The Importance of Registration in the Pharmaceutical Sector

The Importance of Registration in the Pharmaceutical Sector

[View Dutch version of the article here.]

Introduction

Some media and politicians are openly flirting with the idea to replace expensive medicine by small-scale pharmacy compounds. We believe that this is not the right course for patients, innovation or the Dutch business climate. Indeed, these ideas directly oppose the foundation of Dutch and European medicines law. Instead, we as American-based pharmaceutical companies call for measures that stimulate affordability of health care without affecting the Dutch business climate.


The situation

Small-scale pharmacy compounds are often cited as a possible way to decrease spending on medicines. The Dutch Health Care Authority (NZa) even stated that “in small-scale compounds, an alternative for expensive medicines can be found.”1 The NZa thus supports use of small-scale compounds, even when a registered alternative is available. To allow reimbursement of such use, the NZa was even willing to change existing regulations. The Council for Public Health and Society (RVS) also advised to stimulate the use of small-scale compounds to generate savings.2


Small-scale and Large-scale Compounding

A small-scale compound is a compound that is produced by a pharmacist for use by an individual customer of that specific pharmacy. Large-scale compounds are produced on a bigger scale, often by specialized compounding pharmacies. They are then delivered to individual pharmacists who dispense them to patients.

The Netherlands has clear rules on the use of large-scale compounds, as formulated by the Inspectie Gezondheidszorg en Jeugd (IGJ). These rules state that compounds are only authorized when registered alternatives do not exist and that the choice for a compound should be based on medical grounds, as opposed to financial considerations.3 These principles have been confirmed by the European Court of Justice.4 The previous Minister of Health Edith Schippers also underlined the importance of these principles in a Parliamentary letter.5

It thus seems strange that some stakeholders are willing to set these principles aside for small-scale compounds, especially when we take into consideration that these compounds on average do not match the quality of large-scale compounds.6

Small-scale Compounds Are Not an Alternative for Registered Medicines

Let us be very clear: compounds play an important role in high-quality health care. They offer the possibility to tailor medicines to the need of vulnerable patients, such as children or the elderly. They also offer the possibility to temporarily replace registered medicines in case of shortages.

However, this does not mean that compounds are equal to registered medicines. Contrary to compounding pharmacists, pharmaceutical companies conduct years of research to meet all the requirements that authorities, rightly, have established for medicines. A marketing authorization will only be granted after an extensive approval process has determined that new medicines meet these requirements, and medicines continue to be strictly monitored after authorization. All these procedures and stipulations have been set with a clear objective in mind: to protect public health.

In addition, the production of medicines is bound to strict stipulations to guarantee their quality. This requires specific expertise, which is widely available in the pharmaceutical industry. It’s not a given that small-scale compounders can match this level, as recently became clear when the Inspectorate found quality defects in compounds produced by UMC Amsterdam.7 Unfortunately, far more serious defects have been reported in other countries.8 

Given all these arguments, it should come as no surprise that the foundation of European and national medicines law is that patients if possible should always be treated with a registered medicine. In this vision, use of compounds forms a (strict) exception.9 However, the plans of the NZa and the suggestions of the RVS directly oppose this very basis of medicines law.  

Slow Down Innovation

Another risk of the wide use of small-scale compounds is that it can slow down innovation on the medium to long term. Research into new medicines is a costly, long and risky process.10 Why would companies and their investors initiate such a process if there is a risk that at the end of this process, their medicine is replaced by a pharmacy compound?

In our opinion, this possible effect hasn’t received the attention that it deserves. Investors provide capital in the knowledge that an approved medicine will generate income during a limited timeframe. During this time, they should not only recoup their costs; investors (among them many Dutch pension funds) also want a sufficiently attractive return on their investment, especially on such high and risky investments.

This system of companies, shareholders, profits and patents works: in the past decades, it has become possible to cure and prevent (for instance through vaccines) diseases that used to be fatal. Examples are several forms of cancer, hepatitis, HIV and meningitis. However, the replacement of registered medicines by compounds out of financial considerations undermines and threatens the very basis of this system, especially when a medicine is still protected by patents.

A Sustainable Pharmaceutical Budget

We want to be very clear about one thing, though: this is not a plea against discussions on medicine prices. In the discussion on the decision by UMC Amsterdam, for instance, there was strong criticism against the price that Leadiant asked for a medicine that had only been subjected to retrospective literature research.11 We as AmCham Pharmaceutical Committee also renounce such practices.

We also recognize that the government has a responsibility to control the pharmaceutical budget. However, they have ample instruments for this that don’t affect the quality and safety of care. In addition, the use of innovative pricing models can and should be explored further. At the same time, however, good use of budget is not limited to price. We should also invest in appropriate use of medicines, improvement of therapy adherence, use of diagnostics and prevention.

Turn The Netherlands into the Boston of Europe

As American companies in the Netherlands, we value a positive business climate that stimulates innovation. We feel that some recent developments, such as the one described in this article, cause this climate to subside. On the other hand, the Netherlands still holds considerable potential to become the Boston of Europe: high-quality research centers, hospitals and and universities, a booming biotech sector and the arrival of the EMA. As American-based companies, we very much want to contribute to this development, but we do believe that the importance of registration should continue to be respected. Indeed, this is indispensable in our quest to continuously improve the quality of care by developing new medicines.

 

Published: October 30, 2018
Authored by: Pharmaceutical Committee AmCham.
Michel van Agthoven, Chair Pharmaceutical Committee American Chamber of Commerce (AmCham) / Janssen, Pharmaceutical Companies of Johnson & Johnson.
Ad Antonisse, Co-Chair, Pharmaceutical Committee American Chamber of Commerce (AmCham) / AstraZeneca.

 

References:
  1. https://puc.overheid.nl/nza/doc/PUC_238542_22/
  2. RVS, Ontwikkeling Nieuwe Geneesmiddelen: Sneller, Beter, Goedkoper. 9 november 2017, https://www.raadrvs.nl/publicaties/item/ontwikkeling-nieuwe-geneesmiddelen.
  3. https://www.igj.nl/zorgsectoren/geneesmiddelen/geneesmiddelen-zonder-handelsvergunning/collegiaal-doorleveren. ‘Annex Geregistreerd Alternatief’ van de Circulaire, pagina 2: https://www.igj.nl/zorgsectoren/geneesmiddelen/geneesmiddelen-zonder-handelsvergunning/collegiaal-doorleveren
  4. Zie HvJ EU 29 maart 2012, zaak C-185/10, JGR 2012/14 (Commissie/Polen)  en ‘Annex Geregistreerd Alternatief’ van de Circulaire, pagina 2: https://www.igj.nl/zorgsectoren/geneesmiddelen/geneesmiddelen-zonder-handelsvergunning/collegiaal-doorleveren.
  5. “Er is geen juridische ruimte om doorgeleverde bereidingen toe te staan, en zeker niet wanneer er een geregistreerd alternatief commercieel beschikbaar is. De Geneesmiddelenwet en de richtlijn 2001/83/EG die daaraan ten grondslag ligt, staan dat niet toe. Uitgangspunt daarin is dat, behoudens uitzonderingen, alleen geregistreerde producten mogen worden verhandeld. De reden daarvoor is dat geregistreerde producten zijn getoetst op veiligheid, kwaliteit en werkzaamheid. Aan dit fundamentele uitgangspunt van de Geneesmiddelenwet en de richtlijn wil en kan ik niet tornen om doorgeleverde bereidingen ten koste van geregistreerde alternatieven aantrekkelijker te maken.” (Tweede Kamer, vergaderjaar  2016-2017, 29 477, nr. 432)
  6. Zie pagina 2 van de circulaire: “Daarnaast meent de inspectie dat een gespecialiseerde bereidingsapotheek beter in staat is een farmaceutisch verantwoord product te bereiden en af te leveren aan andere apotheken dan in het geval van het op incidentele basis bereiden en terhandstellen (aan individuele patiënten) door een individuele apotheek.”
  7. https://nos.nl/artikel/2244407-amsterdam-umc-moet-van-inspectie-stoppen-met-eigen-medicijn.html 
  8. Janet Woodcock and Julie Dohm. Toward Better-Quality Compounded Drugs – an Update from the FDA. NEJM 377;26, 2509-2512.  
  9. “De eis dat alleen geregistreerde geneesmiddelen in de handel mogen komen, is de kernbepaling van de Geneesmiddelenwet. Van dit vereiste van het bezit van een handelsvergunning kan slechts bij hoge uitzondering worden afgezien. Het is immers onwenselijk als het registratievereiste lichtvaardig opzij zou kunnen worden gezet.” (Tweede Kamer, vergaderjaar 2010–2011, 32 196, nr. 7)  
  10. The New York University has presented the “beta” for different sectors. The beta is the risk of an investment compared to the average risk in the total market. Investments in drug research carry among the highest betas of all sectors. The complete list can be found on pages.stern.nyu.edu/~adamodar/pc/datasets/betaEurope. 
  11. Tweede Kamer, vergaderjaar 2017-2018, 3063, 4 september 2018.
The Importance of Registration in the Pharmaceutical Sector