Italy Takes Global Lead in Pricing Transparency by Forcing Pharma to Disclose Public R&D Funding

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In July 2020, Italy became the first country in the world to mandate pharma companies to disclose data surrounding public subsidies received for the development of new drugs. The decree came almost a year after an Italy-led World Health Assembly (WHA) resolution on transparency of markets for health products, comes in the midst of a global pandemic that has stirred up debate about drug pricing and transparency across the world, and positions Italy at the forefront of the pricing transparency agenda.

 

The Decree is a very good step forward that addresses the asymmetry of information at the negotiating table with the private sector … Having information is vital when you’re negotiating, otherwise you’re negotiating blindly

Luca Li Bassi, former director general, AIFA

According to Luca Li Bassi, former director general of the Italian Medicines Agency (AIFA) and the driving force behind the 2019 WHA resolution, the new decree represents a “very important step” in the move towards enabling the Italian government to negotiate more effectively with pharma companies over the pricing for innovative new drugs.

 

Not only will the decree force private firms to disclose to public health authorities data regarding public funding for the R&D of a new drug, they will also have to reveal information on sales revenues, marketing costs, the status of relevant patents, and reimbursement prices in other countries. This will allow the Italian authorities to compare reimbursements and prices for the same products across borders.

 

Li Bassi told Health Policy Watch that “The Decree is a very good step forward that addresses the asymmetry of information at the negotiating table with the private sector … Having information is vital when you’re negotiating, otherwise you’re negotiating blindly.”

 

He added, “Most importantly, this decree enables AIFA to make a far better-informed analysis of the reimbursements demands made by suppliers, resulting in a significantly transformed negotiation process across the table.”

 

Although approved by the country’s Ministers of Health and Finance back in August 2019, a government reshuffle meant that the rollout of the decree was delayed by almost a year as it had not been published in the official Italian government gazette. With the COVID-19 pandemic still ongoing, the decree’s publication comes at a vital moment as global drug access, pricing and transparency debates rage. Italy has been one of Europe’s hardest-hit countries with 35,587 COVID-19-related deaths as of September 11th 2020 according to the Johns Hopkins COVID-19 tracker.

 

How pharma companies will react to this development and how it will affect their Italian product launch strategies is still unclear, but Li Bassi is hopeful that other countries will follow in Italy’s stead and begin to mandate that more information be provided in pricing negotiations. “Anything that can be done to enhance transparency in the biopharmaceutical sector is definitely going to be useful.”

 

Li Bassi, a key figure in the global push for transparency in medicine markets, a strong advocate for affordable treatments in developing countries, and more recently behind innovative strategies within Italy to make new technologies such as cell and gene therapies more affordable was replaced as AIFA’s director general in late 2019. This move was condemned in an open letter to the Italian Minister of Health signed by 21 patient advocacy groups and 24 leading medicines access advocates from across Europe, Africa and the Americas.

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