Fewer new medicines are reaching European patients, and the factories that could make them are going up in America. Alexander Natz, who speaks for Europe’s smaller drugmakers, warns that new EU laws may come too late to reverse it. He wants Brussels to use the rules it already has.

The EU’s proposed Biotech Act is “great”, says Alexander Natz. But it “will only materialise in three years”. By then, he fears, it may be too late for some companies to come back to Europe.

Mr Natz is secretary general of the European Confederation of Pharmaceutical Entrepreneurs (EUCOPE). The association speaks for small and mid-sized pharmaceutical and biotech companies in Europe. He spoke to EU Perspectives on the sidelines of the European Health Forum Gastein in Bad Hofgastein, Austria.

The backdrop is US medicine pricing. The White House wants US prices in line with the lowest prices paid by other developed nations. This is known as most-favoured-nation (MFN) pricing. By 31 August, 26 manufacturers had signed MFN deals, covering 89 per cent of the branded drug market, according to the White House.

“We already see a decline”

Companies are making big commitments to invest in the US, not only in manufacturing but also in research and development. What action is needed in Europe today?

Things are happening at a very fast speed. The speed is introduced by some measures coming from the US, and not from the measures here in Europe. So the European Union, the member states, by being referenced, they are required to act. We need to act now, in a proper, balanced way. In an ideal scenario, we would find a European solution. It makes us stronger, there’s no doubt about it.

We need to act now, in a proper, balanced way. — Alexander Natz, Secretary General of EUCOPE

You disagree with a recent analysis that says it is too early to judge the effects. Why?

Yes, it’s too early to judge prices of individual medicines running through pricing and reimbursement procedures. I agree. But it’s not too early to judge that there are significant implications. So the message, in my opinion, needs to be different. It’s not too early to judge, because we already see a decline of individual products being launched in European countries.

You see that already?

We see that. That sense of urgency requires activity, ideally at the EU level. If it’s not possible, as we have always been doing in health, there might be some decisions made at the member state level which are worth looking into.

Whether it’s a French agreement [the new framework agreement on medicine prices between the French state and the pharmaceutical industry, signed on 28 September]. But we should not judge a book by its cover. It is not necessarily bad for patient access in France. So why would we criticise it? We should look at these existing examples in more detail. And maybe there can be a blueprint for an action at the EU level, but it remains to be seen.

We should look at these existing examples in more detail. And maybe there can be a blueprint for an action at the EU level. — Alexander Natz

Who needs to take the initiative? Does the leadership need to come from the European Commission?

The Commission certainly plays a critical role in this, but I would not want to play the ball in the field of the Commission only. It’s all the stakeholders. Discussions with payer organisations are so critical. We need to find common solutions. It’s not a unilateral approach. It’s a partnership type of approach, which we have always favoured in Europe.

An EU innovation fund

Were concrete initiatives discussed in Gastein?

Yesterday, we discussed a European innovation fund, which is targeted at precision medicine, at complex medicines which have difficulties. Primarily, I would say, precision medicine and rare disease medicine. Sometimes we see difficulties of those products reaching all patients in all Europe.

We need to clearly define what the innovation fund could be there for. But it could be a fund at the EU level, which would also signal to the industry that Europe is open for innovation, also at the level of pricing and reimbursement. And that could facilitate, potentially, access in all the EU countries. That is a very new concept, but we debated it yesterday, and it could be part of the solution. I think it’s worth looking into this also in the context of the MFF, the multiannual financial framework, the EU’s long-term budget. It is not included there yet.

The old way of waiting

The Biotech Act and other laws now on the table were started before all of this. They will take effect only in a couple of years. Is that too late?

You’re asking, for me, one of the most important questions in all of those debates. We need to become quicker at the end of the day. What is happening in other territories is based on agreements. And agreements don’t take a legislative process. It might take a few months to negotiate, but it’s not years.

So how do we react to this? Again, by being very well balanced and by having thought-through proposals on the table, but it couldn’t take years. The Biotech Act is great, but it will only materialise in three years. This is the old way of looking into things. We wait for our legislation to pass and then to materialise. But I fear that it might be too late for some companies to come back to Europe. Because then they have to make a decision to dismiss this factory, this nice new factory, which they already built in another territory.

Quicker on the legislation, or on new initiatives?

Both. Quicker on the legislation, but also on implementation. And I think there needs to be also clear political signals. The European innovation fund would be a clear political signal that Europe is open for innovation.

A balanced approach in the Joint Clinical Assessment [the EU-level analysis of clinical evidence on a new medicine] would be a clear signal that Europe is open for innovation. Applying our existing legislation, namely the Transparency Directive [EU rules on the transparency of national measures that regulate medicine prices and reimbursement], would be a clear signal that Europe is open for innovation.

We’re applying what we’re having on the table. Today, we can do that. So let’s not wait for too long with those elements where we have instruments today. And let’s not only think in legislative terms. Let’s think in administrative and decision-making terms.

No exit door on pricing

Could Europe also make deals with companies?

It needs to be carefully assessed. There’s equal treatment. Making a deal always excludes someone, the one who has not had the deal. And Europe is much more regulated in terms of pricing and reimbursement. Not so much in regulatory terms, but in pricing and reimbursement.

For example, in Germany, [AMNOG, the law on pricing and reimbursement of newly authorised medicines]. You need to run your product through this process. I don’t think there’s an exit door for companies to say, you know what, we ignore that. That shortcut or exit door, it’s just not existing. And we need to treat all companies equally. So it’s not that easy as what we hear in the US.

Would it help if there were just one European price?

I don’t know. It needs to be carefully assessed what that means. It needs to be carefully assessed if it’s confidential, if it’s not confidential. It’s tricky to answer black and white.

Gold-plating and a trip across the Atlantic

Health got little attention in Commission President Ursula von der Leyen’s State of the Union speech. What did you make of it?

Could have been more. I agree. But I think there are some important elements in there. We need to see healthcare as an investment. We need to see the importance of the healthcare industry. So that was missing in detail a little bit.

But there have been some other comments, also on gold-plating, which I think are quite relevant in general. We have been gold-plating quite a bit, not only in the healthcare industry, but also in other industries and services. The fact that we need to attract industry, it looks like that has been forgotten over the last 15 years.

I found it very promising that the Commission President says, let’s look behind things, whether we’re gold-plating, whether we really need that provision, whether we’re not overcomplicating things.

What will EUCOPE do in the coming months?

We will continue our dialogue with European stakeholders. EUCOPE will also go out and talk on the other side of the Atlantic about our healthcare systems. We will continue the dialogue at the national level, which is so important. And we will also put into perspective all this new legislation for our members.

It is so important also to spell out the strengths of our system, the robustness of our system. In some countries at least, [pricing and reimbursement processes are] existing, and I would even call them predictable. I don’t always like the outcome, but there is a process in place. We need to defend our system. We need to spell out also to our companies that this is an attractive environment to come to.