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08 March 2019 / news

Life Science Bit: NZa and the European Commission publish reports on expensive medicines

High drug prices are currently a prominent subject in the news.

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Over the past weeks, both the Dutch Healthcare Authority (Nederlandse Zorgautoriteit, NZa) as well as the European Commission (the Commission) published reports concerning (amongst other topics) the high prices of medicinal products.

The report of the NZa concerns the expenses, contracting, affordability and accessibility of expensive medicinal products and is entitled “Monitor medicinal products within the specialist medical care”. The report of the Commission concerns the effective enforcement of competition laws within the pharmaceutical industry. Below we will provide you with more insight into both reports.

NZa: Monitor medicinal products within the specialist medical care

In this Monitor, the NZa observes that the costs for expensive medicinal products has risen by 6% in comparison to 2016. The NZa states that health insurers and hospitals are more often successful in reaching an agreement with pharmaceutical manufacturers on lower prices for expensive medicinal products. Nevertheless, there is an expenditure growth due to an increase in patients as well as an increase in newer and more expensive drugs.

The NZa has identified that the costs of expensive medicinal products has significantly increased over the years in comparison to other expenses concerning specialist medical care. In 2017, 8,8% of the total expenses towards specialist medical care was spent on expensive medicines. The NZa notes that this increase in expenses can negatively impact other areas of specialist medical care as there is an agreement in place that holds that the expenses towards specialist medical care should not grow as considerably.

Following the Monitor, the NZa has indicated that they will enter into a dialogue with healthcare insurers and healthcare providers regarding the risks of subsequent costing. Under subsequent costing, medicinal products are compensated by health insurance companies for healthcare providers at the net purchase price (outside of usual ceilings for specialist medical care). This could lead to a decrease in incentive for health insurance companies to buy as cheap as possible. The NZa has announced that it will investigate whether the market can be structured in a more efficient manner.

The Commission: Competition law enforcement in the pharmaceutical sector

The Commission has published a report concerning active competition law enforcement at EU and national level within the pharmaceutical sector.

On the basis of anti-competitive agreements and cases of abuse of a dominant position between the period of 2009 to 2017, the Commission highlights the following:

  • The Commission holds that high prices of medicines adds pressure on the national healthcare systems. It also stated that various anticompetitive practices have been conducted with regard to pay-for-delay agreements as well as regarding excessive prices charged for off-patent medicines. The Commission has also intervened with various mergers that could have led to an increase in prices.
  • The Commission emphasizes that innovation is of imminent importance within the pharmaceutical industry. Within this framework too, the Commission holds that competition laws provide tools that that safeguard innovation. As such, the Commission has prevented transactions that could have compromised research and development efforts to launch new medicines.

The Commission holds that enforcement by the Commission and the national competition authorities can be highly effective and provides a solid basis for competition authorities to continue working and focusing their enforcement efforts in the sector.

Should you have any questions regarding market surveillance within the pharmaceutical and / or life sciences industry, please get in touch with your trusted advisor of the respective teams at Loyens & Loeff.

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