8 July 2024

From transparency to public research: how to make medicines a right not just a business

Eurydice Bersi (Reporters United)
Eurydice Bersi (Reporters United)
Manuel Rico
Manuel Rico
Access to medicines is a struggle for millions - and the pharmaceutical industry remains a largely secretive world. Here, Investigate Europe outlines nine changes to the sector championed by a selection of experts across Europe.
High prices, unequal access and bumper profits. There are many pointed criticisms of Europe’s pharmaceutical industry but changing how this powerful sector operates is no easy task. 

When the European Parliament planned to release a report on improving access to medicines back in 2016, it included a unique proposal: the creation of a public research platform to redistribute some industry profits to fund new drug developments. Unsurprisingly, the proposal was shelved from the final report. 

"The red line was the public research platform," says Spanish socialist Soledad Cabezón, then an MEP and author of the report. "That had to be dropped at the last moment, to achieve consensus, because the representative of the German CDU Party would not accept it."
Cabezón, who now chairs the Fair Access to Medicines Association, still believes that the report had an impact. "My main objective was to reach a consensus that the system had to be changed, which had not been questioned until then in the European Union. And that was achieved."
Yet changes to the system are hard to achieve. Researchers and experts from across Europe have spent years thinking about what an alternative model might look like. A model that considers access to medicines as human right and not just as business. Investigate Europe details below nine essential changes proposed by these experts.
Fair access to medicines is a growing concern among some researchers and academics in Europe.Shutterstock

1. Be transparent

With drugs, there is a public official price and a secret real price. However, the secrecy affects not only the price, but the entire drug chain. States are also unaware of the costs of production, research or the amount of public money invested in developing a drug, as Investigate Europe has revealed in its Deady prices investigation series.

“There is a complete lack of transparency with regard to the cost of the research and development. Of course, you want to have a system that makes sure there is enough financing for the development of new medicines, but how much money is necessary is not really known,” says Ellen ‘t Hoen, Dutch lawyer and public health advocate. “The only figures are published by the drugs for neglected diseases initiative.”
The World Health Assembly adopted in 2019 a resolution on improving transparency in pharmaceutical markets. That text calls on states to take appropriate measures by publicly reporting the net prices of health products and to collaborate to obtain data from laboratories on "sales revenues, prices, units sold, marketing costs, and subsidies and incentives." The resolution was approved, although Germany, the UK and Hungary withdrew from it. The industry showed its clear opposition and very little progress has been made on transparency since.
"Medicines and secret service funds are the only two areas where the destination of public money is not known. It is unusual and unacceptable," denounces Fernando Lamata, physician and former secretary general of Spain’s health ministry.

A secrecy that directly affects taxpayers' pockets: "For a drug that costs €300 we pay €20,000. If the cost were transparent, that would be an embezzlement of public funds and those involved would go to jail. In the case of medicines this is not the case because we are hiding information from citizens."
  Industry is currently pushing for law changes that would make medicines procurement even less transparent in at least three countries: Germany, Switzerland and Belgium.
Research and development costs in the pharmaceutical industry are a closely guarded secret.Shutterstock

2. Don’t pay twice for the same drug

Ellen 't Hoen explains that knowing "who paid what" and the production and research costs would enable a conversation about what is a fair price for all parties involved, patients, communities and companies.
As of today, there is no doubt that the pharmaceutical industry extracts a more than fair profit. A US study of the profitability of large companies between 2000 and 2018 concluded that big pharma had a profit margin of 76.5 per cent versus 37.4 per cent for other industries. An analysis by the consulting firm EY concluded that pharma achieves an average return on sales of over 20 per cent, more than any other industry.
Pedro Pita Barros, a Portuguese professor of health economics, points to another problem: "The fact that the states also heavily finance innovation, through the research grants that exist, ends up creating a situation in which the public pays twice for the same thing, first by financing innovation and then by buying the drug.” Pita Barros believes the contribution of public money should be considered when establishing the final reimbursement price that the state will pay for the drug.

3. Conduct joint negotiations

If the EU were to negotiate jointly with pharmaceutical companies, it would achieve better prices. "The potential collective purchasing power of the EU is colossal. I think that leveraging that power could be very helpful," says Ellen 't Hoen.
However, the EU is not taking advantage of it. The only exception so far was the joint negotiation to buy and distribute the Covid vaccine among the 30 EU/EEA states. Regional attempts to purchase medicines - the Beneluxa coalition being the most notable example - have been mostly shunned by industry.
Conflicting economic interests have led the likes of Germany and Denmark to reject joint negotiations. Italian scientist Silvio Garattini, director of the Mario Negri Institute for Pharmacological Research, explains that countries with a strong national industry more than recover via taxes what they overpay when buying drugs: "Germany is not interested in a joint negotiation because its big pharma industry makes a lot of money around the world and pays taxes in Germany. Or think about Novo Nordisk, the Danish company that sells the anti-obesity drugs, how much money it has generated in taxes in Denmark." Last year, Novo Nordisk's market capitalisation exceeded Denmark's GDP and it became the most valuable company in Europe.
The battle is ongoing, focused on negotiations for costly innovative medicines. In the European council, states like Greece and Malta still plead for joint negotiations by groups of member states while Germany remains a steadfast opponent. The European Commission says it fosters collaboration but in practice, the will of the powerful countries limits its policy options.

4. Conduct public research  

Companies prioritise research into drugs for rare diseases since those can have very high prices, rather than focusing on broader public health needs, such as developing new antibiotics. Some 35,000 people die every year in Europe from infections for which there are no effective antibiotics. "It's no use starting at the end of the story and complaining about prices. You have to go to the beginning and ask why we have ceded control over what drugs are developed," says Anja Schiel, senior adviser at the Norwegian Medical Products Agency. "We know which diseases have no treatment, and yet the industry only develops what allows them to make more money and position themselves better in the market.”

Important research questions are not being investigated. "For example, industry has zero interest in providing us with optimised treatment algorithms to find the right sequence of drugs for different patients.” says Schiel. “So these kinds of studies are never done. If we had a European research institute, we could fund these studies and save a lot of money by reducing the amount of drugs being dispensed or making better sequences of drugs for patients." The European research institute that Schiel proposes is the same idea that Soledad Cabezon, the former Spanish MEP, floated in 2017. 
In Belgium and the Netherlands, this idea is taking shape. Dozens of ongoing, publicly funded trials examine the options industry shuns. For example, does an existing drug also work for other conditions than those it is currently used for? Is it sometimes best to wait and see rather than immediately start medication? Is the new and more expensive drug really better than the existing one? “Pragmatic trials are different because they are comparative,” says Irina Cleemput, senior health economist at the Belgian research institute KCE. “They compare new treatments to the best standard of care. This sort of evidence gathering is not a priority for industry.”

Soledad Cabezon thinks there is scope for industry involvement in this kind of research projects. She proposes moving forward with public-private collaborations, provided that three major conditions are established: that intellectual property is shared between both parties, that the drugs resulting from the research have a fair price and that technology transfer is guaranteed.

The European Commission wants to keep manufacturers satisfied. They are afraid that they will lose that sector as a major contributor to economic growth and employment.

Sahar Barjesteh van Waalwijk van Doorn-Khosrovani

5. Demand better evidence

New medicines that change people’s lives for the better are here and more are in the pipeline. But not everything that is presented and priced as innovation turns out as promised.

New and very expensive medicines are put into the market sometimes with just one study, or with inconclusive data. This is happening more and more often, according to researchers who spoke to Investigate Europe. “The threshold for scientific approval has been lowered,” says Dutch researcher Sahar Barjesteh van Waalwijk van Doorn-Khosrovani, co-author of a Lancet article on the subject.

“The European Commission wants to keep manufacturers satisfied. They are afraid that they will lose that sector as a major contributor to economic growth and employment, because many are already moving to India and China (for manufacturing and the clinical trials). In reaction to the stricter criteria set by Dutch oncologists, industry clearly said: "This will reduce your chance of securing new clinical trials.”

Anja Schiel from the Norwegian Medical Products Agency, says that scientific uncertainty about the effects of new medicines is rewarded. “There is an absolute inverse relationship, the more uncertainty the higher the price.” she says. “No further studies, no information provided. Because if you provide certainty and this shows that your drug is not working, then you have a problem. Honestly, we have been paying enormous amounts of money in the last ten years but we have not bought much health for our people.”

Investigate Europe met a doctor who was a star researcher with a highly promising academic career when he finished medical school. The moment he realised how companies manipulate clinical trials he no longer wanted to be part of this flawed system. “Ι almost quit medicine altogether.” he says “The people designing the clinical trials in order to get the outcome they want, they are geniuses.” He turned his back to research and opened a small practice in a provincial city.
New and very expensive medicines are https://www.investigate-europe.eu/posts/deadly-prices-big-pharma-influence-hangs-over-europes-medicines-regulator Edit Edit Remove Remove put into the market sometimes with just one study, or with inconclusive data.Shutterstock

6. At least publish what you have

A simple way to drastically improve decision-making in healthcare would be to oblige industry to publish the results of all the studies they fund. This is currently not the case.
"There are research design biases, data interpretation biases and data publication biases. For instance, if an adverse effect appears, I do not report it. It is the company that asks the research questions and the company that answers them," says Fernando Lamata, the former secretary general of Spain’s health ministry. In his opinion, everything related to trials should be under the control of independent entities and not of the companies themselves.
“It’s not a secret that there are tons of unpublished results,” says Anja Schiel. “No one really enforces publication. You just have to look at the European Database on Clinical Trials, look at the dates when the studies were finished and look at whether there are results published. You’ll see that they are finished but not published. Apparently somebody doesn’t want to tell us what the results were.”
Schiel points out that researchers are forced to enter into non-disclosure agreements that give industry the opportunity to publish results at will. “It’s not just PhD students, it's entire institutes that are not allowed to publish. Because of confidential contractual obligations, they can’t even talk about it.”

There are research design biases, data interpretation biases and data publication biases. It is the company that asks the research questions and the company that answers them.

Fernando Lamata

7. Don’t flood the market with unnecessary drugs

The sale of a drug in an EU country can be authorised by the European Medicines Agency (EMA) or by the national state agencies. However, the EMA has a monopoly on approving all drugs for cancer, diabetes, neurodegenerative diseases, rare or viral diseases and those produced through biotechnological processes or gene therapies. According to its own data, the EMA rejects just over three per cent of the applications it receives to market a drug.

Schiel regrets that regulators "are forced to accept every submission, no matter how stupid the treatment might be.” And she adds that even if experts provide arguments at the national level for rejecting a product, "then the industry has whole departments to do nothing else than bringing patients to the front page of our newspapers telling: “Oh, what an unacceptable situation, because my pimple cream is not going to be reimbursed.”

At the European level, a drug is approved on the basis of three characteristics: quality, efficacy and safety. Silvio Garattini considers that all three "are important," but they do not make it possible to know whether the new drug is better or worse than those that already exist for the same indication. For this reason, the Italian scientist proposes including a fourth requirement: that the new drug should demonstrate added therapeutic value. “It is estimated that at least 50 per cent of the drugs are unnecessary, that patients would have all they need even if they were not on them”, he says referring to WHO data.

The issue of overmedication is also of concern to many experts, especially in fields such as mental health.
The Amsterdam headquarters of the European Medicines Agency.European Union

8. Slow down the lobby machine

The financial influence that pharmaceuticals have over almost all players in the sector is strong. Companies in Europe pay tens of thousands of doctors' training costs, fund professional societies, and provide money to patient organisations. And, as Investigate Europe revealed, a group of 21 multinationals contribute almost half of the revenues of the EMA, the agency that decides whether or not to authorise their drugs.

there are 290 pharmaceutical lobbyists for 705 parliamentarians, and this does not include consultancy firms employed by pharma," says lawyer Ellen 't Hoen.

Clemens Auer was Director General for Health in Austria and recalls an anecdote about how the pharmaceutical lobby works: "I met with the Austrian representatives of a company that had a new vaccine for children. They wanted to sell the dose for €140. It was spring and I told them: ‘Look out of my window, there you will see Prater Park. When the leaves are turning yellow and colorful, you can come again and offer me a better price.’ A week later, the newspapers were full of claims that I am hindering getting this wonderful product which will save so many lives on the Austrian market. So this is how they work.”

This capacity for social pressure leaves states "in a fragile negotiating position", says Julian Perelman, a Belgian professor of health economics who advises the Portuguese government on the public financing of medicines. "The pressure from patients' organisations and doctors themselves is very great and it is difficult to make the population understand that it is necessary to negotiate for drugs that can save lives," Perelman explains.

The solution, in Fernando Lamata's opinion, is for the EMA and state agencies not to have private financing. This is already happening in France, where its national agency is funded almost exclusively with public money. And to prevent pharmaceutical companies from financing all the players. "Instead of giving this money to the companies through overpricing so that they can distribute it as they see fit, it should be given directly to those involved," Lamata says.

To that end, the companies would have to contribute a percentage of their sales. A committee of professional bodies, including professional associations and scientific societies, would decide on the distribution of funds among these organisations. And the same would apply to physicians and patient organisations.

Many politicians are literally bought by the pharmaceutical industry. The financial power of the industry is very significant and so is their lobbying capacity.

Ellen 't Hoen

9. Change the patent system

Patenting medicines has been controversial from the outset, in the 19th century. At the time, scientists were concerned that preventing others from using health innovations could thwart progress and keep new drugs away from those who needed them most. Only at the end of the 20th century were medicine patents adopted by almost every country, a major victory for the pharmaceutical industry.  

Industry claims patents are vital in order to fund innovation but does not explain where financing innovation stops and excessive profits start. "Intellectual property on drugs was granted by lawmakers. It is therefore the right of lawmakers to change that if it is not working, and if it is not fulfilling its purpose," reflects Clemens Auer.

One of the changes that seem essential to Fernando Lamata is to suspend the patent if there is no transparency about the costs: "The patent is supposed to be in place for financing the research costs and not what the manufacturer wants to ask for. If the manufacturer is unwilling or unable to provide the costs, the patent should be automatically suspended. What is not legitimate is to want a monopoly on the patent and to set the price well above the R&D costs".

Health policy advocates say that even a temporary patent suspension is a red flag for industry.

Nevertheless, in the so-called pharmaceutical package that is now being discussed by the EU institutions there is a reference to compulsory licences, which are permits granted by a government to produce a patented drug without the consent of the patent holder. But the possibility of using them is strictly limited to situations of "public health emergency".

 “The European pharmaceutical industry spends €43 billion a year on marketing in the EU so that you don't see the problems," says Fernando Lamata, a figure that represents 23 per cent of the industry's total turnover. But the problems exist - and so do the alternatives.

Contributors: Paulo Pena, Harald Schumann, Lorenzo Buzzoni, Maxence Peigné, Maria Maggiore and Catrien Spijkerman.
Editor: Chris Matthews.


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