Within a Regional Conference on Pharmacoeconomics held in Opatija, Croatia, I interacted with a distinguished group of experts from the Balkan region, England, Germany, Greece, Sweden, Spain and the USA and posed questions. The names of my distinguished respondents are given below [1]. The resulting conversation sheds light on complex issues of pharmacoeconomics. It can help inform patients and citizens and make this annual event more widely known to the lay public. The Conference provided a compendium of experiences from the Balkan region as well as experiences from other countries. The Regional and 4th annual Conference was conducted by the European Center for Peace and Development, University for Peace established by the United Nations (ECPD, Belgrade) as an adjunct to its Global School of Health. It was directed by Klaus-Dirk Henke, Technische Universität Berlin. The World Health Organisation EURO kicked off the Conference via video link in a discussion of citizen access to vital medications and the need for equity and ethics for all. In Opatija the WHO Regional Office for Europe discussant was Hans Kluge, Director, Health Systems and Public Health. In Opatija the WHO discussant was Hans Kluge.

Why Opatija?

Opatija is an opportunity made possible by local authorities and this location comes naturally. Following on from the first Congress of Balneology organised in 1885 by the Austrian Southern Railway Company, Opatija was declared a climatic health resort and became one of Europe's most important health spas. Balneology studies the therapeutic use of various types of bathing or hydrotherapy as a complementary medicine, a branch of medical science concerned with the therapeutic value of baths, especially those taken with natural mineral waters. Today, it is subsumed under the umbrella of health and well being. some of the first steps in medical tourism as well as contributions to sanitisation of railway carriages emerged from Opatija.

Many things of interest have occurred along the coastline ravaged over the centuries by war, and disease. Pula was a refuge for the Colchidians having failed to retake the Golden Fleece from the Argonauts; the bust of Sanctorios of Padua, contemporary of Galileo and father of medical measurement can be found in a hospital and Museum in Pula; Dubrovnik gave us the regulation of quarantine one of the most restrictive laws of public health, to prevent infectious diseases passing over into Europe; circa 1950 the WHO held meetings in Opatija with Andrija Stampar one of its founding fathers. Recently public health experts convinced the government that thousands of Croatians will benefit from the legalization of Cannabis.

Why this subject of pharmacoeconomics?

The medical drug market is expected to reach a dollar value of one and a half trillion by 2021. To get the brain around this number and what it might mean is hard except to say that it is staggeringly large. It becomes therefore more important for governments to follow cost-efficiency; effectiveness and benefit in their use with individual patients and society in general. With growth of markets goes power!

One useful insight into Pharmaceutical spending over a recent decade shows the asymmetry of therapeutic use between high-income and low-income countries and much greater growth of use in the first. Another insight is the increasing use of antibiotics in hospitals and their falling effectiveness as a result of higher resistance of the enemy bugs and the emergence of the so called super-bugs. Millions of people are infected with agents for whom there is no therapeutic antibiotic. Improving antibiotic use is an issue for patient safety and public health.

Much scientific work points to an increasing level of disappointment with the health sector and scepticism about the justifications for higher drug prices by the pharmaceutical industry. Sometimes the concerns are about the lack of more innovative research for example on cancer or the big C and HIV/AIDS. Much of the work in innovation is done by government and public universities rather than the pharma-industry. Drugs can fall short of their marketing promises with respect to risks and benefits, to unnecessary overdosing and overuse as with psychoactive drugs in children. On the other hand it is part of the future that our universities work closer and closer together with pharmaceutical companies.

One of the greatest concerns of many experts is that drugs are a case of profiteering rather than a necessity to cover high research and development costs. It seems clear that left over after expenditure makes the big pharmaaceutical industry about the most profitable in the US and anywhere. Thus the future research has to elaborate and measure more clearly the individual and collective benefits of the pharmaceutical industry Therapeutic drugs are a major topic in the current debate about people-centred health care and questions of meeting the needs of all the population with financial risk protection being paramount. A single sickness can destroy in many regions a family.

The Balkan region is struggling with high demand for health care and inadequate resources (not only money, but health professionals, new technology etc.) so these types of meetings help to expand and disseminate knowledge and facilitate an exchange of experience between experts in other country systems. It would be a great improvement if there was a higher level political presence, more serious media response and better communications among experts.

It was agreed that the themes chosen for the Conference are significant in the current context and especially relevant for the Balkans. Although the economic crisis has passed in most countries, the predominant context is that budgetary austerity has become a way of life, which is a major reason why economic evaluation and efficiency should be key elements when it comes to the finance of new medicines on the part of the national systems of health.

What is the price of pharmaceuticals?

If the world was ideal, the price of drugs would be determined by direct negotiation between the drug –maker- producer (the pharmaceutical company) and with the insurance funds in both of the major Systems, Bismarck (Germany) and Beveridge (England); between the firm, pharmaceutical company and the Government or its agencies. Bismarckian funds finance health through employee and employer contributions while Beveridge is based on money out of general revenue, i.e. mainly taxes. There are however many in both systems many agencies, commissions, negotiators, self-governmental agencies who negotiate the price with the pharmaceuticals companies. In addition there are also hospitals, wholesale companies, pharmacies/drug stores, office-based physicians and online businesses that also purchase drugs. They are all participants in the process of finding “fair” prices for the pharmaceuticals.

There is no gold standard. A Government agency has to step in to obtain and pay for drugs used in the health sector. Overall, negotiation should take place under the umbrella of competition. Pricing is a complex topic and there is apart from the market and competition not only one Government agency in charge of influencing the prices in health care.

What can we do to deal with access to high cost drugs?

Access to high cost drugs is a challenge in all countries. There isn’t a magic potion to deal with. However we can develop a methodology to try to guarantee a sustainable access to innovation. This methodology include 6 steps: anticipate for planning, evaluate for positioning, establish protocols for harmonizing, measure and follow for monitoring outcomes, share risks for minimizing uncertainty and optimize prices and purchases for minimizing costs. This methodology has been developed by Catalan Health and Social Care Consortium (CSC) in order to help and support its associates (hospitals and other health centres) to carry out their work in regard to managing high cost drugs. This approach permits the incorporation of an efficient policy to face access to high cost innovation.

What are the main challenges to implement a value-based purchasing policy?

Several challenges have been identified to implement a value-based purchasing policy. According to the experience of the Catalan Health and Social Care Consortium (CSC) to encourage and convince the Pharma-industry to consider a value-based agreement is the greatest challenge. Specifically, to establish mutual confidence and reach an agreement related to the information systems used to collect and analyze data and to define the appropriate measure of value are only the key points. The experience shows that value-based purchasing permits the creation of incentives for cost-effective use of medicines, to align industrial and health system incentives and develop information systems oriented to record results in a valid an reliable way.

Any Recommendations?

Yes! Recommendations included the adoption of health management and public health curriculum on subjects relating to negotiation as well as extrapolation models for drug pricing and procurement. A decision was taken on the part of the participants to make an appeal to the legitimate actors in Europe with respect to improving availability of and accessibility to orphan drugs for all children. This initiative came from two Ex-Ministers of Health Dusan Keber (Slovenia) and Ana Rukavina (Croatia). It was seen as a moral issue.

What is an orphan drug?

An orphan drug is one that treats a rare chronic and often life-threatening disease for which no one is ready to fund and it is unaffordable to the family. A few to several thousand people may have such a rare disease. Its rarity makes the production of a therapeutic drug a risky business venture but a humanitarian necessity.

Drugs, all drugs are approved after very strict procedures designed, developed and tested through science. In the USA, there are about 400 approved orphan drugs to treat about 200 rare diseases; in the European Union, the respective numbers are 70 and 45. Development, to stimulate research and marketing of medicinal products for rare diseases is now underway. An internationally recognized system of classification of rare disease could help generate reliable epidemiological data but it is not yet quite there. A new generation of more targeted therapies, such as stem cell therapies, gene therapies and therapeutic gene modulations are under development and new products are becoming available. Public health networks and networks of clinical excellence are mandatory. Making however a disease easier to diagnose at an early stage allows for prevention strategies which, even if there is no effective treatment can have significant positive impact on a patient’s life.

To round out our dialogue we can say that health economics is a systematic and objective system of thought helping to inform and improve decision making in the costly health sector, important to society. It is a tool to improve and refine our information base upon which decisions by doctors with patients and by the health sector are made and a help to health policy enactment. A more effective use of therapeutic medications with fair pricing can contribute to individual and population health and have positive knock-on effects for a country’ economy. To ensure an even sweeter future pill, additional light should penetrate its darker, bitter side.

[1] Respondents: Klaus-Dirk Henke, Conference coordinator, Branka, Legetic, International Consultant, Former Regional Advisor PAHO, Antonio Antoni Gilabert Perramon, Catalan Health and Social Care Consortium, Alvara Hidalgo Vega, Universidad de Castilla-La Mancha,Toledo, Spain, Julijan Naskov Slovenia and Davor Duboka Stanislav Primožič Benno Legler. Marinko Veković Per Troein, Zlatko Komadina, Dragan Bogdanić, Sani Pogorilić.