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November 2013

Pharmaceutical benefit assessments play an increasingly important role in refunds by the national health services. In most European countries, a drug has to successfully pass a post-approval benefit evaluation before it becomes available in the publicly funded healthcare system. Most European Member States have implemented health technology assessments (HTA)-based pharmaceutical evaluation schemes; their results form the basis for pharmaceutical pricing.

Pharmaceutical pricing systems in Europe

The EU Member States maintain different pricing systems. There are basically two variations:

• Systems that allow a drug to be launched only after it has been approved for marketing and a price has been fixed by the authorities;
• Systems that allow a drug to be launched regardless of national pricing measures, and prices are fixed only in a second step.

In regard to the statutory health insurance system, Germany practices the second system, making Germany one of the few European countries where pharmaceutical enterprises are allowed to launch drugs without prior regulatory pricing. Regulatory pricing takes place separately from the product’s market entry.

In most other EU Member States, the prices of reimbursable drugs are fixed by the national authorities or determined through price negotiations before the products can enter the market as part of national health insurance schemes. The majority of countries, including Spain, Bulgaria, Italy, the Netherlands, Austria and France, maintain positive lists of drugs covered by the national health insurance system. A pharmaceutical has to be admitted to the positive list, that is to say a reimbursable price has to be fixed for it, before it can be marketed under the national health insurance scheme.

In the UK, the prices of branded prescription drugs available in the National Health Service (NHS) are currently still set through negotiations with the Association of the British Pharmaceutical Industry (ABPI), using the Pharmaceutical Price Regulation Scheme (PPRS), or with individual manufacturers under the Prices Regulations¹. The value-based pricing system that had been proposed to replace the PPRS for new branded prescription medicines in 2014 appears now to have been largely abandoned.

Pan-European impact of national pharmaceutical pricing schemes

HTA-based benefit evaluations are the basis for national pharmaceutical pricing; in other words: the decision on whether or not a drug offers an additional benefit determines its price. In the current legal situation, pharmaceutical enterprises are required to carry out HTAs in each Member State in order to determine additional pharmaceutical benefits. This leads to problems:

• Pharmaceutical companies as well as national HTA authorities have to invest increased efforts and expenditure, since the current systems do not provide for references to decisions in other EU Member States.
• The decisions on a drug’s benefits may vary from country to country, which impacts upon subsequent national pricing.

Through the external price referencing principle that is applied by most European countries, national regulatory pricing influences pricing in other Member States. External price referencing means that the drug prices in the relevant countries are compared in order to fix a national price or establish a basis for price negotiations with the pharmaceutical undertaking.

In price negotiations in Germany, pharmaceutical enterprises are required to disclose their actual sales prices in other European countries. In France, the Comité Economique des Produits de Santé evaluates the benefit of new drugs, determining their prices by reference to the prices in other important EU Member States (Germany, Italy, Spain and the UK). A similar procedure is employed in the Netherlands, where the healthcare department fixes maximum wholesale prices for all prescription drugs, depending on the average price of similar products in Belgium, France, Germany and the UK.

However, the legal requirements for HTA-based benefit evaluations remain to be harmonised throughout the European Union.

Recent developments in Europe

The European authorities have recognised the lack of harmonisation and the problems associated with it. EUnetHTA, a European HTA network, has been established on the basis of Article 15 of the Directive 2011/24/EU on the application of patients’ rights in cross-border healthcare. The aim is to support and facilitate cooperation and the exchange of scientific information among Member States within the voluntary EUnetHTA network, connecting the national authorities or bodies responsible for health technology assessment designated by the Member States. EUnetHTA was established to support Member States in providing objective, reliable, timely, transparent, comparable and transferable information on the relative efficacy as well as on the short- and long-term effectiveness of health technologies, and to enable an effective exchange of this information between the national authorities and bodies in order to avoid duplication of assessments. Measures that are taken for purposes of this cooperation do not affect the Member States’ responsibility for decisions on cost reimbursement by the national health services under Article 168(7) TFEU.

On 18 March 2013 the Commission published a proposal for a Directive relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systems. The proposal offers first regulatory approaches but does not address or regulate any benefit assessment procedures.

Europe-wide harmonisation required

The laws governing the marketing authorisation and the marketing of medicinal products, pharmacovigilance, and drug advertising are largely harmonised throughout the EU, including assessments in the context of a drug’s marketing authorisation. Member States that examine applications for a marketing authorisation have to exchange assessment reports and acknowledge each other’s decisions. This Europe-wide regulation promotes one of the European legislator’s primary objectives – creating a single market for medicinal products that is subject to harmonised legislation.

HTA-based benefit evaluations as well as mechanisms for the recognition of and reference to such decisions on the same products in other EU Member States remain to be harmonised throughout the European Union. This could be addressed on the European scale, as it is not easily justifiable why different decisions of the Member States should be permitted on HTAs but not on risk/benefit assessments as part of a drug’s marketing approval. One reason is that HTAs of pharmaceuticals are evaluations by scientific criteria, following the standards of evidence-based medicine.

The future Transparency Directive could be used and amended to set up a uniform legal framework for transparent HTA-based procedures, deadlines, and legal relief. The Member States’ participation in EUnetHTA, the European HTA network, shows that a need for approximated HTA procedures and criteria has been recognised on the European level. With a view to the single market and free trade in goods, the legislative bodies should also consider harmonising and coordinating not only the formal assessment criteria but also the Member States’ decision-making practices in benefit assessments.

What pharmaceutical undertakings need to consider

Many EU Member States provide for price regulation in the pharmaceutical sector and HTA-based evaluations are of more and more importance in this context. Pharmaceutical companies seeking access for their products on the European market should carefully select the country to start with and closely monitor the process on HTAs.

In Germany, pharmaceutical enterprises are forced to contribute to and cooperate in the regulatory benefit assessment process and submit a dossier showing, for example, the drug’s medicinal use as well as additional benefits compared to appropriate reference therapies. If they fail to do so, no additional benefit will be recognised. They also have to state the actual sales prices of the pharmaceutical in other European countries. These findings are used as the basis for the price negotiations that are intended to fix the reimbursement price due to the enterprise.

Filing a separate legal action against the benefit assessment is not admissible. Legal proceedings can only be instigated after the pricing procedure has been completed.

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