Spain confronts big pharma on drug prices

The Spanish Government has challenged the price of patented medicines as it has taken a number of major steps announced this week to reduce the pharmaceutical expenditure of the public health system (23%).   The new measures together with Spanish regional policies announced last March will mean savings of between 4 and 5 billion euros and a major reduction in the Spanish public debt that has been an important factor in shaking the confidence of world financial markets.  Last Tuesday President Obama personally called Spanish President Zapatero to request major austerity measures in Spain in order to avoid a domino effect of the Greek debt crisis.  The Spanish budget cuts have also been a condition demanded by the European Union.

The Spanish Health Ministry has unilaterally decided to substantially reduce the price of medicines that have already been patented 7, 8, 9 or 10 years, considering that this amount of time has already given the Pharma industry enough market margin to recover its investment.  The industry representatives like Lily have heavily criticized the measures saying that they will force job losses and reduce R and D. The price the State pays for generic drugs has also been reduced by 25%.

These Spanish measures that affect patented drugs create an interesting precedent for many other issues related to the global access to medicine in the South. It should also be noted that the EU Council under Spanish Presidency has just released an official EU position on Global Health that calls for al de-linking R and D costs from drug prices.

David Hammerstein, TACD, Brussels