not only in resource-limited settings, and that they are growing to become a global barrier to access to essential treatments (6). Regulatory seal of approval is an important distinguishing factor that allows drug developers to charge high prices for products (7). On these grounds, we further advocate that regulatory authorities granting the initial marketing authorization should consider revising their current policies and actively engage in the evaluation of the pricing policies of new, innovative medicines. In particular, regulatory authorities could require innovator companies to provide, as part of the application for marketing authorization, comprehensive information on the research & development costs as well as a justification for the proposed pricing policy.
References
1) Mazzucato Mariana. High cost of new drugs. BMJ 2016; 354 :i4136
2) Knowledge Ecology International. 2016 Xtandi petition.http://keionline.org/xtandi
3) European Medicines Agency. What do we do. Last accessed on 29/07/2015 at http://www.ema.europa.eu/ema/index.jsp?curl=pages/about_us/general/gener...
4) Experts in Chronic Myeloid Leukemia. The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts. Blood 2013; 121:4439-42.
5) Ravinetto R, Guenzi PD, Massat P and Gaidano G. Globalisation of clinical trials and ethics of benefit sharing. Lancet Hematology 2014; 1: e54-e56.
6) Ward JW and Mermin H. Simple, Effective, but Out of Reach? Public Health Implications of HCV Drugs. NEJM 2015; 2015 [Pud ahead of print]
7) Eichler HG, Hurts H, Broich K and Rasi G. Drug Regulation and Pricing – Can Regulators Influence Affordability. New Eng J Med 2016; 374; 19
Competing interests:
No competing interests
01 August 2016
Raffaella Ravinetto
Senior Scientist
Gianluca Gaidano, MD, PhD, Department of Translational Medicine, University of Eastern Piedmont, Novara, Italy
Rapid Response:
Re: High cost of new drugs
In the Editorial published on 27 July 2016 (1), Mazzucato raises the fundamental questions of why medicines are so expensive, what is the right price to pay for a particular drug, and how this should be determined. In particular, she reminds us that “drug pricing must be completely transparent, so that governments can negotiate for better value on behalf of their populations”. But the leading regulatory agencies seem to stay away from pricing issues. Mazzucato notes that the US government never exercised its right to cap the prices of drugs that are developed via largely publicly funded research (2). Also, the European Medicines Agency (EMA) does not take decisions on the price or availability of medicines (3), since decisions about price and reimbursement take place at the level of each Member State.
Currently, most pharmaceutical companies tend to set prices that reflect “what the market bears”, or what one is willing to pay for a product, rather than the “just price” (4). Prices may be disproportionately high, to the point that some EMA-approved drugs will not be reimbursed under national assurance schemes, or they will be subject to strict eligibility criteria. We concur with Mazzucato that “realizing that government has power to actively shape and create markets, and not just remain on the sidelines fixing broken ones, especially in the area of health that is heavily subsidized by the public, is the first important step to reaching a better deal”.
With specific reference to the accessibility of innovative medicines in Middle-Income Countries (MIC), we had previously suggested that when discussing the clinical development plan of a potentially life-saving drug, regulatory agencies should require an “ethical clause” that binds the marketing authorization holders to register it in all MIC involved in the trials and to make it available at tiered prices (5). The case of innovative medicines for hepatitis C now shows that high prices pose a problem not only in resource-limited settings, and that they are growing to become a global barrier to access to essential treatments (6). Regulatory seal of approval is an important distinguishing factor that allows drug developers to charge high prices for products (7). On these grounds, we further advocate that regulatory authorities granting the initial marketing authorization should consider revising their current policies and actively engage in the evaluation of the pricing policies of new, innovative medicines. In particular, regulatory authorities could require innovator companies to provide, as part of the application for marketing authorization, comprehensive information on the research & development costs as well as a justification for the proposed pricing policy.
References
1) Mazzucato Mariana. High cost of new drugs. BMJ 2016; 354 :i4136
2) Knowledge Ecology International. 2016 Xtandi petition.http://keionline.org/xtandi
3) European Medicines Agency. What do we do. Last accessed on 29/07/2015 at http://www.ema.europa.eu/ema/index.jsp?curl=pages/about_us/general/gener...
4) Experts in Chronic Myeloid Leukemia. The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts. Blood 2013; 121:4439-42.
5) Ravinetto R, Guenzi PD, Massat P and Gaidano G. Globalisation of clinical trials and ethics of benefit sharing. Lancet Hematology 2014; 1: e54-e56.
6) Ward JW and Mermin H. Simple, Effective, but Out of Reach? Public Health Implications of HCV Drugs. NEJM 2015; 2015 [Pud ahead of print]
7) Eichler HG, Hurts H, Broich K and Rasi G. Drug Regulation and Pricing – Can Regulators Influence Affordability. New Eng J Med 2016; 374; 19
Competing interests: No competing interests