MILAN, Oct 22 (APM) - Reference pricing of drugs can inappropriately drag prices down outside the EU as it may reflect austerity measures in one market not appropriate for another, the director general of the Italian medicines agency has said.

In an article published on AIFA's website on Tuesday, AIFA's Luca Pani highlighted growing risks, as well as opportunities, associated with the globalisation of healthcare markets and systems.

Pani looked at the challenges for the pharmaceutical industry in an increasingly globalised world using reports by the European Commission as his starting point.

In a similar article last week, Pani highlighted the importance of monitoring registers, health technology assessment (HTA), collaboration with regulators and adverse reactions reporting in adaptive licensing designed to provide early approval of drugs and quick access for patients (APMMA 40074).

In the latest piece Pani said one of the commission’s recent conclusions was that more harmonisation of policies in the EU is inevitable. Pani chose external reference pricing (ERP) of medicinal products, which is used by the majority of national authorities in Europe, to illustrate the point.

It consisted of setting prices using several reference countries, normally the ones with the lowest prices, as a guide. This is seen as a useful method to provide benchmarks for reimbursement price negotiations between public agencies and companies, Pani explained.

But the European commission itself has noted some stakeholders complain that ERP is used without taking into account socioeconomic differences between the countries. Most of all, some of the reference countries have drugs prices which are, or have been, dictated by austerity measures and therefore may not be a reflection of the true value of the product.

Pani warned that the impact of ERP in Europe is felt far beyond the borders of the markets concerned. He said: “We know that management of the price in a national context has implications even on markets outside the EU for our pharmaceutical industry in that non-European countries, especially emerging economies with high incomes such as (South) Korea and Taiwan, make extensive use of ERP with European countries as benchmarks.”

The AIFA chief also commented on the European commission’s intention to strengthen protection of intellectual property, which he said is reflected in the move towards a single European patent.

He said supplementary protection certificates are being considered as well. These would be to compensate for significant loss of revenues during the period after a patent is deposited and before the products starts being marketed.

Pani then moved on to the question of exclusivity of pre-clinical and clinical data. He described it as a very complicated matter but made clear he supports greater openness.

“The Italian agency believes that clinical data transparency creates an advantageous sharing of information and knowledge, satisfies legitimate expectations of transparency from patients who want to fully understand the risks and benefits of treatments which they are or will be subjected to, and represent an economic benefit for the companies themselves,” he wrote.

Pani warned about the risks of increasing globalisation. Europe’s pharma industry will have greater opportunities but face new competition beside that of traditional rivals in the U.S, and Japan.

He noted that many emerging nations, especially in Asia, see life sciences as an engine for growth and they are investing in biomedical innovation. China, India, Singapore and Israel were given as countries which have already emerged as significant producers and consumers of pharmaceutical products and they are likely to become important suppliers of added-value medicines to Europe and the U.S in the future.

At the same time, according to Pani, the aim of these countries is also to reduce their dependence on imported drugs by encouraging international companies to expand their local presence in production and/or R&D.

Pani cited figures showing, in 2008 only 20% of active pharmaceutical ingredients (APIs) supplied to Europe were produced in Europe compared to 80% in 1980.

He said: “The greater dependence on non-European sources has raised concerns about the safety and quality of supplies to Europe. We must create the conditions for our producers to compete without ever abdicating our role of safeguarding health and controlling quality control which has been very successful so far.”

He suggested the way forward is much more collaboration with emerging countries, involving governments, international organisations, pharma companies and civil society to ensure there is better access to high standard medicines in developing markets.

Pani gave a special warning about deregulation as systems look for ways to accelerate access to innovation. He said it is creating risks of increased counterfeiting, illegal medicine sales and more claims about “miracle cures”.

He suggested the right balance needs to be struck between the need to get new medicines to market quickly and the need to test them as safe and effective. “If regulatory agencies are required to direct efforts towards simplifying, accelerating and supporting the development of innovation, then companies must accept they need to operate in a regulated environment and recognises this is an asset and not a source of weakness,” he said.

Pani said deregulation is being forced on the system in a number of ways. The case of Italy’s controversial Stamina stem cell therapy showed how public opinion could influence events adversely. He also warned about inaccurate and superficial information which is published only as a way to increase earnings of product rather than make contribution to understanding it better.

rg/rs