Joint position on the draft Medicines and Medical Devices Law

Joint position on the Draft Bill on Medicines and Health ProductsThe proposed system of price regulation for off-patent medicines puts at risk the supply of medicines and the pharmaceutical industry in Spain.

Farmaindustria.es

Joint position on the Draft Bill on Medicines and Health Products The Draft Bill on Medicines and Health Products recently approved in the first round by the Council of Ministers includes a new price regulation for off-patent medicines in Spain, the so-called “selected price system”. If implemented, this system would cause a serious deterioration in supply problems, would have a very negative structural impact on the pharmaceutical industry in our country and would lead to a reduction in the number of pharmacies with the consequent impact on patients.

All this would be contrary to the concept of open strategic autonomy, a fundamental objective of the Government and the Pharmaceutical Industry Strategy approved last December, and would have a negative impact on investment decisions and economic and employment growth in Spain, as well as deteriorating the maintenance of quality healthcare provision to the public.Medicines and Medical DevicesThe proposed system of price regulation for off-patent medicines puts the supply of medicines and the pharmaceutical industrial fabric in Spain at risk.

The system, regulated in article 116 of the Draft Bill on Medicines and Health Products, consists of establishing prices every six months for each homogeneous grouping of substitutable medicines based on the “blind” offers of the companies. In this way there will be a medicine with the lowest price, a grouping with medicines with selected prices within a price range and a grouping of non-selected medicines that would change every six months. The system aims to achieve a continuous and sharp price drop precisely in the market with the lowest profit margins, such as off-patent medicines. Moreover, the system does not include specific rules to ensure that off-patent medicines remain fully funded.

The system, regulated in article 116 of the Draft Bill on Medicines and Health Products, consists of establishing prices every six months for each homogeneous grouping of substitutable medicines based on the “blind” offers of the companies. In this way there will be a medicine with the lowest price, a grouping with medicines with selected prices within a price range and a grouping of non-selected medicines that would change every six months. The system aims to achieve a continuous and sharp price drop precisely in the market with the lowest profit margins, such as off-patent medicines. Furthermore, the system does not include specific rules to guarantee the permanence of off-patent medicines within full financing. This system would entail a radical change of model, with very negative consequences that have not been sufficiently taken into account when drafting the Draft Bill and which are set out below:

On the drug manufacturing industry:

• An unpredictable and volatile model such as the one proposed in the APL would generate a new scenario of economic instability and uncertainty for companies, with the consequent negative impact on investment and growth decisions in Spain.
• The primacy of price over any other consideration would give an advantage to opportunistic operators who have neither the capacity nor the will to supply the market in a stable way in the long term. Therefore, the proposed model would jeopardise the productive fabric in Spain, which has 106 production plants for human medicines, many of them SMEs.
• This regulation would be a significant obstacle to the resilience of the supply chain and the country’s strategic autonomy. Opting for the cheapest products would generate public savings in the short term, but the destruction of the productive fabric would undermine the capacity for economic growth in the form of productive activity and skilled employment.
• With this new system, which unpredictably places products every six months in three different groups, it would be impossible to plan production and diversify suppliers to improve the resilience of the supply chain, which would prevent it from operating at full capacity, resulting in job losses.
• Without plants or with plants with reduced capacity, Spanish exports of medicines, which exceeded 21,000 million euros in 2023 (the fifth most exported national product), would collapse, and imports from outside the EU would increase, with the consequent deterioration of the trade balance.
• And all of this has an impact in a very tense international context for the pharmaceutical industry: the inflation derived from the war in Ukraine, which caused more than 1.5 billion euros in additional costs in just two years; the uncertainty created by the revision of European pharmaceutical legislation and the new environmental regulations; the instability derived from the imposition of tariffs by the US which, although for the moment leaves medicines out, will have repercussions on global production chains.

On the medicine supply chain:

• The model would aggravate current shortages in an already strained market in Spain and Europe by reducing the number of supplying laboratories, impacting the entire drug chain.
• The management of selected prices would have a very negative impact on wholesalers. Uncertainty arising from constant price revisions would make it difficult to forecast demand and estimate adequate stock levels of medicines, leading to disruptions in the chain and putting the availability of these medicines at risk.
• It would discourage the marketing in Spain of medicines with limited supply in favour of EU countries with higher prices, while encouraging parallel exports, which would lead to additional supply problems.
• It would favour manufacturers offering lower prices, possibly to the detriment of other aspects of supply. This could lead to increased dependence on external (non-EU) suppliers, compromising national strategic autonomy in the pharmaceutical field.
• It would discourage the development and subsequent launch of new generic and biosimilar medicines, as Spain would become an opportunistic country with high uncertainty in marketing volumes at very low prices.

On pharmacies:

• Pharmacists in pharmacies would be left with the same uncertainty as other actors in the chain due to the lack of clear information and significant price fluctuations.
• The implementation of tiered pricing would reduce adherence to treatment and increase the risk of patient errors and problems associated with medicine use, as the medicine dispensed would change frequently.
• By limiting the drugs selected, it would drastically reduce the choice and availability of medicines in pharmacies, and create supply problems that would make continuity of treatment difficult. It would also have a major impact on the pharmacy network and associated employment, especially in the most vulnerable settings, leaving many localities and neighbourhoods without pharmacies, without their professionals and without access to medicines.

For all these reasons, the undersigned organisations request that the regulation of the pricing system selected in the Draft Bill be eliminated and that the reforms be debated and agreed with the sector and the rest of the agents in the chain within the Joint Committee created for this purpose within the framework of the Pharmaceutical Industry Strategy approved by the Government.