Salud por Derecho welcomes Belgian presidency initiative to hold a policy debate on the incentives system in the pharmaceutical package on the next EPSCO Council. Following the policy debate questions shared by the Presidency, Salud por Derecho would like to make the following contributions along the questions shared by the Presidency.
Firstly, the debate seems to be framed around a “yes or no” to incentives, while the question should be however “incentives, what for?”. Are incentives a form of public support to be given to private companies to recoup their investments in R&D? If so, how do we evaluate that? If they are conceived as a tool to de-risk private enterprises, how do they contribute to the public interest in return?
Salud por Derecho agrees that in order to avoid the disproportionate impact on health budgets (affordability) that market and RDP protections create, a capping of total data and market protection is necessary. This is particularly relevant amid ever-increasing medicine pricing tendencies. Given the lack of evidence linking ever-increasing periods of data and market protection with innovation, combined with the large evidence available on the impact of market protection incentives over medicines’ prices¹, we see the proposal of a 11-years cap, as proposed by the Presidency, potentially harmful to health budgets and market competition.
Reducing the entrance of generic competition in the market should be a matter of priority to all health ministers of the EU. We believe that in order to ensure that, the basic RDP should not be increased. We agree with the conclusion of the Presidency when it proposes exchanging one year of RDP with one year of market protection, as this could promote faster market entry of generic and biosimilar options. Nevertheless, while we agree on the “diagnosis” (market protection impedes generic and biosimilar competition), we disagree with the proposal of using regulatory data protection as an incentive.
We advocate for the overall reduction of data and market protection periods. If these incentives are to be used in order to recoup R&D investment, as argued by the pharmaceutical companies and interest groups, certain conditions should be attached to equilibrate the distribution of risks and rewards between private companies and payers. This is necessary to assess whether these incentives are sufficient to recover the R&D and commercialization costs, and whether the targeted medicinal product is accessible and affordable. In other words, the legislation should attempt to attain both fairness to sellers and buyers.²
In that sense, we agree with the proposal of the Presidency to develop a public register, in which the data and market protection periods that apply to a product can be consulted. Nonetheless, in order to fulfill the principles of Transparency, Affordability and Legal certainty laid out by the Presidency, this register should be complemented with the submission of all costs related to the development of the medicinal product (e.g., pre-clinical and clinical trials), as well as the net prices of the health product in all EU MS once the product is approved for P&R.
The proposed register would promote Transparency as a key mechanism of accountability, but also would provide regulators and purchasing agencies with greater information to make informed decisions during the P&R period, ensuring that net prices are close to development costs (improving Affordability), and to the Commission, ensuring that incentives are appropriate, and the legislative text is coherent with market practices. In sum, it would provide legal certainty to health systems, regulators, and purchasing agencies by ensuring that the incentives package is not misused to generate monopolies that lead to higher prices.
Although not considered in its proposal, the Presidency and the Council should consider the broader implications that the package has over access to medicines elsewhere, and use this opportunity to influence how access to medicines is ensured globally. To that end, the Presidency and the Council should consider the inclusion, as a requirement to obtain the incentives package, of a “Global Access Plan”. Such plan shall include detailed actions regarding licensing, knowledge and technology sharing strategies to ensure global access, as well as affordability strategies particularly for low- and middle-income countries (LMIC). Both plans shall facilitate improved public reporting of patent status information of health products and shall be public and accessible.
As for the AMR voucher, while only mentioned but not included explicitly in the discussion, we have argued elsewhere against this incentive, and proposed other combinations of push and pull (e.g. milestone prizes and delinked, multi-country pull incentives) that do not include monopoly extensions and include pro-access conditionalities (see our policy brief on the topic here)
Whereas we understand the attractiveness of the modulated proposal, we believe that some of the criteria to extend the basic RDP could be delinked. Providing appropriate access and supply to medicines is the baseline by which pharmaceutical companies should be evaluated, not a behavior to be further rewarded with market or regulatory data protection, which can generate anti-competitive behaviors (i.e., monopolies). In that regard, an obligation structure as proposed by the Presidency would be preferable.
If the Council decides to pursue any of the other mechanisms proposed by the Presidency, conditionalities must be attached, as explained previously. In addition to the conditions set in our answer to Question A, mechanisms to interrupt the RDP and other incentives when such conditions are not being followed by the MAH should be included. Furthermore, we encourage the Presidency and the Council to consider other policy tools used in other countries when the MAH fails to meet the conditions/options in the proposal of the Presidency (e.g., march-in rights in the United States³).
We agree that the innovation system needs to prioritize those needs that are not met and should be directed to do that under certain conditions, as put forward by the Presidency. However, there are two concerns arising from the document shared by the Presidency, as well as the proposals made by the Commission and Parliament.
The first issue is the definition of UHN provided in the proposal from the Commission, which based on the lack of existing drugs to target a specific disease and/or for drugs that significantly reduce morbidity and mortality compared to the current treatments. Although we consider these criteria relevant, we believe that health needs cannot be met when affordability or supply issues impede access to pharmaceutical products. We ask the Presidency to consider the inclusion of these criteria (e.g., availability of a drug in the country, sufficient supply ensured) to define Unmet Health Needs.
Regarding the proposal to consider all orphan drugs as addressing UMN, the evidence shows the misuse of Orphan Drug incentives through a practice denominated ‘salami-slicing’ by which non-rare diseases are divided into smaller sub-diseases to obtain several Orphan Drug Designations (ODD) for one single drug, expanding market exclusivity over decades⁴. As recognized by the FDA, Orphan Drug incentives “precipitated “the creation of subsets of non-rare diseases or conditions that are artificially narrow”⁵. Therefore, we oppose to the assumption that all orphan drugs address unmet medical needs.
Furthermore, regarding the criteria to designate pharmaceutical products as Orphan Drugs, the original objective of the Orphan Drug regulation was to fix the lack of profitability and attract private capital. Recital 87 of the Commission proposal states:
“Some orphan conditions occur so infrequently that the cost of developing and bringing to the market a medicinal product to diagnose, prevent or treat the condition cannot be recovered by the expected sales of the medicinal product.”⁶
Having this in mind, we ask the Presidency and the Council to consider the sufficient return on investment (ROI) for the developer as a criterion to designate orphan drugs. Using prevalence as the only criteria to obtain ODD has led to higher prices, misuse of incentives and secure significant profits without demonstrating lack of profitability⁷. ROI is an objective, measurable, and fit-for-purpose parameter to designate orphan drugs, in a transparent manner, as the Presidency seeks to achieve.
To avoid excessive prices derived from dominant market positions, and following a modulated design, shorter periods of exclusivity could be initially desirable, with the possibility of extending the duration if the developer demonstrates that the ROI requisite has not yet been realized. On a similar note, we believe that ODD-linked exclusivities should be revoked when orphan medicinal products demonstrate significant profitability.
Other additional conditions we would like to see put forward by the Council are, as expressed in our answer to question A, the requirement to create a public register in which the recipients of ODD incentives can be consulted, together with the number of years of exclusivity granted, as well as the aforementioned access and transparency requirements (See answer to Question A). This could have the following form:
Where an orphan marketing authorization is granted, the market authorization holder shall submit the following information, which shall be public and accessible:
- any direct and indirect financial support received from any foreign or European private entity, including philanthropic entities, public authority or publicly funded body, including tax advantages and subsidies, in relation to any activities for the research and development of the orphan medicinal product, disaggregated by R&D stage.
- a global access plan covering detailed actions regarding licensing strategies to ensure global access, as well as the detailed knowledge and technology transfer strategy, including know-how transfer, and affordability strategies, particularly for low- and middle-income countries.
Referencias:
1 See for instance Tenni B, Moir HVJ, Townsend B, Kilic B, Farrell AM, Keegel T, Gleeson D. What is the impact of intellectual property rules on access to medicines? A systematic review. Global Health. 2022 Apr 15;18(1):40. doi: 10.1186/s12992-022-00826-4.; Hu Y, Eynikel D, Boulet P, Krikorian G. Supplementary protection certificates and their impact on access to medicines in Europe: case studies of sofosbuvir, trastuzumab and imatinib. J Pharm Policy Pract. 2020 Jan 14;13:1. doi: 10.1186/s40545-019-0198-6.
2 Moon S, Mariat S, Kamae I, Pedersen H B. Defining the concept of fair pricing for medicines BMJ 2020; 368 :l4726 doi:10.1136/bmj.l4726
3 A quick FAQ on Bayh-Dole Act march-in rights – Knowledge Ecology International
4 Alonso Ruiz A, Large K, Moon S and Vieira M. Pharmaceutical policy and innovation for rare diseases: A narrative review . F1000Research 2023, 12:211 (https://doi.org/10.12688/f1000research.130809.2
5 Herder M: When Everyone is an Orphan: Against Adopting a US-Styled Orphan Drug Policy in Canada. Account. Res. 2013; 20: 227–269.
6 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52023PC0193
7 Alonso Ruiz A, Large K, Moon S and Vieira M. Pharmaceutical policy and innovation for rare diseases: A narrative review . F1000Research 2023, 12:211 (https://doi.org/10.12688/f1000research.130809.2
