Hogan Lovells Publications | Life Sciences and Health Care Videos | 15 August 2016

In the EU, drug and device design can influence acceptance and pricing

Companies looking to market and sell pharmaceuticals, medical devices, or other treatment products and methods in the European Union face several different hurdles.

The first is called marketing authorization, which is regulatory approval of a product to be sold. The second, which many drug and medical device companies are unaware of, is related to product pricing and reimbursement. It is quite possible, for example, for a product to be approved for sale in the EU but not achieve sales targets because it is too expensive and/or payers will not provide adequate reimbursement.

“To be honest, it’s more like 28 hurdles,” says Joerg Schickert¹ of Hogan Lovells, referring to the 28 individual markets encompassed by the EU. “Unlike in America, where there is one entity (the FDA) making such decisions, in the EU there is no harmonization. Each market sets its own standards and enforces its own policies and regulations.”

It would be nice to say that these are hypothetical issues, but the fact is that each market’s health spend—which, of course, is derived from tax revenues—is quite limited. Even a product that has been proven effective will not necessarily earn adequate reimbursement.

“Increasingly, payers are asking to see outcomes data,” says Schickert. “Simply having a successful clinical trial may not be enough. For example, a drug may have been proven to lower cholesterol in the blood. That’s fantastic, but is there data showing that it therefore also lowers the incidence of heart attacks? If not, a payer likely will balk.”

What drug and device makers need to do, according to Schickert, is engage with a firm like  Hogan Lovells as early as possible, so that products are designed with market and reimbursement approval in mind. For example, products that can be administered by patients themselves incur lower costs than those that require an office visit. And when designing clinical trials, a broader set of metrics should be factored in to the studies.

“We have expertise in the issues of market acceptance and pricing in a general sense,” says Schickert, “but perhaps most importantly we have experience in local jurisdictions throughout Europe. The issues our clients may face in Germany or Greece, Spain or Scotland, for example, can be quite diverse. But because we have a presence in these local markets, we can advise our clients accordingly.”

Watch the video to learn more about pricing and reimbursement issues in the EU.

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