EC ducks action on drug prices

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Andrew Feinberg

White House Correspondent

THE European Commission yesterday drew back from pushing for action on pharmaceutical price controls, to the surprise of industry representatives.

A final Commission document outlining a new policy for the industry was less forceful than earlier drafts on what some parts of the industry considered the crucial issue, state-administered price controls.

'We would have liked it to be tougher,' said Marie-Claire Pickaert, an official of the European Federation of Pharmaceutical Industry Associations. 'I am aghast,' said an industry source. 'To create a single market requires that price controls be either harmonised or reduced.'

Commission officials argue that direct price controls are not at the heart of the industry's problems, that the Commission lacks the legal competence to tackle them, and there are plenty of other issues that need tackling.

'This is a much more sophisticated and pragmatic document than earlier drafts,' said one official, who added that it was unlikely health ministers would have accepted an onslaught on price controls.

The report avoids measures to remove or harmonise direct price controls on pharmaceutical products, which are applied by member states to reduce healthcare budgets.

Some companies argue that price controls in some states restrict their ability to charge market prices for products that have required large- scale research and development costs. Furthermore, since the EU prevents countries from banning imports, low-cost drugs enter markets with looser price controls, bringing prices down, they argue.