Fair pricing of medicines in Malta

I refer to the editorial carried in The Times titled Medicine Prices: When Will Action Be Taken, (June 1) in which it quotes a statement made by John Attard-Montalto. Dr Attard-Montalto had said that Maltese consumers were paying 40 per cent more than the EU average on drugs across the board. There is a significant difference in what the study concludes and what was quoted in the editorial. Whereas according to the government study around 40 per cent of drugs on the market were more expensive than the EU average, the report does not stipulate how much more expensive. It is clear that The Times did not verify the figures.

The government study referred to in the editorial does not appear to be comprehensive, at least insofar as in the manner the findings are reproduced. In comparing local prices to European average prices, the government study does not seem to take into account the many factors that influence prices of medicines on a particular market:

(1) The European average price may be influenced by subsidies/reimbursements pertaining to the particular national health system prevailing in many countries;

(2) The Maltese price is influenced by economies of scale. This is not merely a question of mathematical proportions such as in the case of freight costs.

Furthermore, in all EU states, innovative drugs are included for reimbursement/formulary, whenever the drug is deemed to be an advance in treatment of a particular ailment. In many instances, there is negotiation of prices of "legacy" or older products, whenever newer products are introduced.

However, in Malta, there has been an almost total freeze for new products on the formulary, for the best part of 10 years, with the exception of some cancer drugs just before the last elections. It is to be noted that the Government Formulary List Advisory Committee, should give an opinion on whether a drug is to be included on the formulary within 180 days. In the past days, replies are being received for applications made in 2007/2008. The reason for this delay "being due to lack of resources to review the dossiers".

Indeed, Malta falls well behind the European barometer in the introduction of innovative drugs on its formulary. The HealthCare Business Section of the Malta Chamber is hopeful that in the foreseeable future Malta catches up in this regard and pharma companies will also play their part in reviewing prices of older/legacy products.

This notwithstanding, market forces continue to work well in Malta as evidenced by tight competition among various importers and distributors of medicines.

The Healthcare Business Section is convinced that the government's direct involvement in: (1) the importation of medicines and (2) the setting of prices, would be to the detriment of the national interest in more ways than one.

One needs only to refer to this week's experience of Danish pharmaceutical companies deciding to withdraw from the Greek market after the Greek government decision to cut prices of medicines by 25 per cent to arrive at this conclusion. Since Greek prices are used as reference points in a number of EU countries, the pharmaceutical companies risk that prices in these other EU countries will also be subject to severe reductions.

Were companies to opt out of the local market, this would have a double detrimental effect in Malta as in the local case the country would risk losing employment opportunities in Malta's emerging pharmaceutical sector as well as risking the access to innovative drugs.

The HealthCare Business Section of the Malta Chamber is in favour of the fair pricing of medicines. In fact, it was at its suggestion and initiative that the Price Monitoring Board was set up. It is satisfied to note that this board is now functioning properly with the full support of the Business Section and other stakeholders.