Recently, the US FDA approved Novartis’s spinal muscular atrophy (SMA) gene therapy Zolgensma, which brought dawn to SMA patients and their families, but it has once again refreshed the drug price record with a price of 2.1 million US dollars, making it the most expensive medicine in history.
The rare drug market is niche, but it is precious for the patients in need, and it seems reasonable to use high prices to recover R&D investment. Some observers commented that there are two ways to look at new drugs like Zolgensma: “This is an amazing treatment. Only a few children need it, so this two million is not worth mentioning at all, or we are facing a situation. The biopharmaceutical industry has turned completely to rare diseases because the market seems to tolerate any price, and the FDA only requires very little data.”
At this time, at the just-concluded 72nd World Health Assembly, after a few days of anxious negotiations, representatives of various countries finally adopted a resolution entitled “Promoting the transparency of the market for medicines, vaccines and other health products”, The market transparency of health products such as vaccines has risen at the level of intergovernmental discussions. The resolution calls on countries to increase the transparency of the public price information about the purchase of medical products by the government and other buyers, to improve the patents of drugs, the results of clinical trials, and the transparency of other pricing determinants from the laboratory to the patient throughout the value chain. Supporting the work of transparency and monitoring the impact of transparency on the affordability and availability of health products, including the impact of differential pricing.
The purpose of the resolution adopted by the World Health Assembly is to help member states make informed decisions when purchasing medical and health products, negotiate affordable prices, and ultimately expand the population’s access to health care products. This resolution is a milestone document for governments and their public health systems in the field of drug pricing.
Drug market transparency proposal
At present, many countries in the world (including developed countries in Europe and America) are faced with the problem of “high drug prices, patients can not afford drugs, and government finances can not afford.” The industry and the public have a premise by default: the pharmaceutical industry is a high-tech risk and high investment threshold, but the success rate is low and the supervision is strict. It is necessary to use the profits from the sale of drugs to recover the huge investment in the research and development stage, including the failure of research and development. Cost, and create a source of funding for technological innovation, otherwise medical technology innovation is unsustainable.
However, the composition of the R&D costs and the methodology of the calculations, as well as other factors affecting pricing throughout the value chain of the drug, are not completely clear or transparent, and therefore it is not possible to judge whether the high pricing of a product is really reasonable. Moreover, the public funds of various countries have invested in the early research and development of some pharmaceutical products in the form of subsidies or rewards. The high price of drugs also limits or even hinders the taxpayers from enjoying the technological achievements brought by the previous R&D investment.
For the country, the transparency of the pharmaceutical market helps the government understand the real R&D costs and pricing mechanisms. The government is not overly passive in drug procurement or price negotiations. Of course, the transparency of the drug market is ultimately affordable for patients. Medicine for saving lives.
Italy is the initiator of this motion. In early February of this year, Italy sent a letter to the Director-General of WHO, proposing to discuss “improving medicines, vaccines and other health related matters” under the agenda “Resolving the global shortage and accessibility of medicines and vaccines” on the agenda of the 72nd World Health Assembly. The issue of market transparency of technology, and a draft resolution was attached to the letter. The draft resolution was subsequently supported and co-sponsored by 10 other countries (Greece, Egypt, Malaysia, Portugal, Serbia, Slovenia, etc.) and submitted to the World Health Assembly on May 20. The Italian draft resolution hopes that WHO member states:
Take measures to promote transparency in the pharmaceutical and vaccine markets;
Work with other Member States to develop minimum standards for clinical trial information and transparency of drug and vaccine development costs;
An annual report on the following aspects is required as a condition for registration of drugs and vaccines:
–Sales revenue, price and sales
— R&D expenses, including registration and fees for each clinical trial
— Product-related grants, tax credits or other public sector subsidies and incentives.
The draft resolution has received support from some countries, but the United States, Britain, Germany, Switzerland, Denmark and other countries have a tough opposition. Most of the countries that support the proposal are low- and middle-income countries. The government is faced with how to use limited public financial resources to solve the problem of accessibility of medicines. Even the countries facing opposition are faced with the challenges of high drug prices and limited accessibility. Most of them have a relatively developed pharmaceutical industry (so that representatives of some countries question whether these governments that oppose the proposal represent the industry or the people).
Evaluation of the transparency of the pharmaceutical market
After the support and the opposition continued to confront each other for many days and sought compromises during the consultations, the resolution was finally passed. As far as the contents of the resolution are concerned, it is clear that countries such as Italy hope to create obligations for the pharmaceutical industry, and their initial vision of disclosing various types of information related to drug pricing has weakened a lot, but this does not affect the milestone of the resolution to open the transparent discussion of the pharmaceutical market. significance.
The biggest result of the transparency resolution is that countries have reached an agreement that “appropriate measures should be taken to publicly share net price information”. Many countries are concerned about and expect transparency in drug prices. The drug market in each country is naturally divided, and the regulation of the listing and use of drugs by countries has increased the difficulty of circulation. The same drug has widely implemented differential pricing (or price discrimination) in different markets around the world. Not only that, many pharmaceutical companies will sign confidentiality agreements with the government or large international drug procurement agencies (such as UNICEF, the Global Fund, etc.), requiring the government or the purchaser not to disclose the price of a drug reached by both parties. It is still possible to maintain high prices in other countries’ markets. This practice of signing price confidentiality agreements is common, but there are also many problems. If drug price information is shared between different countries, it can certainly improve the bargaining power of the government and drug purchasing agencies. The transparency of drug prices can be said to be the most basic requirement for the transparency of the pharmaceutical market.
The biggest failure of the resolution is the transparency of clinical trial costs. Some countries represented by the United States (Ministry of Health and Human Services, former President of the United States, Alex Azar) expressed strong opposition. The main difference is whether to disclose the results and costs of clinical trials, or simply disclose the results of clinical trials. Disclosure costs. The country that opposes the disclosure of clinical trial costs believes that, in terms of current practice, the cost of clinical trials remains a matter of private domain management of pharmaceutical companies, and is an important investment in the development of new drugs; but countries that support the disclosure of clinical trial results and costs believe that disclosure The calculation of R&D expenses and R&D expenses helps the government to judge whether the price of drugs is fair and can design a better system to encourage innovation.
The final resolution is limited to the fees that have been “published and voluntarily provided” in relation to the disclosure of clinical trial costs. Even so, this resolution at least raises the issue of disclosure of clinical trial fees that has been kept in the way for future public discussion and proper resolution. Once a national regulatory agency has used clinical trial fees as a mandatory mandatory disclosure obligation, drug regulatory agencies in other countries can learn from their own situation, which will also help to promote the transparency of research and development costs in the pharmaceutical industry and promote the rational pricing of drugs.
This transparency resolution itself does not directly lead to drug price cuts, but it does reveal the information asymmetry in the pharmaceutical market and touches on the key pain points of the pharmaceutical industry. Any good governance system requires transparency of information, and the pharmaceutical industry should not be an exception.