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Kent Bernard, Feb 23, 2009
You could posit several fairly obvious reasons for the perceived lack of new innovative drugs in the European Union: Low reimbursement levels for innovative medicines and insistent tolerance for diversion/parallel would certainly be on the list. And reference pricing often makes generics much more expensive in the EU than in the United States, while at the same time making research into new branded drugs less attractive. If you were making an investment decision, why would you invest in developing new products for which the risk of failure is high and for which the purchasers will not pay a price that justifies that risk? But apart from all of these points, the Commission also seems deliberately to have ignored the elephant in the room. While it might have been politically delicate to look into the actions of Member States, it is unfortunate that the Commission excluded the effects of state regulation from the inquiry. Such regulation controls every aspect of competition in the prescription drug industry in Europe by way of restrictions on price, supply, and access. It has an overwhelming impact, yet the Sector Inquiry treats it as not being there at all.
