Out-Law News 3 min. read
16 Nov 2023, 4:24 pm
A study into an aspect of medicines policy in the Netherlands has found that it has delivered more than $1 billion in cost savings but that it also resulted in that some patients waiting longer to access innovative new treatments.
Since 2015, the Netherlands has applied a so-called ‘lock’ system whereby certain new medicines are withheld from general use until the Dutch Healthcare Institute has examined their effectiveness relative to their price in a control procedure, also referred to as ‘the sluice’. There are two thresholds for entering the lock system – where the medicines would cost more than €20 million a year – previously €40m a year – for one or more new treatments nationwide, or where the per-patient cost exceeds €50,000 a year and the total cost would exceed €10m annually.
The Healthcare Institute commissioned a study on the impact of the lock system on healthcare accessibility and affordability. To inform the study, it developed a new ‘calculation method’ to assess the future effects of the lock as well as retrospectively assess its effects since its introduction. The final report from the study was published in August, while its main findings were also reported in the institute’s magazine last month.
“By creating the calculation method, the Dutch Healthcare Institute has been able to measure the effect on the lock system on the short term,” said Maud de Haas and Judith Krens of Pinsent Masons in Amsterdam. “The Dutch Healthcare Institute is of the opinion that there are overall positive effects to the lock system since the introduction in 2015. Although, there are still some negative effects that need to be dealt with, the lock system is helpful for Dutch healthcare and has made it possible to market costly, but very innovative, medicines on the Dutch market.”
Positive effects found include that it reduces the displacement of hospital care and preserves budget for other healthcare services – between 2015 and 2021, it was assessed as having delivered more than €1 billion in savings to the Dutch healthcare budget by promoting negotiation of lower prices for medicines subject to the lock system, highlighting the lock system’s broader positive effect on healthcare beyond the specific medicines it applies to.
The lock system was also found to have delivered improved health outcomes, with nearly 8,000 ‘quality adjusted life years’ estimated to have been added for patients in the Netherlands as a consequence of the lock system being in operation. This is because the lock system ensures that medicines manufacturers are reimbursed only in cases where it is shown that their product has been effective for patients and where no serious side effects emerge. It was on this basis that the Dutch Healthcare Institute declared the lock system as successful.
However, the study found that the lead times of admitting a lock medicine have increased in every phase of the lock system. The average negotiation time is longer than the time that it takes to review the medicine. The negotiation time depends on the cost effectiveness of the medicine. The average lead time increased from 225 days in 2015 to 518 days in 2020, with the result being that some patients have had to wait longer to access effective new medicines. The Institute said it is necessary to monitor these lead times in the long term.
The study found that the lock system “does not capitalise on the potential health benefits of new innovative medicines in the short term, but that it limits health loss due to displacement in the long term” and indicate that the long-term effects “outweigh the short-term exclusion of new drugs from the market”.
Judith Krens and Maud de Haas said that there is a natural tension between ensuring pharmaceutical companies obtain a sufficient return on investment to incentivise them to invest in developing innovative new treatments, while ensuring the cost of medicines is affordable for healthcare systems and the patients that use them.
De Haas said: “The Dutch Healthcare Institute has presented the issue of medicines pricing as one that the pharmaceutical industry needs to consider from the perspective of social responsibility. It considers that the lock system would become redundant if pharmaceutical companies lowered their prices and means patients could access new medicines faster. However, that is just one side of an issue that is highly complex.”
Krens said: “It can take years to develop new medicines, with significant investment needed for research and to take products through the regulatory testing and approval phase into commercialisation. If pharmaceutical companies are not able to achieve a reasonable return on investment, then this will affect their ability to invest in developing new treatments needed to overcome the problem of antimicrobial resistance or diseases like cancer and other debilitating conditions.”
“EU law makers are currently grappling with how best to strike the balance between supporting faster access to new medicines at affordable prices and incentivising industry investment as they consider proposed reforms to the EU’s general pharmaceutical legislation and to the EU’s intellectual property regime,” she added.
De Haas said that different price control mechanisms for medicines have been implemented across Europe.
“In Germany, for example, a different negotiation system exists to that in the Netherlands,” she said. “The upside of the German system is that once a medicine has obtained marketing authorisation from the European Medicines Agency, pharmaceutical companies and the German government have just a year to agree on the price, meaning patients have more immediate access to the medicine. However, in Germany, the price of medicines is generally higher than it is in the Netherlands.”
10 Feb 2023