Drug industry backs drive to take on US

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Series Details Vol 7, No.5, 1.2.01, p22
Publication Date 01/02/2001
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Date: 01/02/01

By Laurence Frost

Drug company chiefs are joining forces with EU ministers in a bid to close the gap between European firms and their more competitive US rivals.

The working group will attempt to tackle the fragmented price and subsidy regimes across the Union, which the €117-billion industry says hamper the drive to market new products.

The panel, to be co-chaired by Industry Commissioner Erkki Liikanen and health chief David Byrne, will consist of a handpicked group of chief executives, ministers from several member states and a representative from pharmaceuticals lobby EFPIA.

"We don't want any bag carriers," said one Commission official. "This is only for the highest level; the whole idea is to get the leaders in a room, shut the door and see what happens."

The initiative comes after a Commission report found that the 'comparative disadvantage in demand growth' faced by EU firms had contributed to their erratic progress over the past ten years. The report pins much of the blame on the plethora of pricing and reimbursement regimes in different countries.

According to EFPIA, price and subsidy negotiations can add up to three years to the process of approving drugs for sale, eating into their profitable patent period.

"The problem is that there's only one purchaser, the government," explained EFPIA director general Brian Ager. "This round table should look at multi-purchaser systems, to inject more competition into pricing."

Differences of up to 30% between prices negotiated in different countries give rise to 'parallel imports' by middlemen. Manufacturers also warn against an increased risk of counterfeiting and inaccuracies in the translation of instructions.

But any move towards a unified system is likely to meet resistance from southern member states, which traditionally offer lower drug prices and higher reimbursement for patients.

Drug company chiefs are joining forces with EU ministers in a bid to close the gap between European firms and their more competitive US rivals.

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