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Evolution – Not Revolution

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This week Reuters news agency published a story entitled: “Industry weighs radical shake up of European Drug pricing”. It was based on a leaked discussion paper, produced by an EFPIA working group with members drawn from right across the EFPIA membership.

Perhaps “Leading pharmaceutical trade association has conversation about the future” would have been a more accurate ­­– but less newsworthy – title. As an industry, we acknowledge the affordability challenges faced by healthcare systems, under pressure from rising healthcare demand. Our industry wants to be part of the solution in making medicines more accessible and healthcare more sustainable.

In that context, it should be no surprise that, through EFPIA, the industry is engaged in dialogue about how we can work best with governments and healthcare systems in Europe to find solutions to make medicines accessible and healthcare more sustainable, whilst securing future medical innovation.

Discussions about outcomes-driven models of healthcare are of course nothing new. Michael Porter and Elisabeth Teisberg published their book “Redefining Healthcare” in 2006. Their theories was originally developed to respond to problems in US healthcare, but the central principles – that healthcare systems should be focused on delivering value, measured as health outcomes, divided by costs – has taken hold across the globe, even in systems with traditionally much less market competition, such as the European style single-payer model. The starting points are different but the central problem remains the same: that the actors in the system do not have the necessary incentives to deliver what actually matters: better health for patients.

Europe’s history of health is a story of success in which improved socio-economic conditions, lifestyle changes, better prevention and public health strategies, coupled with advances in treatment and better patient care, have all played their part.  But as the continent emerges from a severe financial crisis, healthcare systems and governments across Europe are facing difficult choices as they allocate resources to manage the health and social care needs of their citizens.

Despite the challenges, there are many reasons to be optimistic about a healthier future for Europe. With over 7,000 medicines in development, an exciting, new wave of innovation will play a key role in addressing the challenges faced by patients, healthcare systems, and society. This pharmaceutical innovation is mirrored by developments in medical devices, diagnostics, imaging and data science.

The potential of this exciting new wave of innovation is enormous. We already stand on the brink of a revolution in cancer treatment by exploiting the ability of the body’s immune system to locate and eradicate cancer cells. Collaboration between sectors is driving innovative approaches to treating diabetes, such as a contact lens that can measure glucose levels to deliver the optimum insulin dose. Significant advances in the vaccines sector are targeting global health issues such as malaria, Ebola, HIV, and Cancer.

Genomic research and new data analytics techniques are giving researchers powerful tools to study how multiple genetic factors impact on disease development. This offers a springboard towards the creation of specifically-targeted, personalised medicines.

But patients can only benefit from this innovation if it is affordable now, and sustainable in the future. In the context of ageing populations and chronic disease, the adoption of innovation places additional pressure on resources. How we manage the rising healthcare demand and capitalise on the new medical innovation in a sustainable way is the foremost question for many stakeholders in European healthcare. EFPIA and its members are no different.

In the future, we believe we can contribute to more sustainable healthcare systems by developing new pricing models, such as outcomes-based, or value-based contracts. This has started in a number of countries; it is evolution not revolution. It requires partnering with patients, healthcare providers, payers and industry to create real breakthrough. The document, leaked without our knowledge, will be discussed at the EFPIA Board later this month, and is part of an on-going dialogue based on our commitment to the long-term sustainability of healthcare in Europe.

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EFPIA Director General

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