Medicines Availability and Pricing - part 3 - 5/5/2006

4th May
Government urged to negotiate medicines regulations with EU
Labour MP George Vella yesterday urged the government to hold negotiations with the European Commission on medicine regulations, saying the implementation of existing EU regulations over the past two years had caused hardship to patients.

Speaking during the debate on a Bill aimed at improving the enforcement of consumer laws, Dr Vella said patients were being "crucified" because of the high cost of medicines, and their shortage.

It was shameful that during the EU accession negotiations, it had not occurred to anyone to negotiate particular conditions regarding medicines which were in keeping with the small market in Malta.

Because of this inaction Malta had to adopt EU rules which were more appropriate for bigger markets. For example, while everyone agreed on the registration of medicines, having such registration made specifically for Malta raised prices sky-high because the market was so small. The same applied to labelling in Maltese.

In many cases, pharmaceutical companies had simply decided it was not financially viable to continue selling their products in Malta. In other cases, selling prices had gone through the roof, and he, as a doctor, frequently came across people who told him that they simply could not afford the medicines he prescribed.

In other cases, because of the absence of necessary medicines, patients who could be treated at home ended up in hospital. Medical practitioners were now also unable to administer certain children's inoculations they had used for years, with the Health Department quoting EU regulations. The regulations, surely, were there to help the people, not to make matters worse!

The situation was not being made any better by parallel importation. It was a fact that competition was not working in favour of consumers. How was it that a penicillin-related product cost Lm1.20 in Strasbourg and Lm4.20 in Malta?

While ideally one could not favour price orders, action was definitely needed in the case of medicines. Importers were forming cartels and fixing prices to the detriment of consumers. And the local regulators were doing nothing about it.

Given what had taken place in the past two years, the Maltese government clearly and urgently needed to go back to the European Commission to negotiate new conditions to improve the lot of Maltese patients. Malta's particular conditions, and the hardship which inappropriate EU regulations were causing, needed to be explained.

This was not a case of being against the EU. There was no going back on EU membership, but Malta needed to find ways to show how the EU rules on medicines were not appropriate for Malta, in the same way as Cyprus had also negotiated particular conditions. The MLP was prepared to help the government on this score.

Turning to health insurance, Dr Vella said it was only right that health insurers sought certain information to guard against fraud, but he disagreed that before making payments the insurers were asking patients to submit medical test results and other medical information. This was confidential information which should not be bandied about in offices. Medical information was shared between doctors and not between patients and companies. If necessary, the insurer's doctor should communicate directly with the claimant's doctors. It should not be non-doctors who made assessments on the basis of confidential medical information. This might well be unethical and unacceptable, and should be investigated.

Parliamentary Secretary Edwin Vassallo said the government had the mechanism to impose price orders as a last resort when market forces did not work properly. In the medicines sector he was in favour of the introduction of price orders once competition did not yield the benefits of free competition to consumers.

He said another factor for high local prices was transport. There was no doubt that freight costs were rising because of high fuel prices. He would, however, be having talks in the coming days on how such costs, including port handling, could come down.

Referring to the adoption of the euro, Mr Vassallo said prices did not have to rise and he was personally confident that they would not. However, the opposition was making damaging statements, sowing uncertainty in a very delicate moment. The opposition was trying to instill in the people's mind a perception which did not reflect reality and which was giving businesses a bad name.

The introduction of dual pricing would instill confidence in the market and therefore needed to be introduced as soon as possible, enabling consumers to get used to euro prices. Obviously, euro numbers were higher, because of the exchange rate, and the people needed to get used to them, but that did not mean higher prices.

Mr Vassallo said real competition would remove the need for price orders. That was why parallel trading was good. It was illicit trading and unfair competition which were wrong. Market surveillance needed to be effective at point of sale and the government was committed to ensuring that such surveillance was effective.

He said that the Bill would bring local consumer laws on the same level as legislation in Europe. It would strengthen the Consumer Affairs Department and make it easier for those responsible to safeguard consumer rights to work together. All authorities, including councils, had to understand their importance in the country's commitment to expand commercial activity.

Concluding, Mr Vassallo said it was only right that one expected more from the regulators.

Earlier in the sitting, Joe Brincat (MLP) said the Bill would bring on board various consumer-related laws existing in Europe, where great progress had been made in consumers' affairs. Consumers' associations regularly kept consumers updated, even through television channels. In Malta, on the contrary, such programmes and features in the printed media were lacking, with much attention being given by the media to advertisers' economic strength. It was a case of not wanting to lose advertising revenue to stand up for consumers' rights.

This was why consumers' association were so important.

In Malta, back in 1980, such associations had been given protection, such as against libel action, but not the opportunity to openly do their work.

Unless consumers in Malta took their lot into their own hands they would continue to face stalemate.

It was not always easy to adapt foreign laws in the Maltese statute book. Every country had its own circumstances.

In Malta the vast majority of products on sale were imported after having been manufactured according to other countries' standards.

In the construction sector, for example, the government could not wait for the EU to draw up the right rules and rates: they should be home-bred for the domestic situation, thus affording protection to both consumer and service supplier.

Dr Brincat said that in order to protect Maltese consumers from the dangers of tobacco smoking, tobacco products were made to carry warnings about such dangers. Some manufacturers had decided not to export to Malta so that they would not have to carry the warning in Maltese.

An analogous situation was present in imported medicines. Literature on medicines imported into Malta from Germany was usually in German or Arabic and did not help the Maltese consumer to know what to watch out for.

The bottom line was that the people were not being as well informed as their foreign counterparts on this and other important topics, such as genetically-modified products.

Labour MP Noel Farrugia said that 60 per cent of wages were spent on food and beverages. Therefore the government had to focus much more on this sector to ensure that products were of the right quality.

It also needed to be ascertained that prices were fair, and prices which should have gone down should not go up.

Consumers had the right to find competitive prices but they were unable to do so.

A Labour government would take the measures to safeguard consumers against unfair increase in prices.

On genetically modified organisms, Mr Farrugia said that there were different arguments for and against, now that GMOs were being accepted by the EU, Malta should find space to discuss such issues and understand the challenges it was facing. Mr Farrugia said the Bill being debated was failing to tackle the problems consumers were facing, mainly the rising cost of living.

Malta, Mr Farrugia said, could, up to 2010, give certain subsidies in the agricultural sector. It was now 2006. What would the situation be when the subsidies stopped if farmers and growers were not competitive?

The Labour MP said it was the government itself which was making matters increasingly difficult. Higher energy prices and other government-induced costs meant higher production outlays and lower competitiveness. It also meant less money in the people's pockets.


Pharmacists insist on talks over definition of drug registration rules
Massimo Farrugia

Pharmacists are insisting with the government it should re-open talks with the European Commission on the interpretation of drug registration directives, participants at an economic forum heard yesterday.

A medicine regulations regime introduced upon EU accession is said to have increased the price of medicines and brought about a drastic drop in medicines available on dispensary shelves.

Speaking at a Vodafone Economic Forum, Mary Ann Sant Fournier, from the Chamber of Pharmacists, expressed concern that the number of medicines available was still on the decline, adding that there was a lack of medicines for high blood pressure as well as cardiopathology drugs.

"We fear there will be less medicine on our shelves in January 2007," Ms Sant Fournier said.

According to the healthcare trade section of the Malta Chamber of Commerce and Enterprise, drugs certified by other EU regulatory authorities should be allowed into Malta. The problem, it said, was related to regulation expenses which had increased for local importers and led foreign suppliers to withdraw their products from Malta's "tiny" market.

The chamber said last week that products had been reduced by about 7,000 items, warning that the country might end up with far fewer than 2,000 medicinal items available to the public by January 1, 2007 when new regulations come into force.

However, according to Competitiveness Minister Censu Galea, Malta had to have its own regulatory system since the European Union would not allow the island to import medicines certified by other countries, as it did with founding member Luxembourg.

Health Minister Louis Deguara complained that distinctions between facts and sheer perceptions have been blurred in what has been stated so far.

He said Malta had about 8,000 registered medicines when EU countries like Italy and England had just 5,000. A list of available medicines showed that 900 products were listed twice while 2,000 were not licensed anywhere else in the EU.

Dr Deguara said that between 2003 and 2005, Malta imported Lm150 million worth of medicines and only 0.3 per cent of this had gone to the Medicines Authority. Therefore, the increase in prices could not be blamed on the government.

The Director of Health, Ray Busuttil, said most products were still being imported and sold without an authorisation number or leaflets with a Maltese translation and still their price had increased.

Dr Busuttil said the health authorities were finding it difficult to identify what was contributing to this state of affairs. "Importers and local distributors blame suppliers abroad and the fees charged to bring in certain medicines, but suppliers abroad have told us that the charges are reasonable," he said.

Local distributors ruled out that prices were rising because of cartels as everybody faced pressures to cut prices in order to be competitive.


5th May

When bureaucracy loses the plot
The increasing cost of medicines on one hand and the dramatic reduction in the variety and range of their availability is rightly worrying public opinion.

The situation has been brought about by Malta's obligation to implement the EU directives on drug registration procedures. The prevailing scenario gives ammunition to the Eurosceptics while the government reacts by accusing the importers of medicines with forming cartels and fixing prices.

As the debate heats up and partisan politics enters the fray, any unprejudiced analysis and rational approach to the problem runs the risk of being hijacked. The country can ill afford this.

In the importation of medicines, the implementation of EU directives had the positive effect of ensuring that drugs of questionable efficacy would be withdrawn from the market and the handling and distribution of medicines would be more secure and professional.

Unfortunately, matters seem to have gone awfully wrong and further EU regulations envisaged at the beginning of next year will only aggravate a bad situation.

Such a vital and sensitive issue as the availability of medicines should prod the parties concerned to be honest with the facts at stake and address the situation without pandering to unfair vested interests.

The healthcare trade section of the Chamber of Commerce and Enterprise claims it was not included in the government's EU negotiating team. They insist the economies of scale due to Malta's small population should have been taken into account when fashioning the implementation of EU regulations in this sector.

The section feels that with goodwill and commitment the problems can be tackled satisfactorily. It lists four major problems. These are related to dossiers and maintenance documents associated with registration, as well as labelling and the issue of Maltese translations of the patient information leaflets.

In the case of dossiers and maintenance documents, its representatives claim that the Maltese Medicines Authority should stop duplicating the exhaustive and expensive work of the EU regulatory authority. They feel that products registered in other EU countries that have CPP (certificate of pharmaceutical product) certification should be automatically allowed into Malta.

Even what appears a simple requirement, such as the affixing of a unique Malta market authorisation number, can create enormous logistical and economic problems.

The insistence of the government to have patient information leaflets translated also into Maltese is certainly debatable.

These purely technical and scientific requirements deserve expert, competent and dispassionate solutions that recognise and respect Malta's particular situation.

The government's threatening stance and its proposal to introduce price orders might seem popular but long term could prove to be the wrong attitude. It only antagonises the sectors whose cooperation and know-how is crucial and it avoids looking at the problems in an objective manner, problems that, really, should have been foreseen.

Even now at this late date, if the government lives up to its claim to reduce unnecessary costs, any excessive bureaucratic measures should be either streamlined or, if possible, jettisoned forthwith.

The government is being urged to re-open talks with the European Commission over the registration rules. If the Maltese negotiators were able to secure concessions on other delicate issues, why not about medicinals too? There is certainly no harm in trying.

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