European Union Review of Pharmaceutical Incentives: Suggestions for Change. Medicines Law & Policy, June 2019
(2019; 67 pages)


Pharmaceutical incentives and patients: A lost balance.

Patents and other forms of exclusive rights, such as data exclusivity and market exclusivity, are meant to stimulate innovation by rewarding innovators with temporary monopolies over their innovations. These monopolies enable them to reap commercial rewards if they are successful and encourage yet more innovation. But when exclusive rights are granted over medical innovations, the consequences of monopoly pricing can be catastrophic if a high price means that access to the treatment is not provided to patients or is postponed until lower-priced versions of the product are available. In pharmaceuticals, the importance of striking the right balance between rewarding innovation and ensuring that medicines are available and affordable is particularly critical: Access to medicinal products can be a matter of life and death, of well-being and illness.

Unfortunately, this balance has been tipped hugely in favour of private firms and away from maximising the public benefit. Market exclusivities granted through the patent system and the medicines regulatory system are stacked atop each other, and never rolled back. They are adopted based on assumptions, rather than data that provides evidence for their need. The pharmaceutical industry now benefits from a web of protections in the European Union (EU) that together delay market competition for long periods of time and allow companies to set profit-maximising prices that are unaffordable for many. Companies obtain those rights without needing to demonstrate that their turnover is insufficient to recoup investments and make new ones. The rulemaking for exclusive rights in the EU seems to be driven by a blind belief that exclusivity is good and more exclusivity is better.

The Council of the European Union decided in 2016 to find ways to “strengthen the balance in the pharmaceutical system in the EU and its Member States.” This process offers the EU and its members the possibility to introduce changes to pharmaceutical regulations to ensure innovation is sufficiently incentivised without sacrificing EU citizens’ access to affordable medical treatments. This series of briefing papers focuses on three areas of legislation that warrant readjustment, and offers recommendations to strike a better balance between private sector incentives and public health needs…

The briefing papers suggest policy recommendations to improve legislation on SPCs, data exclusivity and orphan medicinal products.

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