For healthcare to be sustainable, it must work for innovators, healthcare systems and patients (Guest blog)

For all EU governments, managing healthcare budgets is challenging. An ageing population, with people more exposed to chronic diseases, stretches scarce healthcare resources. Geopolitical, economic and social pressures, along with the lasting impact of Covid-19, are placing strain on healthcare systems. Many of them struggle to make the latest medicines available to their patients.

As someone who worked as a medical doctor in the UK’s National Health Service, I know how important it is that patients get the right medicines at the right time. I know, too, that running a health service is resource-intensive. But casting healthcare as a cost rather than as an investment fails to recognize the value of innovation to patients. New medicines are at the heart of healthcare. Ensuring patients have access to them - at the right time – is vital. This is worth working towards.

Net spending on medicines has been stable as a share of total healthcare expenditure in major European countries for the past 20 years. That is despite many new innovative therapies being made available for patients during that time in areas such as cancer, hepatitis C, immunology and many rare diseases which previously had no treatment. Governments are trying to help to manage healthcare budgets by applying mandatory rebates and clawbacks to medicines which, in turn, are covered by manufacturers. With a surging industry pipeline, that is getting harder due to the volume of new medicines and the pace of science.

Government measures to limit pharmaceutical spending can have negative consequences. These measures treat medicines as just another health bill. They miss rewarding innovations that demonstrate significant health gains. They disincentivize an innovator from launching in a country. They overlook the demographic and epidemiological complexity of patient populations. It is vital that investment in early-stage discovery is not deterred. We need more, not fewer, clinical trials and treatment options for patients.

At BMS, we understand governments’ affordability pressures. But measures to make healthcare more sustainable should be carefully considered to balance competing policy priorities. We believe that properly designed policies can reward innovation, drive value and improve patients’ access to medicines.

Managing budgets  

Policies aimed at controlling pharmaceutical expenditure must strike the right balance between managing budgets and getting the most out of innovation. Demand for healthcare is rising. Three-quarters of total European expenditure on health goes on treating chronic diseases[i]. By 2050, there will be close to 500,000 centenarians in the EU. In the same year, the median age of the EU’s population will be 48.2 years[ii]. Ageing exposes us to more chronic illnesses. Innovation can help to deal with healthcare demand.

Some policies like mandatory rebates operate like a tax, with no guarantee that savings delivered on existing or older medicines are reinvested in newer ones. Clawbacks are often activated when overall medicines budget limits, or product budget caps, are reached, irrespective of demand or the medicine type. These measures save money but they cost innovation. That does not help patients.

Tools like clawbacks are used by governments to help with the sustainability of healthcare budgets. Innovators and other stakeholders, including policymakers, should work together on the design of policies that minimize the negative impact of healthcare sustainability measures on innovation and access to medicines.

Innovators, and other stakeholders including policymakers, need to work together on the design of polices to minimize the impact on innovation and access to medicines. Budgets for medicines should be demand-led, growing in line with healthcare needs and set across multi-annual cycles. The holistic value of medicines - for societies, economies, governments and healthcare systems – should be part of health technology assessments.

There should be consensus on value. Innovative contracts, agreed between governments and innovators, should derive from predictable, robust and accepted value-based frameworks. These frameworks can increase certainty around value and budget impact. Patients would be able to access the latest innovations faster.

Delivering innovation

Access to new medicines is unequal in Europe. In some countries, patients can get access to a new medicine very soon after it is authorized by the regulatory authorities. In other countries, they can wait for years. This is frustrating. A tailored approach to pricing that takes into account local conditions, including ability to pay, the healthcare system and value assessment, can make a difference. There must be political will to deliver innovation to all citizens, no matter where they live. Adequate budgets, well-functioning reimbursement systems and efficient healthcare investment can help.

I grew up fascinated by science. I never lost that sense of wonder and possibility. I am as passionate about innovation now as I was when I started studying medicine at Oxford in the UK. That led to a 20-year career in the biopharmaceutical industry where I have seen how diseases evolve, how medicines have improved and how much patients depend on the innovation we bring forward. Healthcare policies can support sustainability, improve patients’ outcomes and reward science. Through dialogue among all stakeholders, we believe that these goals are achievable.

Future EU prosperity will hinge increasingly on competitiveness[iii]. Harnessing our shared economic potential means having a healthy and productive population, and taking advantage of the opportunities of innovation. The sustainability of healthcare systems should not come at the expense of innovation. Instead, one can enable the other, with the result that patients and citizens benefit from a rising tide that lifts all boats.



[ii] Eurostat

[iii] European Commission


Monica Shaw

Monica Shaw is Senior Vice President, European Markets, at Bristol Myers Squibb
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