of Health Jun02
Let me put your mind at rest and say that I
am a pharmacist - a scientist - first
and a politician second. This is the chronological order of my experience
and it is also the intellectual basis for my work.
Michael Watts is very kind to invite me to
speak on the EU vision of Health Care Delivery. Michael had such a vision
long before I did. In 1989, he wrote the guidelines on authorisation for
sale, wholesale and retail distribution of pharmaceutical products that
was adopted by the European Commission as the EU policy on Health Care
Delivery. This was a significant British contribution and we should
congratulate Michael for it.
Enlargement of the EU, incorporating Member
States with more relaxed legislation on supply of prescription items,
substantial expansion of the market for medicines in response to rising
patient expectations and varying pricing and re-imbursement schemes in
different Member States, have forced the European Commission to review and
update legislation that is consistent and sustainable throughout the EU.
There is a need to adopt a new architecture for the European Health
The EU reflects 15 different health
delivery systems. The funding of public health as a % of GDP varies in
each Member State; the ownership of distribution channels - wholesale and
retail - reflect historic and economic preferences of each European
nation. All 900 pharmacies in Sweden are, like the alcohol distribution
shops, state owned; pharmacies in Finland are state owned with an
exception made for the University of Helsinki which owns 16 pharmacies;
pharmacies in Germany do not sell sandwiches and handbags and none of us
could buy a pharmacy in Denmark until an existing owner decided to sell
voluntarily. It is relatively easy to buy prescription medicines, without
a prescription, from a pharmacy in Greece and Spain. Many European
countries have neither a collection system for return of unused medicines,
nor a prescribed procedure for disposal of such items. In the UK, we have
developed good controls on these aspects of health care whilst retaining a
free market for ownership of wholesale and retail distribution.
Therefore, how can the European Commission
and the European Parliament reform the different systems of health care
delivery that exist in the EU? How can we promote the EU ideal of "an
open free competitive single market" for goods and services? How can
we meet the expectations of European citizens and deliver a
cost-efficient, consistent and sustainable quality of health care service
that can be easily regulated?
Let us examine the facts of the drugs
Total sale of pharmaceuticals worldwide
amounts to US$ 380bn of which 50% is in the USA with a population of 270
million. The EU, with a population of 360 million, accounts for US$88bn
i.e. 23%. Japan accounts for 14%, Asia, Africa & Australasia accounts
for 8% and Latin America only 5%. Clearly, selling medicines is big
business in the USA and it's no wonder that manufacturers value the US
market more than any other!
What are the most important sale categories
of drugs by usage?
The top 10 categories account for 30% of
all drug sales worldwide i.e. US$110bn of sales are from:-
a) anti-ulcers $20bn (7%)
b) Cholesterol reducers $19bn (6%)
c) Antidepressants $16bn (5%)
d) NSAIs $10bn (3%)
e) Calcium antagonists (plain) $10bn (3%)
f) Antisychotics $7bn (2%)
g) ORAL ANTIDABETIC $7bn (2%)
h) ACE inhibitors $7bn (2%)
i) Cephalosporins $7bn (2%)
j) Systemic Antihistamines $7bn (2%)
Whilst vaccines cure more people, prevent
more deaths and are, therefore, most cost-effective, their sale value
represents only 3% of drug sales worldwide!
Where do we see the highest rates of growth
in sales value and volume?
USA 17%, Europe 10%, Japan 4%, Asia, Africa
and Australasia 8% and Latin America only 0.1%.
US legislation encourages and rewards
enterprise. Most large manufacturers find it easier to invest in and
operate from the USA rather than the EU. The EU is perceived to lag behind
in its ability to generate, organise and sustain innovation processes that
are increasingly expensive and complex. Consequently, investment in
research and development of new drugs is in the USA. This has serious
implications for the EU as we are losing financial investment as well as
our best scientific brains as they are attracted by more challenging job
opportunities across the Atlantic.
How can we in the EU address this? I think
the EU needs a radical reform of its legislation affecting investment in
R&D; fiscal policies for new drugs, especially vaccines for the
diseases of the poor; licensing of new drugs for sale; pricing of drugs
that prevents market distortion e.g. parallel trade; guaranteed and
uninterrupted distribution from manufacturers to wholesalers and
distributors and efficient use of different healthcare professionals,
especially our pharmacists and nurses.
Currently, the market for health care is
NOT free, open or competitive. Manufacturers negotiate a price and
re-imbursement for their drug with each Member State. This results in
vastly different prices for the same drug in different countries of the EU.
Parallel trade has mushroomed and pharmacies will buy from such sources
forcing governments of Member States to assess the extent of such trade in
order to set price levels for delivery to patients.
The European Commission has initiated the
formation of a working group called the G10 with the representation of 2
European Union Commissioners, the pharmaceutical industry, distributors,
doctor and other interest groups. This group has suggested guidelines for
the deregulation of drug prices for items not purchased or reimbursed by
Member States. It has highlighted the need for creating in the EU an
equivalent of the US National Institute of Health that supports R & D
of essential medicines that have limited markets in the west but are of
great significance in poor countries. It has recommended a scheme to
enhance the quality of information to patients, increased penetration of
generics in the market and post marketing surveillance.
There is a need to liberalise the market so
that ownership of distribution channels is not restricted in the EU. Each
Member State should be free to invest what it likes in their National
Health Service but it is possible to have a uniform price for all drugs in
the EU with differential re-imbursement schemes to avoid market distortion
that supports parallel trade. Such a model has been successfully tried in
East Germany. I have invited the industry to work closely with me to
develop a model that can work and be acceptable to all Member States.
Let me turn to specific proposals of the
European Commission that are being discussed now in the European
Parliament and which will be part of a new European Directive:-
The Commission proposes that for all "new active
substances" registration for authorisation of sale must be done
centrally through the EMEA (European Medical Evaluation Agency) based in
London. At present only biotechnology and significantly innovative
products are obliged to use this procedure. There is, in my opinion, no
justification for this and I intend to persuade colleagues to oppose this.
Mutual recognition procedure (MRP)
The Commission, supported by some MEPs,
would like to eliminate national authorisation agencies. Consistent
pressure by myself and others has now persuaded the Rapporteur, Mrs MŁller,
that national agencies must operate side be side with the EMEA allowing
manufacturers to determine the agency they wish to register. This will
assist those who wish to restrict sale in limited markets.
Direct to Consumer Advertising
The Commission is in favour of a pilot project to offer
extra public information for three specified diseases: AIDS, Diabetes and
Asthma. I am against such a proposal as there is already an adequate
provision for patients to access information on these diseases. Experience
of direct TV advertising in USA has shown a huge increase in both the
number of people requesting medication and the quantity used. Clearly,
this would not be desirable in the EU.
Abolition of 5 year renewal of licence
The Commission proposes to abolish this rule and
expects to enhance pharmacovigilance to protect public safety. I do not
have any objection to this.
Withdrawal of Authorisation
The Commission proposes that authorisation
of a product would be withdrawn if the product is not marketed for more
than 2 years. This is unacceptable as an epidemic could break out soon
after a drug authorisation has been withdrawn. My objection has been well
received by the Rapporteur, Mrs GrossetÍte, and supported by many MEPs
from all political groups.
Prescription for all veterinary medicines
On the continent it is normal practice to consult a vet
and secure his prescription for all veterinary medicines. In the UK and
Ireland we have national lists of products that are exempt and which can
be dispensed by Specially Qualified Persons (SQPs) serving in Agricultural
merchant outlets, especially in our rural areas. Therefore, I challenged
the Commission proposal and was supported by my British and Irish
colleagues. I am delighted that the Rapporteur supports my amendment to
secure this derogation for the UK and Ireland.
Wholesale Distribution of Medicines
I am aware of and against the quotas for prescription
medicines imposed by manufacturers on wholesalers, especially in certain
Member States on the continent. They claim that this is an attempt to
curtail parallel import and it does not disrupt the supply for wholesalers
to meet genuine commitments to pharmacies and hospitals.
I believe that there should be an uninterrupted supply
of medicines from any manufacturer to all registered full line wholesalers
and I have submitted an amendment to secure this. I expect wide support
from my colleagues.
Wholesalers, including those who own pharmacies, are a
crucial link in the supply chain for distribution of medicines. They
provide an authentic and regulated supply backed by adequate stock levels
and comprehensive data in case of emergencies. They face, at present,
difficulty with parallel imports which undermine their services and
undercut their prices. It is alleged that some of the smaller wholesalers
have set up "sister" companies that are involved in parallel
imports. It should be possible to determine the level of parallel trade in
any Member State by examining records of supply at each level in the
supply chain. It would identify those who buy for re-export to parallel
Parallel trade would not exist without market price
distortion. It neither benefits industry that invests in R&D, nor the
taxpayers who finance the health service of every Member State.
Wholesalers remain reluctant to source their supply like parallel
importers for fear of cessation of supply from manufacturers. So why
should it continue to benefit only the least deserving?
I have enjoyed working with manufacturers, wholesalers
and the Pharmaceutical Society that represents the interests of the retail
pharmacists. I will continue to fight hard in the European Parliament to
formulate appropriate legislation that will offer the quality, safety and
flexibility for health care delivery systems in different Member States. I
look forward to working with you and other stakeholders to achieve the
best for patients, the healthcare industry and the taxpayers.