EU pharma package incentivises innovation in gap zones, says ...

Jakub Hlávka, a Czech healthcare economic expert, has praised the European Commission’s pharmaceutical reform for proposals to reduce standard patent protection while extending it for medicines that address unmet medical needs.

Supporting the plan, he said it's a fair way to encourage innovation and improve access to life-saving treatments across Europe.

Hlávka, who serves as the Director of the Institute for Health Economics, Policy, and Innovation at Masaryk University, acknowledged that innovative medicines often come with high price tags. However, he stressed that these costs are justifiable given their transformative impact and the robust cost-effectiveness regulations in place in Europe.

“Ten or fifteen years ago, and certainly longer ago, people were dying from diseases that are now treatable thanks to innovative medicines. This includes fields like hemato-oncology, some metabolic diseases, or multiple sclerosis,” Hlávka explained in an interview for Euractiv.

In Europe, the reimbursement of medicines is tightly regulated to ensure that their costs align with the value they deliver to patients and society. Hlávka noted that this level of scrutiny is not applied to other healthcare sectors, making the high costs of innovative medicines more defensible.

“Merely increasing a budget item does not automatically mean something is wrong,” he said. “We need to assess the added value these treatments bring. If they are proven to improve or extend lives, their cost-effectiveness justifies the investment.”

Right incentives for meaningful innovations

At the heart of the European Commission’s pharmaceutical package is the need to reconcile two goals: protecting innovation by pharmaceutical companies and ensuring timely access to medicines for patients.

The proposal suggests reducing the basic regulatory data protection (RDP) period for innovative companies but with the possibility of earning additional extensions by meeting specific criteria, such as addressing unmet medical needs.

Hlávka supported this approach, emphasising that the package rightly incentivises innovation in areas with significant gaps in treatment options.

“We want more medicines of this type – those that respond to patients’ unmet needs – rather than marginal improvements to treatments we already have,” he added.

Hlávka acknowledged the industry’s concerns about how unmet needs will be defined but argued that the policy provides the right incentives for meaningful innovation.

Europe focus on accessibility

The pharmaceutical industry has expressed concern that the reduced RDP period could undermine Europe’s attractiveness for investment, especially compared to markets like the United States, which offers more lucrative conditions for companies.

Hlávka note he is aware of these challenges but argued that Europe’s focus on accessibility sets it apart.

“In the US, pharmaceutical companies often generate 60–70% of their revenues, even though the population is smaller than Europe’s,” he said.

“This is largely because of the absence of centralised price controls. But that also means high prices restrict access for many Americans, with one-third of people citing cost as a reason they can’t take their prescribed medicines.”

Hlávka highlighted the disparities within Europe as another obstacle, pointing out that some member states approve new medicines much faster than others. These delays and different approval systems in 27 member states also cause problems and make Europe less competitive.

The Czech leading expert also underscored the importance of creating a predictable regulatory environment that rewards pharmaceutical companies for developing innovative, high-value treatments.

At the same time, he called for reforms that improve the efficiency of national approval processes and reduce disparities between EU countries.

“We need to ensure companies are paid fairly for the value they bring, especially for advanced and beneficial medicines,” he remarked, adding, “At the same time, budgetary constraints that limit reimbursement for additional patients are not motivational for companies and could stifle innovation.”

[Edited by Vasiliki Angouridi, Brian Maguire]