The pharmacy exception: recent developments in the Netherlands

In a Nature Biotechnology commentary published earlier this year¹, Professor Schellekens and co-workers contended that technological advances enable magistral drug preparation for treating patients with individually tailored (bio)pharmaceuticals.  They argued that magistral drug preparation, i.e. the preparation of drugs in pharmacies, can drastically reduce costs and development times of medicines. 

Their commentary sparked a debate in the Netherlands. When a pharmacist in The Hague then announced his plans to prepare Vertex Pharmaceuticals’ combination drug Orkambi for all cystic fibrosis patients in the Netherlands², the story was published by all major news outlets.

Following this media storm, the Dutch parliament discussed the pricing of drugs late November. Specifically, parliament discussed various recommendations of the Council for Public Health and Society³. 

The recommendations

The Council recommended that, in order to reduce the prices of medicines, legal instruments should be available to increase the government’s negotiation strengths.  These legal instruments could be, for example, the use of compulsory licenses and the introduction of a ‘pharmacy exception’ in the national law. 

The Council envisaged that a compulsory licence would enable the government to force a patent holder to accept a ‘reasonable’ price for the licence of a therapeutically important drug.  The Minister of Health did not dismiss this option immediately, but noted that data-exclusivity may be an obstacle to produce drugs even with a compulsory licence.  In addition, he said that he expects pharmaceutical companies to appeal any decision to use a compulsory licence.

The Council, like Schellekens et al., also encouraged preparation of drugs in pharmacies.  Whilst pharmacies in the Netherlands may prepare drugs in-house for a small group of their patients without marketing authorisation, national laws relating to medicines and patents currently prevent a broad application of magistral drug preparation as described by Schellekens and co-workers.  The Minister appreciates the initiatives that develop alternative ways of creating new drugs, but argues that the safety of drugs prepared in pharmacies may be an issue that needs addressing. 

The Council also recommended that public research institutes should obtain more negotiation power compared to private investors.  In light of this, the Council recommended that promising pharmaceutical research by research institutes should be funded until phase IIa clinical trials.  It is hypothesised that this would enable the research institutes make demands in the public interest, whilst large pharmaceutical companies remain interested in obtaining the patents. 

Finally, the Council recommended that patients should be allowed to order their drugs online, e.g. from producers of generics.  This recommendation was dismissed by the Minister of Health, who argued that this could be unsafe.

What’s next?

Following the discussion of these recommendations, the Minister has started an investigation into the laws relating to patents and medicines.  Specifically, the Minister wants to establish what is possible and impossible in relation to compulsory licences, preparation of drugs in pharmacies and importation of medicines, when the asking price for a drug remains high after some negotiation.  He will discuss his findings in parliament in the first quarter of 2018.

Interestingly, the debate regarding the cost of medication is in the public eye elsewhere too.  In France, the French Competition Authority is expected to soon propose policy changes relating to the cost of medication⁴.  In Hong Kong, the impact of patents on the cost of medication was discussed at the University of Hong Kong⁵.

A balancing act

As the demands for change in these debates are fuelled by an alleged lack of transparency and rising costs of medication, it is important that policy makers consider the long-term benefits of the current system.  The commercial incentives provided by the current system allow pharmaceutical companies to develop future medicines.  It is therefore important that any change of policy does not remove the commercial incentive entirely.

For more information on this, please contact Wouter Mooij, Kristina Cornish or your usual Kilburn & Strode advisor.

References

1. Schellekens, H. Making individualized drugs a reality. Nat. Biotechnol.(2017).
2. Sedee, M. Apotheker gaat medicijn Orkambi zelf maken. NRC Handelsblad, 21 November 2017. Accessed online, 13 December 2017: https://www.nrc.nl/nieuws/2017/11/21/apotheker-gaat-medicijn-orkambi-zelf-maken-a1582057NRC Handelsblad.
3. Raad voor Volksgezondheid en Samenleving, ‘Ontwikkeling nieuwegeneesmiddellen: beter, sneller, goedkoper’. November 2017.
4. Hogan Lovells Paris, e-mail message to Kristina Cornish, November 2017.
5. Rosati, E. Sir Robin Jacob calls for system 2 thinking for patent law. Accessed online, 13 December 2017: http://ipkitten.blogspot.co.uk/2017/11/sir-robin-jacob-calls-for-system-2.html.For more information on this, please contact Wouter Mooij, Kristina Cornish or your usual Kilburn & Strode advisor.