When it comes to health equity, the citizens of smaller countries in Europe can sometimes be at a disadvantage. According to the World Health Organization (WHO), health equity is achieved when everyone can attain their full potential for health and well-being, and it promotes equal treatment by narrowing unfair disparities.
While general health equity is influenced by biological, structural and social issues, when it comes to medicines there are a range of factors that contribute to a country’s access to drugs and treatments, including GDP, the healthcare infrastructure and market access pathways.
For drug launches, population size is also relevant. The size of some countries in Europe can be a prohibitive factor to pharma companies when launching, and this can result in some smaller nations missing out.
Access to medicines: Luxembourg
Luxembourg has to import all of its medicines, subject to a quota system, as manufacturers are not incentivised to launch products directly into the market.
Drug prices are based on the pharmaceutical list price approved by the country or territory of origin (COO), and ex-manufacturer prices of medicines in Luxembourg cannot exceed this. Therefore, modifications to drug prices only occur when they are amended in the country of origin.
Most of Luxembourg’s drugs come from Belgium, allowing it to benefit from the Belgian market’s attractive prices, but a complicated system for reimbursement can delay products reaching pharmacies.
According to GlobalData, because Luxembourg’s pharmaceutical market is solely based on medicine imports, new product releases are largely dependent on rollout in Austria, Belgium, France and Germany. Similarly, the limited size of Luxembourg’s pharma market risks cannibalisation by bigger markets, potentially leading to drug shortages.
Luxembourg-based RTL Group reported in March that the country was experiencing a major drug shortage, with patients “struggling to obtain commonly used drugs such as cough syrups”.
Sequencing of European countries in drug launches
The reluctance of pharma companies to debut new products in smaller countries can be seen in this interactive graph from GlobalData, which shows the average sequencing of European countries for drug launches.
It is mainly large, western European countries such as Germany, UK and Italy that are at the forefront of launch sequences, but there are some smaller nations, including Denmark, Austria and Slovenia, near the front of the queue. So, why are they ahead of others?
Pricing: Denmark
Looking at Denmark, which is second in position only to Germany, the answer may lie in its attractive pricing policies for suppliers. Medicine prices are unrestricted and fixed by the manufacturer.
Hospital-only medicines are regulated through voluntary pricing agreements made between the Danish Ministry of Health, the Danish Regions and The Danish Association of the Pharmaceutical Industry (Lif).
An international reference pricing (IRP) scheme was introduced for hospital drugs that are outside these voluntary agreements.
Worldwide, policymakers have relied heavily on IRP to control pharmaceutical prices, setting maximum prescription drug prices in one country based on what other similar-sized nations pay. Despite a debate on its merits and whether the mechanism is fully transparent, it remains a popular system for setting drug prices around the world.
In Denmark, IRP is undertaken as a one-off process with a view towards setting a maximum sale price for hospital products at the time of launch.
According to GlobalData, as a result of the tendering procedure by Amgros (which manages the procurement of almost all drugs used in Danish public hospitals), the Danish Regions made average discount rates of 41% in 2020. However, these figures include all drugs. For medicines operating under a monopoly with limited competition, discount rates have historically been significantly lower.
Manufacturers are thus able to maintain the highest possible price under the Danish IRP and tendering system. The high Danish list prices can partly be attributed to the fact that they can be permanently set, based on as few as three markets – usually early-launch, high-priced markets.
By launching early in Denmark, suppliers can ensure a higher price is used for IRP in other countries that follow that set price.
Is collaboration the solution?
Smaller countries often face medicine shortages due to their market size, leading to higher prices. They also face difficulties in bargaining power, with the industry minimum stock requirements often being too large. Additionally, many countries lack a centralised reporting system, relying on the systems of their larger neighbours to monitor drug stocks and warn of any shortages.
Solutions to this issue start with collaborating with neighbouring countries, such as the Nordic region, which has led to the successful pooled procurement of medicines.
There is also a WHO-backed initiative in place. The Small Countries Initiative (SCI) is a network of 11 European nations, which have two million or fewer inhabitants, brought together to address health-related issues and vulnerabilities.
In March, the SCI held its first policy dialogue to understand its members’ needs for access to medicines and the areas needing technical assistance. The Roadmap Towards Better Health in Small Countries in the WHO European Region, 2022–25 was endorsed, calling for stronger mechanisms to ensure accessibility, availability and affordability of medicines, vaccines and medical devices.
Maximising medicine access
“To us at Abacus Medicine Pharma Services, it’s a priority to help create access to medicine across European countries regardless the size of the country,” comments Simon Estcourt, managing director, Abacus Medicine Pharma Services. “With our pan-European distribution and commercialisation services and in-depth knowledge of Europe’s orphan and specialty medicine markets, we are capable of supporting pharma companies on their journey of launching licensed products in any European country, resulting in providing patients better access to treatment options.”
Abacus Medicine Pharma Services (AMPS) has extensive knowledge of European payment systems and payer needs. The Commercial Partnerships service offers a comprehensive approach for pharma companies, facilitating the introduction of licensed products to European markets. It focuses on developing market access solutions for patients, implementing commercial strategies to capture value and providing a distribution service for pharmaceutical products.
With extensive industry knowledge and expertise, the service creates innovative solutions for partners, physicians and patients, particularly in the treatment of rare and orphan diseases.
