Talks on prices of expensive medicines show great promise

Dutch Health Minister Edith Schippers’ talks with manufacturers on the price of very expensive new medicines are paying off. For several years her goal is to have innovative valuable drugs sustainably accessible to patients at acceptable cost. As a result of the negotiations, spending on these medicines could be as much as €203 million lower in 2018. Ms Schippers told the Dutch House of Representatives today. More negotiations will be held in the coming months.

Transparency

This is the first time that information has been made public on how much savings these negotiations could potentially yield. Manufacturers routinely demand secrecy in return for discounts, making it impossible to reveal the savings on each drug. Now that negotiations have been concluded with several pharmaceutical companies, insight can be given on the actual and potential benefits. The lack of transparency about the results of the talks has been a source of great dissatisfaction. Enhancing transparency about medicine prices has in fact been a top priority of the Netherlands Presidency of the EU.

Financial deals

The National Health Care Institute of the Netherlands forecasts the cost of many new medicines before they are included in the basic health insurance package. These are estimates of the minimum and maximum spending on a drug in the first years after its introduction on the market. If the cost per treatment or the possible total expenditure on a medicine are exceptionally high, and the drug is known to be effective, the minister may decide to launch negotiations on the price.

A deal with the manufacturer can lower the price of a medicine or keep the total costs from becoming too high. As a rule such deals are made before the drug is included in the basic health insurance package, before patients start using it. In most cases the ultimate savings depend greatly on how often a medicine is prescribed: the more prescriptions, the higher the discount. This limits the financial risk even if it’s initially not clear how many patients will be eligible for a treatment.

The actual savings realised in the first year, 2014, amounted to €13.9 million. This was out of a total of €95.9 million in spending on the eight medicines covered by agreements that were in effect that year. The savings made in 2015, during which 16 deals were in effect, will be announced during the coming year. The effects of recent deals, for example on nivolumab and on several medicines for hepatitis C, will not be known until a number of years have passed.

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