The EFPIA added that ‘prices are converging in Europe due to these practices, and because of the phenomenon of parallel trade. The convergence as such is not a problem for the pharmaceutical industry—provided this practice does not create a "race to the bottom", after which no one is willing to pay for research’.

The comments come in response to the publication of an independent report commissioned by the European Parliament’s committee for Environment, Public Health and Food Safety (ENVI) [1]. The report found that EU countries’ routine use of international reference pricing to control drug prices seems to be leading to price convergence for some drugs and, in general, to lower prices.

In the EU 24 out of 27 countries use the practice of international (or external) reference pricing in order to regulate pricing for new pharmaceuticals coming onto the market in their country. Only Germany, Sweden and UK have resisted using this price-control mechanism so far.

Mr Richard Bergström, EFPIA Director General added that ‘the report illustrates the perverse effects of international price referencing’, and expressed concern that converging prices may cause problems with access to new medicines for some European patients.

The report is expected to feed into the European Commission’s planned modernisation of the 23-year old Transparency Directive (89/105/EEC) on drug pricing and reimbursement in the EU.

The EFPIA told GaBI Online that it is taking an active role in the European Commission’s initiative on Access to Medicines, DG Enterprise and Industry, and added that ‘the ENVI report* provides a good basis for a much needed discussion between stakeholders’ [2].

*An independent report commissioned by the European Parliament’s committee for Environment, Public Health and Food Safety (ENVI) has highlighted some problems with access to medicines due to the widely used practice of international reference pricing within the EU [1].

Related article

Concerns over international reference pricing in the EU

References

1. Kanavos P, Vandoros S, Irwin R, Nicod E, Casson M. Differences in costs of and access to pharmaceutical products in the EU. ENVI. IP/A/ENVI/ST/2010-12. March 2011.

2. Philomène Bouchon. EFPIA Communications Manager. Personal communication. 16 May 2011.