Pharmaceutical Industry Welcomes the "G10" Medicines Report but Calls for Action and clear Follow-up
Brussels, 7 May 2002 - EFPIA welcomes the official presentation to the President of the European Commission of the G10 Medicines report which includes a set of recommendations for improving the pharmaceutical industry's competitiveness while ensuring high levels of public health protection.The initiative of Commissioners Liikanen and Byrne to set up the G10 high-level group in March 2001 was a first response to policy makers' concerns about the deterioration of the European pharmaceutical industry's competitiveness, as clearly shown in the December 2000 benchmarking report on 'Global Competitiveness in Pharmaceuticals' prepared by Professor Pammolli and his team at the Commission's request. Over the last ten years, pharmaceutical R&D investment in the US rose fivefold, while in Europe it only grew 2.4 times. The pharmaceutical market in Europe has been negatively affected by significant and unpredictable government intervention. As in other industries, excessive state intervention stifles competition, discourages innovation and creates significant inequity among European patients' rights to access of medicines which could most help them.
The G10 Medicines report contains 14 recommendations, some of clear relevance to Europe's competitiveness (see annex). As a whole, the G10 report underlines the need for Europe to find a right balance between attracting R&D, rewarding innovation, and, in that context, the development of generics:
Encouraging R&D requires the maintenance of a high level of intellectual property protection.
Rewarding innovation requires timely access of new medicines to all European markets at appropriate prices.
Promoting generics must be accompanied by the setting up of appropriate market conditions for in-patent medicines.
However, the industry notes in sharp contrast that the measures recently adopted
in Italy (reduction of prices by 5% and reduction of the length of intellectual
property rights) go in the opposite direction of G10's work.
G10 offers a discussion platform that involves and commits the various interested parties (Commission, Member States, Industry, Patients, Mutualities) to the whole set of recommendations. The industry's support to the G10 report is based on the following:
The report cannot be considered as an end in itself but as a first step of a
process. Indeed, the core problem faced by the pharmaceutical industry in Europe
has yet to be addressed: the fragmentation of European pharmaceutical market,
which leads to parallel trade flows, which is exacerbated by unilateral price
reductions imposed by some Member States and which will be further aggravated
by the forthcoming EU enlargement.
The G10 recommendations should be regarded as a package of measures/proposals which cannot be selectively implemented (no cherry picking). The follow-up to this report should not be limited to the development of a set of benchmarking and performance indicators but should lead to the setting up of a platform to monitor the simultaneous implementation of the various recommendations.
Subject to these conditions, industry representatives reiterate their commitment
to work closely with the Commission, Member States and interested parties on
the follow-up to the G10 report and next steps in the process. The pharmaceutical
industry representatives who took part in the G10 process (Mr Jean-François
Dehecq, EFPIA President, Mr Chris Viehbacher, President of Europe, GSK Pharmaceuticals,
and Mr Allessandro Banchi, AESGP President) believe that the multilateral dialogue
has been helpful in identifying the key issues and proposing a way forward which
also recognizes the needs of Member States and patients.
The European Federation of Pharmaceutical Industries and Associations (EFPIA) represents the pharmaceutical industry operating in Europe and brings together 18 national pharmaceutical industry associations and 44 pharmaceutical companies. Its mission is to promote pharmaceutical research and development in Europe in order to find better cures that improve human health worldwide.
For further information, please call direct at EFPIA:
Christophe de Callataÿ, Communications/PR Manager
Tel: +32 2 626 25 77
fax: +32 2 626 25 66
e-mail: cdc@efpia.org
website: www.efpia.org
Further information on G10 Medicines Group, can be found on the G10 Medicines
website: http://pharmacos.eudra.org/F3/g10/g10home.htm
ANNEX
The G10 Medicines report contains 14 recommendations, some of clear relevance to Europe's competitiveness:
Recommendation 1 calls for the regular collection of benchmarking and performance indicators covering the pharmaceutical industry's performance in relation to industrial competitiveness; the prevention and treatment of diseases referencing morbidity and mortality data; and the relationship between the various EU and Member State regulatory structures and availability, access and uptake of pharmaceuticals.
Recommendation 2 deals with faster registration processes to improve the introduction to the market of new medicines. In this respect, measures which could be implemented include an improvement of the decision-making process - which could cut the administrative delay from the European Agency for the Evaluation of Medicinal Products' (EMEA) Committee for Proprietary Medicinal Products (CPMP) opinion to the issuing of the marketing authorization by the European Commission from the current 150 days (in practice) to no more than 30 days - and the setting up of fast track procedures for medicines of high medical need/benefit.
Recommendation 3 deals with Member States improving the time taken between granting of marketing authorizations and pricing and reimbursement decisions to secure more rapid access of patients to medicines. This would add further pressure on those Member States which do not meet the time limit (180 days) stipulated in the so-called Transparency Directive (Directive 89/105/EEC).
Recommendation 6 is a modest first step towards a competition-based single market in medicines. It embodies the concept that a Member State's authority to regulate pharmaceutical prices should extend only to those medicines purchased or reimbursed by the State. This implies the lifting of price controls for "over-the- counter" (OTCs), medicines which are not reimbursed by national health systems and sales of medicines into the private sector. The lifting of price controls for sales of medicines into the private sector would increase the industry flexibility to establish a nominated market price for private payers and other consumers.
Recommendations 8 and 9 deal with fostering research and refer to the need to put in place a European equivalent to the US National Institutes of Health (NIH), to support the development of orphan and paediatric medicines as well as the development of a biotechnology strategy in Europe, including the implementation of the directive on biotechnological inventions (Directive 98/44/EEC).
Recommendation 10 - on patient information - embodies the principle that patients seeking information should have unhindered access to information. It calls for the continuation of the existing ban on advertising and for the elaboration of a workable distinction between advertising and information that would allow European patients actively seeking information (including from industry) to be able to do so.
Recommendation 14 takes the enlargement issue into account calling for a derogation governing parallel imports to be included in accession treaties. The derogation which has been negotiated so far in the accession treaties only covers those products for which a differential in intellectual property protection exists between the EU Member States and the candidate countries. Recommendation 14 implies that such a derogation is not sufficient in itself and paves the way for the addition of a protocol to the accession treaties in order to cover differences in public health and marketing and economic conditions between the two regions.
There are a few recommendations on which industry has expressed serious concerns,
in particular:
Recommendation 4 - on generics - includes generic prescribing and dispensing among ways to increase generic penetration in individual markets.
Recommendation 7 - on cost effectiveness - provides for the development of health technology assessment, including clinical and cost effectiveness, in the Member States and the EU. Although the assessment of relative effectiveness is a matter of national competence, the objective is to facilitate the exchange of information on national practices between Member States. The industry has strongly warned against inappropriate use of clinical and cost effectiveness assessment (i.e. at time of launch) which can only fail patients (because it delays access to needed medicines), industry (because of uncertainty and increased costs) and budget holders (because costs will rise).
The other recommendations deal with self-medication, patient information leaflets,
post marketing surveillance and core funding for patient groups.
FACTS & FIGURES
The pharmaceutical industry remains one of Europe's best performing high-technology growth sectors (employment, R&D, trade surplus). However, benchmarking and performance indicators show the vulnerability of the pharmaceutical industry in Europe with respect to the US increasing its relative position as a locus of innovation.
Between 1990 and 2001, R&D investment in United States rose fivefold, while in Europe it only grew 2.4 times.
In 1990, major European research-based companies spent 73% of their worldwide R&D expenditure on the EU territory. In 1999, they spent only 59% on the EU territory. The USA was the main beneficiary of this transfer of R&D location.
Although Europe's biopharmaceutical sector is growing steadily, it remains dominated by its American counterpart. While direct employment is estimated at 61,000 in Europe, about 162,000 employees work in the US.
Between 1990 and 2000, the US market grew by 11.4% per annum well ahead of Europe (weighted average growth of 7.3%). Figures adjusted for inflation show an even bigger differential of market growth between the US and Europe, with the US market growing twice as fast as the European market.
Europe clearly lacks a climate which favours and rewards innovation. According to IMS Health data, 62% of sales of new medicines marketed since 1997 are generated on the US market, compared with 21% on the European market.
The loss of return on R&D investment resulting from the fragmentation of the EU pharmaceutical market and consequent parallel trade flows was estimated to amount to € 3,500 million in 2000.
It would be too simplistic to attribute the deterioration of the European pharmaceutical environment to a single factor. As a whole, Europe remains less attractive for R&D investments than the US. The economic and healthcare environments, the science base, the investment conditions, the regulatory framework, and societal attitudes towards new technologies all contribute.
