Ireland Seeks to Join European Drug Price Negotiation Bloc

Ireland’s Minister for Health, Simon Harris, announced this week that Ireland is seeking to join Belgium, the Netherlands, Luxembourg, and Austria in their BeNeLuxA Initiative, a group that negotiates price deals on pharmaceuticals directly with manufacturers.    
The Center for Biosimilars Staff
February 15, 2018
Ireland’s Minister for Health, Simon Harris, announced this week that Ireland is seeking to join Belgium, the Netherlands, Luxembourg, and Austria in their BeNeLuxA Initiative, a group that negotiates price deals on pharmaceuticals directly with manufacturers.    

Harris wll now issue a letter of intent to the organization to formally signal Ireland’s interest in joining the collaboration and will travel to Belgium and the Netherlands in the coming weeks to begin discussions with an aim toward joining the bloc. In a statement, Harris said that that supply and price challenges are “…not unique to Ireland, and many countries are battling with the same issues. That is why, over the past [2] years, my department has been engaging with other European countries in an effort to identify solutions to medicines pricing, sustainability, and supply.”

The BeNeLuxA bloc was formed in 2015 with the mission to foster sustainable national healthcare systems in Europe, and to address the challenge of affordability of innovative therapies. The group participates in horizon scanning (seeking information about high-cost therapies that will be become available in the near future), health technology assessments (HTAs), information sharing and policy exchange, and—critically—price negotiations with industry.

According to a discussion paper published the European Public Health Alliance (EPHA) in 2017, health ministers from the Netherlands and Belgium first saw the need for such a negotiating bloc after drug maker Gilead introduced the high-cost sofosbuvir (Sovaldi) in the European marketplace. Realizing the potential for expensive drugs to strain health systems, the founding member states felt that they needed to increase their bargaining power with drug makers.

According to EPHA, drug makers “are used to negotiating bilaterally with national governments. This puts them in a favorable position, having a panoramic overview of each of the 28 EU member states’ pharmaceutical policies, purchasing power, and willingness to pay.” At the same time, national governments lack insight into neighboring countries’ policies, creating an asymmetry of information on drug pricing.

Thus far, BeNeLuxA has not had major successes to report; in May 2017, the bloc announced that it had not been able to reach a deal with drug maker Vertex on its lumacaftor/ivacaftor drug combination for the treatment of cystic fibrosis, which, according to an HTA undertaken by BeNeLuxA, was worth 82% less than Vertex’s asking price. The governments represented by BeNeLuxA declined to supply the drug in their healthcare systems, so patients will not have access to the therapy.

Furthermore, the paper notes that there exists a concern among policy makers that drug companies may attempt to discourage efforts like BeNeLuxA by refusing to negotiate so as not to set a new precedent. EPHA suggests that, as a potential solution, “Governments might wish to respond by making the BeNeLuxA route the only available option for reimbursement of a company’s products or for some clusters of products.”

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