Eurohealth Summer 2001 - LSE Home · Gordian knot? Leigh Hancher 26 Toward a Euro-NICE? Alan...

Volume 7 Number 2, Summer 2001

Fifteen ways to price a pill:

Medicines in the single market

Developing the health role ofthe Commission:Interview withFernand Sauer

The politics, economics andscience of antimicrobialresistance

Building ahealthy CommonAgriculturalPolicy

eurohealth

Undue delay in cross border healthcare?

The long awaited judgements of the Court of Justice in theGeraets-Smits/Peerbooms and Vanbraekel cases (C-157/99and C-368/98 respectively) have now been made (12 July).They have far reaching consequences for Europe’s patientsand its healthcare systems.

The Smits/Peerbooms judgement in particular has signifi-cant implications for the delivery of European healthcare.The prior authorisation rule restricting the acquisition oftreatment abroad is declared as an obstacle to the freedomto provide services. It appears to resolve the question of theapplicability of the right to service in another Member Statefor patients from tax funded national health systems. It alsorefers to hospital care, another area left in ambiguity fol-lowing the earlier Kohll and Decker cases (see Eurohealth7(1) Spring 2001).

Fundamentally, the Smits/Peerbooms judgement refers to‘undue delay’ as a legitimate basis for seeking treatment inanother Member State. This is to be interpreted on an indi-vidual basis, according to personal medical history and con-dition. In systems with highly rationed supply this couldlead to significant use of services abroad.

This development in the right to receive healthcare serviceshas arrived at a time when patients are becoming moreproactive and there is growing information about medicalconditions and services provided. The opportunities forpatients in this context are great as best practice amonghealthcare systems and their ability to deliver particularservices become more transparent. The failings of nationalsystems to deliver will be clearer, perhaps creating thepolitical incentives for governments to improve them.

Nevertheless, national healthcare systems are also defendedby the judgements. Smits/Peerbooms accepted the need toensure the financial balance of social security systems – apoint that provides a check against large numbers of peopleflocking to receive care abroad. Governments and health-care administrators can also look to potential benefits ofincreased cross border care. Areas of expertise and efficien-cy can be exploited to deliver services to patients at lowercosts and there are opportunities for localised surges indemand to be met quickly by utilising capacity in otherMember States. The dynamics of scale and of comparativeadvantage can potentially lead to more efficient servicedelivery.

The judgements will doubtless be the basis of further dis-cussion and debate as many questions remain to beresolved. But the direction, at least, is now clear: there is thepotential for the development of greater cross border use ofhealthcare services. Eurohealth will examine the implica-tions of the judgements in greater depth in the next issue.

Mike SedgleyEditor

MENT

LSE Health and Social Care, London School ofEconomics and Political Science, Houghton Street,London WC2A 2AE, United Kingdomtel: +44 (0)20 7955 6840fax: +44 (0)20 7955 6803email: [email protected]: www.lse.ac.uk\Depts\lse–health

EDITORIAL

EDITOR: Mike Sedgley: +44 (0)20 7955 6194email: [email protected]

SENIOR EDITORIAL ADVISER:Paul Belcher: +44 (0)7970 098 940email: [email protected]

DEPUTY EDITOR:Anna Maresso: +44 (0)20 7955 6288email: [email protected]

DESIGN EDITOR: Sarah Moncrieff: +44 (0)20 7834 3444

EDITORIAL TEAM:Johan CalltorpJulian Le GrandWalter HollandMartin McKeeElias Mossialos

SUBSCRIPTIONS

Claire Bird: +44 (0)20 7955 6840email: [email protected]

Published by LSE Health and Social Care and theEuropean Health Policy Research Network(EHPRN) with the financial support of LSE Healthand Social Care and Merck & Co., Inc. News section compiled by ENHPA and HDA.

Eurohealth is a quarterly publication that provides aforum for policy-makers and experts to express theirviews on health policy issues and so contribute to aconstructive debate on public health policy inEurope.

The views expressed in Eurohealth are those of theauthors alone and not necessarily those of LSEHealth and Social Care and EHPRN.

ADVISORY BOARD

Dr Anders Anell; Professor David Banta; Mr NickBoyd; Dr Reinhard Busse; Professor Correia deCampos; Mr Graham Chambers; Professor MarieChristine Closon; Professor Mia Defever; Dr GiovanniFattore; Dr Josep Figueras; Dr Livio Garattini; Dr UntoHäkkinen; Professor Chris Ham; Professor DavidHunter; Professor Claude Jasmin; Professor EgonJonsson; Dr Jim Kahan; Dr Meri Koivusalo; ProfessorFelix Lobo; Professor Guillem Lopez-Casasnovas; MrMartin Lund; Dr Bernard Merkel; Dr Elias Mossialos;Dr Stipe Oreskovic; Dr Alexander Preker; Dr TessaRichards; Professor Richard Saltman; Mr Gisbert Selke;Professor Igor Sheiman; Professor JJ Sixma; ProfessorAris Sissouras; Dr Hans Stein; Dr Miriam Wiley

© LSE Health and Social Care 2001. No part of this publication may be copied, reproduced, stored in aretrieval system or transmitted in any form without priorpermission from LSE Health and Social Care.

Design and Production: Westminster European,email: [email protected]

Reprographics: FMT Colour LimitedPrinting: Seven Corners Press Ltd

ISSN 1356-1030

eurohealthCOM

Contents Summer 2001 Volume 7 Number 2

Fernand SauerDirector of thePublic HealthDirectorate,European Commission

2 Interview by Paul Belcher

Contributors to this issue

ELISABETH BAUMHÖFER is Managing Director ofthe Österreichishen Bergbauernvereinigung (BBV,Austrian Mountain Farmers’ Organisation).

PAUL BELCHER is Head of European Affairs at theEuropean Health Management Association andSenior Editorial Advisor, Eurohealth.

ALASTAIR BENBOW is a physician and VicePresident of European External Relations,GlaxoSmithKline Pharmaceuticals.

JOHN BOWIS OBE MEP is a Member of theCommittee on the Environment, Health andConsumer Policy, European Parliament

REINHARD BUSSE is Head of the Madrid Hub,European Observatory on Health Care Systemsand Visiting Professor at the Escuela Nacional deSanidad, Madrid.

JOANNA COAST is Senior Lecturer in HealthEconomics, Department of Social Medicine,University of Bristol.

JIM FURNISS is Senior Vice President ofCambridge Pharma Consultancy, Cambridge, UK.

LEIGH HANCHER is Professor of European Law,Tilburg University, Netherlands, and a Partner atKennedy van der Laan, Amsterdam.

CLAUDIO JOMMI is Head of the PharmaceuticalObservatory, Centre for Research in HealthcareManagement, Bocconi University, Milan.

TIM LANG is Professor of Food Policy at ThamesValley University, United Kingdom.

VINCENT LAWTON is Managing Director ofMerck Sharp & Dohme Limited (MSD).

ERKKI LIIKANEN is European Commissioner forEnterprise.

TIM LOBSTEIN is Director of The FoodCommission, London.

ALAN MAYNARD is Professor of HealthEconomics at the University of York and VisitingProfessor at LSE Health & Social Care, The LondonSchool of Economics and Political Science.

AILEEN ROBERTSON is Acting Regional Adviser inthe Nutrition and Food Security Programme,World Health Organisation, Copenhagen.

MIKE SEDGLEY a researcher in British pharmaceutical price regulation at the LondonSchool of Economics and is Editor of Eurohealth.

RICHARD SMITH is Senior Lecturer, HealthEconomics Group, School of Health Policy andPractice, University of East Anglia.

CHRIS VIEHBACHER is President ofGlaxoSmithKline Pharmaceuticals Europe and amember of the European Commission G10 group.

HELMUT WALERIUS is Assistant within theCommunicable, Rare and Emerging Diseases Unit,Directorate for Public Heath, EuropeanCommission.

RICHARD WISE is Professor of ClinicalMicrobiology at City Hospital Birmingham andwas advisor to the UK House of Lords Report onAntibiotic Resistance. Currently he is the UKDepartment of Health Chairman of the SpecialistAdvisory Committee on Antibiotic Resistance.

41 European Union news

by the European Network ofHealth Promotion Agenciesand the Health DevelopmentAgency, England

Fifteen ways to price a pill: Medicines in the single market

7 Interesting times in German health policyReinhard Busse

9 Price controls in France: Budgeting for medical benefit?Jim Furniss

11 Italy: Past reforms and futureprospectsClaudio Jommi

13 Profit or loss? Fulfilling dual aims in pharmaceutical price regulation in the UKMike Sedgley

15 Competitiveness, innovation andnew market dynamicsVincent Lawton

19 Where next for pharmaceuticals in Europe?Erkki Liikanen, EuropeanCommissioner for Enterprise

21 The G10: An opportunity toimprove competitiveness and benefit patientsChris Viehbacher and Alastair Benbow

23 Pricing European pharmaceuticals:Can the Commission untie theGordian knot?Leigh Hancher

26 Toward a Euro-NICE?Alan Maynard

1 Editorial: EU health research: science v. policy?John Bowis MEP and Paul Belcher

The politics, economics andscience of antimicrobialresistance

27 Strategy for action:Commission proposals to combat antimicrobial resistanceHelmut Walerius

29 Antimicrobial resistance: a hazard to public healthRichard Wise

32 Can economics help?Joanna Coast and Richard Smith

Building a healthy CAP:in association with theEuropean Health ForumGastein

34 Food matters: Why healthmust be a factor in thereform of the CommonAgricultural PolicyTim Lang

36 Agriculture, health andnutritionTim Lobstein and Aileen Robertson

39 Society and the environment: A newapproach to agricultureElisabeth Baumhöfer

eurohealth Vol 7 No 2 Summer 20011

EU health research: science v policy?John Bowis OBE, MEP

Member of the Committee on the Environment, Health and Consumer Policy, European Parliament

Paul BelcherHead of European Union Affairs, European Health Management Association & Senior Editorial Adviser, Eurohealth, LSE Health

In February, the EuropeanCommission put forward a new strat-egy to develop EU research policywith a proposal for the SixthFramework Research Programme for2002–2006 (FP6). The Commission isseeking a fundamental change bymoving away from funding individualresearch projects towards a more inte-grated and structured approach thatwould aim to strengthen Europeanresearch capacities.

However, the proposal appears toseriously neglect health issues.Indeed, as reflected in the authorshipof this editorial, there is anxietyamong many sections of the healthpolicy community about the future ofhealth services and health policy relat-ed research in particular.

Addressing policy challengesThe proposal is overly dominated bythe scientific objectives of the priorityareas or ‘Key Actions’, such asgenomics and biotechnology forhealth, at the expense of equallyimportant policy related research.This is a step backwards from thegradual advance of policy researchsince the more biomedically focusedprogrammes of previous years.

Scientific advances can only benefitEuropean citizens if they are translat-ed into policies for health systems andhealth services. This is evident in thefield of genomics with its profoundimplications for current health poli-cies and the organisation of healthsystems. Member States require thetools necessary to address this and themany other policy challenges that willconfront all their health systems. Thisis why health policy relevance wasintroduced as one of the evaluationcriteria in the research programmes.

End of ‘Public Health and HealthServices’ researchUnder the current FP5, the section on‘Public Health and Health ServicesResearch’, has provided an important

focus for policy orientated activitieson the implications of biomedical andtechnological advances for health pol-icy, the improvement of health sys-tems and better management of healthservices. This has been cut from thenew proposal and replaced with aconfusing section on ‘Anticipating theEU’s scientific and technologicalneeds’, which contains a small subsec-tion on ‘Policy orientated research’.This neither defines nor guaranteesresearch on health policy and healthservices. Encapsulating these con-cerns, during the EuropeanParliamentary research debate onMay 28th it was described as:

“..a jumble sale of a programme witha very small amount of money”

(John Bowis MEP)

The relative lack of importance givento health policy research in theCommission’s proposal is at oddswith the higher political profile healthis acquiring throughout theCommission in order to implementArticle 152 (Public Health) of the ECTreaty. This Article contains a specif-ic reference to research in the publichealth field. Moreover, the new EUhealth strategy, which will supportthe implementation of Article 152,recognises the importance of policyresearch on health systems and healthservices to improve public healthacross the EU.

Insufficient fundingThe Commission has proposed 880million euros for ‘Policy orientatedresearch’. However, this smallamount must be spread over up to 20different policy areas includinghealth. In contrast, the 483m eurosallocated to generic research underFP5 has to be shared between onlyseven areas – one of which is definedspecifically as ‘Public health andhealth services research’.

A further concern is related to the factthat, as the Commission proposal forthe new EU health programme fore-

sees a separate budget of 300m euros,this might reduce the amount allocat-ed to health policy research withinFP6. As the health programme budgetis small in comparison with its wideranging objectives, integrating healthpolicy issues into the research pro-gramme must form a key part of theCommission’s effort to achieveTreaty based health objectivesthrough all EU policies.

No ring fencing for healthUnlike FP5, there is no ring-fencedfunding for public health and healthservices research in the new proposal.Instead, a competitive bidding processis now taking place between Commis-sion Directorates-Generals (DGs) tosecure a slice of the 880m euros allo-cated for ‘Policy orientated research’.

DG Health and ConsumerProtection, along with other DGs, hasbeen invited by DG Research to sub-mit ‘bids’ for funding to implementparticular policy goals. A possibleblue print for public health and healthservices related research could befound in the information strand of theproposed future EU health strategy.Indeed, it is understood that DGHealth has submitted a number ofresearch proposals in line with this.

However, there is concern as to howDG Health’s ‘bids’ will fare in theevaluation process now taking place,described as ‘political horse-trading’by several EU officials. The biddingprocess contrasts with the prioritieslaid down from the outset for publichealth and health services researchunder FP5 and the Commission’soften stated political commitment tohealth.

The challenge ahead is to ensure astrong link between the final decisionon FP6 policy related research priori-ties and the EU health strategy. Asfunding for the health strategy is lim-ited, the support of, and coordinationwith FP6 will be crucial in achievingthe health objectives of Article 152.

eurohealth Vol 7 No 2 Summer 2001 2

INTERVIEW WITH FERNAND SAUER

Your appointment as Director comes atan interesting time with the EUinstitutions in the process of approvinga new EU health strategy. What are thehealth policy priorities and changes inapproach in this new strategy?The priorities in the new health programmeare often expressed in terms of a ‘threestrand’ approach: health information,health strategy, and health determinants. Ithink it is right to move away from the‘vertical’ approach of having eight separatehealth programmes to a new single healthprogramme. Over the years the verticalapproach has become inflexible, as it wasnot possible to introduce other diseasesinto the programmes.

Are Member States more ready toaccept the Commission’s health role asyou move into this second health strategy, based on Article 152?I see in the new programme an opportunityto manage better the limited resources atour disposal in a way that may encourageMember States to accept more readily ourlegal mandate in health. The atmosphere of

suspicion about our role and the need torespect the ‘subsidiarity’ principle havebecome much clearer in the debate on thenew health strategy. I feel that thoseMember States which have been concernedwith subsidiarity in public health are nowmore reassured about what we are going todo – and importantly what we are notgoing to do.

Interestingly, in recent debates in theEuropean Parliament and Council ofMinisters, national representatives havevoiced concerns that the Commissionwould not have sufficient capacity to runthe new programme and they have suggest-ed that we should create a special healthcoordinating centre to assist us.

One thing is clear, each week that I havebeen in my new post, there has been a public health crisis of one sort of another –uranium in Kosovo, for example – and inmost cases we don’t even have the compe-tence to do anything about it. But it showsthat politicians are now much more con-scious of the importance of health in theexpectations of European citizens.

Fernand SauerDirector, Public Health Directorate, European Commission

Interview byPaul BelcherSenior EditorialAdviser,Eurohealth

So, you recognise that there was a lotof scepticism about the EU’s first, albeitrestricted, role in public health following the Treaty of Maastricht.Yes, even within the Commission itself!And I would suggest that, ironically, it wasBSE and other health crises that were veryprogressive from a political perspective indeveloping the broader EU competence inpublic health based in the AmsterdamTreaty.

Unfortunately, public health was a negativeelement in the European political picture,viewed as an obstacle to other policies, butnow people are seeing that it has a verypositive purpose. In my opinion, health is avery important economic driver. If youcontrast the difference between an agingpopulation that is healthy and an ageingpopulation that is sick, in economic terms,the difference is huge and it is a real eco-nomic challenge which has to be broughtinto the European integration process.

Do you see scope for further develop-ing the EU’s role in health?I believe that if we are successful in launch-ing this new policy with the full participa-tion of stakeholders, then three or fouryears down the road to the nextIntergovernmental Conference it might betime to reinforce the legal basis for health,which is at a halfway house at the moment.

On the one hand, there is an explicitEuropean Community health competencebut it is very limited and relates only topublic health policy here in DG[Directorate General] Health andConsumer Protection [DG Sanco]. Yet thisis only one part of many health relatedpolicies of the Commission, such as healthand environment, health in the workplace,pharmaceuticals etc. Even in the late 1980s,the health element of the EU pharmaceuti-cal regulations was already very advancedwithout any formal health basis in theTreaty. So, there are many health relatedEuropean policies and now is the time tointegrate them better in the medium term.

What in your view are the key lessonsthat the Public Health Directorate haslearned over the past decade? Arethere still problems to be solved?My predecessors had to work more in anintergovernmental role, like the WHO orCouncil of Europe, than in the integratedmode that I was used to. And they didwhat they could in the circumstances andthey did a very good job. They prepared

the ground for the change in the Treatyintroducing Article 152 on public health.But, as for lessons to be learned, my opin-ion before leaving EMEA was that thereshould be a more flexible and openapproach to public health in theCommission, although that lesson waslearned even before I came here.

One lesson, which all the departments ofthe Commission have had to learn the hardway, is about financial management. Wedon’t have a huge budget but we do have acomplicated one, with eight budget linesand many small contracts with NGOs.This is the biggest challenge because therules, necessary for accountability, meanthat there is greater scrutiny. Ironically, thenew programme will be simpler, with oneprogramme and a single management com-mittee. However, when combined with thenew financial complexity, it is actuallymore complex than before.

One third of my colleagues, one way oranother, now have to deal with financialmatters. The system has become even morerigid because of the need to be moreaccountable and this should be addressed inthe general reforms of the Commission.

Do you think you have the resources inplace to deal with this heavy financialadministration, programme implemen-tation and policy development for thefuture?At the moment people are excessivelyoccupied with the day-to-day financialadministration of our work and we don’thave enough time to reflect. But the newprogramme is an occasion for change.

So you will have more resources infuture to implement the new programme?Well, I need more resources, though not somuch in terms of big numbers, as in termsof expertise. We have been given a chal-lenge by the European Parliament to set upa European health centre and this meansbig resources. The only thing I can say isthat the Commission generally is limited inits ability to increase staff and so we haveto look at the possibilities within which wecan work now. This may lead, perhaps inthree to four years, to an external resourcebeing created such as an executive agency.This will not be like the EuropeanMedicines Evaluation Agency (EMEA),which is independent, but would be 100per cent owned by the Commission andassigned very specific tasks, limited bud-gets, and be set up for a specific number of



“Health is a very

important economic

driver”

years to run a programme. In our jargon,this is ‘externalisation’. The advantage ofworking in this way is that it is a generalapproach that would apply across theCommission, not only to health, which theCommission has proposed to the Councilof Ministers. Council has not yet decidedto accept this but in the next few monthsthis may change and we would be one ofthe first candidates. In contrast, if we hadto create a new institutional system onlyfor the public health sector it would becomplicated and perhaps take four yearsbefore it could be set up.

If there were agreement between the insti-tutions on how certain technical, highlyspecialised tasks could be delegated, with



“… public health policy here in DG Health and Consumer

Protection … is only one part of many health related policies

of the Commission”

the Commission retaining the policy ele-ment, this would then resolve our problemof resources. This is purely speculation ofcourse, but it would be one way to meetthe expectation expressed in Parliament andCouncil about setting up a health ‘centre’,without making empty promises that can-not be fulfilled. There is no possibility ofthe Commission creating a large directoratedealing with public health.

Things will need time. DG Sanco itself is aresult of mergers between different branch-es of the Commission and as with all merg-ers they take time to settle. Moreover, thefood scares and the creation of theEuropean Food Authority are so high onthe agenda at the moment they are usingmost of the energy of the Commission. Ifthere were new resources they would prob-ably go to this area over the next two years.However, at the end of 2002 DG Sanco willbe more stable, the Commission will be inthe middle of its mandate, consumer andfood safety affairs will be covered ade-quately and so there will be more time toconsider public health.

A final point: their suggestion is not unrea-sonable but my message to the EuropeanParliament and Council is that if we have tocreate a new institution or European healthcoordinating centre it cannot be done viathe health programme and we would need acompletely different legal basis. If they saidthat establishing a centre was a prerequisite,it might mean postponing the implementa-tion of the new programme for anotherthree years. What I would recommend isthat the programme is adopted first, so thatwe know the tasks ahead, and then wewould be able to see how much we couldtackle internally and how much should beexecuted by new rules, which require a sep-arate discussion.

In the information strand of the newhealth programme you propose workon aspects of healthcare systems, bestpractice etc. Could you explain whatthe Commission is planning to do in thehealthcare field?It is clear that when it comes to making arecommendation that would have a directimpact on the cost of healthcare, this is avery tricky area for the Commission. Whoare we to give advice to, if we are not thepaymasters and not responsible for health-care? While any discussion of the issueswould have to be neutral from the point ofview of financing, we can help identifywhere the best practice is. The exchange ofinformation that would follow would havea structuring effect without having to intro-duce binding legislation.

It could mean the introduction of coreEuropean guidelines and we would thenleave it to Member States to put them intoeffect in their own context as they wished.Generally, the question is not to find newpractices but to discuss what already exists

and find a consensus. So the question ismore one of dissemination than imposing anew standard.

As your programme passes through thepolitical process, do you find thesehealthcare, best practice aspects aregaining support or meeting resistancein the Parliament and Council?Of course, Parliament would like us to govery far in this direction but a minority ofMember States would prefer us to deletethese references altogether. I think weshould maintain the references in the textbut we will be scrutinised. In the end, weshould be judged by the value of our workon best practice itself and not the fact thatwe might want to issue recommendations.

Recent cases in the European Courthave brought healthcare to the fore indiscussions about the EU Single Marketand access to medical treatmentabroad. DG Employment appears to bedealing with the issues from a technicaland administrative perspective. Is therenot a health dimension to this cross-border debate that is relevant to DGSanco?Currently, this causes a dilemma for theMember States and the Commission. Willpolicy be governed by the courts or shouldthere be more active involvement of policymakers? I have seen recently in Spain themigration of UK patients to find better healthcare, and such situations willlead to tension between the Member Stateswhen it comes to financing. To solve theseproblems, will they envisage new contrac-tual arrangements, as between Norway andGermany for specialised healthcare facili-ties, or will we have to have a panEuropean approach?

In terms of the split in responsibility forhealth and cross border social securityissues between DG Sanco and DGEmployment, I do not believe in being ter-ritorial and I have to recognise that withthe limited resources I have, my priority isnot to double the activities of my staff. Ifthe Commission wanted to put all healthareas under one roof that is a question ofreorganisation for the Commission, but itis not my mandate.

For me, health in other policy areas is moreabout making people aware of health inareas where they would not have thoughtabout it and to enter into dialogue with uswhen they design their policies.

At a practical level, are there sufficienthorizontal links within the Commissionin terms of consultation processes, suchas the Interservice Group on health, toachieve this?I now chair the Interservice Group, whichbrings together representatives of otherCommission Directorates General to dis-cuss policies with a potential health impact.This had become a rather loose arrange-ment and my policy now is to have onemeeting every three months. We also haveseveral sub-groups that meet in the mean-time.

Is the group taken seriously by otherDirectorates General? Does it make adifference?We invite all the DGs we can think of andthey are usually represented. Internallythere has been a strong worded communi-cation to the other DGs saying that wehave to cooperate to prevent conflicts. Ihave now chaired a couple of these meet-ings and the atmosphere was rather good.

There is no question about the legitimacyof the Interservice Group. Two years ago,other DGs would not have reacted in thesame positive way but now they recogniseits value. Rather than having to tell themwhat to do, they are thinking about issuesin advance. They are bringing questions tothe meetings and it is not simply a matterof us scrutinising what they are doing; it ismore than a routine exercise where peoplesimply put a health slogan into their textssaying ‘we are taking health into account’.

What are your plans for the proposedconsultative ‘European Health Forum’which will bring together the variousstakeholders in EU health policy development?Having separate discussions with so manypartners is not only a waste of time but alsothe source of many misunderstandings aspeople will be tempted to say differentthings in different meetings to please peo-ple. We have got very positive feedbackfrom our Forum proposal issued inDecember and we are now organising thethree levels of the consultation process: acore of partners who help us prepare theForum and a larger group of 60 to 70 whowould meet on invitation to discuss issuesand then maybe next year a sort of openday where everyone could participate –paralleled with a website that anybody canjoin. The Forum is not only to get feedbackand inspiration for our policies. This willindeed be half or 60 per cent of the



“One should not

underestimate the

capacity of the general

public to understand

the issues.”

activities of the programme, but I also seethe potential for direct exchanges betweenproviders and users, or Member States andhealth organisations which could run as anopen debate and which might not lead toany European action now but would helpus to understand the context of the situation.

So as well as advising you on policy youwould see it as a way of bringing togetherthe various parts of the health communitywho may not normally communicate soreadily?

Yes, and these organisations can be ratherhostile to each other! Indeed, there will betimes when we would just be observers inthe debates and in other cases we wouldgenerate the debate in order to get somefeedback for a policy issue or a response toquestions raised by others. There are somany areas where people would like us tointervene now and we can use the Forumto help shape a general understanding ofwhat is possible, feasible, and desirable.

Some patient groups and NGOs aresensitive about involving industry inthe discussions. What is your view?I think the conditions for participationneed to be made transparent. Industryshould not use the Forum as a privilegedpartner. Of course when you put industrywith NGOs you have to protect the patientorganisations. I would not limit involve-ment just to the pharmaceutical industrybut also include other industries as well,such as the IT industry.

Another concern is funding. Will theForum be financed from the health programme budget, which is alreadylimited, and will there be any fundingto address the financial imbalance ofstakeholders who participate?First, it will be funded from the health pro-gramme as there is no other source of fund-ing. It could be linked to the informationobjectives in the first strand of the pro-gramme.

Second, I see the need to support patientgroups and NGOs in a special way.Unfortunately, when the consumer groupsemerged there was a special direct EU sub-sidy voted through to support them butthis did not happen in the health sector asthe health sector developed too late in theprocess. However, while there is no struc-tural support, there is a lot of support forthe health sectors and networks within thehealth programme.

In the future, I would like to do away withthe clientelism that sometimes existswhereby NGOs that lobby us have to besupported structurally for this purpose. Idon’t know if we should them subsidisethem to be lobbyists – that is a differentfunction and I think in the future weshould distinguish their roles more clearly.I think we have to be careful to see whatthe legitimate interests are of all parties andhow we can balance the influences toachieve an objective picture. We also needto develop the representativeness at EUlevel of organisations that may be very welldeveloped at national level but have difficulties emerging on the Europeanscene.

So you intend a much closer evaluationof the organisations that you will fundin the future?Yes, value for money! It will be necessaryto look at what the organisations consist ofand who they actually represent. I havebeen used to a situation in previous jobswhere some groups simply gave themselvesthe name of ‘European’. The Health Forumitself will help us recognise those who havereally something to say and to give them agreater role.

Looking back, what would you like tohave achieved within the next fiveyears?If European citizens have the impressionthat something has been done at Europeanlevel that really helps their health status inthe next five years, then that would be a bigsuccess. At the moment our impact appearslimited, as it is mediated through profes-sionals. There is such a demand from citizens for health, as demonstrated by theincreasing use of health websites for exam-ple. People don’t want to have govern-ments telling them what to do but as policymakers the least we can do is to validate theinformation provided through the internetetc.

I would also like to see that the evidencebased healthcare approach, NICE etc, bet-ter shared and made more understandableto the general public. One should notunderestimate the capacity of the generalpublic to understand the issues.

The euro will be a big change in the nextfew years and, I would like citizens to beable to see a similar European impact onhealth – that Europe has improved theirhealth determinants as well as their generalhealth status. I believe this is achievable.



“There is no possibility

of the Commission

creating a large

directorate dealing

with public health.”

Along with cost-sharing measures and pre-scription limitations, reference prices andspending caps are two of the main elementsin the German strategy to control drugexpenditure.1 While in 1998 patients paidDM 5.5 billion for prescribed drugs in co-payments (equal to 14.1 per cent of totalpharmaceutical expenditure), this amountdecreased to DM 4.0 billion (10.0 per cent)in 1999 and DM 3.6 billion (8.7 per cent) in2000. By comparison, the sickness funds’share of pharmaceutical expenditure in2000 grew by a total of DM 4.4 billion(+12.0 per cent). As the overall rise in themarket accounts for only DM 2.5 billion(+6.4 per cent), almost half of the increaseis a result of decreased co-payments.

Reference pricesThe idea behind reference prices was toestablish an upper limit for the costs reim-bursable through the sickness funds.* Thelaw stipulates that reference prices bedefined for drugs (1) containing the samesubstance, (2) with similar substances and(3) with comparable efficacy.

The federal associations of sickness fundsset the prices for drugs. Due to the lowerprices set for drugs formerly above the ref-erence price, these regulations led todecreasing prices for reference priced drugsoverall. However, the pharmaceuticalindustry partly compensated for thisthrough increases for non-reference-priceddrugs. For the sickness funds, the savingsare currently estimated to be in the range ofDM 3 billion per year, roughly 9 per centof their pharmaceutical expenditure. Forpatients, reference prices mean that the dif-ference between reference and retail pricehas to be paid out of pocket if a moreexpensive alternative is chosen.

Late in 1998, the new red-green parliamen-tary majority introduced tighter regula-tions for the setting of reference prices, i.e.

legally they would now not be higher thanthe highest price in the lowest third of themarket. For 202 out of a total of 446 druggroups with reference prices, prices weresupposed to be lowered from 1 April 1999for a saving of approximately DM 550 mil-lion. However, this reduction was stoppedin the courts and reference prices in generalcame under legal threat when a pharmaceu-tical company successfully sued. Early in1999, a court ruled that price setting by thesickness funds violated European Unioncartel regulations. Regarding the latter, thefederal Court of Appeals decided to ask theEuropean Court of Justice for a prelimi-nary ruling on 4 July.

While the Ministry of Health, the sicknessfunds and the physicians were happy withthe current solution, the pharmaceuticalindustry provided strong opposition. Forexample, the Director-General of theAssociation of Research-based Pharma-ceutical Companies (VFA), Cornelia Yzer,demanded: “The reference price systemmust be re-evaluated. Reference prices aresuperfluous.” She gave three reasons whythe system is obsolete. (1) The price reduc-tion initially planned by the sickness fundswould have led to a situation in which theprices of some pharmaceuticals would havedecreased to the lowest level in all ofEurope. (2) Reference prices represent anunnecessary interference with regular mar-ket price formation. (3) The reference pricesystem is unconstitutional and violatesantitrust law.

Early in 2001, the ministry undertook toput reference prices on a new legal footingi.e. to fix them through a Ministry ofHealth ordinance, an instrument which isquite uncommon in German statutoryhealth insurance regulation. As the sicknessfunds felt that the draft bill was ambiguousabout the situation from 2004 ( i.e. whetherreference prices would still exist after theexpiry of the new law), they decided topass new reference prices unilaterally inMarch, a decision they reversed in Maywhen the final version of the bill was pre-sented. According to this bill, the currentregulations on reference prices are only


MEDICINES IN THE SINGLE MARKET: NATIONAL CONTEXTS

Reinhard Busse

Interesting times inGerman health policy

Reinhard Busse is Head of theMadrid Hub, EuropeanObservatory on Health CareSystems and Visiting Professorat the Escuela Nacional deSanidad, Madrid.

* In Germany, the pharmaceutical industry’s pricing is unregulated while the distribution of drugs throughwholesalers and pharmacies and their respective surcharges on ex-factory prices are regulated in great detail.

German health policy is by no means boring. After the resignation of Andrea Fischer (Greens) as Minister

of Health in the middle of the BSE crisis, her successor, Ulla Schmidt (Social Democrats), has initiated a

number of reforms. Reference prices and spending caps for pharmaceuticals are two reform targets.

suspended until the end of 2003. Duringthis period, the Ministry will issue an ordi-nance with the aim of putting referenceprices into force, enabling a saving of aboutDM 650 million. From 2004, the old regu-lations will again be in force, unless newrules to ensure the survival of delegateddecision-making are deemed necessary.

Spending capsThe spending cap for pharmaceuticalsimposed a real reduction in pharmaceuticalexpenditure when it was first introduced inlate 1992. In 1993, any excess spending upto DM 280 million would have been clawedback from both the physicians’ associations(from physician remuneration) and thepharmaceutical industry. From 1994 to1997, the 23 regional physicians’ associa-tions were liable for any overspending withno upper limit. While all physicians’ associ-ations met their cap in 1994, overspendingoccurred in several regions from 1995, firstin the east (with almost 13 per cent higherexpenditure than the west) and from 1996also in western regions. The physicians’associations resisted payment, arguing thatthey could not effectively manage overallor physician-specific drug expenditure, dueto untimely and unspecified data.

In 1997, the regional spending caps wereabolished (from 1998) and replaced bypractice-specific targets. For these practice-specific targets, the legal limit for over-pre-scribing and paying-back was set at 125 percent of the target, with exceptions for cer-tain types of drugs and patients with certainindications (i.e. opiate addicts, post trans-plantation patients etc.) as well as for specif-ic circumstances within practices. When thered-green government came into power inlate 1998, it retained these targets for indi-vidual practices but also re-introducedspending caps at the regional level.Physicians’ associations were then liable forany over-spending up to 105 per cent of thecap. As a kind of compensation, debtsresulting from the former spending capwere waived. In 1999, 10 physicians’ associ-ations did not meet their limit and, in 2000,this number had risen to 19 out of 23. Forthat year, the physicians’ associations owethe sickness funds more than DM 1 billion– an amount of around DM 17,000 per

physician in the case of four eastern regions.

After a few days in office, Ulla Schmidtdeclared that the collective requirement topay-back part of their income had negativeeffects on physicians and that she wouldtherefore abolish it in favour of practice-specific targets. Obviously, this announce-ment was warmly welcomed by the FederalAssociation of Statutory health Insurance(SHI) Physicians which reassured the min-ister that the ‘political trust’ placed in themwas justified. Cornelia Yzer of the VFAwas more outspoken: “The deficits of phar-maceutical budgets are dramatic. This costabatement instrument has proved its ineffi-ciency for many years.” The sicknessfunds, on the other hand, pointed to thefact that the practice-specific targets are notwelcomed by all physicians as they consti-tute a more severe limitation of their free-dom. Therefore, the announcement of theFederal Association of SHI Physiciansshould be viewed sceptically, especially asno physicians’ association has yet used theinstrument to review the actual prescrip-tion behaviour of its members.

While the new minister was initially verypositive that pharmaceutical expenditurecould be contained without a spending cap,she has already become more sceptical.Late in May 2001, she said that the 9.7 percent increase in the first quarter of 2001constituted a “severe danger for the finan-cial stability of the statutory health insur-ance” and warned that the contributionrates might have to be raised, a dangerwhich the sickness funds had already point-ed to earlier. In June, the first major fundincreased its rate by a full percentage point.

In conclusion, while no German physicianhas ever paid back a single mark due to sur-passing pharmaceutical spending caps, theinstrument did contain costs as demonstrat-ed by both the initial drop in expenditureand the recent post-announcement increas-es. While there are well known potentialdangers to therapeutic quality resultingfrom such unspecific measures as spendingcaps* (and therefore other measures such asguidelines, positive/ negative lists etc. arenecessary), currently it seems doubtful thata sustainable solution can be found withoutimposing limitations of some sort.



REFERENCES

1. Busse R. Health CareSystems in Transition –Germany. Written in collabo-ration with A. Riesberg andedited by A. Dixon.Copenhagen: EuropeanObservatory on Health CareSystems, 2000.

* The VFA pointed to the results of a TNS Emnid survey of 1891 people. Of those SHI patients seekingmedical treatment during the past 12 months, 9.3 per cent were refused a pharmaceutical prescription or theprescription was postponed. 59 per cent of those who were refused a pharmaceutical cited the spending capor costs as the reason for the refusal. For 84 per cent, the refused or postponed pharmaceuticals had beenprescribed in the past. (Due to the methodology, the actual need for the requested prescription could obvi-ously not be measured.)

“While the new

minister was initially

very positive that

pharmaceutical

expenditure could be

contained without a

spending cap, she has

already become more

sceptical.”

France has a complex system for control-ling the price of pharmaceutical products,developed over a long period of time.While the basic structure has remainedconstant for the last decade and more, theway in which that structure is applied hasbecome increasingly sophisticated as government officials have become betterinformed and more proficient at their costcontainment task.

There is a two stage process for assessingthe status of new products following mar-ket authorisation. First the Commission deTransparence assesses the value of the drug,from two perspectives: to determinewhether it should be reimbursed under thehealthcare system; and to assess the extentto which it provides an increase in medicalbenefit (amelioration du service medicalerendu, ASMR). These assessments arebased primarily on clinical data, and partic-ularly the phase-3 clinical trials on whichthe market authorisation is based.

The approach adopted by the Commissionde Transparence is essentially comparative.The key comparators used are normally themarket leader in the therapy area in France,the product with the lowest treatment cost,and the most recently reimbursed productin the therapy area in France. The recom-mendation on reimbursability is expressedin a three point scale of service medicalerendu, SMR. Products may be classified as1 (of major therapeutic importance), 2 (ofsome therapeutic value) or 3 (of insufficienttherapeutic value). Products in classes 1 and2 are reimbursed, while products in class 3are not.

Second the Commission de Transparencerates the extent of therapeutic benefitoffered by the product within the contextof a comparative framework. Very fewproducts achieve the highest ASMR ratingof 1 (major therapeutic advance) and mostnew products are listed as 3 (modestimprovement in efficacy or reduction ofside effects) or 4 (minor improvement inefficacy or convenience).

While the assessment is based on clinicaldata, a narrow view is taken of what is

accepted. Thus atorvastatin (Tahor inFrance) was given a rating of 5, because itdid not have the long term outcomes dataof the comparator product, simvastatin.While most observers would accept that onthe basis of atorvastatin’s LDL-loweringperformance it was reasonable to assumethat the long term outcomes would be atleast comparable, the Commission deTransparence was not willing to make thatjudgement in the absence of data. HenceTahor was priced at a discount to the mar-ket leader, simvastatin.

It can be argued that it is not unreasonablethat the French authorities should under-take a comprehensive evaluation beforedeciding whether to reimburse (i.e. purchase) a new product. Nor is it un-reasonable that such an evaluation shouldbe based on the best available evidence, theclinical trial data. However, this needs to betempered by a degree of flexibility overhow that evidence is used and interpreted.There are inevitably limitations in what isknown about new products, and it is unfairthat reimbursement, and ultimately price,should be constrained by those limitations.When new data does become available – forexample when long term studies confirmthe outcome benefits of Tahor – there is nopossibility of a price increase to recognisethat added value.

The reimbursement decision for new prod-ucts is based on the SMR recommendationof the Commission de Transparence andthe outcome of the price negotiations withthe Comité Économique des Produits deSanté (CEPS). These negotiations reflect anumber of elements. The ASMR awardedby the Commission de Transparence is oneimportant factor. Only products with anASMR of 1, 2 or 3 have any real prospectof achieving a price premium over the comparator products against which theyhave been assessed, and even this is notguaranteed.

Other factors influencing price include thecost of the main therapeutic alternatives,the size of the target patient population and the expected cost (or budgetaryimpact) of the new therapy, the position ofthe new product in therapy (is it first, second or third line?) and the ONDAM,the annual budget, which is broken down



Price controls in France:Budgeting for medical benefit?

Jim Furniss

Jim Furniss is Senior Vice President of Cambridge Pharma Consultancy,Cambridge, UK

“price control in

France, as in other

markets, has

conspicuously failed to

achieve its primary

objective of cost

containment”

by therapeutic area. One effect of this isthat in some therapy areas targeted by theGovernment for cost savings there is effectively no prospect of achieving a pricepremium.

Price negotiations can be difficult and prolonged, and France is very definitelywithin the low priced group of countries inEurope. Moreover, innovative productsmay become available in France only aftersignificant delay.

In addition to determining the reimburse-ment price for new products, the CEPSoperates a range of other cost controlmethods focused on price. These operate atthe level of the industry, in the form ofcompulsory rebates if pharmaceutical salesin specific therapeutic areas exceeds prede-termined targets; at the level of the compa-ny, if company turnover exceed limitsnegotiated annually with each company;and at the level of the individual product,where specific price/volume agreements arenegotiated, so that if expenditure exceedsthe agreed level, the company is required topay rebates to the Government, or reducethe price of the product, or both. One consequence of this increasing proliferationof rebates is that the list price – alreadytypically one of the lowest in Europe – is infact significantly overstated. The real revenue to companies, after rebates, is substantially lower than the list priceswould suggest.

Moreover, the CEPS is developing the abil-ity to implement creative new approachesin the attempt to achieve their cost contain-ment objectives. Earlier this yearPfizer/Pharmacia’s new anti-inflammatory,Celebrex, was awarded a price in Franceconsistent with that in most otherEuropean markets – a not inconsiderableachievement, considering that this provideda substantial premium over the currentgeneration of non-steroidal anti-inflamma-tories. The price for achieving this was theacceptance of an automatic price reductionof 18 per cent after three years in the mar-ket. The same deal was subsequentlyapplied (after six months delay) to MerckSharp & Dohme’s competing product,Vioxx. No doubt this precedent will beused in the future for other therapeuticinnovations expected to have a significantimpact on clinical practice.

A frequent criticism of the French systemis the lack of transparency over the basis onwhich the pricing decisions are made. Itmay not be coincidence that the term‘transparency’ is applied to the body

responsible for the assessment of medicalbenefit, which does operate largely on thebasis of “objective and verifiable criteria”,to quote from the European Commission’sTransparency Directive EC 89/105, but notto the CEPS. But in this respect France isno different from other systems based onnegotiation, whether at the level of theindividual product (e.g. the CUF in Italy)or the company (e.g. the PPRS in the UK).

Perhaps a more important criticism is thatprice control in France, as in other markets,has conspicuously failed to achieve its primary objective of cost containment.Every year, in France as in almost all othercountries, pharmaceutical expenditureincreases at a greater rate than allowed forin the budget. The response in France hasbeen to apply the price control system evermore restrictively, to the detriment notonly of the pharmaceutical companies butalso of patients in France who face increas-ing delays in access to new medicines.

One consequence of failure is that theGovernment has to resort from time totime to emergency measures. The mostrecent example is the ‘Plan Guigou’announced in June, and named after MmeGuigou, the Minister of Health. Thisencompassed price reductions for two cate-gories of products – those classified by theCommission de Transparence as offeringlittle therapeutic benefit, and innovativeproducts in several therapeutic categorieswhere expenditure was running ahead offorecast and budgetary provision. Thusproducts such as the modern antidepres-sants, the SSRIs, and the most effectivecholesterol-lowering drugs, the statins,have been subjected to price cuts in therange 8-10 per cent, although French priceswere already amongst the lowest inEurope.

Such panic measures, on top of the accumulation of price controls and rebates,suggest that the authorities are increasinglyseeing the pharmaceutical companies as thesolution to the budgetary problems of thehealthcare system, but in the wrong way.The pharmaceutical companies argue thatthe effective use of modern medicines canease budgetary pressures by reducingdemands on other aspects of the healthcaresystem. The French Government, however,sees modern medicines as a source of revenue to be plundered whenever it hits abudgetary crisis. It is perhaps not surpris-ing that the head of Pfizer has been musingabout whether his company can continueto launch innovative products in France.



“innovative products

may become available

in France only after

significant delay”

The regulation of prices for reimbursabledrugs* in Italy changed in 1994,1,2 passingfrom an administrative model, where priceswere set by the regulatory authorities, onthe basis of cost information produced bythe pharmaceutical companies, to a surveil-lance model, based on the AEP (AverageEuropean Price): the pharmaceutical com-panies became free to set their prices, pro-vided that they did not exceed the AEP. Ifthey did, products would have been delist-ed. The new model was consistent with thenew regulatory environment, favourable totransparency, a cost-containment approachand a strict relationship between pricingand reimbursability.3 Initially, only fourcountries – France, Germany, Spain andthe United Kingdom – were considered tocalculate AEPs. The principle of ‘similarity’was adopted to identify the Europeanequivalents of Italian products: same activeingredient, same route of administration,same or therapeutically comparable phar-maceutical form, and similar dosage.Generics were included in the calculationsand OECD GDP Purchasing PowerParities (PPPs) were used to convertnational prices into liras.

Industry criticismsThe pharmaceutical industry criticisedharshly various aspects of the new model –which was regarded as instrumental toreducing prices – including the restrictionof the comparison to only four countries,the inclusion of generics in the calculationof the AEPs (whereas the generic market inItaly is negligible) and the use of PPPs toconvert national currencies. Pressure fromthe pharmaceutical industry and theCouncil of State, appealed to by the phar-maceutical companies, caused a review ofthe system in 1998. At present the AEP iscalculated as a weighted average of all EUcountries’ prices (excluding Luxembourgand Denmark, due to the lack of data onthe consumption of drugs, produced byIMS Health). In addition, PPPs werereplaced by nominal exchange rates. The

Italian government required that pricesabove their AEPs be lowered immediately.Prices below their AEPs, on the otherhand, were allowed to reach their AEPs insix annual equal steps: in 2000 the thirdstep was applied.

‘Same price for the same drug’In 1996, in order to curb the public pharmaceutical spending, the so called‘same price for the same drug’ principle wastemporarily introduced. According to thismodel, drugs with the same active ingredi-ent and the same or therapeutically compa-rable pharmaceutical form (but possiblydifferent dosages) had to have the sameprice per unit of compound. If not, alldrugs but the cheapest were delisted andthus excluded from coverage by the nation-al health service (Servizio SanitarioNazionale, SSN). This rule strengthenedthe relationship between pricing and reim-bursement: as expected, many pharmaceu-tical companies reduced prices to maintaintheir products under SSN coverage, where-as some other companies decided not toreduce prices and their drugs were conse-quently delisted. In 1998 the ‘same pricefor the same drug’ was in principle abol-ished: according to the new regulation,drugs in the same ‘therapeutic class’ (most-ly coincident with the fourth level of theATC classification) must have the samereimbursability status, provided that theyare not priced above their AEP (even ifthey have different prices).

The contractual modelIn 1997 a new contractual model was intro-duced for prices of products licensedthrough the European procedure.4 Thismodel was extended to drugs licensedthrough the mutual recognition procedurein 1998. Cost-effectiveness (using the SSNperspective), the product’s price in othercountries, sales forecasts (in order to con-trol public expenditure) and industrialimplications (effects on investments,employment, exports) were listed as the



Claudio Jommi

Claudio Jommi is Head ofthe PharmaceuticalObservatory, Centre forResearch in HealthcareManagement, BocconiUniversity, Milan.http://cergos.uni-bocconi.it

Italy: past reforms and future prospects

* Prices for non-reimbursable drugs have being set freely by the pharmaceutical companiessince 1994, even if the regulatory authorities monitor them. Initially a ceiling to their growthrate was imposed. At present, (i) the pharmaceutical companies are simply obliged to report anyprice increases to the Ministry of Health and the Interdepartmental Economic PlanningCommittee; (ii) no more than one increase is allowed per year; (iii) the Ministry of Health mayintervene to prevent unwarranted price increases.

“public expenditure on

drugs is exploding”

parameters to be considered in the negotia-tion. Negotiations were run by the CUF*on the basis of a preliminary investigationmanaged by a technical group made up ofrepresentatives of the CUF, theDepartments of Health, Treasury andIndustry. In 2001 the contractual model hasbeen partially reviewed:

i even if the CUF is still accountable forthe final decision, the negotiation isnow managed by the technical group,where a member of the CUF simplyparticipates as an ‘outside observer’;

ii the technical group includes expertscoming from the permanent Central-Regional Governments conference;

iii an economic evaluation dossier will berequired only for important innova-tions.

The contractual model could in principlehave been accepted comfortably by thepharmaceutical industry: economic evalua-tions should have been run using the SSNperspective; industrial parameters wereincluded for the first time since 1994.However, the pharmaceutical industrycriticised the way the CUF managed nego-

tiations, because the Committee focused ontherapeutic value (degree of innovation)and costs consideration (sales forecasts),overlooking the industrial issues and therelationships between drugs and otherhealthcare services.

Reference pricingFinally, the introduction of a reference pric-ing system is scheduled for July 2001. Foractive ingredients with a generic availableon the market, the SSN will reimburse theaverage weighted price of drugs with a 20per cent minimum lower price than theoriginator (provided that the average is cal-culated on drugs with the same activeingredient, the same route of administra-tion, the same form and the same dosage).The patient will cover the possible differ-ence between the price of the actual pre-scription and the reference value. Referencepricing will be applied only to 49 activeingredients, due to (i) the absence of ageneric drug for many out of patent activeingredients (a generic drug is available for50 per cent of the out of patent market) and(ii) the limited dimension of the out ofpatent market (25 per cent of the drugscovered by the SSN).

AnalysisThere are several key facets to price regula-tion in Italy. Firstly the regulation is quite

complex and parameters are heterogeneous.This could be interpreted as the result ofthe absence of a strategy in the regulationof prices. The regulatory framework lookslike the ‘sum’ of responses to differentshort term needs:

i to implement a transparent model(based on the AEP), after the‘Tangentopoli’ era;

ii to contain public expenditure andrespect the global budget for pharma-ceutical spending, introduced in 1994and abolished in 2001 (AEP, contractualmodel, ‘same price for the same drug’);

iii to link prices with reimbursability taking into account the therapeuticvalue of the drug (‘same price for thesame drug’);

iv to pursue static efficiency (price compe-tition among similar drugs) (‘same pricefor the same drug’ and reference pricing).

Secondly, dynamic efficiency (‘appropriate’incentives should be present to encouragecompetitive research and development) andindustrial goals have been mostly neglectedand pricing policy has been mostly drivenby short term cost-containment and longterm health policy objectives. The principleof pricing on the basis of the therapeuticvalue prevailed. This approach is consistentwith the central role played by the CUF,made up of pharmacologists, pharmacistsand clinicians.

The future of pricing policy is difficult topredict. On one hand the regulatoryauthorities seem to be paying more atten-tion to the changed nature of the policyfield: it seems the CUF has abandoned itscentral role in the negotiation of prices(even if the CUF has the ultimate decision)and the scope for other factors (in additionto therapeutic value) could increase in thenear future. On the other hand, publicexpenditure on drugs in 2001 (+25 per cent;+14 per cent in 2000) is exploding. This isdue to:

i the abolition of co-payment;

ii the abolition, or widening, of some ofthe CUF’s Notes (the compulsoryguidelines introduced in 1994), whichenlarged the public coverage of somedrugs (for example SSRIs and lipid low-ering drugs);

iii the introduction of new and expensivedrugs like the anti-inflammatory Cox-2.



* The CUF (CommissioneUnica sul Farmaco) is the mainregulatory authority of thepharmaceutical market. TheCUF is made up of pharma-cists, pharmacologists and clinicians.

“the regulatory

framework looks like

the ‘sum’ of responses

to different short term

needs”



Drug public expenditure increase couldfoster a policy orientated to:

i a short term general prices cut;*

ii a price negotiation again driven by acost-containment approach;

iii a gradual extension of reference pricingto therapeutic classes, as in phases twoand three of the German model),together with a strengthening of infor-mation policy on generics.

Finally, the more Regions are madeaccountable for their health budget,5 themore they are putting pressure on the cen-tral regulatory authority to intervene –either with a stringent centralised cost-con-tainment approach, or by decentralisingsome drugs policy, for example local refer-ence prices and formularies.

REFERENCES

1. Fattore G, Jommi C. The new pharmaceu-tical policy in Italy. Health Policy1998;46(1):21–41.

2. Jommi C. La regolamentazione pubblicadel settore farmaceutico in Italia: aspetti criti-ci e prospettive di sviluppo. Mecosan 1998,7(27):53–76.

3. Bozzini L, Martini N. Drug policy – fromchaos toward cost-effectiveness. Lancet1996;348: 170–71.

4. Fattore G, Jommi C. Il prezzo dei farmaciinnovativi tra regolazione e mercato. Mecosan1997;22:103–12.

5. Fattore G. Health care reform and costcontainment in the Italian national health ser-vice. In: Mossialos E, Le Grand J. HealthCare and Cost Containment in the EuropeanUnion. Aldershot: Ashgate, 1999.

* Price cuts and freezes havebeen used extensively in thepast. For example, in 1995 thegovernment mandated a gen-eral price cut of 2.5 per centfor products covered by theSSN. The price cut was raisedto five per cent for companieswhose total revenues hadincreased by more than 10 percent in 1994 compared to1993. This was followed by avirtual price freeze in 1996.

Profit or loss?Fulfilling dual aims in pharmaceutical price regulation in the UK

The British system of regulating pharma-ceutical prices is unique. No other countrydirectly regulates the profits of companiesselling products to its publicly fundedhealthcare service. The British system is anoutcome of several special features ofhealthcare delivery and industrial regula-tion in the UK. The National HealthService is a highly centralised, tax-fundedsystem that occupies a monopsonistic posi-tion in the pharmaceutical market, whilethe British state is notable for its preferencefor an arms-length relationship with indus-try and minimal regulation. These two fac-tors combine to form the organisationalcontext of pharmaceutical price regulationin the UK. The outcome – thePharmaceutical Price Regulation Scheme(PPRS) – is an attempt at fulfilling simulta-neously health and industrial policy goals.It aims to achieve the health policy goal ofcost containment and the industrial policygoal of a successful and internationallycompetitive pharmaceutical industry.

Operation of the PPRSThe PPRS has existed in one form or anoth-er since 1957 when the first Voluntary PriceRegulation Scheme (VPRS) was signed bygovernment and industry in response to therising cost of medicines purchased by theNHS. It remains, formally, a voluntaryagreement between the two. The PPRS sets

a cap on the rate of return on capital (ROC)of companies doing business with theNHS.* This cap is 21 per cent profit onoverall business. It is intended to give com-panies a fair return, in line with other sec-tors that do business with government.Profit is determined through the submis-sion by companies of financial data to theDepartment of Health. The PPRS also spec-ifies limits for the amount companies canattribute in their financial data to variousactivities in the production process of theirproducts – from research and development(R&D) to sales. There are caps, for example,on R&D costs and on promotional spend-ing – 20 per cent and six per cent of salesrespectively. These ceilings are negotiatedroughly every five years, as part of the rene-gotiation of the whole PPRS agreement.The current scheme was signed between theDepartment of Health and the industrytrade association, the Association of BritishPharmaceutical Industry (ABPI) in 1999.1

How does it work?The scheme aims to achieve ‘reasonableprices’ for NHS medicines. As prices are

Mike Sedgley

Mike Sedgley is a researcher inBritish pharmaceutical priceregulation at the LondonSchool of Economics and isEditor of Eurohealth.

* Some companies have their profits assessedas Return on Sales (ROS). This applies tothose with low capital bases. Most compa-nies are assessed on an ROC basis.

not themselves regulated, what it in factdoes is effect to some degree the amount, inaggregate, that government pays for NHSmedicines. High prices in one part of acompany’s portfolio must be offset bylower prices elsewhere. It regulates, butdoes not set, prices directly in so far as theycannot easily be raised once they have beenset by companies and so in real terms pricesof individual medicines continually fall.Only if company profits fall significantlybelow the allowable ROC is a rise in priceof an individual medicine considered by theDepartment of Health.

The basic ‘dynamic’ of the PPRS is there-fore that as real prices of products are erod-ed by inflation, pharmaceutical firms mustrelease new medicines into the marketplacein order to maintain their allowable profitlevel. Free pricing at launch is a key featureof the system and such releases enable com-panies to move back up to their allowablerate of return if they have fallen back fromit. Through this, the scheme aims toencourage innovation.

The scheme exercises no control over vol-umes of consumption and therefore cannotdetermine the overall NHS drugs bill. Therelease of new medicines into the market-place could, in theory, have a significanteffect on NHS costs if demand for themproved to be very high. The effect of thescheme is therefore quite limited: it helps,where a company is already at its profitceiling, to ensure that the effect on theNHS’s costs of the release of new drugsunder patent protection are to some degreecompensated for by price reductions onother, older products.2

Each renegotiation of the PPRS has includ-ed a one off, across-the-board price reduc-tion on all business with the NHS. Thescheme therefore provides an occasionalopportunity for government to keep incheck the growth in the NHS drugs bill.The 1999 scheme included a 4.5 per centoverall price reduction.

In summary, the PPRS interacts with andaffects the market for medicines in severalways:

– It allows free pricing at launch.

– It prevents product price increases.

– It encourages new product launches.

– By capping company profits it canpotentially reduce the effect of newproduct launches on the NHS budget.

– By capping various aspects of companyexpenditure as legitimate components of

capital employed it can affect companybehaviour.

– It provides a five-yearly opportunity forrenegotiation of details and a one-offprice reduction.

– It provides a context and an arena for aclose and cooperative working relation-ship between government and industry.

New pressures on the PPRSThe PPRS is a piece of supply side regula-tion operated by government in two guises.First, as a purchaser acting on behalf of thetaxpayer and second, in a legal capacity as aregulator of the market. The principles atwork behind the PPRS are, then, first, thata buyer of such a large amount of any com-pany’s products has a legitimate right tonegotiate their price; and second, an obliga-tion as regulator to intervene in a marketwhich it sees as uncompetitive. In otherwords, both the demand and supply sidesof the medicines market are seen as special.

The industry has done a great deal of workattempting to persuade government that thesupply side has become progressively morecompetitive over recent years, and this wasone of the principal foci of the task forceset up as part of the 1999 PPRS.3 On thedemand side, meanwhile, budgets havebeen introduced into primary care toincrease physician sensitivity to the costs ofmedicines. This is in addition to the provi-sion of prescribing advice to physiciansthrough a system known as PACT (pre-scribing analysis and cost trend data).

PACT has been followed by another sys-tem, PRODIGY, which advises physiciansand other prescribers on lower cost treat-ment options. The new National Institutefor Clinical Excellence (NICE) aims toimprove the ‘cost effectiveness’ of NHScare and while its conclusions are onlyadvisory it is likely to have a significanteffect on the behaviour of practitioners, andhence act as a further demand side control.4

There is significant debate about the rolethe PPRS plays in the changing healthcarelandscape. It may be that controls andadvice within the NHS edifice are able to create a demand side that emulates amore normal market and hence reduce theneed for supply side regulation. Whateverthe options for reform in the context ofEuropean systems of price regulation, thePPRS is already a flexible regime.

The broader contextAs a flexible system of regulation, thePPRS can be seen as having developed



“convergence between

national systems is

extremely difficult to

achieve in the absence

of synergy in the

funding of healthcare”

“both the demand and

supply sides of the

medicines market are

seen as special”

alongside particular circumstances thatunderpin its uniqueness. The position ofthe Government as the dominant purchaserin the market place is the key factor. This isimportant in the European context wherethe interconnectedness of price regulationwith state-dominated healthcare marketsmeans that synergy between national sys-tems is extremely difficult to achieve in theabsence of convergence in the funding ofhealthcare.

Aside from features of the British health-care system, there are features of the UKmarket that appear to enable the particularform of the PPRS. The market is small byinternational standards and this can only inpart, it seems, be attributed to NHSrationing. Indeed, as cost sharing mecha-nisms are extremely limited, direct pay-ments for medicines by British consumersare lower than in most other Europeancountries yet prescriptions per head are30–80 per cent lower in the UK than inother European countries such asGermany, France and Italy.5 The smallervolume of consumption inevitably allowsgreater flexibility over price.

Furthermore, British physicians areextremely conservative in their uptake ofnew medicines, seemingly waiting for evi-dence of their effectiveness to be wellestablished.6 Such therapeutic conservatismallows greater flexibility over the price ofnew medicines, as a surge in volume atlaunch is far less likely in the UK than else-where. These two factors mean that higherprices and free pricing at launch have lesseffect on overall costs than they would oth-erwise, or elsewhere.

Convergence?The PPRS shows how the regulation ofpharmaceutical prices and the structure andoperation of publicly funded healthcareservices are interlinked. Furthermore itsuggests that characteristics of consump-tion, prescribing and the pharmaceuticalsmarket that are to some degree separatefrom the structure of healthcare services areimportant features of the landscape inwhich any regulatory regime develops.Any attempt to develop greater uniformityin the price regulation of pharmaceuticalsacross the EU is likely to encounter thesequite fundamental obstacles.



REFERENCES

1. Department of Health. ThePharmaceutical PriceRegulation Scheme, July 1999.

2. Mossialos E. An evaluation ofthe PPRS: is there a need forreform? In: Green DG (ed).Should Pharmaceutical Prices beRegulated? London: IEA, 1997.

3. See article by Vincent Law-ton in this issue of Eurohealth.

4. Tucker A, Taylor D. HealthWealth and Medicines for All?Regulating the PharmaceuticalIndustry for CommunityBenefit. London: King’s Fund2000.

5. Health Care Systems inTransition: United Kingdom.European Observatory onHealth Care Systems, 1999.

6. House of Commons. PrioritySetting in the NHS: The NHSDrugs Budget. HealthCommittee Second Report,Volume 1. House of Commons,Session 1993–94, paras 28–30.

Competitiveness, innovation andnew market dynamics

“A successful pharmaceutical industry is a prime example ofwhat is needed in a successful knowledge economy. The UK’spharmaceutical industry has an outstanding tradition and hascontributed very substantially to our economy and to the welfareof our citizens”.

Vincent Lawton isManaging Director ofMerck Sharp & Dohme.

The pharmaceutical industry too often gets a bad press. So it is refreshing to beable to begin this article with the words above – especially so when those wordscome from no less a source than Britain’s Prime Minister, Tony Blair.

The significance of PICTFTo his credit, Mr Blair has shown commitment to the pharmaceutical industry inBritain, by agreeing to establish the Pharmaceutical Industry CompetitivenessTask Force (PICTF), to look at what can be done to make the UK even moreattractive as a location for the industry. After a year’s work programme, in whichI was involved as a member of the task force, PICTF published its report at theend of March.1 I think PICTF achieved three things.

First, it showed that different government departments can work with each other,and with the industry, in constructive joined-up dialogue. Second, it proposed a

number of practical steps that we can takehere and now to make Britain an easierplace in which a global pharmaceuticalcompany can do business. And third, itestablished the idea that the Governmentand the industry need to continue workingtogether, at a very senior level, to ensurethat we make further progress. To that enda Ministerial Industry Strategy Group isbeing set up to take the PICTF relationshipand its agreed actions forward.

In short, PICTF is an excellent example ofthe much-vaunted public-private partner-ship in practice. However, the welcome Iextend to the PICTF report is qualified.The reason for this lies in what I see to be acontinuing gap between the BritishGovernment’s pro-industry sentiments intheir speeches and statements, and what ishappening on the ground.

Unfortunately, unless we close that gap,the steady loss of pharmaceutical invest-ment to the UK, as to Europe as a whole,will continue.

The competitiveness gapThe UK’s competitiveness malaise is notsolely a UK problem. The EU as a whole islosing out to the USA as a source of aninnovative and competitive drive in phar-maceuticals.

Ten to twenty years ago, the European andthe US industries were neck and neck inthe rush to get new molecules patented.Today, the US industry is approaching halfof all registered patents -– and the EU hasfallen back. The dominance is even greaterwhen stated in terms of patents cited,where the US industry accounts for overhalf of patents cited and the EU under onethird.

I work for an American company. Part ofme is proud of this lead that we haveopened up. But the UK is my market. Partof me also says to the politicians: you musttake notice of these trends and learn thelessons from them.

Those lessons are spelled out well in arecent report by an Italian economist FabioPammolli and two colleagues, which waswritten for the European Commission.2

The Commission has responded by settingup its own task force – the G10 group –under the leadership of EnterpriseCommissioner Erkki Liikanen, to explorehow Europe as a whole can become moreattractive for the pharmaceutical industry.

The European pharmaceutical industry,concludes the Pammolli Report, is becom-

ing less competitive. Partly, it says, this isbecause US multinationals appear to bemore successful than their European coun-terparts in producing innovative medicines.But this is by no means the end of thestory.

The US also benefits enormously from theimmense creative potential of its biotechsector. The United States more and moreseems like the natural home for globalresearch in biotech sciences. Europeancompanies, just as much as US ones, tendto look to America as the focus for theirbiopharmaceutical research.

The final factor identified in the Pammollireport is quite simply that demand hasgrown much faster in the US than inEurope over a comparable period, both inquality and quantity. It is clear that theAmerican pharmaceutical industry benefitsfrom having on its doorstep the mostsophisticated market for prescription medi-cines in the world.

Michael Porter, the global guru of competi-tiveness, puts the point well. “Ultimately”,he has written, “nations succeed in particu-lar industries because their home environ-ment is the most dynamic and the mostchallenging, and stimulates firms toupgrade and widen their advantages overtime”.3 This is a key lesson for Europe: thestrength of the pharmaceutical industryhere will be directly proportional to howopen European markets are to new medicines.

NICEThis is why, in the UK, the NationalInstitute for Clinical Excellence – NICE –is so relevant to the competitiveness of thepharmaceutical industry. Set up to coverEngland and Wales, it has already spurredan equivalent in Scotland and looks set togo further. NICE is part of a European col-laborative project on health technologyassessment. We are already seeing the firststirrings of ‘EuroNICE’ in the under-growth.

Pharmacoeconomic evaluation, however,which is what NICE is about, should bewary of trying to run before it can crawl.The pharmaceutical industry pushed forNICE to be included on the PICTF agenda. Many of the issues remain unresolved and will be subject to a reviewof NICE this year. We hope that this willbe a fundamental review, looking from firstprinciples about how NICE can improvethe speed of access of innovative medicinesin the NHS.



“A commitment to

competitiveness is one

thing. What matters is

carrying it through.”

The stated objectives of NICE are not theissue. Everybody wants to get the bestmedicines to patients as quickly as possible.We all want to eliminate clinical practicethat is either out of date or was never effec-tive in the first place.

Unfortunately, the British experience todate is that NICE has become self-defeat-ing. We have the new phenomenon ofNICE ‘blight’. While the Institute is spend-ing months in judgement on a particulartechnology, the NHS doesn’t use that tech-nology. The result is further delay in get-ting medicines to patients – further delayon top of the NHS’s already notorious las-situde in embracing new technology.

NICE is also self-defeating because its con-clusions are not properly outcome-based.They cannot be. NICE intervenes at a stagetoo early in the product cycle to be able toassess outcomes properly. It is a soberingthought that if NICE had been around toassess the cholesterol-lowering drug sim-vastatin at the time of its launch in 1989, italmost certainly would have produced anegative report. The results of theScandinavian Simvastatin Survival Study(4S) showed that simvastatin reduced heartattacks and saved lives in patients withangina or previous heart attacks. Access tothat medicine would have been denied, orat best delayed, and many people wouldhave died unnecessarily.

NICE is self-defeating because it bearsdown disproportionately on the first-to-market products. There have been positiveNICE appraisals, but they have tended tobe of well-established products, with theevidence to support them. It is very differ-ent where, as NICE intends, it assesses themarket leader at the very time when thatproduct is out on its own. At that stage, bydefinition, the long term outcomes datathat NICE needs to do its job are not available.

The result is quite likely to be a negative orcautious appraisal. And even if NICE isprepared to give the product the benefit ofits doubt, by the time judgement is given, ayear or more may have passed. In today’sindustry this is more than enough time fora competitor to have arrived. This is profoundly anti-innovative.

It may be argued that, in global terms,these points are of negligible importancesince the UK is only three per cent of theworld market. But what happens in the UKhas a wider impact, disproportionate to thesize of the market. Moreover, as I say,NICE might not long be confined toBritain in any case. It would be a greaterror for a competitive pharmaceuticalindustry if NICE were expanded beforesome of these fundamental questions canbe sorted out.

The value of competitionGovernments, let me be quite clear, areabsolutely justified in seeking value fromthe substantial sums that are spent on prescription medicines. But value will notbe best achieved through regulatory aspira-tions that are based upon a science that hasbarely progressed beyond the stages ofalchemy. On the contrary, value and competitiveness are best secured throughcompetition.

If we look just at the UK market, the evi-dence of competition and its effects isimpressive.

– There are more corporations competing.In each of the top 29 therapy classes,accounting for virtually all sales, thereare four or more companies with com-peting products.

– Competition is leading to the fasterentry of new products. The average timebetween entry for a first and secondproduct, and between a second andthird, has been falling progressively for40 years.

– Market competition leads to lower



CAPOTEN captoprilCOZAAR losartan -25%

DIOVAN valsartan -33%

APROVEL irbesartan -30%

AMIAS candesartan -36%

CEPOREX cefalexinSUPRAX cefixime -75%

ORELOX cefpodoxim -66%

CEDAX ceftibuten -57%

TAGAMET cimetidineZOTON lansoprazole -38%

PROTIUM pantopraz -48%

CIPROXIN ciprofloxacinTARIVID ofloxacin -22%

UTINOR norfloxacin -49%

BRUFEN ibuprofenEMFLEX acemetacin -55%

MOBIC meloxicam -74%

ADALAT nifedipineISTIN amlodipine -50%

MOTENS lacidipine -44%

Figure 1

COMPETITION: RECENT LAUNCH PRICES COMPARED WITHTHOSE OF BENCHMARK PRODUCTS

Launch prices of a selection of products launched in the 1990s, adjusted forinflation to December 1997 levels, compared with those of the originalbenchmark products.

“The United States

more and more seems

like the natural home

for global research in

biotech sciences.”

prices. As figure 1 shows, for selected1990s breakthrough products, the priceof subsequent entrants was significantlylower, by an amount up to 75 per cent inreal terms.

– In the UK there is large scale competi-tion in the off-patent market. There areover 100 suppliers, distributors andwholesalers of generics. Over 70 percent of prescriptions today in the UKare written generically.

The evidence is clear: competition exists inthe pharmaceutical market and it has a clearand demonstrable effect on both qualityand value. Competition works.

Enabling conditionsA greater reliance on market competitionand consumer choice is one of a number of‘enabling conditions’4 for competitivenessthat my company, Merck & Co., Inc., hasdeveloped based on work by MichaelPorter. Those conditions in full are summarised in figure 2. Other importantfactors which make for a competitiveindustry include adherence to the rule oflaw and a strong commitment to basic bio-medical research.

American companies have long been cham-pions of deregulation and market reform.In the UK this position has led us to advo-cate the progressive deregulation of thePharmaceutical Price Regulation Scheme.The PPRS creates perverse incentives,rewarding those with the biggest buildingsrather than the best brains. Competitionwould keep prices under control while pro-viding a far more effective stimulus to trulyinnovative effort.

This indeed should be part of a widerprocess of market reform embracing NICEand the multitude of demand-side controlswhich the UK Government, and otherEuropean Governments, have steadilyintroduced into the market. These effortsseem wholly focused on reducing expendi-ture on medicines, rather than encouragingbest value from medicines spending,through the forces of competition andinformed choice.

Under former Commissioner Bangemann,Europe began to make some progresstowards liberalising the market in pharma-ceuticals, even if the most conspicuous fea-ture of his so-called round table talks wastheir apparent circularity. WithCommissioner Liikanen now at the helm,and with his commitment to a competitivepharmaceutical industry in Europe, let us

hope that deregulation will come back ontothe agenda.

Performance indicatorsA commitment to competitiveness,whether at UK or EU level, is one thing.What matters is carrying it through. This iswhy one of the most important and wel-come outcomes of PICTF was a commit-ment to develop an internationally compa-rable set of competitiveness performanceindicators. These will enable both theGovernment and the industry to assessprogress on the goals that PICTF has set.Progress will be formally measured andassessed every year. This is perhaps thePICTF outcome that will be of greatestlong term significance. It will provide thenecessary pressure and stimulus to securecontinued improvements in the competitiveenvironment.

Wake up callIn conclusion, therefore, the evidenceshows that the UK, and the EU more wide-ly, is steadily losing out to the USA inpharmaceutical industry competitiveness.Governments, at both EU and nationallevel, have recognised the problem. But theresponse is confused.

There is a need therefore for both the UKGovernment, and Governments acrossEurope to review and revitalise their over-all approach to competitiveness. In the UK,PICTF was the beginning of that process.It is by no means the end.

The UK will become a truly competitivelocation for pharmaceuticals when we haveembraced the principles of competition,deregulation and recognised the linkbetween a dynamic and demanding phar-maceutical market and an innovative phar-maceutical industry. The UK may havestarted to wake up to this issue. We are stilla long way from solving it.



REFERENCES

1. Department of Health.Pharmaceutical IndustryCompetitiveness Task Force,Final Report, March 2001. Seewww.doh.gov.uk/pictf

2. Gambardella A, Orsenigo L,Pammolli F. GlobalCompetitiveness inPharmaceuticals: A EuropeanPerspective. Prepared for DGEnterprise of the EuropeanCommission, November 2000.Seehttp://pharmacos.eudra.org

3. Porter ME. The CompetitiveAdvantage of Nations. TheFree Press, 1998.

4. Gilmartin RV. The Impactof Economic and PoliticalFactors on PharmaceuticalInnovation. CMRInternational, 1998.

Figure 2

ENABLING CONDITIONS

¥ Global business environment based upon free market principles andrule of law

¥ Effective intellectual property protection

¥ Government support for basic bio-medical research

¥ Effective and transparent regulation

¥ Market-based competition & customer choice

The provision andfunding of healthcareis widely seen as oneof the key challenges

facing modern societies. Every time weopen the newspaper we see new questionsraised, and new comparisons made betweenthe health systems of different countriesand regions – debates around the deliveryof specific medicines for specific diseasesand the funding of new treatments.

This is a situation that will continue to existfor the foreseeable future. The pressures ofageing populations, new diseases and eventhe recurrence of old diseases, such astuberculosis, represent a continuing chal-lenge for post-industrial societies across theworld. The medicines to treat disease are ofcourse central to this debate; there is asocial imperative, and wide consensus, thatcitizens should have rapid and open accessto the treatments they need.

Role of the EUA primary objective of the EuropeanUnion and its Member States is to improvethe length and quality of life of its citizens.This is a responsibility that both theCommission and the Member States takevery seriously. The past ten years have seenfor example the development of aCommunity health strategy, as well as astring of major advances in cooperation atCommunity level and beyond in the wayswe develop, assess, market and delivermedicines.

The ‘Bangemann Round Tables’ in 1996-1998 examined obstacles in the way ofachieving a single market in medicines. Aclear conclusion was that different sectorsof the pharmaceutical industry are facingdifferent challenges, as are patients andMember States; these different actors arenow more closely linked than ever, andefforts to influence the environment forone part of the equation will inevitablyimpact on all the others. Following theTreaty of Amsterdam, which enlarges theEuropean Community’s competence inpublic health, the Commission now has

more scope for involvement in such issues.

The High Level GroupWe face a range of demands which are allmore or less explicitly linked, and it was inorder to attempt to balance out as many ofthese as possible that Health andConsumer Protection CommissionerDavid Byrne and I invited stakeholdersfrom a wide variety of interests to take partin the ‘High level Group on Innovationand the Provision of Medicines’.

This group, which comprises some of themajor players from the different industrysectors, plus Member States’ Industry andHealth ministers as well as specialists inpatients interests, and mutual organisa-tions, represents an attempt to focus on anagenda that has so far been approachedwith considerable caution by both publicand private stakeholders.

The medicines agenda for Europe sitsbroadly on pillars which interact with anddepend upon each other. It is worth settingthese out, and looking here in some detail atthe situation we are faced with, and some ofthe ways in which we might make progress.

The medicines agendaOver many years, a variety of cultural,medical and social traditions, mixed withgovernment healthcare policy, have shapedthe structure of the demand for medicines.These infrastructures, consisting of differ-ent structures and reward systems, result indifferent approaches to ensuring the bestpossible patient access to medicines, anddifferent balances between this objectiveand its counterpart – an effective, interna-tionally competitive and innovative indus-try that produces a steady stream of newtreatments.

As well as their complementary responsi-bilities in relation to health, both MemberStates and the Commission have a respon-sibility to foster the competitiveness of theCommunity’s industry, by encouragingcompetition to the benefit of consumers,and enhance performance on a world-wide


MEDICINES IN THE SINGLE MARKET: EUROPEAN PICTURE

Erkki Liikanen

EuropeanCommissioner forEnterprise

Where next for pharmaceuticals inEurope ?

“there is a social

imperative, and wide

consensus, that citizens

should have rapid and

open access to the

treatments they need.”

basis. Europe has over past years seen a rel-ative decline in competitiveness andemployment in many industries. The per-formance and structure of the pharmaceuti-cal sector, as a typical high technologyindustry has been the subject of numerousstudies. In particular there has been grow-ing concern over the lack of attractivenessof Europe as an investment centre for phar-maceutical companies.

This has been highlighted by severalreports over the past few years, all of whichnote that whilst the EU remains the majorworld producer of pharmaceuticals, the UShas overtaken it in terms of both new inno-vations and overall impetus, especially inthe ‘new sciences’ of biotechnology.

This has led to concerns about decliningcompetitiveness of the European industryin world markets. Whereas Europe has fall-en behind the US in recent years in intro-ducing new products, European companieshave invested heavily in the US.

It is worth noting that the comparisonbetween the EU and the US in simple eco-nomic terms often hides a crucial culturaldistinction. Europe is built of MemberStates that share a certain set of social val-ues – the social security systems of Europeare a direct result of the concept of socialsolidarity, which is much stronger in theEU than in the US.

That said, there is a considerable diversityof approach by Member States in this con-text, and our work in this area seeks tobring together Health and Enterprise poli-cy – often dealt with in isolation – in amore ‘joined up’ way.

The single marketSignificant progress has been made duringthe past decade to pave the way towards asingle European market in terms of scien-tific and technical regulation. In particularthe introduction of the Community proce-dures for technical approval of productsacross the European Union. This progressgives us a substantial base for further work.

Not every challenge connected with thesechanges can be solved simply by legislativereform, but in most cases the legislator canease the way forward and should provide asustainable and predictable legal environ-ment.

I believe that by addressing these questionsin concert – Member State, industry,patients and Commission, there is scope forprogress, and I think that the level ofexpertise of those assembled in the group

creates a solid base and impetus for thefuture.

Technical issues – the ReviewThe new strategic approach is of courseintended to complement the ongoing workthat continues to demonstrate strong dailycooperation at all levels between MemberStates, the Commission and Industry. Thereview of pharmaceuticals legislation,which we launched on 18 July this year, isone of our key activities in this field.

The current marketing authorisationschemes are based on the principle of coop-eration and close involvement of MemberStates in the evaluation of medicinal prod-ucts. We do not intend to touch this princi-ple: it would not be wise to abandon thingsthat work well. So why review? After sev-eral years of operation it was time to takeaccount of both technological challenges(new products and therapies: notablybiotechnology and gene therapy) and polit-ical challenges (in particular, the enlarge-ment of the European Union and globalisa-tion), so that the European system remainsup to date and is capable of tackling thechanges ahead.

That said, it is nevertheless evident thatthere are areas where we can improve; weneed to get the right kinds of medicine topatients better and faster. We have to paymore attention to the transparency of thesystem. In the wake of recent health scaresno one would argue against the need forbetter market surveillance in order to main-tain and indeed further strengthen publicconfidence.

Conclusion The key issue is how to achieve a SingleMarket that both ensures a high level ofprotection of public health, and promotescompetitiveness, growth and employment –whilst recognising the legitimate right ofMember States to control their healthcareexpenditure. Considerable progress hasbeen made in licensing and in intellectualproperty – although there is, as we haveseen, still work to be done on the marketside.

To sum up, the Community is moving intoa new phase. In both technological andsocial terms, the environment is changingvery fast. The Commission, by dealingwith both strategic and technical issues atonce – in direct contact with all stakehold-ers, is taking a broad view of what needs tobe done to actively meet the challenges ofthe future.



“our work in this area

seeks to bring together

Health and Enterprise

policy in a more ‘joined

up’ way”

The European market in pharmaceuticals isfragmented. This has considerable impacton the competitiveness of the pharmaceuti-cal industry. Member States have differentmarket structures reflecting differences inthe way they organise and fund theirhealthcare services (including medicines).For the pharmaceutical industry this makesEurope a difficult and complex market inwhich to work. The regulatory environ-ment is risk averse, being consistently slower to grant approvals than elsewhere,lacking in transparency, using informationtechnology inadequately and lacking thepartnership seen between industry and reg-ulatory authorities elsewhere. The sciencebase also lags well behind that of the US.The long term competitiveness of the EUpharmaceutical industry is, as a result, indecline.1 Progress is possible in a number ofkey areas and this is the focus for Glaxo-SmithKline input into the G10 initiative.

Market accessA key policy objective of Member Statesand the European Union is to ensure thatpatients have access to high quality medi-cines and to innovative treatment thatimproves existing therapy and addressesunmet patient needs.

Considerable delays are currently experi-enced in access to new, effective medicines.There can be as long as four years betweenpatients in the first and last Member Statehaving access to an innovative medicine.2

Equality of access to EU citizens will beimproved by creating a more favourableenvironment for the introduction of newmedicines by minimising the delays whichoccur during the regulatory process, theissuing of product licences after marketingauthorisation, in price negotiations and inreimbursement systems. Several changesare needed:

– a fast track authorisation procedure inareas of unmet medical need;

– reduction in delays between regulatorydecisions and subsequent launch;

– reduction in delays in notification ofpricing and reimbursement decisions;

– to be allowed immediate direct access tothe non-reimbursed market after licens-ing at a price determined by the manu-facturers.

Pricing and reimbursementPricing and reimbursement for medicinesused in the national public healthcare sys-tems are decisions that lie within the com-petence of Member States. The marketstructure in many Member States differssignificantly from the United States inways that damage the competitiveness of allsectors of industry, without necessarilyproviding benefits to payers or patients. Inparticular, the slower uptake of innovativenew medicines and lower prices in Europe,damage both patients (delayed access tomodern medicines with quantifiableimpacts on health outcomes) and the inno-vative industry (lack of incentive andreward for innovation).

Within both EU and national policy com-petencies, price controls for medicinesshould be limited to those products that arereimbursed by Member States. By allowingthe removal of controls on non-prescrip-tion medicine prices and permitting priceliberalisation for non-reimbursed medi-cines and all medicines in the private sector,a truly competitive single market would becreated in these areas.

This proposal would not impact on theability of Member States to regulate theprices of medicines that are purchased orsubsidised by the state. Nor would it haveany impact on the ability of national systems to decide which products theywished to reimburse. All parties need towork flexibly together to move towards



The G10 An opportunity to improve competitiveness and benefit patients

Chris Viehbacher

Alastair Benbow

Chris Viehbacher is President of GlaxoSmithKline Pharmaceuticals Europeand a member of the European Commission G10 grouping.

Alastair Benbow is a physician and Vice President of European ExternalRelations, GlaxoSmithKline Pharmaceuticals.

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AVERAGE DELAYS FACING PATIENTS FOR NEW MEDICINES

The delay between receiving marketing authorisation in the first EU Member Stateand first consumption in each individual country

Source: IMS HEALTH

more consistent prices for patentedproducts, at a level that rewards inno-vation appropriately within a frame-work that allows Member States tocontain overall public expenditure.

Evaluation of new medicines We recognise the desire to assess thevalue of innovative medicines forpublic reimbursement in order toallocate public resources efficientlyand inform national decision making.At present, such systems appear tosupport primarily the financial interests of payers (which is a legiti-mate objective) but not necessarilythe interests of either patients orindustrial competitiveness. The costof undertaking additional studies bypharmaceutical companies and therisk of being assessed ‘not cost effec-tive’ reduce still further industrialcompetitiveness. At the same time,developments of importance topatients – such as improvements inquality of life, reduced side effects ormore convenient administration –receive little recognition from reviewbodies focusing on cost or formulaicinnovation indices.

Any relative and cost effectivenessevaluation by Member States shouldremain separate from technicalapproval on criteria of quality, safetyand efficacy. This principle shouldcontinue to be reflected in theupcoming review of pharmaceuticallegislation. Differences in morbidityand mortality across Europe, differ-ent healthcare structures and differentprices mean it is only possible toundertake such evaluations at anational level.

Patients and medicine provisionHealth literate citizens are an asset tosociety. Patients increasingly demandinformation about their disease andavailable treatments and areapproaching health professionals inan informed way. Providing informa-tion to patients improves communi-cation with doctors3 and encouragesbetter compliance with medicine use4

so ensuring safer and more successfuloutcomes.

It is crucially important that patientshave access to reliable, factual andbalanced information over choices ofhealthcare and medicines. The phar-maceutical industry can play a central

role in providing such information.Patients seeking information aboutproducts from manufacturers shouldbe permitted to do so across thewhole of Europe.

Intellectual propertyHigh standards for protection ofintellectual property (IP) rights sup-port competitiveness and promote theintroduction of new medicines andindications. This principle is wellestablished. Strong IP rights are fun-damental to the economic model ofthe research based industry. The timeand cost required to bring newadvances to market are such that aperiod of exclusivity is essential inorder to justify the investment,ensure a return, and generate fundsfor further research. Rewards forinnovation encourage continuedR&D and improve the competitive-ness of industry. However, withoutincentives created by appropriateconditions for pricing and marketaccess, EU support for IP is insuffi-cient to improve competitiveness andcreate jobs in Europe.

Enlargement of the EU raises specialissues for pharmaceutical manufac-turers. The candidate countries haveno history of an innovative pharma-ceutical sector and have traditionallylow standards of IP. It is essential toensure that the they match the IPstandards of the rest of the EU, andthat any necessary transitional provi-sions fully respect the prevailing stan-dards for each product in the currentmembership. The need for specialarrangements most critically musttake into account the ability of acces-sion countries to maximise affordableaccess for their citizens.

There is a need for a level playingfield across all EU Member States inIP legislation and the elimination ofdisparities between IP treatment ofproducts in different countries. Thisincludes the need for harmonisationof data exclusivity for all productsand for additional clinical data.

The science base in EuropePharmaceutical industry success isbased on commitment to innovationand sustained research and develop-ment (R&D) investment. The phar-maceutical sector depends on worldclass excellence in university research

and on well trained graduates.Emphasis must be placed on longerterm basic research, with closer inte-gration between scientific disciplines.

There is potential for public/privatepartnerships in health informatics.Healthcare delivery systems havemuch to offer in epidemiology, out-comes research, technology assess-ment, and population genetics relat-ing to the diseases that are of greatestimportance for Europe. Exchange ofhuman and financial resourcesbetween the public and private sec-tors through increased industry/academia links should be fostered.

Overall, an environment should becreated which encourages pharma-ceutical investment: academic scientific excellence; high qualitymanagement; technology transferpractices; flexible, science-based regulatory systems; strong intellectualproperty protection and the encour-agement of partnership between public and private sectors.

ConclusionThe G10 process offers the prospectof progress in improving industrycompetitiveness whilst bringing bene-fits to European patients. All thoseinvolved need to work hard to makesure this opportunity is not wasted.



REFERENCES

1. Gambardella A, Orsenigo L,Pammolli F. Global Competitiveness inPharmaceuticals: A EuropeanPerspective. Prepared for DGEnterprise of the EuropeanCommission, November 2000.

2. Edmonds P, Glynn D, Oglialoro C.Access to important new medicines.European Business Journal2000;12(3):146–57.

3. Katon W, von Korff M, Lin E et al.Collaborative management to achievetreatment guidelines: impact ondepression in primary care. JAMA1995;273(13):1026–31

4. Buchner DA et al. Effects of an asth-ma management programme on theasthmatic member: patient-centredresults of a 2-year study in a managedcare organisation. American Journal ofManaged Care 1998;4:1288–97.

Price divergences within Europe fuel theprocess of parallel importation – the re-exportation of branded medicines from lowpriced markets to high priced markets.Growth in parallel trade from beyond theexpanding European borders cannot beexcluded.1 On patent expiry, the lucrativemarket position enjoyed by leading brand-ed products increasingly comes underthreat from generic substitutes. Patent pro-tection for pharmaceuticals has been weakin many eastern European countries, andtheir thriving generic manufacturing sectoris gearing up for full integration into theEU.2 Further, several accession countriesare contemplating the introduction of socalled Roche-Bolar type provisions in theirdomestic intellectual property laws toallow generic manufacturers to developversions of patented pharmaceuticalsbefore the patents expire. The EuropeanParliament has lent its support to thisapproach.3 Added to this cocktail is theimpact of e-commerce and the spread ofcampaigns by patient advocates and health-care and insurance companies for moreefficient medicine purchasing procedures –all of which will put pressure on the mar-gins enjoyed by traditional pharmaceuticalwholesalers.

The legal and policy frameworkThe processes of intra-brand (paralleltrade) and inter-brand (generics) competi-tion are considered by the EuropeanCommission, particularly the DirectorateGeneral for Competition (DG Comp), as

essential for the eventual realisation of asingle market across the EU. TheCommission as legal guardian of the Treatyon European Union must safeguard theseprocesses. In particular it must guaranteethe proper enforcement of the Treaty ruleson free movement of goods and competi-tion – two of the principal pillars on whichthe single market edifice is constructed. Ifthe original manufacturer attempts to pro-tect a high priced market from parallelimportation, through seeking to enforce itsintellectual property rights, it may find thatit has infringed Treaty rules on free move-ment. Attempts to reach agreements withwholesalers and distributors to restrict sup-plies to a market and cut off the source ofparallel trade may also infringe Treatycompetition rules. The Commission doesnot have a monopoly on enforcement ofthese provisions, which can be enforced bythe party claiming injury through courts ineach Member State.

The pharmaceutical market differs in sever-al important respects from the market formost goods, as the consumer/patient rarelyselects the product or pays or is even awareof the full price. Nor can the supplier usu-ally set its own price: in the majority ofMember States prices are regulated througha bewildering variety of techniques (seeother articles in this issue). Generally, gov-ernment intervention is more stringentwhere the volume of demand is traditional-ly high.

To add to the complications, the pharma-ceuticals sector and the eventual creation ofa single pharmaceutical market poses theEuropean Commission particular legalproblems and confronts it with severalintractable policy dilemmas. Repeatedclaims by the research-based industry thatthe rise of parallel importation threatensnot just short term profits but the longterm investment and innovation potentialof one of Europe’s most important indus-trial sectors have found some sympathy atCommission level – in particular at DG



Pricing European Pharmaceuticals:

Can the Commission untie the Gordian Knot?

Leigh Hancher

Leigh Hancher is Professor of European Law, Tilburg University,Netherlands, and a Partner at Kennedy van der Laan, Amsterdam.

Prices for medicines, especially prescription medicines, continue

to diverge dramatically across the Member States of the

European Union, with some market leaders costing up to 50 per

cent more in the high price northern markets as compared to the

southern European markets. The eventual accession of the east-

ern European countries now lined up to join the EU will

undoubtedly lead to wider divergence in prices.

Enterprise, the Commission Directoratefor industrial policy. The Commission hasbeen forced to try to reconcile its legalduties to protect the process of parallelimportation under the free movement ofgoods and competition rules with its indus-trial policy ambitions for a strong, innova-tion-based European industry.

Commission competenceThese issues are not new but they arebecoming increasingly urgent, especially asenlargement is likely to exacerbate the situ-ation. An important dilemma is the natureof the Commission’s executive competenceto launch policy initiatives and eventuallypropose binding rules to deal with the phe-nomenon of price divergence, and with itintra- and inter-brand competition. Is thisto be dealt with as an industrial policyissue, as a health policy issue or as a socialsecurity and consumer protection issue?The choice of policy focus is not merely ofpolitical importance but has a definite legaldimension. The division of competenciesbetween Member States and theCommunity differs depending on whetherindustrial policy or public health and socialsecurity is at stake. The latter areas remain,legally and politically, the preserve of theMember States. And how should such poli-cy choices be reconciled with theCommission’s related legal duties toenforce the principles of European law?This will be a key focus for the newly cre-ated high level group on competitiveness inthe industry.

The Commission may effectively protectparallel importation through a judiciousenforcement of the Treaty competitionrules: it can and has ruled that companieswho seek to impose export bans or otherrestrictions on wholesalers operating in lowpriced countries to supply their products tohigher price markets infringe Article81(1)EC – which outlaws cartels and agree-ments restricting competition.4 TheCommission can give clear guidance as tohow it interprets the Treaty rules.

Its recent decision of 8 May 2001 prohibit-ing Glaxo Wellcome (GW)* from main-taining a dual-pricing scheme indicates thatit is not prepared to accept the researchbased industry’s argument that it should beentitled to take appropriate action torespond to differences in national pricecontrol regimes.5 GW had notified theCommission of new conditions for the saleof all its products to wholesalers in Spain.These wholesalers would have to pay high-er prices for products which they would

export than for products which they wouldresell for consumption on the domesticmarket. GW’s dual pricing system wasfound to limit parallel trade from Spain toother Member States for the vast majorityof its products and therefore interferedwith the Community’s objectives of inte-grating national markets. The Commissionwas not convinced by the ‘ consumer wel-fare’ claims that losses incurred by GW dueto parallel trade would seriously affectGW’s R&D budget which it uses to devel-

op innovative drugs. GW’s dual pricingscheme was seen by many as an importanttest case. The Commission was confrontedfor the first time with agreements thatexplicitly sought to restrict parallel tradebut which the company sought to justifyon economic grounds. The policy implica-tions are clear: companies will have to con-tinue to live with national regulatory diver-gences. The Commission stressed that loss-es stemming from parallel trade could bededucted from budget items such as mar-keting costs, rather then from R&D costs.6

The findings of the recent report on‘Global Competitiveness in Pharmaceuti-cals: A European Perspective’ commis-sioned by DG Enterprise7 have encouragedthe Commission’s competition services tomake such a bold statement. This Reportconfirmed that the European industry hasdeclined in competitiveness compared tothe USA, with large differences and trendsacross the Member States. The Report putsforward a number of explanations to sup-port its finding that as a whole Europe islagging behind in its ability to generateorganise and sustain innovation processesthat are increasingly expensive and organi-sationally complex. Significantly theReport stresses that many nationalEuropean markets are not competitiveenough, and that the nature and intensityof competition in final based markets is tooweak to nurture efficiency and innovation.Parallel trade is the only source of competi-tion for products still in patent.



* Now merged with SmithKline Beecham to form GlaxoSmithKline (GSK).

“Commission attempts to tackle the issue of price diver-

gence at source have not found much favour from either

the Member States or from the research based industry.”

Harmonisation These important findings may providerenewed stimulus for Community actionon the very national price regimes thatinsulate the sector from competitive forces.At the same time, Commission attempts totackle the issue of price divergence atsource by seeking to harmonise nationalrules on pricing and profit controls havenot found much favour from either theMember States, who regard this as a matterof health policy and therefore of nationalcompetence, or from the research basedindustry, who distrust attempts to set aver-age ‘European’ prices for their product.Previous efforts to reach consensus underthe auspices of the three Bangemann roundtables failed to deliver.8

The adoption of the so called PriceTransparency Directive in 1989 was origi-nally intended as a first step, but may bethe last step in the direction of Communityregulation.9 The Commission has notestablished sufficient consensus among the

Member States to move towards a stricterCommunity level regime. The 1989 mea-sure is limited in its aims: it does not har-monise the levels at which national pricecontrols or profit caps are fixed, but merelyendeavours to ensure that the national pro-cedures are efficient, transparent and fair.10

Moreover, if transparency improves, itbecomes easier for the Commission andstakeholders to establish whether or notthe Treaty rules on free movement andcompetition are being respected, particular-ly if these processes favour domestic pro-duction over imports. The recent attemptby the UK parallel trade organisation forjudicial review of the modulation provisionin the UK Pharmaceutical Price RegulationScheme (PPRS) is a case in point.*

Where to now?The recent findings that institutional andregulatory factors might serve to protectand insulate the European industry fromcompetition as opposed to forming barriersto the further expansion of what is usuallyviewed as one of Europe’s most competi-tive sectors may well offer the Commissiona new point of departure from which totackle the vexed issue of price regulationand concomitant divergence throughoutthe Community. The key policy questionswill be whether the Commission can suc-ceed in convincing national governments toaccept intervention in sensitive health poli-cy issues. There are a number of possibleavenues to explore.

A more vigorous promotion of genericcompetition is certainly one avenue, buthere the Commission will have to reopenthe debate on how far the R&D basedcompanies should continue to enjoy intel-lectual property right protection – still amatter of national law. Another optionwould be to adopt the current Americanexperiment and seek to move more pre-scription products into the OTC market.This might well appeal to budget consciousgovernments. Inevitably both strategieswill lead to bargaining for regulatory con-cessions on the part of the R&D basedindustry. A certain relaxation of the currentCommunity restrictions on advertising ofprescription products to the public maywell be a possible candidate for review inthe trade-off game. The Commissionshould also be careful to ensure that it hasthe right pressure groups lined up on itsside. The debate on how to tackle pricingcan no longer be safely confined to a privi-leged dialogue between industry and gov-ernments.



REFERENCES

1. See EFPIA. Draft Position on Discounted Pricing. January 2001. See alsoReport of the meeting between the Commission and six major companies on29 May 2001 and proposals put forward by the European Parliament in:Agence Europe 2001; 7978.

2. Accession states start driving the EU agenda. Scrip 2001 (February):13–15.

3. Scrip 2001;2638(2). The Commission has however supported the research-based industry in its concerns to limit pre-patent expiry development workfor commercial purposes.

4. The judgement of the Court of First Instance in the Bayer case illustratesthe limits of its powers in this respect Case T-41\96, Bayer v. Commission.Judgement of 26 October 2000.

5. The European Court of Justice had already made it eminently clear thatdivergent national price regulations in the pharmaceutical sector do notexclude the operation of the Treaty rules on free movement in Merck andPrimecrown 1996. Joined Cases C-267\95 and C-268\95.

6. Commission Prohibits Glaxo Wellcome’s Dual Pricing System in Spain. Pressrelease IP/01/661. Brussels, 8 May 2001.

7. Gambardella A, Orsenigo L, Pammolli F. Global Competitiveness inPharmaceuticals: A European Perspective. Prepared for DG Enterprise of theEuropean Commission, November 2000.

8. Commission Communication on the Single Market in PharmaceuticalsCom (98) 588 final, November 1998.

9. Council Directive 89/105 O.J. 1989 L40/8.

10. For a fuller discussion of the Directive see: Hancher L. Regulating forCompetition. Oxford: OUP, 1990 pp. 170–75.

* The research based industry has used the Directive to challenge nationalschemes that use imported product prices as a benchmark, see Scrip 2001;2627(5). See the complaint filed by LIF, the Danish pharmaceutical industry asso-ciation, Scrip 2001;2612(3). The Commission has also invoked the Directive tolaunch infringement proceedings against the Greek and Finnish governments,see Scrip 2000;2589(7) and Scrip 2000;2558(6) respectively.



The National Institute for ClinicalExcellence (NICE) for England and Waleswas created to evaluate new health tech-nologies and offer advice to the NationalHealth Service (NHS) on whether thesetechnologies are clinically and cost effec-tive. The performance of NICE has beenless than impressive; for example, it hasapproved all new pharmaceutical productsand failed to articulate a hierarchy, orleague table, of relative incremental costeffectiveness. Consequently, NHS expendi-ture has been inflated and resource alloca-tion has been distorted.1

The example of NICE is an imperfectmodel for the development of a Europeanwide system of health technology appraisalwhich informs or determines reimburse-ment decisions. The original vision forNICE was that it would use the best scien-tific advice in appraising competing tech-nologies and rank these in terms of clinicaland cost effectiveness. Such informationwould assist local healthcare decision mak-ers who have to determine which, of manycompeting service improvements, shouldbe funded.2

The goals of any Euro-NICE would needto be agreed carefully and its organisationalstructure would need to be consistent withthem. Healthcare purchasers and providersdo not wish to know merely that interven-tions are clinically effective. There aremany interventions (including a glass ofwater!) which can improve the health statusof a patient but all treatments cannot befunded with the limited resources available.

The ultimate criterion in ‘rationing’resources in a public healthcare system isrelative incremental cost and benefit. Whatis clinically effective is not always costeffective. However, those interventionswhich are cost effective are always clinical-ly effective.3 A failure to note and opera-tionalise such distinctions can lead to inef-ficient decisions that deprive patients ofcare from which they would benefit. Thus

NICE guidance on the cancer drugs taxoland taxanes leads to treatments with smallbenefits, in terms of enhanced duration andquality of life, at high cost. Because NICE‘advice’ tends to be considered by NHSdecision makers as mandatory, it is rapidlytranslated into treatments for patients.However, many cancer patients wouldbenefit much more if such resources wereused to support psycho-social support,where the literature has demonstrated sig-nificantly greater cost effectiveness.

Thus, the first elements of any system ofEuro-NICE should be the determinationof the prioritisation criterion (for example,incremental cost effectiveness) and the cre-ation of a ranked hierarchy (or leaguetables) of competing therapies. The nextstep is to agree how costs and benefitsshould be identified, measured and valuedin a systematic way. There is much guid-ance and a high degree of internationalagreement about how economic evalua-tions should be carried out.4

It is likely that estimates of costs and bene-fits of particular technologies will varyfrom country to country because exchangerates do not reflect local opportunity costsor purchasing parity. Factor prices ofinputs such as labour might also vary.Estimates of the patient outcome may varyinternationally if there is no agreementamongst clinicians about the processes ofdelivering the care. Good systematicreviews should reduce this variation, pro-vided evidence wins over opinion! Progresscould be made in agreeing the methods ofeconomic evaluation to be used by theEuropean Union. Whilst the results of suchevaluations may vary it is likely a highdegree of harmonisation could be achieved.

The benefits of harmonisation could beconsiderable, with wasteful and inefficienttherapies being rejected for reimbursementand scarce resources targeted on thoseinterventions which give the greatest ‘bangfor the buck’. Only the pharmaceuticalindustry will be worried by such policychanges. Healthcare systems will benefit bybeing able to deliver care more efficientlyto competing patients waiting in pain anddiscomfort. Such benefits should pleasetaxpayers throughout Europe!

Towards a Euro-NICE?

Alan Maynard

Alan Maynard is Professor of Health Economics at the University of York and VisitingProfessor at LSE Health & Social Care, the London School of Economics and Political Science.

REFERENCES

1. Cookson R, McDaid D andMaynard A. Wrong SIGNNICE Mess. BMJ, 2001 (forth-coming).

2. Maynard A and Bloor K.Regulating the pharmaceuticalindustry, BMJ 1997;315:200–01.

3. Maynard A. Evidence-basedmedicine: an incompletemethod for informing treatment choices. Lancet1997;349:126–28.

4. Drummond MF, O’Brien B,Stoddart GL and TorranceGW. Methods of EconomicEvaluation of Health CareProgrammes. Oxford MedicalPublication, 2nd Edition, 1997.

Does the new pharmaceutical regulation in the UK provide a

role model or a warning for the rest of Europe? Either way,

what lessons can be learnt?


The European Commission has adopted aCommunication setting out a CommunityStrategy to combat the threat to human,animal and plant health posed by antimi-crobial resistance. It has also adopted aproposal for a Council Recommendationon the prudent use of antimicrobial agentsin human medicine.

The Recommendation encourages nationalgovernments to take measures to containthe spread of antimicrobial resistance byencouraging a more prudent use of suchagents. The proposed Recommendationrepresents the first attempt at Communitylevel to take action in the field of humanmedicine and completes the various actionsalready under way with respect to veteri-nary and phytosanitary uses of antimicro-bial drugs. The Strategy gives a comprehen-sive overview of the ongoing actions withrespect to surveillance, prevention, researchand product development and internationalcooperation. The Göteborg EuropeanCouncil conclusions underlined again theneed for action to tackle the issue.

The Community strategyThe Community strategy is multidiscipli-nary and based on scientific advice. Theevaluation by the Scientific SteeringCommittee (SSC) of the EuropeanCommission, in its opinion of 28 May1999, stated that prompt action was neededto reduce the overall use of antimicrobialagents in all areas: human medicine, veteri-nary medicine, animal production andplant protection. The strategies most likelyto be effective in the control and contain-ment of antimicrobial resistance will be

those that can be introduced speedily with-out undue costs in all Member States, andwhich can be monitored and enforcedacross the EU. The SSC pointed to the pos-sible need to introduce effective legislationand regulation to support the achievementof its proposals. The important areas ofaction identified concern the prudent use ofantimicrobial agents, prevention, the devel-opment of new methods for prevention andtreatment, and monitoring the effects ofinterventions.

Successive European Health Councils havealso asked the Commission to develop aninitiative on the use of antibiotics in humanmedicine. The Community Strategy out-lines a series of ongoing and upcoming EUactions at different levels: support forawareness raising amongst doctors, vets,farmers, and patients; ‘prescription only’use in all sectors including agriculture; sur-veillance of resistance against certainantimicrobial agents and the consumptionof these agents; monitoring and reportingon residues in food; phasing out of all usesas growth promoters in feed and as markersin genetically modified organisms; reviewof existing uses as food additives. In addi-tion research and development of newantimicrobials and of alternative treatmentsand vaccines is being encouraged.International cooperation in efforts tocombat antimicrobial resistance in interna-tional forums such as the World HealthOrganisation (WHO), and in particularwith candidate countries as well as devel-oping countries, is to be reinforced.

The Commission has identified four keyareas of action and a number of specificactions within those areas that form themajor elements of the Community strategyto contain antimicrobial resistance:

1. Surveillance Monitoring the evolutionand the effects of interventions through theestablishment/strengthening of accuratesurveillance systems on antimicrobial resis-tance in the human and veterinary sectorand the consumption of antimicrobialagents.

Action 1: Develop coordinated and coher-ent surveillance networks at the Europeanlevel. Encourage the participation of non-EU countries and the links between alreadyestablished surveillance networks in humanand veterinary medicines.

ANTIMICROBIAL RESISTANCE

Strategy for actionCommission proposals to combatantimicrobial resistance

Helmut Walerius is Assistantwithin the Communicable,Rare and Emerging DiseasesUnit, Directorate for PublicHeath, EuropeanCommission.

The emergence of antimicrobial resistance has become a major

public health problem. Overuse and misuse of antimicrobial

agents have encouraged the growth of resistant organisms.

Infectious diseases that have become resistant to standard anti-

microbial treatment present a threat to human and animal health.

Helmut Walerius

This article has been written using information prepared by the Group of Spokespersons of theEuropean Commission


Action 2: Put in place and improve the col-lection of data on consumption of antimi-crobial agents in all sectors.

2. Prevention of communicable diseases,and infection control to reduce the needsfor antimicrobial agents. This includes theprudent use of antimicrobial agents whichentails the need for improved productinformation for authorised antibacterialmedicinal products and the promotion ofeducational and behavioural actionstowards professionals (clinicians, veterinar-ians, farmers) and the general public.

Action 3: Increase the importance of antimi-crobial resistance information for the mar-ket authorisation process in human medi-cine, veterinary medicine and agriculture.

Action 4: Support, at Community level,educational campaigns directed at profes-sionals and the general public to avoidoveruse and misuse of antimicrobial agents.

Action 5: Fully apply the principle thatantibacterial substances are available inhuman and veterinary medicine by pre-scription only and distributed in a con-trolled way in agriculture, and evaluatewhether the prescription-only rule shouldbe applied to all antimicrobial agents as aprecaution.

Action 6: Reinforce and promote preven-tion programmes of infections in humanand veterinary medicine, in particularimmunisation programmes.

Action 7: Reinforce the residue monitoringsystem in food as regards methods ofanalysis, sanctions and reporting systems.

Action 8: Phase out and replace antimicro-bial agents used as growth promoters infeed.

Action 9: Review the use of the two autho-rised antimicrobial agents in food.

Action 10: Ensure that GMOs which con-tain genes expressing resistance to antibi-otics in use for medical or veterinary treat-ment are taken into particular considerationwhen carrying out an environmental riskassessment, with a view to identifying andphasing out antibiotic resistance markers inGMOs which may have adverse effects onhuman health and the environment.

3. Research and product developmentNew modalities for prevention and treat-ment of infections and continued supportfor research into new drugs and alternatives.

Action 11: Encourage the development ofnew antimicrobial agents.

Action 12: Encourage the development ofalternative treatments and vaccines.

Action 13: Support the development ofrapid and reliable diagnostic and suscepti-bility tests.

4. International cooperation Antimicrobialresistance does not respect frontiers. Aneffective strategy requires close cooperationand consultation between the Commission,Member States and other involved parties,especially at international level.

Action 14: Encourage the development ofcooperation, coordination and partnershipat international level in particular via theexisting international organisations.

Action 15: Pay special attention to candi-date and developing countries by helpingthem put in place appropriate structures.

Council Recommendation The purpose of the proposal by theCommission for a Council Recommenda-tion on antimicrobial agents is to containthe spread of antimicrobial resistance byprudent use of antimicrobial agents inhumans.

Following the actions identified by theCommission in its strategy, the measuresthat are to be implemented by MemberStates are as follows:

– Collecting and analysing data on antimi-crobial resistant micro-organisms andon consumption of antimicrobial agentsavailable to prescribers, pharmacies,industry, health insurance providers etc.to detect potential links for interventionmeasures.

– Enforcing the principle that antibacterialagents should be available by prescrip-tion only, and evaluating whether thisrule should be applied to all antimicro-bial agents as a precaution.

– Developing guidelines and principles onthe prudent use of antimicrobial agents,including principles for evaluation ofapplications for marketing authorisation.

– Improving prevention of infections toreduce the need for antimicrobial agentsby reinforcing immunisation programmes and developing infectioncontrol standards in hospitals and thecommunity.

– Enhancing knowledge of the problemby specialised education programmesfor health professionals.

– Raising awareness of the problem of


“The proposed

Recommendation

represents the first

attempt at Community

level to take action in

the field of human

medicine.”


Charles Darwin died almost 120 years ago.If he were alive now he would understandperfectly the problems we face. Bacteriadisplay the evolutionary battle most vivid-ly: exert an ecological pressure and aresponse will be seen – survival of thefittest. For antibiotics, this means thatoveruse (or possibly any use) will be fol-lowed by antibiotic resistant bacteriaemerging. No doubt Darwin would saythat this was inevitable, and Professor SteveJones at London’s University College, whohas updated the Origin of the Species,would agree. We should examine why thisis the case and what can be done to delay orminimise the impact of resistance.

Bacteria are ideal subjects for the study ofevolution. They divide frequently (onceevery 20 minutes rather than 20 years forhumans), they have many and sophisticatedways of exchanging genetic information(unlike us – that is, until ‘genetic engineer-ing’ becomes more widespread!) and theselection pressure for change is so great, i.e.

vast antibiotic use. It is very difficult toestimate how much antibiotic use there isbut it is about 100 million kilogramsworldwide per year. When bacteria becomeresistant, therapy is likely to fail. Doctorswill then have to prescribe other agents –often more expensive, sometimes less safe.

Use of antibioticsBefore one can attempt to control antibiot-ic use, there is a need to know where theyare used. Figure 1 is a very rough guide.2

The statistics will differ by country even ina relatively homogeneous region such asthe EU. Animal use in particular variesconsiderably. As shown, total use is equal-ly divided between animals and man. Twopoints stand out. Firstly, in humans, thecommunity use of antibiotics greatlyexceeds that in hospitals. Secondly, in ani-mals, on a worldwide basis growth promo-tion (that is antibiotics being used for eco-nomic and not health needs) greatlyexceeds therapeutic use. A recent US reportestimates that 70 per cent of all antibioticsare used as growth promoters in livestock.3

EU legislation has restricted this misuse inrecent years. The agricultural aspects areimportant as many animal bacteria caninfect humans directly through farm work-


antimicrobial resistance among the gen-eral public.

– Encouraging research on the develop-ment of antimicrobial resistance and thedevelopment of rapid diagnostics toenable efficient early treatment of com-municable diseases.

– Identifying or establishing, for thesepurposes, national organisations witheffective coordination between theMember States and the Commission.

The Commission will establish an advisory

group through the Community network onthe epidemiological surveillance and con-trol of communicable diseases to supportMember States’ efforts and ensure a coordi-nated Community approach in addressingthis action plan. The Commission will alsoensure close cooperation with EEA/EFTAcountries, applicant countries and interna-tional organisations such as WHO toincrease synergy and avoid duplication ofeffort in the fight for a prudent use ofantimicrobial agents. The Commission pro-posal also sets a time frame for the accom-plishment of the various measures.

Antibiotic Resistance: A hazard to public healthFew would question that antibiotics have vastly contributed to the improvements in public health that we

have witnessed over the past 50 to 75 years. The chance of previously fit people in Europe dying of pneu-

monia, a skin infection, puerperal fever or tuberculosis has declined dramatically. We are however on the

edge of an abyss – antibiotic resistance is now ‘a major public health concern’, so said the 1998 UK House

of Lords Select Committee.1 Is this problem as severe as some believe, what is its extent and what can be

done, if anything, to reverse it?

Richard Wise

Richard Wise is Professor of Clinical Microbiology at City HospitalBirmingham and was advisor to the UK House of Lords Report on AntibioticResistance. Currently he is the UK Department of Health Chairman of theSpecialist Advisory Committee on Antibiotic Resistance.


ers, or indirectly, such as Salmonella andCampylobacter, which cause food poison-ing. Animal use and abuse of antibioticsmust be addressed in parallel with that inhuman medicine.

Community useThe greatest misuse of antibiotics is in thecommunity. Up to two thirds of antibioticsare used here for respiratory tract infec-tions, usually the common cold, sinusitis,bronchitis and sore throats. These simpleinfections are overwhelmingly caused byviruses and therefore a great source ofantibiotic misuse (antibiotics only beingeffective against bacteria). Why are somany prescriptions given for these self-lim-iting diseases? Patient expectation of aquick remedy is an important factor. Tothis must be added diagnostic uncertainty –‘what if I am wrong?’ thinks the doctor.

It is not surprising that one of the bacteriawhich is causing considerable current con-cern, Streptococcus pneumoniae (an organ-ism implicated in many cases of pneumoniaand meningitis), has developed resistance tomany of the antibiotics which areemployed to treat respiratory tract infec-tions. In particular, resistance to the peni-cillin family of antibiotics is widespreadand is often combined with resistance toother agents. The resistance rate toStreptococcus pneumoniae can vary greatly,for example from very high rates of peni-cillin resistance in Spain yet low rates inItaly. Quite why there are such differencesis poorly understood. Similarly resistancerates of this bacteria to erythromycin(another commonly used antibiotic) is farhigher in France than in the UK. In thiscase the incidence of resistance does seemto mirror national usage of this drug, whichis also lower in the UK than France. Thereis greater potential for resistant bacteriathan a generation ago, as vulnerable groupssuch as young children and the elderly livein kindergartens and residential homes.

Hospital useIn hospitals the problems are very differ-ent. Although the overall use of antibioticsis much less, they are used more intensive-ly, the patients are more severely ill and thepossibilities for cross infection are enor-mously enhanced. It is not surprising that itis in the Intensive Care Units of hospitalsthat the major antibiotic resistant infectionsare encountered. Rather than the respirato-ry tract bacteria, which are the majorsource of concern in the community, a dif-ferent group are found in hospitals. The

media in many countries have highlightedproblems with the so-called methicillin-resistant Staphylococcus aureus (MRSA,often labelled the ‘super bug’). In manyEuropean countries this is now a majorproblem. As infection control or isolationfacilities are often over stretched, infectionscaused by this organism are more difficultto treat (by using more expensive and pos-sibly more toxic antibiotics) and the patientstay in hospital is prolonged and may beassociated with increased mortality. Theproblems are compounded by the generalpressures on hospital care with too fewnurses and beds leading to pressure toshorten hospital stay. This can cause abreakdown in the infection control proce-dures which all hospitals attempt to apply.In my own hospital, patients, for the bestof motives, are often moved between threeor more wards during their in-patient stay– a recipe for cross infection mayhem.Hospital acquired infection, often causedby multi-resistant bacteria, imposes a greateconomic burden. In a European study ofmore than 10,000 patients, 45 per cent werefound to be infected and one third of theseacquired their infection while in hospital.4

Assessing the problemWhat can be done to improve this acceler-ating and accumulating problem? Firstly, itis important for both national governmentsand local institutions to undertake mean-ingful surveillance of antibiotic resistance.It is self evident that it is necessary to knowthe extent of any problem in order to mea-sure the effect of meaningful change. Yet somuch surveillance is conducted in anunquestioning way. Most commonly labo-ratories report the numbers of isolates andtheir antibiotic resistance patterns to local,regional or international centres. This hasthe advantage of being inexpensive but is ofdubious value, as there is no denominatordata; and often there is poor access to theseresults by those who would benefit most.There is a need to collect more robustinformation so that clinicians can changeclinical practice to optimise their use ofantibiotics. Local and national bodies musthave a clear view on why these data areneeded. Is it required for scientific purpos-es (for example, to study different mecha-nisms of antibiotic resistance) or to influ-ence national policies or to assist local clini-cians in their prescribing? Different needsmay dictate different surveillance systems.One particular need is to link prescribingof antibiotics with local resistance patterns.Currently relatively few countries havesuch information.


FIGURE 1: WHERE AREANTIBIOTICS USED?

Total 100 million Kg

50% Human

5—20% hospitals

80-—95% community

50% Animal

20% therapeutic

80% growth promoter/prophylactic

“A coordinated

European approach

would be a highly

worthy ambition.”


Rational useSecondly, there is a need to educate themedical and allied professions on rationalantibiotic use. Unnecessary use in viralinfections has already been mentioned.Protracted courses for simple infections,such as those of the urinary tract and theover use of valuable agents for the prophy-laxis of surgical operations are obvious can-didates for change. The medical professionshould also integrate the information whichis emerging from the recent science ofpharmacodynamics which studies the rela-tionship between the drug and the bacteria.Pointers are emerging that suggest ways touse drugs to their maximum effect andreduce the likelihood of the emergence ofresistance. Changing doctors’ prescribinghabits is difficult and will need to be longterm beginning in medial school. There areencouraging signs. In the Netherlands aconcerted effort to reduce antibiotic pre-scribing for many of the more trivial dis-eases has been successful. In the UK areduction in antibiotic prescribing by gen-eral practitioners of about 20 per cent hasbeen observed over the last two years.There is a need to educate the public, toreduce their expectation of antibiotics forthe more minor respiratory infections. Acoordinated European approach would bea highly worthy ambition.

There is a need for an extended role for thedrug licensing authorities. Should lesseffective agents be withdrawn? Should cer-tain antibiotics only be available understricter control in hospital? The EuropeanAgency for the Evaluation of MedicalProducts (EMEA) and the national bodiesmust adopt a more proactive approach.

Controlling infectionInfection control is at the heart of theproblem of reducing the impact of antibiot-ic resistance. There must be adequate infec-tion control teams who should set them-selves targets for controlling their localproblems. Community infection control isas yet an underdeveloped area. In particu-lar, how to influence infections in day careand elderly care units must commandgreater priority. A new cadre of ‘communi-ty infection control’ nurses should bedeveloped.

Antibiotic resistance and infection controlhave been Cinderella subjects for researchfunding. Scientifically more glamorousareas such as the mechanisms of antibioticresistance have attracted funding, yetresearch into strategies to avoid such resis-tance in the first place have been neglected!

There is a need to have a far more preciseview on the way the genetic elementsencoding resistance spread in a given com-munity, and the more fundamental aspectsof the most efficient means of implement-ing infection control procedures requiresstudy. Expansion of information technolo-gy to link prescribing with resistance pat-terns is eminently achievable but as yetonly minimally implemented.

Finally there is a need for the highly inven-tive pharmaceutical industry to producenew antibiotics. With one exception, in thepast 25 years, there has been no totally newagent introduced to clinical use. We havehad a plethora of compounds related toexisting antibiotics. What are required areagents active against totally new targets.There is likely to be a dearth of these in thenext five to ten years.

ConclusionsAll those interested in the health of thepublic must be seriously concerned aboutthe current situation. The actions I havementioned will not solve the problems.Current information suggests that resis-tance can develop rapidly, but once estab-lished it is slow to reverse. We also knowthat the new antiviral agents now comingonto the market will have the same prob-lems: increasing use brings increasing resis-tance. The now almost uniform prescrip-tion of three anti-HIV agents is preciselyrelated to anti-viral resistance. Theincreased costs are self evident.

The WHO recognises that the problem isinternational. Bacteria regularly cross inter-national borders; an epidemic of antibioticresistant respiratory infections in Iceland isthought to have originated in Spain.Inaction is not an option if we are to avoida return to the pre-antibiotic era.Coordinated international action has thepossibility of delaying the emergence offuture problems.

Antibiotics are extraordinary drugs. Theyare unique in that they act against indepen-dently living organisms, the bacteria, whichin their turn have developed ingeniousstrategies to circumvent their effects – ‘sur-vival of the fittest’ in dramatic action.Equally, antibiotics are unique in that theirmisuse (or even their reasonable use) has acost not only on the patient (such as possi-ble toxicity) but upon society at large(namely emerging bacterial resistance whichcan be transmitted). Multidisciplinarymultinational action is required in order toavoid a possible ‘post antibiotic era’.


“There is a need to

educate the medical

and allied professions

on rational antibiotic

use.”

REFERENCES

1. House of Lords. Resistanceto Antibiotics. London: TheStationery Office, March 1998.

2. Wise R et al. AntimicrobialResistance. British MedicalJournal 1998;317:609–10.

3. Miot C. Antimicrobials infood production. ASM News2001;67:196–200.

4. Vincent JL et al. Microbialresistance: Lessons from EPIC.Intensive Care Medicine2000;26(Suppl 4):S4–S8.

The use of antimicrobials can result in theunwanted ‘side effect’ of the developmentof resistance. Economists conceptualise this‘side effect’ as a negative ‘externality’resulting from the consumption of antimi-crobials.1–5 A classic example of a negativeexternality is pollution, where a cost isimposed on others not directly involved inthe decision to produce or consume thecommodity causing the pollution.Resistance is an externality that has bothglobal and inter-generational impacts.6

Once resistant micro-organisms havedeveloped, their spread (although depen-dent on a number of epidemiological fac-tors) will not be halted by national borders.Collective action across countries is there-fore needed.7 Additionally, many of themajor effects of resistance are likely to beincurred by future generations, and policydecisions will therefore have to weigh cur-rent costs and benefits against those occur-ring to future generations.3

Surely antimicrobial resistance is a biologi-cal problem, which will be solved by scien-tific means? In part this is true, yet thereare a number of aspects where the econom-ics of antimicrobial resistance can help indetermining the most efficient means ofcontaining resistance. This article empha-sises three main aspects, discussed below.

Bases for policy developmentWhat are the criteria for developing policiesto deal with resistance? What should theaim of such policies be? Should they aim toeradicate resistance or just reduce its devel-opment? If the latter, by how much?Economics can help in thinking throughsome of these issues. By concentrating uponefficiency – maximising outputs for giveninputs– economists seek to determine theoptimal rate at which resistance should beallowed to develop, balancing the costs andbenefits of antimicrobial usage over time.1,8

The issue of this optimal rate of antimicro-bial usage can be informed, for example, byassessing the ‘time preference rates’ of citi-

zens and policy makers. Time preference isthe extent to which people prefer to tradecurrent, against future, costs and benefits,and is operationalised through the notionof a ‘discount rate’ – similar to a real rate ofinterest. The issue of whose preferencesshould count in such decisions is one whichis dealt with extensively by both econo-mists and philosophers.9 Time preferencerates specific to antimicrobial usage havenot been explored to date, but are vital inassisting policy makers in acting on behalfof both current and future generations.

Development of policy responsesMedical literature and research tends tofocus on physical methods of reducing thetransmission or emergence of resistance,such as through improved hygiene or thecycling of antimicrobial treatments. Withineconomics the focus tends to be on devel-oping policy responses that ‘internalise’ theexternality of resistance. In relation toantimicrobial resistance this would mean,for example, providing incentives for con-sumers, prescribers and/or producers totake account of the possible ‘externality’costs of consumption of antimicrobials tosociety. Although work in this area hasbeen limited, there has been some discus-sion of policy instruments such as taxationand transferable permit markets in relationto use of antimicrobials in primary care inthe UK’s NHS3 and a more extensiveassessment of how such a permit systemmight operate.10 With such policy respons-es there are, however, important issues toconsider. For example, there are difficultiesin directly charging for healthcare provision(unacceptable in many cultures, and inmany ways inherently undesirable from anefficiency point of view). There is also theparadox that containing the emergence ofresistance requires policies that result inlower antimicrobial usage, yet the resultantloss in revenue for pharmaceutical compa-nies reduces their incentive to research anddevelop new antimicrobial treatments.

Evaluation of alternative policiesDetermining optimal policy responses tocontain antimicrobial resistance requiresconsideration of their respective costs andbenefits. The development of methods forthe economic evaluation of healthcare hasincreased rapidly over the last twenty years,and the application of these methods toantimicrobial resistance is a way of ensur-ing that the most cost-effective policies arebeing followed.11 There are, however, twosources of concern in relation to economicevaluation and antimicrobial resistance. The



Antimicrobial Resistance:

Can economics help?

Joanna Coast

Richard Smith

Joanna Coast is Senior Lecturer in Health Economics, Department of SocialMedicine, University of Bristol.

Richard Smith is Senior Lecturer, Health Economics Group, School of HealthPolicy and Practice, University of East Anglia.

first is that in most, if not all, evaluations oftreatments which use antimicrobials noaccount is taken of the impact upon thedevelopment of resistance and its conse-quent costs.2 Although, theoretically, eco-nomic evaluation should be able to incor-porate the costs of this externality, eco-nomics can also explain why this does not,in practice, occur. On the one hand, eachanalyst effectively free-rides on the currentlevel of resistance, assuming that their oneevaluation will make little difference to theoverall development of resistance. On theother, the costs associated with obtainingthis information for any individual evalua-tion are outweighed by the benefits ofdoing so: thus it can appear to be optimalfor analysts to ignore resistance!

The second concern is that current evi-dence for the cost effectiveness of alterna-tive strategies for containing resistance isextremely poor. Many assessments of theeffectiveness of particular strategies havenot considered the associated costs.12 Inpart this is due to the fact that economicevaluations are only now increasing in fre-quency. Of more concern is the difficultyof undertaking economic evaluations in thisarea: the effects of policies to contain resis-tance may be very diffuse and difficult to

identify; effects occurring far into thefuture may be extremely uncertain; andsome forms of outcome may be more diffi-cult to value than others. All of these fac-tors mean that economic evaluation ofthese policies may be particularly difficult.2

Empirical and theoretical developmentsInevitably, developments in the economicsof resistance are partially dependent uponscientific and epidemiological advances, butthere are areas of the economics of resis-tance where significant progress could bemade. In relation to policy development,empirical work to estimate the time prefer-ences of citizens and policy makers overboth current and future generations isrequired. Relaxing restrictive assumptionsand thus increasing the realism of models,would also be helpful.

Policy development work by economistshas been relatively limited to date. Furtherdevelopment of policies, perhaps usingsimulations or experiments, would providea valuable source of information. Researchis also needed into the applicability of thesesorts of policy solutions at different levelsof healthcare, ranging from individual hos-pital policies, through broader communityand primary care policies, to collectiveaction policies at the international level.

Finally, there are a number of options forimproving the evaluation of the costs andbenefits of alternative strategies. At thelevel of individual pieces of empirical workthere is huge scope for the economic evalu-ation of particular interventions alongsiderandomised controlled trials and otherstudies. Despite the difficulties of suchwork, many of these problems will only beilluminated and resolved when health econ-omists become involved in empirical stud-ies. At a higher level, and in the absence ofstrong comparative research evidence, thereis an urgent need for the development ofcomprehensive economic models to evalu-ate alternative policies. Such models wouldneed to incorporate information about thepotential long term impact of resistance,how this is affected by current antimicro-bial use and how it may vary with changesto future use and socioeconomic factors.

Although further developments areundoubtedly required, the economics ofresistance can assist in clarifying the basisfor policy development, identify and devel-op policy options and, through the assess-ment of the cost and benefits of alternativeoptions, help to identify optimal policysolutions.



REFERENCES

1. Phelps CE. Bug/drug resistance. Sometimes less is more. Medical Care1989;27:194–203.

2. Coast J, Smith RD, Millar MR. Superbugs: should antimicrobial resistance beincluded as a cost in economic evaluation? Health Economics 1996;5:217–26.

3. Coast J, Smith RD, Millar MR. An economic perspective on policy to reduceantimicrobial resistance. Social Science and Medicine 1998;46(1):29–38.

4. Brown G, Layton DF. Resistance economics: social cost and the evolution ofantibiotic resistance. Environment and Development Economics 1996;1:349–55.

5. Baumol WJ. Antibiotics overuse and other threats. Environment andDevelopment Economics 1996;1:346–9.

6. Smith RD. Antimicrobial resistance: the importance of developing long-termpolicy. Bulletin of the World Health Organization 1999;77:862.

7. Smith RD, Coast J. Antimicrobial resistance and global public goods forhealth. In: Woodward D, Smith RD, Beaglehole R, Drager N (eds). GlobalPublic Goods for Health. WHO, 2001 (forthcoming).

8 Laxminarayan R. Bacterial Resistance and the Optimal Use of Antibiotics.Discussion paper 01-23. Washington DC: Resources for the Future, 2001.

9. Broome J. Counting the Cost of Global Warming. Cambridge: White HorsePress, 1992.

10. Smith RD,.Coast J. Controlling antimicrobial resistance: a proposed trans-ferable permit market. Health Policy 1998;43:219–32.

11. Drummond MF, O'Brien B, Stoddart GL, Torrance GW. Methods for theEconomic Evaluation of Healthcare Programmes. Oxford: Oxford UniversityPress, 1997.

12. Smith RD, Coast J, Millar MR. Over-the-counter antimicrobials: the hiddencosts of resistance. Journal of Antimicrobial Chemotherapy 1996;37:1031–2.

“the economics of

resistance can assist in

clarifying the basis for

policy development”


I have argued before in these pages that theterrain of EU food policy is witnessingremarkable change.1 A health dimension toreform of the Common Agricultural Policy(CAP) has to be part of this process. Afterdecades in which agriculture has dominatednot just the finances of the EuropeanUnion but its political attention, suddenlyother food matters are getting a look in.This is to be welcomed. The Commissionand Council, famous for arcane and com-plex meetings to negotiate new agriculturalfinancial packages, have woken up to thefact that there is more to food policy thanthe bizarre architecture of farm support orthe joys of calculating the cost oflabyrinthine wheat and dairy régimes. Fearof unmanageable consumers stalks the cor-ridors of power.

A changing landscapeIt is food safety, as we know, that hasgrabbed political attention. In 2000, theFood Safety White Paper promised a widerange of new legal initiatives including aconsolidating food law and action on issuesranging from labelling to irradiation. TheEC Regulation of 8 November 2000 is nowdelivering on that process. Even nutrition,long the Cinderella of political attention,got a mention in the White Paper. Notenough, but at least something.

The speed of change is symbolised by thecreation of a new Directorate General, DGSanco, in charge of consumer and healthprotection and most recently the newEuropean Food Authority (EFA). This newbody will start work in 2002. At the nation-al level, Member States such as Greece,Ireland, the Netherlands and the UK haveeither set up food agencies or are doing so.

This rapidly changing landscape demands at

least two responses. First, there needs to bean open but tightly monitored system forwatching the changes underway. A recentmeeting in Dublin, hosted not by the EUbut by the WHO’s Office for Europe andthe Food Safety Authority of Ireland, beganlooking at what each government was actu-ally doing to reform its food safety andstandards institutions and procedures. Forsome the issue is food safety. For others theissue is wider food and health policy.

Second, there is a need to be clear aboutthe purpose of all this is. Although there isgreat potential for the EFA, it is essential tokeep asking whether it is necessary. AcrossEurope, we need to clarify what value agen-cies add to food policy formulation andimplementation. How will this plethora ofagencies relate to one another? Scepticsargue that the changes are driven more bythe need for politicians to be seen to bedoing something than by a genuine desireto shake up food standards and wrenchback control from big food companies oragribusiness that have so long dominatedEU food and agricultural decision making.

Will EFA be able to deliver the changes theCommission seeks? One fault-line is thatthe need to have a closely integrated systemof risk assessment, risk management andrisk communication is confused by the cur-rent plan. Under this, the Commissionremains in charge of risk managementwhile EFA is charged with risk assessmentand communication. Yet the classical modelof risk analysis posits that all three must beseamlessly connected. This and other issuesquestions were explored recently by areport for the European Parliament.2

The problems of CAPThe Common Agricultural Policy is thebiggest illustration of the delicacy at hand.CAP accounts for about half of the totalEU budget. CAP expenditure in 1998 was

BUILDING A HEALTHY COMMON AGRICULTURAL POLICY

Food mattersWhy health must be a factor in the reform of the Common Agricultural Policy

Tim Lang is Professor of Food Policy at Thames Valley University, UnitedKingdom.

The Common Agricultural Policy is under great pressure. We must stop talking

about the outcomes of ill health and focus on the determinants. Changing the

Common Agricultural Policy is a symbol of whether the political will to act is

real or rhetorical.

Tim Lang

“Fear of unmanageable

consumers stalks the

corridors of power.”

38,748 million euros. No wonder it is themost politically divisive EU policy. Thegood news is that this is now realised. Thebad news is that the realisation is more out-side the EC than inside. Europe still lacks acommitment to create a food policy ratherthan an agriculture policy.

The problem with CAP is not that it doesthings badly but that it is based on an out-of-date model and set of policy goals. CAPwas born out of the ashes of the food defi-ciencies of the Second World War. Thehunger of the 1930s framed its designers’approach. The great architects of CAP andthe Food and Agriculture Organisation’sWorld Food Programme argued that whatwas needed was to unleash investment andscience to raise productivity. If adequatelydistributed, they assumed that publichealth would improve. By the mid 1970s,this model was already inadequate butrather than going back to policy basics andasking: ‘What do we want our food systemto be and do?’, CAP was by then set inmotion. The only conceptual change to themodel was to add health education – subse-quently criticised as too individualistic andtacitly putting responsibility for food sup-ply onto consumers, a task they cannotpossibly execute. This old model is repre-sented in Figure 1.

A model for the futureWhat is now needed is a new model (figure2) around which CAP should be reformed:a joint commitment to good nutrition, foodsafety and sustainable food supply. This isthe model that the World HealthOrganisation’s Office for Europe (WHO-E) has steered into acceptance by all 51 ofits member states last September. All 15EU Member States signed this new com-mitment.

The WHO-E Food & Nutrition ActionPlan outlined a programme of action andpreparation of scientific arguments anddata running up to 2005.3 A backgroundpaper is in preparation which is due to go

to consultation later this year leading to aMinisterial in 2002. This offers publichealth organisations an opportunity to rallysupport and to work with agriculturaliststo re-orient CAP.

Happily, this initiative coincided with oth-ers that could begin to deliver this newmodel for Food and Agriculture. The firstwas the Eurodiet project, a three yearprocess for setting up an EU-wide systemof dietary advice and nutrition informationgathering. This process was completed atCrete in May 2000 and made proposals fordata-gathering, health promotion and foodand health policy.4

The second was the little acknowledged butpotentially powerful French Presidencywork culminating in the Brussels CouncilResolution of 8 December 2000 with a listof Actions agreed by Health and SocialAffairs Ministers.5 This should lead toactions such as Health and EnvironmentalImpact Assessments of CAP.

Collectively these are great steps forwardfor public and ecological health. At lastanother vision for CAP reform is availablefor policy makers, other than the sterileneo-liberal vision of just sweeping it allaway. Besides failing the political ‘laughtest’, a growing body of opinion sees it asdelivering Europe’s food system into thehands of powerful agribusiness aboutwhom Europe’s consumers are deeply nervous.

The evidence is mounting about CAP’sexternalised costs. These are direct and indi-rect health costs such as contribution to car-diovascular disease and treatment for foodpoisoning. Environmental assessments forpesticide and nitrate pollution are also mea-surable for issues such as loss of amenity,cultural dislocation, decline of employment,losses of wildlife, hedgerows, stonewalls,soil erosion and carbon losses from soil.

There is much to do but the stakes are high.There is a fundamental tension between theneo-liberal critique of CAP and the mod-ern cost internalisation position. FinanceMinistries favour the former, but must bepersuaded of the advantages of the latter.Ecological and human health analysis ofCAP has a complex story to tell.

Europe is blessed with glorious diversity ofcuisine, farms and products. But it alsoshelters hideous inequalities of diet relatedill health. Ultimately we have to ask: Whatsort of food system do we want? Is policyin control of the food system or is it, asseems to be the case, in control of us?



REFERENCES

1. Lang T. Where is Europeanfood policy going?Eurohealth 2000;5(4):28–30.

2. Trichopoulou A, MillstoneE, Lang T, et al. EuropeanPolicy on Food Safety,Luxembourg: STOA. Sept2000. PE292.026/Fin.St.

3. WHO Resolution: TheImpact of Food and Nutritionon Public Health. RegionalCommittee for Europe, 11–14September 2000. Copenhagen:WHO Regional Office forEurope. EUR/RC50/R8.

4. See Public Health Nutrition(special issue) 2001;4(1)(A).

5. French PresidencyWorking Paper: Health andHuman Nutrition: Elementsfor Action. Brussels:European Commission, 24August 2000.

Figure 1 Food s impact on health — the mid to late twentieth century model

Health

ScienceIncreasedproduction

Distribution

HealthEducation

Figure 2 The new food policy approach— 21st century model

FOOD POLICY

Fo

od

Saf

ety

Su

stai

nab

le f

oo

d s

up

ply

Nu

trit

ion

Capital


The major nutritional problems related tothe food supply in Western Europe are notcaused by a lack of protein (our diets arerich in meat and milk products) nor a lackof energy (we consume high levels of fatsand sugars) but primarily by an inadequateconsumption of vegetables and fruit.

Appropriate policies – for example toencourage greater investment in horticul-tural production – can help to resolve thisimbalance and simultaneously improveprevailing environmental and social condi-tions. Vegetables and fruit can be mademore accessible to the local population,improving food security and nutrition,enhancing the local economy and strength-ening social cohesion in rural areas. Thus,food policies can be geared towards socioe-conomic and environmental goals as well asimproving public health. Health authoritiescan promote intersectoral collaboration toaddress the determinants of public health.We look here at the links between agricul-ture and health, especially nutrition, anddescribe some opportunities for changingagriculture policy.

Nutrition, food and agricultureRecent experience in Europe (such as diox-in contamination in Belgium, BSE inBritain, and a decline in wildlife acrossEurope) has shown how food contamina-tion and environmental pollution aredirectly linked to agricultural productionmethods. These links can be given financialcosts: for example, an assessment in the UKsuggested that the environmental andhealth costs of agriculture were as high as$6 billion annually.1

This assessment excluded any linksbetween nutrition and agriculture, forwhich documentation is less well estab-lished. There are several reasons why thenutrient quality and diversity of our diets

are linked to agriculture policy:

– The biodiversity of our diet has declineddramatically. One estimate suggests thatjust 15 crops supply 90 per cent of theworld’s human food and livestock feed.

– The selection of species for commercialcrops has favoured productivity (highyields, fast growth, response to fertilis-ers) over nutrient diversity and nutrientdensity.

– Stocks of wild foods (fish, wild edibleplants, game) with high nutrient densityand an abundance of protective phyto-chemicals and polyunsaturated oils arethreatened.2

– Policies which lead to the mass destruc-tion of vegetables and fruit in the EUreduce access to these foods, in turnreducing the nutritional content of theEuropean diet.

Besides antioxidants (carotenoids, vitaminsC & E, selenium), vegetables and fruitscontain dietary fibre and other phytonutri-ents, such as quercetin, which are biologi-cally active compounds in human metabo-lism. There is now clear evidence of thehealth benefits of eating more vegetablesand fruits. Estimates suggest that 30-40 percent of certain cancers (colorectal, gastricand lung) are preventable by increasingdaily intakes of vegetables, fruit and fibre.A low intake of vegetables and fruit is alsoassociated with micronutrient deficiencies,hypertension, anaemia, premature delivery,low birth-weight, obesity, diabetes, andcardiovascular diseases. As a result of theseobservations, the World HealthOrganisation recommends the daily con-sumption of more than five portions (400g)of vegetables and fruits per day.

The supply of vegetables and fruits variesconsiderably throughout the Europeanregion. The greatest supply is in Greecewhere there is over 1000 grams of vegeta-bles and fruit available per capita per day.Greece has the lowest rate of prematuremortality from cardiovascular disease. In


Agriculture policy, health and nutrition

Tim Lobstein

Aileen Robertson

Tim Lobstein is Director of The Food Commission, London.

Aileen Robertson is Acting Regional Adviser in the Nutrition and FoodSecurity Programme, World Health Organisation, Copenhagen.

Public health experts need to pay increasing attention to agriculture policies.

Agriculture can provide employment, food security, healthy diets and a healthy

environment, but it will only do so when its current practices are challenged.

“The average family is

paying some 1000 euros

annually as a result of

EU agricultural

policies.”

contrast most other EU countries do nothave enough vegetables and fruit to ensurenutrition security for the population.Accession countries are in an even worsestate. It has been calculated that levellingup the intake to the highest consuminggroups could result in tens of thousands oflives saved each year in the EU.

What should be the objectives offood production?A reformed agriculture policy shouldincorporate the following elements:

– Following the Rio Summit and Agenda21, there is an overriding objective toencourage sustainable forms of agricul-ture, including producing foods thatmirror the population’s needs, as set outin dietary guidelines for EU MemberStates. All dietary guidelines stress theneed to increase intakes of vegetablesand fruit and to decrease saturated fats.

– Publicly financed subsidies for agricul-ture should aim to achieve the abovegoals. For example, funding should goto support the promotion of increasedconsumption of vegetables and fruit,instead of the consumption of meatproducts and full-fat milk. In contrast,intervention price support for cereals(the bulk of which are used for animalfeed) has encouraged farmers to convertland from vegetable and fruit productionto cereal production.

– Resources for research and developmentinto sustainable agriculture and healthimpact assessments should be provided.At present, most agricultural researchresources are devoted to the needs ofconventional methods of production(including biotechnology), and mostresources for impact assessment aredevoted to a narrow range of environ-mental concerns.

Opportunities, 1. Health ImpactAssessmentsHealth cannot be protected, sustained orpromoted by the action of the health caresector alone. There is a need to assess andchange the impact of other sectors on thehealth of the population, and to do thisthrough the development of intersectoralhealth policies.

This need has given rise to a call for thedevelopment of a systematic approach,methodology and procedures for HealthImpact Assessment (HIA).3 The signifi-cance of human health and its determinantshas been emphasised as an aspect of

Environmental Impact Assessment (EIA),particularly in the USA, Canada, Australiaand New Zealand as well as in the WorldBank.

Research into the health impact of agricul-ture policy is urgently needed. Under theAmsterdam Treaty, the European Union iscommitted to ensuring that ’…a high levelof health protection shall be ensured in thedefinition and implementation of allCommunity policies…’ (Article 152). Thesingle largest policy operating in the EU,responsible for around half the overall bud-get, is the Common Agricultural Policy(CAP). As has been discussed in severaldocuments, many of the measures underthe CAP act to reduce the potential forhigh consumption of fruit and vegetables,and promote the consumption of meat anddairy products, sugars and fats.

Opportunities, 2. EnlargementAs we have suggested, the EU’s system ofcompensatory payments to farmers distortsagricultural markets and encourages poordiets. If the EU’s intention is to apply thesepayments to the countries of EasternEurope currently applying to join the EU,then the implications for social cohesionand public health in these countries areserious, with the following likely distor-tions:

1. Land prices will rise, which will make itharder for young farmers going intoagriculture.

2. Production of crops and livestock willintensify, with concomitant burdensplaced on the environment.

3. Absentee ownership is common inaccession countries, and much of theincome from EU subsidies would beinvested outside agriculture. Thus, pay-ments will be of little benefit to thoseworking on the land, resulting in anagricultural policy that transfers wealthto a substantial number of non-farminglandowners.

4. Agricultural productivity in 2000 in theaccession states was only 11 per cent ofthe EU level. Increasing productivitywill mean that less labour will berequired, creating high levels of unem-ployment. In Poland the agriculture pol-icy calls for the percentage of the work-ing population engaged in agriculture tobe cut from 28 per cent in 1998 to justfive to seven per cent before joining theEU.

5. Food production policies during the



“The biodiversity of

our diet has declined

dramatically.”

“The EU’s system of

compensatory

payments to farmers

distorts agricultural

markets and …

encourages poor diets.”

1970s and 1980s led to the consumptionof high levels of fats and meat productsbut low levels of fruits and vegetables.An extension of the present EU agricul-tural policy would perpetuate these eat-ing patterns and discourage healthierdiets.

In many accession countries, the price offoods has increased more rapidly thanincome levels, and in some countriesbetween 30 per cent and 60 per cent ofhousehold income is spent on food, com-pared with less than 20 per cent in the EU.In response to this household food insecu-rity, supplementary food production andsmall-scale farming has increased andappears to be more efficient than largerscale farming methods.4 A rapid changedue to high levels of capital investment mayjeopardise the food security being devel-oped in the region.

Opportunities, 3. The general public In 2000 the total support for agriculture inthe EU was some 40.2 billion euros (nearly50 per cent of the total EU budget) creatinga tax burden on EU citizens of some 130euros per capita. The protective measuresalso raise the price of food compared withworld market prices, adding another120–150 euros per capita cost to the con-sumer. The average family is paying some1000 euros annually as a result of EU agri-cultural policies.

Consumer expectations will be an impor-tant consideration in the CAP discussions.In order to assess public perceptions, twoEurobarometer opinion polls were carriedout among farmers and the general publicin 2000. The surveys were carried out bytelephone interview on 16,000 members ofthe general public and 3,500 farmers andrevealed a widespread interest in agricultur-al issues and a wish for more information.5

Whilst 92 per cent of the general publicthink that agriculture is important, only 50per cent had heard about the CAP. Bothfarmers and the general public were askedto rate the importance of a list of 12 policyobjectives, including food safety, environ-mental protection, the improvement ofrural life, the protection of farm incomesand the competitiveness of European agri-culture on international markets.(Questions on nutrition and diet were notasked.) A clear majority of people thoughtthat all the objectives were important (rat-ings varied between 76 per cent and 97 percent) but the levels of satisfaction with howthey were being met ranged between 16 per

cent and 57 per cent.

The protection of farm incomes and smallfarms were seen to be badly served, byboth farmers and the general public. Foodsafety and environmental protection wereconsidered to be the top priorities but thesurvey revealed an acute need for informa-tion about agriculture policy.

Indirectly, consumers are already protest-ing against agriculture policy because theybuy less meat. Since the BSE crisis, demandfor beef has dropped by 27 per cent onaverage and in Germany by 50–80 per cent.This is damaging for agriculture policy but,from a nutritional perspective, this trendmay prove to be healthy if the dietarychanges include the consumption of morefruit, vegetables, wholegrain cereals or fish.

Opportunities, 4. The first Food andNutrition Action Plan for the WHOEuropean RegionIn September 2000 the 51 member coun-tries of the European Region of the WorldHealth Organisation unanimouslyendorsed a resolution to implement theregion’s first Food & Nutrition ActionPlan.6 This document makes the case forcombining nutrition, food safety and sus-tainable food production concerns into anintersectoral policy, and offers support tomember state governments to develop,implement and evaluate such policies.

Progress with implementation will bereported to the Regional Committee inSeptember 2002. In addition, a more com-prehensive evaluation of the impact of thisfirst Action Plan will be reviewed duringthe first Ministerial Conference on Food &Nutrition in 2005.

This political commitment gives publichealth experts an extraordinary and impor-tant opportunity to lobby both at nationaland European level for an agriculture poli-cy that explicitly promotes health.

ConclusionUnsustainable agricultural systems havegrown out of the narrow focus on produc-tivity that has monopolised agriculture pol-icy. Their economic costs are alreadybecoming apparent but their human healthcosts – including their nutritional impact –have not received sufficient attention.

A number of opportunities for changingagricultural policy are becoming available,and public health experts are urged toensure that their views are fully expressedin this process.



REFERENCES

1. The Environment Agency.Agriculture and theEnvironment: An impact state-ment prepared by theEnvironment Agency (draft).Bristol: UK GovernmentEnvironment Agency, October2000.

2. Crawford MA. Fatty acidratios in free-living anddomesticated animals. Lancet1968;22 June:1329–33.Trichopoulou A et al.Nutritional composition andflavenoid content of ediblewild greens and green peas: apotential rich source of antiox-idant nutrients in theMediterranean diet. FoodChemistry 2000;70:319–23.

3. Lehto J, Ritsatakis A.Health Impact Assessment as aTool for Intersectoral HealthPolicy. Discussion paper for aconference: Health ImpactAssessment: From Theory toPractice, Gothenburg 28–31October 1999.

4. Hughes G. AgriculturalImplications of CCEEAccession to the EU, FAIR1CT95-029; working papers 2/7and 2/10. Wye College,University of London, 1998.

5. European Commission.http://europa.eu.int/comm/agriculture/survey/index_en.htm

6. WHO. The First Action Planfor Food and Nutrition Policy:WHO European Region2000–2005. Copenhagen:WHO Regional Office forEurope, 2001. Seewww.who.dk/Document/E72199.pdf



We have a responsibility for our future andagriculture plays a crucial part in it.Current agricultural policy underminesrural, environmentally sustainable andsocially acceptable methods of agriculture.This is why the Coordination PaysanneEuropéen (European Farmers Coordina-tion, CPE) is convinced that the EU’sCommon Agricultural Policy (CAP) needsto be reviewed and redesigned.Importantly, such a review has to beundertaken in dialogue with consumers.The current focus on food safety does notnecessarily mean that our food is healthy,nor that it has been produced in a sustain-able way.

Stories of nitrates and pesticides in groundwater, antibiotic residues in meat, dioxinsand salmonella in poultry, the risks ofgenetic engineering, and not least BSE, fartoo often make sad headlines in the mediaand have given agriculture a bad name.These problems are, however, the conse-quences of industrial farming, under whichall farmers have to suffer. Small and medi-um sized farms still constitute the majorityof farming enterprises, and they are farmore environmentally friendly than indus-trial agriculture. Furthermore, they are cen-tral to maintaining local economies. Undercurrent agricultural policy a ‘farmers’ agri-culture, rather than an industrial agricul-ture, faces a difficult task if it is to work inan environmentally sustainable manner andstill survive. Instead, it runs the risk ofbeing sacrificed in the interests of multina-tional companies and global trade, as wellas being undermined by the logic of shortterm cost minimisation.

Society’s real needsWe want an agriculture that focuses on thereal needs of society. This means:

– Protection of the environment and ofbiodiversity.

– Production of high quality and healthyfoods.

– Avoidance of over production.

– A focus on regional markets and a moveaway from mass production for theglobal market.

– Fair trade relations.

– Prices that provide adequate pay forfarm workers.

– Maintenance of small and medium farmstructures.

– Preservation and creation of jobs inrural areas.

Environmentally and socially acceptableagriculture needs to be further developedand given committed political support inEurope and elsewhere. In Europe, as inAustria, there is intensive mass productionwhich leads to:

– Over production and an undermining ofcompetition.

– Undue pressures on the environmentand lower food quality.

– The economic degradation of theregions, including a loss of jobs, ruralcommunities and productive land.

This industrial model, which puts greatstress on the environment, is the dominantform of agriculture in the EU and swallowsthe lion’s share of agricultural subsidies. Asits legitimacy in the eyes of the publicdiminishes, however, efforts are beingmade to conceal it. This is done either withthe help of dubious terms such as the‘European Model of Agriculture’ and‘Ökoland Oesterreich’ (‘Eco-landAustria’), or through the use of advertisingbased on idyllic imagery of the traditionalcountryside.

It is important to highlight these contradic-tions and to bring them to the awareness ofthe public. Nevertheless, consumer behav-iour is ambiguous and contradictory.According to opinion polls, 90 to 95 percent of people asked declare themselves infavour of maintaining smaller scale agricul-ture. Yet other studies show that 60 percent of the same consumers buy the cheap-est foods when doing their shopping.

Society and the environment: A new approach to agriculture

Elisabeth Baumhöfer is Managing Director of theÖsterreichishen Bergbauernvereinigung (BBV,Austrian Mountain Farmers’ Organisation).

“subsidies serve only

to support large and

intensive farming

enterprises and they

undermine genuine

competition”

Prices and payThe distribution of subsidies to agri-culture in the EU has led to exces-sive production of some productsand increasing pressure for rationali-sation. In order for high qualityfoods to achieve adequate prices,subsidised over production has to bereduced. In Austria, subsidies cur-rently account for around two thirdsof agricultural income. They are tiedto the size of the operation and thenumber of animals, but not to therequired labour or the preservationof the environment. In consequence,subsidies serve only to support largeand intensive farming enterprisesand undermine genuine competition.

We need a clearly defined system ofgrading and ceilings for subsidies,which will support small and envi-ronmentally conscious enterprises.In order to support employment inagriculture, subsidies should relateto the number of employees, and bebased on an ecological minimumstandard. No farmer in the worldcan produce at the artificially lowworld market prices that currentlyoperate. They are in many caseslower than production costs. We areconfronted with the paradoxical sit-uation that a litre of drinking watercosts more than a litre of milk and aton of waste costs more that a ton ofwheat!

In the long run food prices shouldcover production costs. The pricestructure should take into accountthe consequential cost of environ-mental destruction caused by inten-sive production, including the globaltransport of agricultural raw materi-als, such as animal feed, and the costsof healthcare. These costs are cur-rently borne by the tax payers whoare required to support industrialfarming and not by those directlyresponsible – the industrial farmersthemselves.

The green challengeThrough a chemically intensive pro-duction process and enormous ani-mal feed imports, we in the EU havean ongoing problem with produc-tion surpluses. Productivityimprovements of three per cent perannum have had the effect of push-ing three per cent of farmers out ofagriculture annually. If this trend

continues, the number of farmerswill be halved within the next twodecades.

We need an effective reduction ofthese surpluses by restricting thenumber of animals per hectare to anecologically sustainable level, alongwith a reduction in the use of fer-tilisers and chemicals. This repre-sents a starting point for a wide-spread ‘greening’ of agriculture.Effective quota regulations andreductions are needed to reduce sur-pluses, as are incentives to restrictproduction.

Next steps– Abolition of export refunds and

the introduction of a duty thatcan be collected from the big pro-ducers in the event of over pro-duction.

– Compensatory Allowancesshould be restricted to sustainableagricultural production processes.

– The creation of Europe’s ownprotein plant production so thatwe are no longer reliant on theimport of animal feed.

– The establishment of a feed bonusfor cultivation of vegetable feedto replace the silo-maize bonus;abolition of the ‘non-land utilisa-tion’ premium and the transfor-mation of grain surpluses intofeed and protein-plant produc-tion.

– The application of the precau-tionary principle and, with cur-rent knowledge, a clear ban onthe use of gene technology inagriculture and food production.

– Active promotion of sustainableproduction processes by theEuropean Agriculture Grants andGuarantee Fund (EAGGF) tohelp the greening of agriculture.

Nutrition sovereigntyUnder ‘nutrition sovereignty’ weunderstand the right of every regionand nation to produce its own food.Such sovereignty forms the funda-mental basis for nutritional security.This unites farmers in the developedworld with those in developingcountries. The conservation of bio-diversity is a key factor in enablingnutritional security in the longer

term and as part of this, farmingcommunities should maintain con-trol over seed stocks.

The interconnectedness of the globalagricultural economy means thatpolicies in the EU can have damag-ing consequences across the world.The large European imports of soyafrom Brazil, used as animal food-stuffs, contribute to the destructionof the rainforests that are cleared tomake way for soya production,while at the same time contributingto the over production of food in theEU. A vicious circle has been createdin which there is hunger and envi-ronmental degradation in one part ofthe world and over production inanother.

As a consequence, the orientation ofthe CAP towards the world market,rather than focusing on internalneeds, has negative consequencesbeyond Europe. Export dumpingnot only undermines food produc-tion and, in turn, the existence offarmers in many regions of theworld, but it threatens nutritionsecurity and the environment.

The rural dimensionThe ‘second pillar’ of the Agenda2000 programme should not be usedto counter the damage caused by theCAP. Rather, it should supportmore integrated rural developmentprogrammes with ecological qualityproduction, regional processing andmarketing, as well as preserve andcreate valuable jobs. And with that,it should help to achieve a better bal-ance between the regions within theEU.

The CPE and the BBV (Österre-ichishen Bergbauernvereinigung,Austrian Mountain Farmers’Organisation) are convinced that toensure the nutritional value of ourfood and to preserve the ecologicalbalance worldwide, this can only bepossible with a non-industrial andresponsible agriculture. For that it isnecessary to support smaller scaleagriculture and local rural communi-ties. We should not allow ourselvesto be played off against each otherany longer, but must achieve world-wide solidarity amongst farmers andconsumers.




News from the European Union compiled by Simone Burmester at ENHPA and HDA

HEALTH COUNCIL MEETING

On 5 June 2001 the Health Council met in Luxembourg. Mr. Lars Engqvist, Swedish Minister for Health and Social Affairschaired the meeting. The Council debated the following items:

The Community strategy on publichealthThe Council reached politicalagreement on its common positionregarding a programme ofCommunity action in the field ofpublic health.

This six year programme focuses onthe improvement of health informa-tion and knowledge, enhancing thecapability to respond rapidly tohealth threats, and addressing healthdeterminants. This new programmewill replace the eight existingCommunity action programmes.

The action programme will comple-ment national policies and is intend-ed to ensure a high level of healthprotection in the definition andimplementation of all Communitypolicies and activities. The totalbudget assigned to this programmewill be EUR280m. The decisionwill be adopted and forwarded to

the European Parliament for its sec-ond reading, in accordance with theco-decision procedure of theTreaty.

Alcohol as a health determinantThe Council adopted aRecommendation on alcohol andyoung people. Member Statesshould promote research and dis-seminate evidence based informa-tion on the factors that motivateyoung people to start drinking.Another recommendation is to raiseawareness of the effects of alcoholand foster a multi-sectoral approachto educating young people aboutalcohol.

Tobacco as a health determinantThe Commission reported on theresults of negotiations of the WHOFramework Convention on tobaccocontrol. The Council took note ofthe presentation of the Commission

of its proposal for a Directive ontobacco advertising and sponsor-ship, as well as of the interventionsby delegations.

Variant Creutzfeld-Jacob andTransmissible SpongiformEncephalopathyThe state of play of the monitoringactivities, as well as the measures tobe taken shortly by theCommission, to respond to thechallenges of Variant Creutzfeld-Jacob and Transmissible Spongi-form Encephalopathy were orallyreported to the Council. TheCouncil also discussed briefly theprogress of health issues in otherpolicies and took a note aboutreports on health in the candidatecountries and on NorthernDimension Policies.

For the full conclusions see website:www.europa.eu.int/pol/health/index_en.htm

SUSTAINABLE DEVELOPMENT

The European Commission pro-duced a proposal on SustainableDevelopment in May 2001. Thisproposal builds on a Commissionconsultation paper, and was pre-pared for the Gothenburg EuropeanCouncil. It will also be published inthe EU contribution for the 2002World Summit on SustainableDevelopment.

‘A Sustainable Europe for a BetterWorld: A European Union Strategyfor Sustainable Development’ pre-sents a long term vision whichincludes the insight that economicgrowth, social cohesion and environ-mental protection must go hand inhand.

The strategy focuses on a number ofproblems and threats to sustainabledevelopment such as the emission ofgreenhouse gases, antibiotic resis-tance, hazardous chemicals, foodsafety, poverty, ageing of the popu-lation, loss of biodiversity, wastevolumes, soil loss, transport conges-

tion and regional imbalances. Tomake the strategy a success it needsurgent action, political leadership, anew approach to policymaking, par-ticipation and international responsi-bility.

The Sustainable DevelopmentStrategy consists of several objec-tives with specific actions.

– Improve policy coherence andput sustainable development atthe core of all policies.

– Use price incentives in policyproposals to achieve social andenvironmental objectives in aflexible and cost effective way.

– Invest in science and technologyfor the future, supportingresearch into sustainable develop-ment.

– Improve communication andmobilise citizens and business,including encouragement of envi-ronmental reporting by business.

– Take enlargement and the globaldimension into account.

European Council conclusionThe Gothenburg Summit on 16-17June concluded that SustainableDevelopment is a fundamentalobjective under the Treaties. TheEuropean Council agreed a strategyfor sustainable development thatestablishes a new approach to policymaking. The arrangements forimplementing the strategy will bedeveloped by the Council.

The full version of the Commission’sstrategy on Sustainable Developmentis available at:www.europa.eu.int/comm/environ-ment/eussd/index.htm

The complete version of theEuropean Council conclusion from the Gothenburg Council isavailable at:www.europa.eu.int/comm/gothenburg_council/index_en.htm


News from the European Union

TOBACCO

New legislation on tobaccomarketingOn 15 May new legislation on themanufacture, presentation and saleof tobacco products was reached inthe Conciliation Committeebetween the European Parliamentand the Council. Health warningswill now cover at least 30 per cent ofthe front and 40 per cent of the backof packets (current warnings coveronly four per cent). Cigarettes soldfrom 1 January 2004 in the EU needto have a reduced level of tar, nico-tine and carbon monoxide. The samewill be required for cigarettesexported after 2007. The new legisla-tion gives Member States the optionof forcing manufacturers to includeshocking colour pictures of thehealth effects of smoking from 2003.

From 30 September 2003, terms suchas ‘mild’, ‘ultra light’ and ‘low tar’,

which can mislead consumers intothinking cigarettes are safe, will beforbidden.

More information on the EU’s tobac-co policies can be found on theCommission website: http://health/ph/programmes/tobacco/publication.htm

New Directive on tobaccoadvertisingIn 1998 the Directive 98/43/EC onbanning tobacco advertising waschallenged by the GermanGovernment and the tobacco indus-try and consequently rejected by theEuropean Court of Justice. On 30May the European Commissionproposed a new Directive on tobac-co advertising and sponsorship. TheDirective refers to existing regula-tions in Member States and will follow requirements set down by the

European Court of Justice. If accept-ed by the Council and EuropeanParliament, tobacco advertising willbe banned from newspapers, maga-zines and the internet. Tobaccosponsorship of cross border (thoughnot national) sporting events will bebanned. Free distribution of tobaccoproducts at events as a form of promotion will also be banned.

The proposed Directive can bedownloaded from the followingaddress: http://europa.eu.int/comm/health/ph/programmes/tobacco/comm283_en.pdf

The WHO framework conventionOn 11 June the EC held a debriefingon the second round of negotiationsfor the WHO framework conven-tion on tobacco control. It wasattended by industry, Member Statesand NGOs. The Commission andthe Council negotiate on behalf ofthe EU Member States at the meet-ing. The Commission presented themain elements of the Chair’s text ofthe draft Convention and pointedout the Community position on thistext. The next negotiation round willbe held in November.

The Council’s full conclusion is available at: http://europa.eu.int/eurlex/ en/dat/2001/c_174/c_17420010619en00010001.pdf

For more information about theWHO Framework Convention see:http://tobacco.who.int/en/fctc/index.html

Nicotine addiction preventioncampaign DG Health and ConsumerProtection recently launched a ten-der for a three year communicationcampaign aimed at smoking preven-tion in adolescents. The campaignwill be Community wide and allMember States must be covered. Thecampaign will be multimedia, usingcinema, television, press, and inter-net. The estimated annual value isEUR6m.

For the full invitation to tender andgeneral information, contact: [email protected]

PUBLIC HEALTH PROGRAMMES: UPDATE

Pollution related diseasesThe Commission adopted a programme of Community action on pollutionrelated diseases in the context of the framework for action in the field of publichealth. Proposals for projects must be submitted by 31 July 2001.

For further information on the programme see:http://europa.eu.int/comm/health/ph/programmes/call/pollution.htm

For funded projects in 2000 in the field of pollution related diseases see:http://europa.eu.int/comm/health/ph/programmes/pollution/ph_poll_fp00_en.htm

Health monitoringProposals for the Programme of Community action on health monitoringmust be submitted to the 15 of July.

Documents for submitting an application are available at:http://europa.eu.int/comm/health/ph/programmes/monitor/index_en.htm

Drug addictionFunded projects in the ‘Programme of Community action on the preventionof drug dependence’ of the year 2000 are listed at:http://europa.eu.int/comm/health/ph/programmes/drugs/projects_2000/proj00index_en.htm

CancerFor projects funded in the year 2000 see:http://europa.eu.int/comm/health/ph/programmes/cancer/proj2000_en.pdf

Injury Prevention:The programme can be found at website: www.europa.eu.int/comm/health/ph/programmes/call/ojc00-286/wrkprog2001_en.pdf



On 1 July Belgium took over theEuropean Union Presidency. TheBelgian Government recentlypublished their priorities for thePresidency. The priorities are:

– Deepening the debate over thefuture of Europe.

– Improving quality of work,advancing equal opportunityand combating social exclusionand poverty.

– Promoting sustainable eco-nomic growth and a commoneconomic policy.

– Creating a European area offreedom security and justice.

– Promoting sustainable devel-opment and improving qualityof life.

– Enlarging the European Unionand strengthening the externaldimension of the EuropeanUnion.

Other important issues for theBelgian Presidency will be theintroduction of the euro and thesetting up of a permanentEuropean unit of magistrates.

The priorities also include astrong social dimension and top-ics such as modernising socialsecurity and the sustainability ofpensions. Priorities for health inparticular are:

– Mental Health

– Food safety

– Antibiotics

– Blood safety

– Social equality

– Community Action plan onpublic health

– Tobacco

– Alcohol

– Electromagnetic field radiation

– Drug addiction

– E-health

See the Belgian Presidency web-site: www.eu2001.be

Success is no accidentThe European Agency for Safetyand Health has launched a campaignnamed ‘Success is no accident’ whichwill be the focus of a ‘EuropeanWeek’ in October.

The campaign focuses on activitiesto reduce the number and severity ofwork related accidents and theimportance of workplace safety andhealth in general.

See the European Week website,http://osha.eu.int/ew2001

Accident prevention in SMEsThe cost of work related accidents isstill a serious cause for concern tothe European economy. About 4.8million work related accidentsresulting in more than three daysabsence from work and over 5,500fatal accidents were counted in theyear 1996. In small firms, the rate offatal accidents is around double thatof larger companies.

The European Agency for Safetyand Health at Work providedEUR5m for an accident preventionscheme in small and medium sizedenterprises (SMEs). The Agency

provides grants for projects thatcontribute to the reduction of acci-dent risks in SMEs. Fundingbetween EUR25,000 andEUR200,000 per project can eitherbe submitted by SMEs themselves orbe aimed at SMEs’ specific needs.SMEs are defined as enterprises thathave fewer than 250 workers, smallfirms fewer than 50, and micro firmsfewer than 10.

For the full details of the call and itseligible project activities and selection criteria see website:http://agency.osha.eu.int/calls/oshame2001.

Risk assessment and pregnantworkersThe European Commission in con-sultation with the Member Statesand with the assistance of theAdvisory Committee on Safety,Hygiene and Health Protection atWork have prepared a set of guide-lines on risk assessment and preg-nant workers.

The document, Council Directive92/85/EEC, can be accessed via website: http://euroe.osha.eu.int/legislation/guidelines/

HEALTH AND SAFETY AT WORK

E-HEALTH

The Commissioner responsible for the Information Society, Erkki Liikanen,spoke on the EU’s ‘eEurope’ Action Plan at a workshop on ‘Quality Criteriafor Health Related Websites’ on 7 June. In order to assist Member States inreaching the stated target of ensuring that primary and secondary careproviders have the necessary health informatics infrastructure in place, the‘Health Online’ chapter of the Action Plan sets out four actions at EU level:

– Best practices in eHealth will be identified and disseminated, in order toassist purchasing departments in decision making.

– A series of data networks will be established to assist with informed health-care planning in Member States.

– A communication on legal aspects of eHealth will be drafted that will clari-fy which existing legislation has an impact on eHealth in order to removesome of the uncertainties expressed by industry about the legal aspects ofsuch commercial activity.

– A set of quality criteria for health websites will be developed to boost con-sumer confidence in the use of such sites and foster best practice in thedevelopment of sites.

Further details can be found on website: http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=SPEECH/01/268|0|RAPID&lg=EN

BELGIAN PRESIDENCY



NEWS IN BRIEFEuropean Food AuthorityThe European Food Authority(EFA) is one step closer to beingestablished. At the end of May, theInternal Market Council reached acommon position on the creation ofthe EFA. The proposal has threeobjectives:

– to set out definitions, generalprinciples and requirements gov-erning foodstuffs and animal feed;

– to establish the European FoodAuthority;

– to determine procedures for deal-ing with matters having a direct orindirect impact on food safety.

The competence of the EFA hasalready been determined. The com-position of the Management Boardand the venue of the European FoodAgency will be discussed later. TheCouncil will try to finalise its com-mon position before the end of theSwedish Presidency. The BelgianPresidency wants to have the EFAoperational before the end of 2002.

The text of the Commission’ s propos-al on the EFA is available at:http://europa.eu.int/eur-lex/en/com/dat/2000/en_500PC0716.html

European Year of DisabledPeople, 2003On 30 May the Commission adoptedthe proposal to establish 2003 as theYear of People with Disabilities. TheEU will fund this initiative withEUR12m. The budget will be used toinitiate projects on awareness activi-ties, events, meetings and reports andwill be complemented by otherEuropean and national initiatives.

The European Year of DisabledPeople is the Commission’s responseto the European Social Agendaadopted last December at the NiceSummit, calling for more action inthis area. The first Eurobarometersurvey on attitudes towards disabledpeople has been published.

For more information about theEuropean Year of Disabled Peoplesee website: www.europa.eu.int/comm/employment_social/news/2001/jun/135-en.html

For information aboutEurobarometer see websites:www.europa.eu.int/comm/dg10/epo/

www.europa.bg/en/eurobaro.htm

Parliament endorses air qualityParliament’s delegation to theConciliation Committee voted unan-imously in Strasbourg on 3 July toendorse an agreement, struck withCouncil after two years of negotia-tions, on rigorous new air qualityrules for the EU. The rules willreduce acid rain and smog by settinglimits on emissions from large powerstations and overall ceilings to be metby the Member States for four keypollutants.

Annual Report on Human Rights2000The European Union Annual Reporton Human Rights for 2000 is nowavailable. The report gives insightinto the Union’s policy on humanrights and support for the democraticprocess. Important issues are: childprotection, women’s rights, racism,social exclusion and refugees.

The report has been published inEnglish, French, German and Dutch.For information about the AnnualReport, contact the GeneralSecretariat of the Council on:[email protected]

New Generalised Scheme ofTariff Preferences (GSP)On 12 June the EuropeanCommission adopted a newGeneralised Scheme of TariffPreferences Regulation to foster sus-tainable development. This newRegulation supports more effective-ness in the interest of developingcountries. The proposal includesduty free access for all non-sensitiveproducts. The new regulation com-pletes and fully incorporates therecent ‘Everything But Arms’ initia-tive in favour of Least DevelopedCountries, which provides for dutyand quota-free access for the LeastDeveloped Countries.

For more information see:www.europa.eu.int/comm/trade/miti/devel/ngsp_reg.htm

Breast implantsA report by the Petitions Committeecalls for legislation to ban cosmeticbreast implants on patients under 18years. The report also demands theprotection of patients’ health byimproving marketing and qualitycontrol. The committee recommendsthe installation of national breastimplant registers, as a database forlong term research. Advertising forthis form of cosmetic surgery shouldcarry health and risk warnings, if notbe totally banned. A priority for theCommittee is the need for betterresearch programmes about the dan-ger to people’s health and results onthe rupture rate of implants.

The full report is available at:www.europarl.eu.int/committees/peti_home.htm

HIV/AIDS, malaria and TBThe General Affairs Council backedthe Commission’s five year plan foraddressing HIV/AIDS, malaria, andtuberculosis which was unveiled on21 February. The main strands ofaction are on development, trade andresearch. The Commissions’ planincludes measures to make key drugsmore affordable for developingcountries, increase the investment inresearch to develop new generationsof drugs and vaccines, and to buildeffective health systems as a founda-tion for reducing poverty. The G8summit in Genoa in July also saw theformal launch of a global fund tofight Aids, malaria and tuberculosis,although promised contributions sofar are only a little more than $1bndollars.

The full strategy Commission papercan be found at the following web-site: http://europa,ei.int/comm/devel-opment/lex/en/2001/com2001096.pdf

The ENHPA and HDA can be contactedat the following addresses:

European Network of Health PromotionAgencies, 6 Philippe Le Bon, Brussels Tel:00.322.235.0320 Fax: 00.322.235.0339Email: [email protected] Health Development Agency for England Trevelyan House, 30 Great Peter Street,London SW1P 2HW Email:[email protected]

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