Belgium and the Netherlands see safety in numbers for drug price negotiations

Maggie De Block

Sky-high prices for rare disease drugs have triggered pushback from European officials, with countries such as Germany and France battling to bring down their costs. Now two E.U. members are taking a different approach to price negotiations: They're using their collective clout to purchase the drugs.

Belgium and the Netherlands will jointly negotiate with pharma companies to purchase meds for rare diseases, focusing on conditions that affect fewer than 5 in 100,000 people, Reuters reports. Usually, each European country negotiates separately with pharmaceutical companies. But by joining forces, Belgium and the Netherlands "represent more patients, which allows us to bargain at a lower price," Belgian health minister Maggie De Block said in a statement seen by the news outlet.

The move could set off a trend in Europe, putting more pressure on prices for treatments affecting relatively few patients. European markets are smaller than the U.S. pharma business, and though that means fewer patients to treat, it also means smaller budgets. Plus, Europe's health systems are publicly run or supported, so the spending isn't spread out among hundreds of payers as it is in the U.S.--where Medicare can't negotiate prices in any case.

European countries already are twisting arms to lower skyrocketing costs on hepatitis C meds. In October 2014, the French government said it would tax drugmakers producing pricey hep C treatments that present an undue burden on its healthcare system, proposing a "progressive contribution scheme" that would make sure patients could access the latest treatments. The arm-twisting seemed to pay off, as a few months later France struck a deal with Gilead Sciences ($GILD) to get its hep C wonder drug Sovaldi at the lowest price in Europe.

Gilead's Sovaldi

Germany also recently inked its first hep C deal, with four of the country's state health insurers in January negotiating money-off arrangements with Gilead for steep discounts on its drugs. The German discounts will be taken off its list price in the country, which runs at about €60,000 ($67,000) for each drug.

And the negotiations kept on rolling, with Germany striking a deal with Gilead in February in buy Sovaldi at €41,000 for a 12-week course--a deep discount from the company's initial price of €56,500. More price deals could be on the horizon with new agreements in Spain and Italy, Gilead COO John Milligan said at the time.

Meanwhile, payers and lawmakers in the U.S. continue to battle it out with companies producing expensive therapies. In December 2014, Express Scripts ($ESRX) set off a hep C pricing war by striking an exclusive deal with AbbVie ($ABBV) to cover the company's Viekira Pak in exchange for a "significant discount" off its $85,000 list price. Gilead responded with a few payer deals of its own, forging exclusive pacts with Aetna ($AET), CVS ($CVS) and UnitedHealth ($UNH) for Sovaldi and Harvoni in return for discounts on the drugs.

- read the Reuters story

Special Reports: The top 10 most expensive drugs of 2013 | The new drug approvals of 2014 - Harvoni - Viekira Pak

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