E-DRUG: Pharmaexec: A Watershed on Transparency and International Collaboration in Drug Pricing?
--------------------------------------------------------------------------------------------------------
[Here is a detailed useful - but quite long - analysis of the passage of the 'pricing transparency draft resolution' and the outcome. Thank you Thiru. BS]
http://www.pharmexec.com/watershed-transparency-and-international-collaboration-drug-pricing
A Watershed on Transparency and International Collaboration in Drug Pricing?
May 30, 2019
By Neil Grubert <http://www.pharmexec.com/neil-grubert>
On May 28, 2019, the 72nd World Health Assembly (WHA) in Geneva adopted a
significant resolution on transparency in the market for health-related
products. Dr. Tedros Adhanom Gheyebresus, the Director-General of the World
Health Organization (WHO), hailed the resolution as a 'landmark agreement'.
The final resolution is considerably weaker than the original draft but
still contains some measures that could have a substantial impact on market
access around the world. Moreover, the WHA discussions started a process
that has the potential to expand significantly and take on a life of its
own.
The original resolution, proposed by Italy's Minister of Health, Giulia
Grillo, in February, sought to promote greater transparency in four areas:
pricing, R&D costs, clinical trial data, and patent information. Several
other governments, as well as numerous non-governmental organizations, were
quick to embrace Italy's proposals.
Disclosure of clinical trial costs - a major stumbling block
The draft resolution presented to WHA delegates on May 20 urged member
states to 'undertake measures to publicly share information on prices and
reimbursement cost of medicines, vaccines, cell and gene-based therapies
and other health technologies.' The final resolution referred to publicly
sharing information on 'net prices'.
In its original draft, the resolution would 'require the dissemination of
results and costs from human subject clinical trials regardless of outcome
or whether the results will support an application for marketing approval'.
The final version of the resolution changed the language substantially,
calling on member states to 'take the necessary steps, as appropriate, to
support dissemination of and enhanced availability of and access to
aggregated results data and, if already publicly-available or
voluntarily-provided, costs from human subject clinical trials regardless
of outcomes or whether the results will support an application for
marketing approval'. What would have been a 'requirement' to disclose the
results and costs of all trials instead became a recommendation to share
aggregated results. Furthermore, data on the costs of clinical trials would
be disseminated only if they were already in the public domain or provided
voluntarily by manufacturers - an unlikely eventuality.
Similarly, the original draft of the resolution would have required the
publication of annual reports on sales revenue, prices, units sold, and
marketing costs for individual products, as well as details of the costs of
each trial used to support a marketing authorization application and
information on financial support from public sources used in the
development of a drug. The final resolution merely calls on member states
to 'work collaboratively to improve the reporting of information by
suppliers on registered health products, such as reports on sales revenues,
prices, units sold, marketing costs, and subsidies and incentives'.
The draft resolution called on the WHO Director-General to 'propose a
model/concept for the possible creation of a web-based tool for national
governments to share information, where appropriate, on medicines prices,
revenues, units sold, patent landscapes, R&D costs, the public sector
investments and subsidies for R&D, marketing costs, and other related
information, on a voluntary basis'. This recommendation was diluted
considerably in the final resolution, which referred only to 'assessing the
feasibility and potential value of establishing a web-based tool to share
information relevant to the transparency of markets for health products,
including investments, incentives, and subsidies'.
The draft resolution proposed the creation of a forum to 'develop suitable
options for alternative incentive frameworks to patent or regulatory
monopolies for new medicines and vaccines' that would both promote
universal health coverage and adequately reward innovation. This proposal
was omitted from the final resolution.
Several other relatively uncontentious measures survived largely intact
from the original draft, including recommendations on sharing patent
information, improving national capacities to develop and produce drugs
(especially in developing and low- and middle-income nations) and holding a
biennial Fair Pricing Forum to discuss affordability and the transparency
of prices and costs related to health products.
Fascinating international politics
What may actually be more significant than the measures included in the
resolution is the politics of the negotiation process. The draft of May 20
was sponsored by Italy, Greece, Malaysia, Portugal, Serbia, Slovenia, South
Africa, Spain, Turkey, and Uganda.
By May 28, Algeria, Andorra, Botswana,Brazil, Egypt, Eswatini, India, Indonesia, Kenya, Luxembourg, Malta, Russia, Sri Lanka, and Uruguay had joined the original sponsors, though Turkey had dropped out (a move that some observers attributed to objections
raised by Germany). The diversity of the countries backing the resolution
clearly shows the widespread desire for greater transparency in the global
pharmaceutical market.
Even before the WHA convened, Germany, Denmark, Sweden, and the United
Kingdom reportedly tried to block the resolution. Once the meeting began,
regular reports from attendees indicated that Germany and the United
Kingdom, along with France, the United States, Switzerland, Denmark,
Canada, and Japan, led opposition to various aspects of the resolution.
As the WHA progressed, France apparently softened its opposition to
disclosure of information regarding the cost of clinical trials, while
Switzerland and the United States expressed support for greater openness
with regard to drug pricing. Garrett Grigsby, a US negotiator, went so far
as to say that 'the United States enthusiastically welcomes the
resolution's focus on improving price transparency for health technologies
and encourages other governments around the world to take steps to improve
their healthcare systems and promote competition by publishing prices of
medicines and other health products'.
Notwithstanding the support for the resolution from many countries, Germany
and the United Kingdom remained concerned that the resolution was being
rushed and could have unintended consequences, particularly for
differential pricing in less-affluent countries. The delegate from Botswana
responded that the 'African group is in full support of the adoption of the
resolution, seeing it as a key to achieving universal health coverage'.
In the end, Germany and the United Kingdom, along with Hungary, chose to
dissociate themselves from the resolution, a highly unusual step at WHA
meetings.
A mixed response to the final resolution
Following the conclusion of the WHA, the Italian Minister of Health said
that 'today is a historic date: the whole world has believed in our
proposal for a resolution that represents a challenge for greater equity in
access to care and now the [member] states are committed to adopting the
principles we have carried out to remove barriers to the right to health'.
Grillo believes the 'taboo' over questioning drug pricing criteria has been
overturned. She expressed optimism that 'the WHO's decision opens a new
path in drug price negotiations, setting a principle of transparency from
which there is no turning back'.
Other observers of the WHA were more measured in their assessment of the
resolution's likely impact. James Love, Director of Knowledge Ecology
International, tweeted that 'the resolution is, as expected, weaker overall
than the version from May 20 sponsors text, but represents an impressive
statement on price transparency, at a time when non-disclosure agreements
have become increasingly common'.
Gaelle Krikorian, Head of Policy at Medecins Sans Frontiers' Access
Campaign, described the resolution as 'a welcome first step to correct the
power imbalance that exists today during negotiations between the buyers
and sellers of medicines'. However, she sees a need for far more
information on the real costs of bringing a new drug to market.
A representative of the International Federation of Pharmaceutical
Manufacturers and Associations (IFPMA), warned governments to 'carefully
consider potential risks to patients, particularly in less developed
countries, of sharing outcomes of confidential price negotiations across
countries'. The implication is that prices in less-affluent countries could
rise if wealthier nations used international transparency to demand lower
prices for their markets.
Balancing cost containment with support for the pharmaceutical industry
At first glance, one of the most startling developments at the WHA was the
decision of the United States - traditionally, a staunch defender of the
research-based pharmaceutical industry - to support the resolution, albeit
after pressing for numerous changes to the text. On reflection, however,
this outcome is not so surprising. President Trump has pledged repeatedly
to lower pharmaceutical prices in the United States and is expected to
issue an executive order in June that would require pricing transparency
across the pharmaceutical supply chain. Access to information on net prices
in other countries could intensify pressure from the Trump administration
to narrow the sizeable gap between prices in the United States and other
affluent nations - by reducing US prices and raising prices in other markets,
which the President has accused of 'freeloading'. Needless to say, other
governments would be unwilling to increase their prices to oblige the US
President.
It is interesting that disclosure of net prices proved less contentious
than R&D costs, though it is perhaps telling that Germany and the United
Kingdom refused to endorse the final agreement. Both countries cited
concerns about potential unintended repercussions of a hasty resolution as
a fundamental objection. More-cynical observers point out that Germany and
the United Kingdom both rely heavily on negotiating confidential rebates or
discounts on list prices of new medicines. Furthermore, critics note that
opposition to the more-aggressive original draft of the resolution came
largely from countries that are home to sizeable research-based
pharmaceutical industries - the United States, Germany, the United Kingdom,
France, Switzerland, and Japan.
Emergence of new multi-country alliances
It is instructive to compare the countries that are in the opposing
camp - notably the sponsors of the WHA resolution. Italy is clearly the
driving force behind this initiative and appears determined to continue to
pursue the agenda of greater transparency in the global pharmaceutical
market. Not surprisingly, it received backing from many less-affluent
nations around the world, including Algeria, Botswana, Brazil, Egypt,
Eswatini, India, Indonesia, Kenya, Russia, South Africa, Sri Lanka, Turkey,
Uganda, and Uruguay. However, a substantial number of European countries
also decided to sponsor the transparency resolution, while others voiced
their support at the WHA.
Significantly, several of the sponsors of the WHA resolution - Italy, Greece,
Malta, Portugal, Slovenia, and Spain - are also members of the so-called
Valletta Declaration group, formed in May 2017 to collaborate on the
assessment and procurement of new medicines. This alliance is just one of
nine cross-border market access partnerships involving 29 European
countries. Their objectives range from cooperation on horizon scanning and
health technology assessment, through sharing pricing data, to joint
negotiation of prices. It is noteworthy that Germany and the United Kingdom
are not among the countries that participate these multi-country alliances.
In addition, the EU has plans to develop its EURIPID international pricing
project. Launched in 2010, it currently manages a database that contains
the official prices of more than ten million products in 27 European
countries (Germany is a notable omission). The project has already
published a guide to external reference pricing and has ambitions to expand
the pricing database by adding fields such as sales volume. The European
Parliament has also recommended that 'real' prices should be included in
the EURIPID database.
No room for complacency in the pharmaceutical industry
The pharmaceutical industry may choose to take comfort in the fact that the
final resolution consists largely of recommendations for voluntary action
rather than the requirements for comprehensive disclosure proposed in the
original draft. However, such a response could prove to be dangerous
complacency. The WHA in Geneva may not have given the WHO the authority to
demand information from manufacturers, but the agenda will be pursued
further at future meetings - starting with a UN High-Level Meeting on
Universal Health Coverage in New York in September.
Even if the WHO does not receive the powers mooted in the draft resolution,
there is nothing to stop the existing cross-border alliances from
expanding, in terms of both their membership and the range of their
activities. Europe has led the way and other parts of the world will follow
if they see the early initiatives achieving success. Inspired by their
collaboration in Geneva, it is not inconceivable that countries from
different regions could forge new, and more-ambitious, partnerships in the
coming years. Increased transparency and information sharing would be a
challenge for the pharmaceutical industry, but the growth of multi-country
price negotiation and procurement would be a far more troubling development.
*Neil Grubert is a global market access consultant and trainer.*
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
thiru@keionline.org