LAWS – Healthcare for the rich, how people die in the EU: without reimbursements to patients, denied access to life-saving drugs
“If the document comes out, we risk opening Pandora’s box and the pharmaceutical company suing us for millions of dollars.” This was the reaction of the director of a health company (ASL) in central Italy when Investigate Europe(IE) contacted her for explanations on a purchase deed found online between the ASL and the pharmaceutical company Vertex for the supply of Kaftrio, a medicine used to treat cystic fibrosis. After the call, the ASL immediately removed from the Internet the contract which reported the real price of the medicine paid by the health company, which had been made public by mistake. This is because in Europe and elsewhere it is not possible to know the real price of a drug. In exchange for confidentiality, healthcare facilities enjoy a discount on the purchase of the drug Big pharma. In this way, “companies think they can negotiate better agreements country by country, and states can negotiate stronger agreements. In particular those countries that have greater economic power,” he explains Paul Fehlnerpresident of the pharmaceutical company reVision Therapeutics.
One of the reasons cited by pharmaceutical companies to maintain the secret pricing system, which according to some sources began to spread in Europe around 2010, is that it allows for differentiated prices in various European countries, making less wealthy countries pay a lower price. “In the global pharmaceutical market, prices of the same product vary from one country to another. This is often advantageous for poorer countries, which can access medicines at a lower price,” he said IE Leif Rune Skymoen, Director General of the Norwegian Pharmaceutical Industry Association. The investigation of Investigate Europe shows a different picture, where in some cases rich nations pay less than those in Central and Eastern Europe.
Starting from company registers and health and budget data from national authorities, IE has developed an estimate of the prices of some drugs used to treat cystic fibrosis, dividing the local revenues of Vertex Pharmaceuticals, the company that produces those drugs, with the number of patients treated in 2022, in order to obtain the unit cost of treatment.
If in Western Europe, the average, net of VAT, was estimated at around 71,000 euros in France, 81,000 euros in Italy, 87,000 euros in Spain and 88,000 euros in the Netherlands, IE estimates that the price per patient in 2023 for Poland was 109,000 euros, including VAT, while in the Czech Republic the estimated annual cost in 2022 was 140,000 euros (it is not clear whether the figure includes VAT or not). In Lithuania the government has said it is prepared to pay up to 8.4 million euros to provide drugs to treat cystic fibrosis to up to 48 patients. This could equate to 175,000 euros per person.
Countries strike secret deals in hopes of keeping costs down, but prices of innovative drugs have risen everywhere. “Expensive drugs are a growing challenge for national budgets and individual patients. New drugs have an increasingly higher price,” we read in a report from the EU Commission. In the Netherlands, the share of the national hospital budget for these drugs “has gone from 0.6 to 10% in the last 15 years,” says Dutch oncologist Wim van Harten; a trend also confirmed by the Norwegian authorities. In Italy, spending on new drugs went from 5.17 billion euros in 2014 to 8.54 billion in 2022, with overall pharmaceutical spending (public and private) reaching 34 billion (around 9 billion more than to 2012).
And meanwhile the profits of Big pharma they grow. US researchers compared the annual profits of 35 large pharmaceutical companies with those of 357 companies in other sectors of the S&P 500 stock index. For the period 2000-2018, the median gross profit margin of pharmaceutical groups was 76.5%, while in other sectors it was 37.4%.
“With transparency of prices, all countries would know what the price actually paid by other states is and therefore they could agree to ensure that the price falls,” he says Silvio Garattini, president and founder of the Mario Negri Institute. According to the scientist, this does not happen because “the conditions of the various countries are different, such as the difference in income or the presence or absence of the pharmaceutical industry in the country”.
Thus, when in 2019 the member states of the World Health Organization (WHO) adopted a non-binding resolution, proposed by the Italy of the then Conte government, to improve transparency on drug prices, Germany and the United Kingdom , supported by the United States, Japan, Switzerland, Denmark and Sweden – all countries with important pharmaceutical production sectors – have attempted in every way to weaken the resolution. In the end, a downward compromise was reached that allows pharmaceutical companies not to disclose research and development costs, public subsidies received and clinical trial data. In addition to negotiated drug prices net of discounts.
When Giorgos Pamboridisformer Health Minister of Cyprus, found that sometimes their prices were “double, triple or even five times higher than those paid by other countries”, he said he was shocked by the fact that the EU allows Big pharma to treat its members so differently. There have been attempts by European states to join forces and negotiate together, attempts which have led to limited success. When ten countries, including Cyprus, Greece, Italy, Malta, Portugal and Spain, signed the Valletta Declaration to cooperate in purchasing medicines in 2017, the industry showed no interest and the initiative stalled, several participants said IE.
The Beneluxa initiative (i.e. the network between Austria, Belgium, Ireland, Luxembourg and the Netherlands) has managed to negotiate, albeit only in three cases, the prices of some high-cost drugs especially with small companies, but Big pharma she is not willing to cooperate. “Big pharmaceutical companies don’t seem to support these types of initiatives,” he says Paolo Pertile, professor of economics at the University of Verona. The only time that pharmaceutical companies negotiated at European level was for anti-Covid vaccines. But even in this case the prices were secret. “If the EU had used its strength not to accept confidentiality clauses, he could have changed the cards on the table,” he says Sabine VoglerHead of Pharmacoeconomics at the Austrian National Institute for Public Health.
Meanwhile, the suspicion that every time there is a confidentiality agreement someone gets worse conditions proved to be well founded when the price of AstraZeneca’s Covid vaccine was leaked in January 2022. In South Africa the price was 2.5 times higher than in most EU countries.
*All articles published on these two pages and the following two are part of the “Deadly Prices” investigation by Investigate Europe
