November 2013

Joint effort is needed to boost productivity in health care

We’re in this together: from pharmaceutical companies to clinicians, public health specialists to patients – all have a part to play in making our health systems more efficient. That’s why getting everyone together under the banner of the Lithuanian EU Presidency is so important, says Richard Bergström

With shrinking budgets and rising demand, Europe’s health systems are being forced to put the focus on eliminating waste and improving productivity to get more out of the – still considerable – resources that are available.

“Everyone has to contribute to this,” says Richard Bergström, Director General, European Federation of Pharmaceutical Industries and Associations (EFPIA). The member companies of EFPIA have come a long way in this respect, embracing health technology assessments designed to quantify the value-add of drugs, signing framework pricing agreements with individual governments and cooperating in generic substitution when innovator drugs reach the end of their patent life, Bergström says.

“The pharmaceutical industry knows it has to live in the real world, for example in giving undertakings on equality of access to medicines. Before we didn’t think it was our problem,” Bergström notes.

Similarly, the industry has cooperated with programmes put in place by member states including Spain and Italy, since the start of the financial crisis, to promote uptake of generics. “The drugs were all originally invented by our members. Just because the patent has expired is not to say products are no good, but in the drive for efficiency, we’re not credible if we argue the price should stay high,” says Bergström.

A new equilibrium

As an indication of the contribution the shift to generics is making to health system efficiency, Bergström noted that while over the past 10 – 12 years the consumer price index as a whole has risen by 25 per cent, the price index for drugs has fallen by 16 per cent. “The benefit from that is tremendous,” he said. Governments are getting much more in terms of volume and products, without increasing the share of health care expenditure devoted to pharmaceuticals.

The need to find what Bergström describes as “a new equilibrium” is acknowledged by public health experts, who are coming to realise there must be a long-term and more strategic view of pharmaceutical industry innovation – that recognises new drugs can improve productivity and lead to efficiency gains. “There’s a lot of really exciting new products in the drug pipeline, which will not only bring value in terms of improving treatments, but also make for cost reductions elsewhere, for example by reducing care costs, or the cost of other interventions,” Bergström says.

Accommodating and deriving the efficiency benefits of novel, innovative drugs, calls for changes in the system to allow the savings to show through. A potent illustration comes from the way in which anti-TNF alpha antibody drugs have transformed the treatment of rheumatoid arthritis. “People said anti-TNF alpha drugs would break the bank, but in fact there are huge benefits. It’s just that as things stand with silo budgeting, the savings are not evident,” says Bergström.

Apart from the huge benefits in terms of individual mobility and pain reduction, people diagnosed with rheumatoid arthritis in their 40s and 50s can remain in work, do not need disability payments and continue to be able to care for themselves. It is also the case that rather than purely adding to costs, drugs costs are shuffled, from paying for steroids to paying for antibody drugs.

Forecasts of the cost of new drugs should also weigh the fact that while they will in time go generic, the benefits will be retained. “Cardiovascular drugs which have made such a huge contribution to reducing morbidity and mortality used to carry a higher price tag, but they are now all off-patent,” Bergström noted.

Spending drugs budgets more productively

All of which points to the need to read across health systems and recognise when a cost increase in one area results in a saving in another, contributing to greater efficiency and productivity overall. “We need better tools for assessing where the value lies. Medicines tend to be kept in a box, but the impact of new and better drug treatments obviously has an influence on costs elsewhere in the system,” Bergström says.

Despite the cuts there have been to drugs budgets, medicines still account for an average of 15 per cent of health care spending across Europe. There are definitely opportunities to spend this money more productively, Bergström believes. In particular, better adherence by patients with chronic diseases would allow them to avoid exacerbations that not only cause personal suffering but also drive up emergency care costs.

Agreeing to dissect out where cost and value lie across health systems, “is not an easy discussion to have,” says Bergström. That is why the Vilnius meeting, which is creating a single forum for representatives from across the piece, including public health experts, health economists, the health workforce, pharma and government, is so important.

“We rarely have all these people in the same place: Vilnius will be the opportunity to bring together all the different strands and see what works,” Bergström concluded.