Pharmaceutical companies are objecting to a Malta-led proposal to bring about better transparency when it comes to the pricing of medicines bought by EU health authorities.

Health Minister Chris Fearne, who is leading the price-transparency discussions known as the Valletta Declaration, said the pharmaceutical companies were opposing price transparency “because is will weaken their position of strength when negotiating”.

The declaration has so far been signed by 10 EU countries, representing some 160 million citizens.

As things stand today, medicine contracts between pharmaceutical companies and individual countries do not allow the purchasing authorities to divulge the prices they are paying.

This places pharmaceutical companies at an advantage since they know the price that is offered to each country, while the health authorities are in the dark.

“This puts health authorities at a disadvantage when negotiating. Pharma companies invariably tell all the different countries that their (secret) price is ‘the best’. This is manifestly impossible," a spokeswoman for Mr Fearne’s ministry explained.

"Additionally, at the moment, while the big pharma companies have amalgamated, procurement authorities remain fragmented. Price transparency is the first step that will allow member states to start negotiating and procuring medicines jointly.”

Pharma companies invariably tell all the different countries that their (secret) price is ‘the best’. This is manifestly impossible

In 2017, when Malta held the presidency of the Council of the European Union, a number of member states – now totalling 10 – came together to sign the Valletta Declaration. The declaration aims to ensure that new medicines coming onto the market are available to everyone at sustainable prices.

Earlier this month, the so-called Valletta group – consisting of Portugal, Spain, Italy, Malta, Croatia, Greece, Cyprus, Romania, Slovenia and Ireland and led by Mr Fearne – met in Malta to start discussing the matter further.

But last week the European Federation of Pharmaceutical Industries and Associations (EFPIA), that represents the pharmaceutical industry operating in Europe, pushed back on the price-sharing proposal, arguing it could reduce access to medicines.

EFPIA argued that, among other things, this would scale back rebates on drug prices that are negotiated confidentially.

“Malta believes that transparency of prices between the countries, who are ready to participate in the sharing of prices between themselves, would increase the negotiating power of the countries concerned when they are negotiating prices of individual products with the industry on a national level,” the ministry spokeswoman said.

“The current situation is that nationally published prices are not the actual prices (they do not reflect discounts and other negotiated terms) and the actual price being paid by each country remains secret to all other countries.

Transparency of prices would increase the negotiating power of countries

"If countries within the Valletta Declaration agree to share actual prices of medicines between themselves, then they would be in a stronger position to negotiate the prices for specific medicinal products for their respective national health systems,” she said.

The transparency model will be further discussed during the next Valletta Declaration meeting in Rome in September. The aim is to take the issue before the EU Health Ministers Council.

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