Belgium’s social security budget could save more than €400 million a year by taking over the pricing of just 25 of the most expensive medicines, according to the research department of the Belgian Workers’ Party (PTB).
The question concerns the application of what is known as the “Kiwi model” after its use in New Zealand. This allows for a public tender for medications to treat rare medical conditions, with the contract going to the lowest bidder. Patients using the drugs of pharmaceutical companies who charge more would simply not be reimbursed, thereby encouraging patients to demand their doctors prescribe the cheaper alternative.
The PTB has calculated the application of the Kiwi model for only 25 of the most expensive drugs, used for what are known as “orphan conditions” because they are rare and so receive little attention from the pharmaceutical companies, who see little potential benefit from development.
“At present, it’s the pharmaceutical industry that controls prescription habits, reimbursement policy and the price of medication, with the sole and single aim of inflating their profits as much as possible,” claims Sofie Merckx, a member of parliament for the PTB. “The Kiwi model applies the very opposite of that logic, based mainly on the needs of the patient.”
Her analysis is supported by a study to be published in the latest issue of the journal Regards Economiques from the university of Louvain-la-Neuve, which argues that drugs company play on the emotional impact of news stories about rare medical conditions to inflate their prices for certain drugs, sometimes by up to three times, while keeping the true price of production a tightly guarded secret.
Next week marks the 20th anniversary of an EU rule intended to encourage research into orphan conditions, which has been effective in its aim.
“However, this increase has not benefited all rare conditions equally,” the journal states. “Investments in research and development particularly target rare conditions which are more frequent in the population, those which appear in adulthood, and those which are marked by premature death in adults. In this way, conditions which affect young children tend to receive the least investment, whereas one in two rare conditions affects children.”
The article calls for three measures, one of which is to increase the leverage political representatives have on manufacturers, similar to the Kiwi model, especially on a European level, where politicians would be able to exercise more leverage.
In addition, the researcher calls for a European register of patients with rare conditions, to help evaluate the need for medication as well as the likely return for pharmaceutical companies. And lastly, the journal calls for more transparency in the costs of R&D, as well as negotiations on the price of medications.