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<pre>Development of new
medicines
Better, faster, cheaper
The Hague, November 2017
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<pre>                                                                                                         55
Foreword
Numerous new medicines are being put on the market. This means an improvement in the quality
of life for many patients, and for others a significant extension in the time left for them when they
are severely ill. New medicines are essential for good care, and their development is going to keep
progressing further and can be expected to yield ever-improving results.
The question is, however, whether a new medicine must be accepted no matter what the cost. It
does sometimes look that way. The price of new medicines is often exorbitantly high; figures of over
€100,000 per patient per year are no exception. How is it possible that medicines can be so
expensive?
The RVS (Council for Public Health and Society) has shown that the high prices are partially the
consequence of an inefficient development process: nine out of ten medications do not end up on
the market. The costs of failures are set off against the price of the one medication that does reach
the market. Another factor is that the high prices are the result of the market power of the
pharmaceutical companies, the limited counterweight provided by government, hospitals, health
providers and health insurers and the generally accepted duty of care that we in the Netherlands –
rightfully – do not want to give up. In a political administrative sense it is then virtually impossible
not to include an expensive medicine in the compulsory standard health insurance.
The RVS wants to break this stranglehold. In these recommendations, the Council sketches out an
alternative perspective and states how the development of new medicines can be done better,
more quickly and more cheaply. The Netherlands can make a start on this and show that the
development and market introduction of new medicines is also perfectly possible for an acceptable
price while observing the international norms.
Pauline Meurs
Chair of the Council for Public Health and Society
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<pre>66                                                     RVS - Development of new medicines
The Council for Public Health and Society
(Raad voor Volksgezondheid en Samenleving, RVS)
is an independent strategic advisory body.
The task of the RVS is to advise the government and
the House of Representatives and the Senate of the States General
about the broad lines of both policy areas.
Composition of the Council
Chair: Pauline Meurs
Council members: Daan Dohmen, Jan Kremer, Bas Leerink,
Liesbeth Noordegraaf-Eelens, Greet Prins, Loek Winter,
Jeannette Pols (council member as from 1 September 2017) and
Pieter Hilhorst (council member as from 1 September 2017).
Director ad interim (until 1 November 2017): Luc Donners
Deputy director: Marieke ten Have
Council for Public Health and Society
Parnassusplein 5
Postbus 19404
2500 CK The Hague
T +31 (0)70 340 5060
mail@raadrvs.nl
www.raadrvs.nl
Twitter: @raadRVS
Publication 17-10
ISBN: 978-90-5732-271-6
Original title: Ontwikkeling nieuwe geneesmiddelen. Beter, sneller, goedkoper
Translation: AVB Vertalingen
Graphical design: Studio Koelewijn Brüggenwirth
Photography: Studio Oostrum (published with permission from TNO)
Printing: Xerox/OBT
© Raad voor Volksgezondheid en Samenleving, The Hague, 2017
No part of this publication may be disclosed, reproduced,
stored in a data processing system or transmitted by
means of printing, photocopying, microfilm or any other
way whatsoever without permission from the RVS.
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<pre>                                                                                         7
Foreword                                                                               5
Summary                                                                                9
1 Introduction                                                                        11
    1.1 Background to the recommendations                                             11
    1.2 Focus of the advice                                                           11
    1.3 Reading guide                                                                 12
2 The current development route for a new medicine                                    13
    2.1 Stages in the development of a new medicine                                   13
    2.2 Costs of developing medicines                                                 15
    2.3 Patenting new chemical entities                                               15
    2.4 Who does what?                                                                15
    2.5 Who funds what?                                                               16
    2.6 Marketing autorisations, pricing and remunerations                            17
3 Problems with the current development pathway and possibilities for improvement     19
    3.1 The current development process is lengthy and costly                         19
    3.2 Strict rules do not guarantee good outcomes                                   19
    3.3 The current development process is extremely inefficient                      20
    3.4 Pricing in a monopolistic market                                              23
    3.5 Possibilities for improvement                                                 25
    3.6 Alternative development models                                                27
    3.7 Summary conclusion                                                            27
4 Solution directions                                                                 29
    4.1 Introduction                                                                  29
    4.2 Reining in the high and very high prices                                      29
    4.3 Reducing the risk of failure along the development pathway                    36
    4.4 Bundling expertise                                                            38
    4.5 Shortening development processes                                              38
    4.6 Making space for smaller (Dutch) companies to access the market independently 38
    4.7 Finding out when non-commercial development of medicines is desirable         39
    4.8 Summary conclusion                                                            39
5 Recommendations                                                                     41
Appendix
    1 Request for an opinion                                                          43
    2 Alternative development models                                                  45
Literature                                                                            53
Preparation of advice                                                                 57
Participants in the expert meetings                                                   59
Other experts who were consulted                                                      61
Abbreviations                                                                         63
Publications                                                                          65
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<pre>8 RVS - Development of new medicines</pre>

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<pre>                                                                                                        9
Summary
New medicines are becoming increasingly expensive. Amounts of €100,000 a year or more for
treating a single patient are no exception. Expenditure on expensive medicines is increasing every
year by about 10%. That cannot continue in the long run.
The reason that manufacturers give for the high prices is that developing medicines takes a great
deal of time and money. Development timescales averaging twelve to thirteen years are mentioned
(ten years for R&D – research and development – plus two to three years for administrative
procedures) (EFPIA 2016) and costs of €2.6 billion for a new drug (DiMasi et al. 2016). It is a high-risk
venture: nine out of every ten medicines do not reach the finishing line and the costs of those are set
off against the pricing for the one medicine that does reach the market. Medicines are developed in
the private sector and investors therefore expect an appropriate – high – return on their investments
as the reward for the high financial risks. The only companies capable of taking on such financial
risks, calculating in the substantial risk of failures and demanding high prices are the major
pharmaceutical companies (Big Pharma), thanks to their size. As a sector, the pharmaceuticals
industry is consistently in the top three in terms of profitability, with an average return of over 20%
(Forbes 2015).
The governmental authorities have to look at both the interests of society and those of the
individual patients. This means that the authorities must keep excessively expensive medicines out
of the collectively insured package, yet at the same time must not deny any individual patient a life-
saving treatment. If a manufacturer is not prepared to ask a socially acceptable price for its products
in negotiations, the authorities will have to make use of the opportunities that national and
international regulations offer for making the medicine available for patients at an acceptable price,
for instance by imposing enforced licences, allowing patients to order medicines from abroad via
the Internet to be delivered to their homes, encouraging preparations at the pharmacy and tackling
abuse of the position of power.
The classical argument that is used against this kind of government intervention is that it
undermines the development of new medicines, because investors will no longer be prepared to
make funds available for it. This will certainly be the case if the authorities demand unreasonably
low prices for which it is impossible to develop a medicine. However, if the price level is both
competitive and realistic, this will encourage businesses –given their aim of at least maintaining
their profit levels – to develop medicines more quickly and less expensively.
National and international regulations – in particular requirements to intro- duce a medicinal
product on the European and other markets – are often stated as the root cause of lengthy
development at high costs. These requirements apply in particular to time-consuming and
expensive clinical studies. While it is certainly desirable that European regulations should be
changed in a number of areas, and the Dutch government has been working hard for this,
improvements have already been made in the meantime. The current fast track procedures are an
example. They allow medicinal products to be given access to the market by the European
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<pre>10                                                          RVS - Development of new medicines
Medicines Agency (EMA) within just a few years on the basis of what are sometimes very small
clinical studies.
The question still remains of whether it is possible to reduce the extremely high probability of
failures in the development of new medicines. The answer is yes. But a lot of effort is required from
a large number of parties if this is to be achieved. It starts with the scientific research that is often
the foundation for developing a new medicine. As stated earlier, an average of nine out of ten drugs
drop out during the costly clinical research. These are all drugs that were effective in models and/or
test animals such as lab mice, but which were finally shown not to be effective in humans. A more
rigid and closely verified look should be taken beforehand at whether the animal and other models
used properly represent the specific disease in humans for which they serve as a model. One
possible solution is offered by ‘natural’ models, in animals or otherwise, such as test animals that
naturally develop conditions that are very similar to those of humans. This can also reduce the
numbers of test animals needed. Other important points are independent clinical research and
sharing knowledge, in particular about clinical research data. Although some of the data is public, a
lot is still kept secret, causing duplicated work and unnecessary wasted time at research institutions
as well as in companies. Assistance from patients in developing new drugs is also important.
The question arises as to what use the advice is from the Council for Health and Society (RVS),
because new medicines are developed at the global scale. The Netherlands is just a small player and
does not have a large pharmaceutical industry. However, our scientific research is among the best
and we also have an innovative biotechnology sector. There are also various initiatives in the
Netherlands for developing medicines in a different way. All this creates opportunities. It is
important to ensure a good climate for clinical research in the Netherlands. This also requires a
proper information infrastructure, among other things. The availability of a personal health record
(PHR) adds to the help provided by patients and the efficiency and effectiveness of clinical research.
The recommendations in this advisory document can help encourage the development of new
medicines in the Netherlands, so that we can show that things can be done better, faster and less
expensively, even given the current international framework. The Netherlands can lead the way in
this.
Nevertheless, the efforts already put in by the Dutch government to ensure the desired changes in
the regulations at European level have to be continued. This is a task for the long haul. This covers
European patent regulations, rules about data exclusivity, orphan drug Regulations and the use of
European research funds.
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<pre>                                                                                                     11
1 Introduction
1.1 Background to the recommendations
The reason these recommendations are being made is the request for advice from the Minister of
Health, Welfare and Sport (VWS) in a letter dated 22 March 2016 (Appendix 1). In this letter, the
minister asks the RVS to give advice about more efficient development of new medicines and
alternative development models. The reason for this request for advice is that more and more often
medicines are being developed for small groups of patients. These medicines can mean a great deal
to those patients but are often (extremely) expensive at the same time. There is no longer a
relationship with the R&D costs, or even with the added value. This is endangering the affordability
of care.
The current development process for new medicines takes a long time and is costly. Many
medicines fail to cross the finishing line. The minister's main question is:
“How can medicines be developed faster and more efficiently, with the efficiency improvements
resulting in lower prices or otherwise benefiting society?”
In addition, the minister points out the problem that it seems impossible in practice for small
companies to introduce medicines onto the market independently.
Specific attention was asked to be paid to personalised medicines, i.e. medicines that are tailored to
the patient, such as gene therapy. Do these always have to be made available to the patient by a
commercial party using market authorisations, or is non-commercial development of medicines one
of the possibilities?
1.2 Focus of the advice
New medicines are developed at the global scale and are highly regulated through international
legislation and regulations. There is a lot of criticism of these regulations, in particular of the
additional protection certificates for medicinal products under patent legislation and market
                                                                                                 1
exclusivity for orphan drugs, which is based on the European regulations on orphan drugs.
Modifications have to be tackled at the international level. The Netherlands is very active in this
field. However, ensuring changes at the international level is a long-term task whereas the problems
are urgent right now. That is why this advice is focusing on what is possible in the Netherlands in the
shorter term within the context of current international regulations.
By far the majority of new medicines that are introduced on the market in the Netherlands are
developed elsewhere, primarily the United States. In the first instance, there were hopeful reports
that the new American president wanted to tackle the high prices for medicines in the US. After
consultations with large American pharmaceutical companies, he stated, “The US drug companies
have produced extraordinary results for our country, but the pricing has been astronomical for our
country.” However, he added that he wants other countries to pay “their fair share” for “US-made”
pharmaceuticals and that “global freeloading” must stop (Ramsey 2017).
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<pre>12                                                                    RVS - Development of new medicines
This does not bode well for the Netherlands and Europe, and an important question is how we can
control the costs of new pharmaceuticals to make sure that care remains affordable. As a
counterweight, more new pharmaceuticals will have to be developed in Europe, and in different,
more affordable ways. The Netherlands does not have any large pharmaceutical companies. This
creates opportunities for testing alternative development models. If those are successful, they can
be used as examples by other countries.
The current development model has some fundamental problems. For instance, the majority of
promising medicines – up to 98% in some areas – drop out during what are often costly clinical
studies. The development process must become faster, better and cheaper. The Netherlands can
play a pioneering role in the development of alternatives. In this advisory document, we will look
into how this could be done.
1.3 Reading guide
In Chapter 2 we give an outline of the current development route for new medicines. Chapter 3 then
describes the problems with the current pathway; This also includes the pricing and the possibilities
for improvements. In Chapter 4 we explore directions that may yield solutions and in Chapter 5 we
give answers to the minister’s questions in the form of six recommendations. Appendix 1 contains
the request for advice and Appendix 2 describes a number of alternative development models that
have been devised or have already taken concrete forms.
    Notes
1   An orphan drug is a medicinal product for a rare, severe condition. Rare is taken to mean that less than five out of every
    10,000 people in the European Union suffer from the condition.
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<pre>2 - The current development route for a new medicine                                                   13
2 The current development route for
         a new medicine
2.1 Stages in the development of a new medicine
There are three phases in the development of a new medicine: the research, development and
marketing phases. The research phase is when a new potential medicine is developed. During the
development phase, the safety and efficacy of this drug are tested. Once it has been demonstrated
that a drug is safe and effective, the European Medicines Agency (EMA) gives permission for the
drug to be sold on the European market. We will give a brief description of the three phases.
Research phase
The search for new medicines can be done in several ways. The classical way, phenotype screening,
means testing numerous different chemical compounds of low molecular weight on cells or lab
animals, looking for a possible therapeutic effect. After that, the biological basis for the effect is
investigated. Sometimes this may not be found until many years later. These processes are often
trial and error. A therapeutic effect of a substance is often found by accident. There are also various
examples of drugs where a side effect became the main effect, such as sildenafil (Viagra) which was
originally developed to lower blood pressure.
In addition to these largely trial-and-error methods, target-based pharmacology has also emerged
strongly in recent decades (see Figure 1). The basis of the new medicine then comes from
fundamental research into processes in the body. This yields knowledge about the specific causes
and mechanisms that play a part in certain conditions and which can be a potential drug target.
After that an attempt is made to develop a medicine that acts upon this target. This can be done in
several ways. For example, large collections of small molecules known as compound libraries can be
tested for their affinity with a drug target. Computer modeling can also be used to find molecules
that can bind to a target. This approach yielded imatinib, for example. This medicine is a small
molecule used for chronic lymphatic leukaemia, a type of blood cancer. It inhibits signal transfer
within cancerous cells by binding to specific enzymes.
Figuur 1: Moderne, target-based ontwikkeling van nieuwe geneesmiddelen
Bron: Van Gool, 2016
A third biopharmaceutical method is the production of specific proteins: antibodies against the drug
target. A receptor can for instance be blocked, which disturbs a signal transfers. The names of this
type of biopharmaceuticals end in ‘mab’ (monoclonal antibodies). One example is nivolumab, a drug
against cancer.
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<pre>14                                                            RVS - Development of new medicines
The first substance that is found to act against the target is called the lead compound. This
substance is the starting point for further development. The effect must be validated. Changes are
made to the chemical compound, attempting to optimise the effectiveness and minimise the side
effects. The substance must also be chemically characterised, in detail. Promising products are
patented as new chemical entities (NCEs). The substance must then be manufactured according to
the rules that apply to medicinal products, the Good Manufacturing Practice (GMP) conditions, so
that they can be tested on lab animals and humans.
Development phase
Five sub-phases can be distinguished within the development phase: the preclinical phase, the
clinical phase (which is further split into phases I, II and III of clinical trials), and the registration
phase.
The pharmacology and the acute and chronic toxicity are studied in the preclinical phase. These
investigations are, among other things, conducted on lab animals. If the results are favourable, the
clinical phase follows, in which the drug can be tested on humans. It is tested initially on a small
number of healthy volunteers to determine the safety and safe dose (Phase I clinical studies). If the
results are successful, Phase II follows. A distinction is often made between Phase IIa and Phase IIb.
The drug is tested on a small group of patients in Phase IIa and if the results are positive it is often
referred to as a proof of concept: it has been shown that the drug works or at least appears to work in
humans. The drug is tested on a slightly larger group in Phase IIb. The distinction between phases IIa
and IIb is mainly of financial importance. A startup often develops a drug and sells it to a larger
pharmaceutical company after the proof of concept has been given.
The drug is then tested on an even bigger group of patients (the Phase III trial). If this study is also
successful, a licence can be requested. As a rule, consultations with the licensing authorities
regarding the requirements for those studies will already take place during phases IIa and IIb. When
the drug is accepted on the market by the licensing authorities, the manufacturer determines the
price; after scaling up production, the product can be released on the market. Moreover, this does
not mean that the drug is automatically paid for from the collective healthcare insurance;
Acceptance in the insurance package is a separate process: see Section 2.6.
Once the drug is on the market, it is still monitored for any (rare) side effects that were not
discovered earlier. This is known as pharmacovigilance, Phase IV research or post-marketing
surveillance. This is done by the manufacturer. Additionally, anyone can report side effects to the
                      2
Lareb Foundation. This foundation takes care of the national recording and evaluation of side
effects and interactions of medicines.
It is important to note that the development of new medicines takes place at an international level.
Research into new medicines is done in centres that are spread across the globe.
In Phase III, clinical studies of a particular drug are often done in multiple locations around the world
at the same time (multicentre studies). The financing and patenting discussed below are also done
on a global scale. Current legislation for patenting and market approval is regulated almost in its
entirety at the European level. The decision taken at the national level is whether or not to
reimburse a medicine through the health insurance that is mandatory in the Netherlands.
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<pre>2 - The current development route for a new medicine                                                     15
2.2 Costs of developing medicines
Developing a new medicine costs a lot of money. The actual costs will vary from one medicine to the
next. Sometimes the development proceeds quickly, and sometimes there are major, expensive
setbacks. Estimates of the average costs of developing a new medicine vary widely, from hundreds
of millions of euros to several billion. The Flemish Biotechnology Institute works on the basis of total
costs of €900 million. Other calculations give a figure of €2.6 billion for a new medicine. The costs of
the research phase are estimated in the first case at €100 million, plus €190 million for the preclinical
phase, €475 million for the clinical phase and €135 million for the licensing and so forth. De
European Federation of Pharmaceutical Industries and Associations (EFPIA) gave the following
percentages of the overall development costs in 2016 for the various phases: preclinical studies
21.2%, phase I clinical trials 8.9%, phase II 10.7% and phase III 28.7%, licensing 5.1%, phase IV 13.7%
and other costs 8.9%.
2.3 Patenting new chemical entities
As stated above, it costs a lot of money to develop a new medicine. Investors are only willing to
invest large sums if they can earn them back in the longer term (with a profit). This is possible if the
medicine is protected by a patent. A patent is a social contract between the patent holder and
society at large: in exchange for full publication of the details of the invention, the patent holder is
granted a number of rights for a limited timeframe, the patent period. A patent gives the holder the
exclusive right (subject to a number of exceptions) to produce, apply, use or trade “the patented
                      3
product or method”. Rights can be claimed for a period of twenty years after the patent is granted,
with (for drugs) a maximum extension of five additional years as a Supplementary Protection
Certificate to compensate for the time it takes to get market authorisation. If the drug is tested for
paediatric use, another six months may be added.
Anyone may replicate the drug after the patent expires. The investors are expected to have
recovered their investments by then. For example, if the development of a drug takes ten years,
within a remaining patent period of ten years plus additional protection certificates the investments
can be earned back in 15.5 years at most.
2.4 Who does what?
As stated in Section 2.1, new medicines can be developed in various ways. Research and
development based on classical development methods (such as phenotype screening as mentioned
above) is done almost entirely within the pharmaceutical industry. A number of large
pharmaceutical companies have large collections of different low molecular-weight compounds
(compound libraries) for this.
Target-based pharmacology, based on fundamental research into biological processes, is generally
carried out in academic centres and the results are published in scientific journals. This knowledge
can lead to potential drug targets being identified. Various parties can proceed from there. A univer-
sity may make a suitable molecule itself and patent it. The university can then set up a company, a
spin-off that develops the drug further. The university can also sell the patent directly to a company
that develops the medicine further.
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<pre>16                                                           RVS - Development of new medicines
Pharmaceutical companies can also make a new molecule entirely by themselves or in collaboration
with universities, and then patent it and develop it further themselves. What often happens in
practice is that when a promising new drug target is published in the literature, companies descend
upon it and attempt to use it as the basis for developing new medicines. If this is successful, it means
that multiple new medicines targeting the same drug target will appear on the market after ten to
fifteen years. The compounds often look very similar to each other and work in the same way. A
good example of this is ACE inhibitors, a group of medicinal products that lower blood pressure, all
looking chemically similar to each other and acting upon the same enzyme, angiotensin I converting
enzyme (ACE). In a number of cases, this is because small modifications have been made: a
variation of an agent patented by a competitor may also be patentable because it is seen as a new
chemical entity. These are then referred to as me-too drugs, from the point of view of them being
(modified) copies. The medicines are, however, often developed in parallel.
As stated earlier, the biggest cost item for this is clinical trials. As a rule, pharmaceutical companies
have these studies performed for them by contract research organisations (CROs). These are
commercial companies that specialise in setting up and evaluating clinical trials. Many of these
studies are multicentre trials, running concurrently in a large number of different countries, not only
in the United States and Europe but also for example in India and African countries. Coordination
between the various centres is a significant cost item. In addition, hospitals and care providers often
ask for money for carrying out clinical trials. This accounts for a quarter of the costs. The costs of
recruiting the patients are one third of the overall costs (McGuire 2011). The overall costs are in the
region of €100,000 per patient per trial. This means that the Phase III study with 2000 patients costs
around €200 million (Schellekens 2016). The paradoxical aspect of this is that the smaller the
anticipated effect of a medicine is, the greater the number of patients who have to be included in
the study to demonstrate this effect – and the more expensive it becomes.
2.5 Who funds what?
The fundamental research that is carried out by academic centres is partially paid from collective
resources (direct governmental funding and other public cash flows) and partly from private
resources, for example from companies or health funds (the external cash flow).
As stated earlier, the development of a drug costs many hundreds of millions of euros. This money
is provided by investors. Intermediaries select highly promising initiatives and raise funds from
investors, such as institutional investors and wealthy private individuals. Given that these are high-
risk investments, the investors generally require returns of at least 20%. The money is used for
setting up startups for carrying out preclinical and clinical research. If the drug appears to be
successful, this is generally sold in Phase II to a large pharmaceuticals company – Big Pharma –
because they have the expertise that is needed for licensing and marketing, and because they have
a strong enough capital position to fund and organise Phase III studies and the licensing procedure
and the marketing, but above all because they are capable of handling the high risk of failure.
Where the medicines are for a small market, for instance orphan drugs for which the clinical trials
are necessarily smaller (and therefore cheaper), a medium-sized pharmaceuticals company can also
take this risk.
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<pre>2 - The current development route for a new medicine                                                     17
2.6 Marketing autorisations, pricing and remunerations
In order to be able to earn back the investments, it is of course important that a medicine must be
approved for use on the market worldwide. Decisions about this in the United States are taken by
the Food and Drug Administration (FDA). They are taken centrally in Europe for the majority of
drugs, with the EMA making the decision (see box). As can be seen from the boxed text, cancer
drugs for instance are covered by the European regulations, but medicines against cardiovascular
disease are not. These may be licensed selectively in one or more European countries. In the
Netherlands, this assessment is made by the Medicines Evaluation Board (MEB).
Medicines that have to be authorised at the European level
European regulation 726/2004 states which medicines are obliged to be licensed at the European
level (by the EMA). These have to meet one of the following criteria:
– Products that are developed using one of the following processes: recombinant DNA
    technology, controlled expression of genes, methods for hybridomas and monoclonal
    antibodies, and biosimilars that are also developed using one of the above-mentioned
    processes.
– Products that are in the ‘Advanced Therapy Medicinal Product’ category (ATMPs); gene therapy,
    somatic cell therapy, tissue manipulation therapy or a combination thereof.
– Products that focus on one of the following diseases: acquired immune diseases, autoimmune
    diseases, viral conditions, cancer, neurodegenerative conditions, diabetes.
– Products that have acquired the status of an orphan drug.
The EMA checks whether a medicine is safe and effective. If, in the EMA’s opinion, the research data
provided means that this is the case, the medicine will be approved for the European market. It
should be noted here that the term ‘effective’ is taken to mean that the medicine in question is not
inferior in efficacy to the treatment standard or, in the absence thereof, that it is not less effective
than a placebo.
The EMA makes no evaluation of the price of the medicine. A medicine is developed on the free
market and the manufacturer is therefore free to set the price level for a medicine. In the
Netherlands, the maximum price is legally regulated and set to the average of the prices of the
same medicine in the United Kingdom, Germany, Belgium and France.
An authorisation to market the medicine does not mean that it is automatically recompensed in the
Netherlands through the mandatory health insurance (the basic health insurance package). A
distinction has to be made here between extramural and intramural medicines. Extramural
medicines are generally handed over to the patient by an external – public – pharmacy. Intramural
medicines are in general used in a hospital in the context of specialist medical treatment. An
extramural medicine is recompensed if it has been entered in the GVS (Medicines Reimbursement
System). This is a closed system. If the medicine has not been included in the GVS, it will not be
reimbursed. Manufacturers can ask the Ministry of Health, Welfare and Sport (VWS) for a medicine
to be included in the GVS. The minister decides whether or not to do this on advice from the
National Health Care Institute (ZIN).
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<pre>18                                                          RVS - Development of new medicines
The system for intramural medicines is open: they are reimbursed if they meet the criteria listed in
law, such as being in line with the current state of scientific knowledge and practice, and the
requirement that those insured can reasonably expect it. This is subject to the assessment of the
parties themselves: profession- al groups, patients and insurers. There is an exception for extremely
expensive medicines. The minister may decide to put these in what is referred to as the lock (in
Dutch: sluis). This is a legal option for excluding an intramural medicine from the compensated
package until the ZIN has assessed it and the VWS ministry has had an opportunity to negotiate
about the price. If the negotia- tions are successful, the medicine will be reimbursed (possibly also
with conditions imposed). If not, the product is not included in the package of insured items.
   Notes
2  https://www.lareb.nl/.
3  Dutch Patents Act 1995, Article 53, paragraph 1.
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<pre>3 - Problems with the current development pathway and possibilities for improvement                     19
3 Problems with the current
         development pathway and
         possibilities for improvement
3.1 The current development process is lengthy and costly
The previous section outlined the current development path for a new medicine. One reason given
by manufacturers for the high prices of new medicines is that the current development pathway is
very lengthy and costly. Development timescales averaging twelve to thirteen years are mentioned
(ten years for R&D plus two to three years for administrative procedures) (EFPIA 2016) and costs of
€2.6 billion for a new drug (DiMasi et al., 2016). It is a high-risk venture. Many medicines fail to cross
the finishing line. Investors therefore expect an appropriate (i.e. high) return on their investments as
the reward for the high financial risks.
As stated earlier, at least half the costs and the development time are taken up by clinical studies.
The licensing authority requires these studies so that the safety and efficacy of a medicine can be
assessed. The strict rules have been set up as a consequence of disasters in the past, such as the
thalidomide affair in the nineteen sixties (sold in the Netherlands under the brand name Softenon).
This was popular for helping people sleep and as a medicine for morning sickness during pregnancy.
Although it was thought to be safe for pregnant women to use, it caused severe birth defects.
3.2 Strict rules do not guarantee good outcomes
As well as allowing side effects to be uncovered, the clinical studies also determine the effectiveness
of a medicine. It is important to note that the clinical studies are carried out by the manufacturers
themselves or on their behalf. Various studies have shown that trials paid for by the
pharmaceuticals industry yield more positive results more often for their products than
independently financed ones (Lexchin 2012). A significant proportion – 65% – of clinical research
that is carried out in Dutch hospitals is initiated by the pharmaceutical industry (CCMO 2015).
In the past, the licensing authority generally required studies to be carried out as double-blind,
randomised controlled trials (RCTs). To ensure that the internal validity was as high as possible, the
patients are selected rigorously. Patients who have already been treated with other medicines are
generally excluded, as are elderly patients, those who are or could be pregnant, children and
patients with multiple morbidity. This means that generalising the outcomes is often dubious, as
only a select group have participated in the study. In the advice by the Council for Public Health and
Society (RVS) issued as Zonder context geen bewijs [No evidence without context] there is a more
detailed discussion of inter alia RCTs (RVS 2017a).
It is estimated that only 5% of the patients that care providers see every day in their consulting
rooms meet the inclusion criteria of the RCTs that are the basis for marketing authorisation for a
new medicine for a frequently occurring condition. This percentage is higher for rare conditions:
there are often so few patients, sometimes only a few dozen, that it is not possible to be too choosy.
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<pre>20                                                          RVS - Development of new medicines
There are even occasions where virtually all possible patients are in one trial and there are
insufficient patients available for a new trial.
The safety of medicines is important, but it is also relative. It is logical that a new medicine against a
cancer that is going to cause the death of the patient in the short term, with or without the existing
treatment, is subject to lower safety requirements than those imposed on medicines against non-
life threatening conditions such as e.g. a sleeping pill for (healthy) pregnant women or a medication
for ADHD in children. However, safety in the longer term cannot be determined using the current,
relatively short-duration studies. The current licensing procedure only provides superficial certainty
for this category of medicines. For instance, children are currently treated for ADHD with
amphetamine-like substances, although nobody knows what the consequences in the longer term
are. The newspapers recently had banner headlines after a PhD thesis (Schweren 2016) stated that
ADHD medication is not harmful in the longer term.This was, however, research carried out among
children, adolescents and young adults. The actual effect at older ages will only become known in 30
to 50 years’ time. The same applies to prescribing contraceptive pills to adolescents. Although these
medicines have been on the market for decades, little or no research has been done into the effects
on this specific group of patients. The manufacturer will – justifiably – counter with the argument
that these medi- cines are not intended for these indications or patient groups. The patient
information leaflet for contraceptive pills based on desogestrel states for example: “There is not yet
                                                                                               4
enough information about the use of desogestrel in children and adolescents aged under 18”.
Guidelines are applied flexibly
The licensing authorities are aware of the issues sketched out above and always weigh up the risks
and benefits for the patient. In contrast to what manufacturers often claim, the guidelines are
applied flexibly in practice. For instance, Hatswell et al. found in a study examining the period 1999-
2014 that a considerable proportion of new medicines were allowed onto the market on the basis of
single-arm (i.e. non-randomised) studies (Hatswell et al., 2016). These are studies in which all the
patients in the trial are treated with the new medicine and the efficacy is determined based on
comparisons with historical information, i.e. on the basis of known treatment outcomes. The
patient groups are often small, sometimes consisting of just a few dozen people. Examples of
products that have been approved by this route are Sovaldi®, a medicine from the company Gilead
for treating hepatitis C, and Strimvelis®, a gene therapy medicine from the company GSK for the
condition ADA-SCID, a rare and severe congenital immune system disorder.
There is therefore most certainly flexibility in the shape of adaptive pathways that examine whether
certain categories of medicines can be allowed onto the market via a modified route. This can range
from fast-track assessment to limiting or skipping one or more phases from the development
pathway. Another development is provisional authorisation for medicines before the licensing
authorisation is complete. The EMA then imposes the requirement that the medicine will be
followed up via registries in which data about the treatment of patients is included. Manufacturers
now set up separate registries for that purpose for their products.
3.3 The current development process is extremely inefficient
By far the largest cost burden in the development of new medicines is the very large number of
failures. Only one out of twenty-four new molecular entities (NMEs) reaches the finishing line
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<pre>3 - Problems with the current development pathway and possibilities for improvement                    21
(Bunnage 2007). According to a recent study that looked at the period 2006-2015, 9.6% of the new
medicines that go into Phase I clinical trials ultimately end up being introduced on the market
(Thomas et al., 2016). A study in 2004 gave this figure as 11% (Kola and Landis, 2004). It seems
therefore as if the success percentage is decreasing. Broken down by the various phases, the
success percentages are:
— Phase I to phase II: 63,2%;
— Phase II to phase III: 30,7%;
— Phase III through to submitting an application for marketing authorisation : 58,1%;
— and from submission of an application through to marketing authorisation: 85,3% (Thomas et al.
    2016).
This means that more than half of all medicines fall by the wayside during the very costly clinical
trials in Phase III, and all the investments that have been made are lost.
These are only averages. The success percentage is higher in some areas. The overall chance of
success is 20% for drugs for cardiovascular conditions, whereas the figure for neurodegenerative
conditions is just 8%. The success percentage in the period 2002-2012 for medicines against
Alzheimer's disease was 0.4%. In addition, the few medicines that did reach the market were not
very effective. They only slowed the course of the disease down to a small extent. This also applies
for many of the new and costly medicines against cancer, which often only prolong life by a few
months.
The costs of all the misfires are ultimately set off in the price of new medicines that do get licensed
and authorised for the market. This happens largely indirectly because investors demand high
returns on their investments because of the high likelihood of failure.
This raises the question of why so many medicines fail. Various causes for this can be discerned. A
key factor is the fact that there is a distinct lack of knowledge about the causes of diseases and
knowledge about the exact working mechanisms and the potential side effects of new medicines.
Risk factors are often known, but the underlying mechanisms of disease are unknown (Gregori-
Puijané et al. 2012; Bowes et al. 2012). Attempts are made to unravel these issues using animal
models, usually mice. However, these animal models often turn out not to be very good models of
the disease process in humans. Drug targets found in mice often turn out not to be valid in humans.
Many medicines that work in mice turn out not to work in humans or to be too toxic.
Why is the laboratory mouse such a poor predictor? Is it because mice are too far removed from
humans, from an evolutionary point of view, or are mice under laboratory conditions too far
removed from humans? Various researchers believe that the latter is the case. Lab mice – and
laboratory animals in general are kept in highly artificial circumstances that are very different from
the natural surroundings. Specially bred lab mice that for example develop tumours spontaneously
are also very different from the way diseases and conditions develop ‘naturally’.
The question that then rises is why the academic world is working with the ‘wrong’ animal models. A
key reason for this is the reductionist approach. In order to unravel a biological mechanism, that
mechanism is interfered with while keeping all other conditions as constant as possible. This is often
done nowadays using ‘knock-out’ mice. If it is suspected that a particular protein plays a part in a
given biological mechanism – a biological pathway – then the gene that codes for that protein can be
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<pre>22                                                           RVS - Development of new medicines
disabled (‘knocked out’). The effects that then occur in the mouse can help clarify the working
mechanism. In order to keep the other conditions as consistent as possible, the experiments are
carried out using mice that are genetically as similar as possible, that are kept in identical laboratory
conditions, with the same food and so forth. Mice are bred that exhibit symptoms that appear
similar to conditions in humans. For instance, genetic studies in humans showed a link between
Gilles de la Tourette syndrome and the SLITRK1 gene. These results were published in a respected
journal (Abelson et al., 2005). A knock-out mouse was then created in which this gene was disabled.
The mouse then exhibited behaviour that looked as if it was obsessive-compulsive (Schmelkov et
al., 2010). In addition to this Tourette-like mouse, there are also Parkinson-like and Alzheimer-like
mice and others. Potential medicines against these conditions are tested using these mouse
models, with people often forgetting that only disease-‘like’ mouse models are involved, without it
being clear whether this mouse is a good model.
There are numerous other examples of animal models with major question marks hanging over
them. One example is the EAE mouse. Mice do not spontaneously develop multiple sclerosis (MS),
but it is possible to create a condition with a similar clinical picture in mice, namely Experimental
Autoimmune Encephalomyelitis (EAE). It is a highly artificial model that – amazingly – ultimately
has yielded successful treatments for patients with relapse-remitting MS. It has however also
yielded numerous drugs that appeared promising in the EAE mouse but did not work in patients, or
even exacerbated the condition (’t Hart 2015).
Another important factor is the market mechanism. Both academic research institutions –
particularly if held to account for the value they add – and companies carry out research behind
closed doors. After all, once findings are published they can no longer be patented. Multiple parties
will often descend upon a particular drug target as soon as it becomes ‘hot’. A great deal of research
into suitable molecules is then replicated. Given that the majority fail, a lot of money is wasted.
But even when a drug is patented and the invention is published, a large proportion still fall by the
wayside during the clinical phases. Pharmaceuticals companies are of course perfectly aware of this.
Given the extremely high costs of clinical research, it might be expected that these companies
would do everything possible to improve the situation. After all, if a company was able to improve
the probability of success, it would generate a considerable competitive advantage – as well as
profits. Nevertheless, this does not happen in practice.
One possible explanation for this is that the high failure rates are in fact the very source of the
position of power enjoyed by large pharmaceutical companies. Thanks to their size, they are the
only companies capable of taking on such financial risks, calculating in the substantial risk of failures
and demanding high prices. Within the current system, with a monopoly that is based on patents,
they can charge the costs of the large number of failures through to the customers (the patient or
insured party or society, as the case may be), thereby still achieving generous profit margins. The
pharmaceuticals industry, compared with other sectors, is consistently in the top three in terms of
profitability (Forbes 2015), with an average return of over 20%.
The ethical aspect
The problem outlined above also has a significant ethical aspect. A lot of work is duplicated. This
means that a lot of clinical studies, largely in the form of RCTs, are done that are not actually
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<pre>3 - Problems with the current development pathway and possibilities for improvement                     23
necessary. Patients who submit to this voluntarily are thus being exposed to unnecessary risks. They
are also not able – taking the group as a whole – to benefit from any positive results. After all, these
are kept confidential. The only ones who benefit from the RCT are those in the group that are given
the new drug, and only then if it is successful. All the others do not benefit. In addition, the people
who were benefiting from a new drug do not receive it any longer once an RCT is completed, as they
only get the drug during the clinical trial and then have to wait until it gets licensed. And once the
drug does come onto the market, there is still the question of whether it will be reimbursed through
the basic health insurance.
The market mechanism is not the only source of waste. Things go wrong in the academic world as
well at times. In 2005, Ioannidis published an article entitled Why most research findings are false. In
that article, which caused a great deal of fuss, he demonstrated that the majority of published
research results were incorrect (Ioannidis 2005). Macleod et al. stated in an article in the Lancet in
2014 that they estimated that 85% of the billions of dollars and euros expended annually on
biomedical research, including clinical research, is wasted (McLeod et al., 2014).
3.4 Pricing in a monopolistic market
The high development costs for new medicines – which cover the costs of drugs that fail, plus a
monopoly based on patents, high marketing expenditure and generous margins – lead to what are
sometimes very high prices. This does not yet automatically mean that lower development costs
will lead to lower prices.
In a competitive market, the price of a product is related to the development and production costs.
However, the market for new drugs is monopolistic in nature because the medicines are protected
by patents. In a monopolistic market, the price of a medicine is determined by what the customer is
prepared to pay for it – their willingness to pay, or value-based pricing. The insurance principle used
in healthcare means that the willingness to pay is the result of a complex process of regulation plus
political and administrative decision-making.
For rare conditions, this monopoly on medicines is strongly exacerbated by the European
regulations that came into force in 2000 for orphan drugs. These are medications for conditions that
occur in the European Union in less than five out of every 10,000 inhabitants. In addition to
protection by patents, a company has additional protection such as ten years' market exclusivity
after licensing. This means that no medicines based on the same mechanism of operation for the
                                                                     5
disease in question may be put on the market during that period. The regulation has strongly
encouraged the development of new orphan drugs. It has however also had the perverse effect of
medicines being investigated and licensed for narrow and restricted indications in order to obtain
the status of an orphan drug, while the study results indicate that its efficacy is broader. A reduction
in price would then be the consequence of this broadening of the indication, but that does not
happen. In order to encourage this, price versus volume agreements have been made in a number of
countries, such as France. The EMA no longer gives a medicine the status of an orphan drug so
quickly.
An important effect in the pricing in a monopoly-based market are the guide- line price levels
known as anchor prices. These are prices that are seen as a ‘normal’ price at a given moment and are
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<pre>24                                                           RVS - Development of new medicines
accepted without much discussion by customers, i.e. political circles and society. There is a
discussion in the first instance, such as the discussions in the past about Taxol and Herceptin, but
once the political world agrees, the new price level is accepted without many difficulties.
The phenomenon of anchor prices is clearly visible in medicines that are based on the same
mechanism of operation. When the first me-too products appear, the price level of the original
medicine is retained. If the new medicine is or appears to be more effective, it will even be offered at
a higher price. This is despite the fact that a manufacturer generally has lower development costs
for a me-too medicine. It is a law of economics that in an oligopoly market – one in which there are
only a small number of providers of the product – the providers will adjust their prices to match each
other even if (prohibited) agreements to that effect are not being made. The pharmaceutical
markets and sub-markets for new medicines are oligopolies, particularly after the major mergers
and takeovers in the past. This does not mean that competition is entirely absent, but that it is
principally driven by marketing instruments – getting the medicine familiar to the doctor’s pen –
rather than by the price. A lot of money is therefore spent on marketing in this sector.
For innovative companies who put an entirely new medicine according to a new mechanism of
operation onto the market, it is frustrating to see that competitors can then jump on the gravy train
of their success and make much more profit from it. Extra strict requirements are imposed on any
entirely new type of medicine. A great deal of expensive research has to be done. These are also the
companies that have to put in a great deal of effort and expense to achieve new, higher anchor
prices. They have to sort out all the teething problems for manufacturers who later market a similar
product.
We should note that the issue raised is generally not about ill will or malice on the part of individual
companies. In a capitalist system, pharmaceuticals companies – like any other – are ultimately
forced by their shareholders to maximise returns. A company that does not charge high prices will
be taken over, voluntarily or otherwise, and the new investor will maximise the returns. This
phenomenon is occurring more and more often. One example is the takeover in 2011 of Pharmasset
by Gilead for $11.2 billion. The drug Harvoni that was developed by Pharmasset generated sales
worldwide of $15.3 billion in the year that it was introduced.
The phenomenon of guideline prices also works backwards down the ‘pharmaceutical tree’.
Promising products made by startups are acquired by Big Pharma on the basis of turnover
expectations, which are in turn derived from the achievable market prices or anchor prices. Original
patent holders such as universities attempt in turn to sell patents to startups for the highest possible
price. The final result is that there is no longer any relationship between the price of a new medicine
and the development costs. A good example is the drug acalabrutinib for treating certain forms of
leukaemia and lymphomas. It was developed by a small Dutch startup called Acerta Pharma, whose
participating interests included the Brabantse Ontwikkelingsmaatschappij [Brabant Development
Company]. The pharmaceuticals concern AstraZeneca acquired a majority interest in the company
in 2015 for the sum of €4 billion, with an option on the remaining shares for €3 billion when the drug
                                                                       6
receives marketing authorisation, which is expected to be in 2018. The readiness to pay a total of €7
billion is based on the turnover that they expect to achieve at a specific price. A drug that resembles
acalabrutinib, ibrutinib for treating chronic lymphatic leukaemia, costs €70,000 per year. In 2016,
the minister put this drug into the ‘safe’ and the National Healthcare Institute advised the Minister
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<pre>3 - Problems with the current development pathway and possibilities for improvement 25
on 8 June 2017 at the medicine should only be included in the package for a specific group of
           7
patients. Given that acalabrutinib seems to be more effective than ibrutinib and has fewer side
effects, it may be expected that it will command a higher price.
3.5 Possibilities for improvement
The issues that we outlined in the previous section suggest approaches for efficiency improvements
in the development process. We will list a number of these here.
Natural animal and other models and reverse translation
Various aspects of the use of animal models could be improved. First of all, there is the question of
whether an animal model is in fact always needed. We are seeing a development in practice in which
human cell lines and artificial organ systems such as organoids are being used increasingly often.
Effort is being put into next-generation technologies such as genomics, transcriptomics, metabo-
lomics, epigenomics and microbiomics in order to understand the biological processes better. This is
certainly a step forwards in the search for drug targets and leads. However, they remain reductionist
approaches that are indeed needed initially, but which are still a long way removed from humans as
complex organisms interacting with their surroundings. Potential medicines will therefore always
still have to be tested on a complete organism.
One possible solution is offered by ‘natural’ models, in animals or otherwise, such as test animals
that naturally develop conditions that are very similar to those of humans, instead of selectively
bred laboratory mice. One example that could be mentioned is the Ossabaw hog. This breed of pig,
named after the island of Ossabaw in Georgia in the United States, is highly susceptible to obesity
and then exhibits a metabolic syndrome with insulin resistance, glucose intolerance and so forth: it
develops type 2 diabetes. Another way of improving the validity of animal models is to study why
medicines that turn out not to work during the clinical phases did work in the animal models. If the
reason for this can be determined, that knowledge can be used to improve the animal model.
Research such as this, which is also known as reverse translation, is not very popular. Researchers
like to investigate things that can yield positive results, such as new breakthrough medicines.
Biomarkers for validating animal and other models
The term biomarker is used generally for any clinical feature, often biochemical in nature, that is
correlated with a condition. Elevated glyHb or HbA1c concentrations in the blood are for example a
biomarker for diabetes. Biomarkers are increasingly being adopted in the treatment of specific
groups of patients (personalised medicine). Biomarkers allow precision medication to be adminis-
tered, for example Herceptin in HER2-positive breast cancer.
The purpose of these biomarkers is to make better predictions about the outcomes of treatments in
specific patients or groups of patients. In order to improve the probability of success for a new
medicine, it is also extremely important to investigate biomarkers for validating the animal model
that was used. Checks must be made to see if the biomarkers for a condition in humans match those
in the animal model. The reverse also needs to be checked: if biomarkers are found in the animal
model, they also need to be demonstrated in human patients. If not, the way the disease progresses
is clearly different and the model may not be suitable; further research is required.
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<pre>26                                                           RVS - Development of new medicines
Drug rediscovery
Humans are of course the best experimental model for conditions that affect humans. Existing
medicines that have proved safe sometimes transpire in practice to have unexpected useful side-
effects that are discovered by chance, such as the healing effect of the antihypertensive propranolol
in haemangiomas. The major benefit of these examples of drug rediscovery is that they involve
existing medicines for which a great deal is already known about the safety, posology and side-
effects. It only has to be tried out with a new group of patients. This sounds easier than it is, because
it turns out to be difficult to find funding for such research in practice. Companies are generally not
interested because it concerns existing medicines for which the patent has often already expired.
There are occasions when a company is interested. An existing medicine can be licensed for a new
indication. That costs money, but the company can impose a higher price, because unlicensed
prescribing of the drug is no longer allowed once it is authorised for the indication. The patent for
the antifungal ketoconazole expired thirty years ago. However, it turns out also to work in Cushing's
disease. The company Laboratoire HRA Pharma registered it for this indication and raised the price
by a factor of ten with respect to the original price.
Do-it-yourself medicine
An important development in this regard is that patients are increasingly taking matters into their
own hands and starting experimenting with existing medicines that may possibly be effective for
other indications, cancer in particular. The Internet is an important source of information for this. A
well-known example from the pre-Internet age is Ben Williams, an American emeritus professor of
psychology who was diagnosed with a glioblastoma multiforme brain tumour. The average length
of survival after diagnosis is fifteen months. After studying the results of scientific research, he put
together his own cocktail of medicines. He is still alive over twenty years later. Other patients have
copied his strategy (Akst 2013; Williams 2017).
Tales abound on the Internet about similar ‘wonder cures’. It is understandable that these may be
taken with a pinch of salt, but it remains a fact that patients are able to use the Internet for instance
to see (possible) drug rediscovery results and they are experimenting increasingly often. Care
providers do not generally want to work along with this, which means that patients are forced to use
the illegal circuit. This is an undesirable situation. The solution is to bring such experiments into the
regular care fold, in the form of clinical trials and by offering supervision and assistance. It might
then progress to become a valuable alternative development model. The costs of these trials can be
kept very low. These are after all existing and often very cheap medicines. The Netherlands could
take a pioneering role in this.
Public availability of clinical research data
The belief that the results of clinical research should be made publicly available enjoys broad
support (not traceable back to individual patients, naturally). The methods used, the data and the
analyses can then be checked by anyone afterwards. The EMA agrees with these opinions and, since
20 October 2016, has been publishing all clinical research data within 60 days of a new medicine
being authorised for the market or rejected.
Publication after the clinical research is completed does not solve the problem of duplicated work
mentioned above, though. All research with medicines in Europe does have to be registered in the
                      8
EudraCT database , but this register is confidential and only accessible to the competent authorities
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<pre>3 - Problems with the current development pathway and possibilities for improvement                     27
of the various member states. The core data of clinical research within the EU is publicly available
via the EU Clinical Trials Register, though. During the clinical phases, which can last a number of
years, a lot of information therefore remains confidential. To prevent double work, it is desirable
that information about clinical research should be available for everyone from the very beginning.
This allows an open discussion about e.g. the trial design and aspects may come to the fore that the
evaluating and supervisory agencies may have overlooked. Particularly for reducing the change of
failure during clinical research projects, a discussion about the validity of the results of the
preclinical studies of the animal and other models used is essential. Interim reports during clinical
research are also important, as they can for example be the first indication of possible problems in
the process later on. The researchers who are involved may miss these signals, but publication of
the data increases the likelihood of them being picked up and measures being taken in good time. In
the extreme case, this can mean that a project will be terminated early, saving a great deal of time
and money. The above means that the entire research process has to be transparent.
No financial links between researchers and financiers/the pharmaceutical industry
Disclosure alone is not enough. The results can still contain biases that are very difficult to detect.
Patients have the right to independent research. The researchers must not have any interest in a
particular study outcome. It must be separate from the researchers who developed the medicine. It
also means that there should not be any direct financial relationship between the people conducting
the research and those who finance it, the pharmaceutical industry. A similar type of disconnection
is incidentally also desirable in the case of e.g. patenting agencies. These organisations currently
finance ‘themselves’ from fees paid by patent holders and so have a vested interest in granting as
many patents as possible.
In addition, patients who have taken part in a clinical trial and benefit from a new drug ought to be
able to keep receiving that drug after the study is terminated.
3.6 Alternative development models
The problems within the current system of medicine development have led to ideas and initiatives
for alternative development models. Initiatives within the Netherlands are for example Cinderella
Therapeutics, Fair Medicine and my Tomorrows and the Netherlands Antibiotic Development
Platform (NADP). These initiatives and a number of ideas are described further in Appendix 2. Many
of these initiatives demand an international approach that can be difficult to realise, particularly in
the short or medium term. However, a number of them present opportunities, particularly the
Dutch ones mentioned earlier.
3.7 Summary conclusion
This chapter has described a number of problems as well as debunking a number of myths. The
regulations turn out to be more flexible than is often claimed, for instance. The statement that
medicines are pricey – sometimes extremely so – because the development costs are so high does
not hold water. The price that the manufacturer demands is related less to the development costs
and more to what the customer is prepared to pay. The high likelihood of failure during the
development is often seen as a fait accompli, but there are in fact various possibilities for reducing
that risk.
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<pre>28                                                                  RVS - Development of new medicines
   Notes
4  PIL for desogestrel 0.075 mg, Teva film-coated tablets, 7 Dec 2015, db.cbg-med.nl/Bijsluiters/h111004.pdf.
5  http://www.ema.europa.eu/ema/index.jsp?curl=pages/regulation/general/general_content_000393.jsp&mid=
   WC0b01ac058061f017.
6  https://en.wikipedia.org/wiki/Acalabrutinib.
7  Care package advice for ibrutinib (Imbravica®) 8 June 2017, reference 2017023606.
8  EudraCT database (2017) eudract.ema.europe/eudract-web/index.faces.
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<pre>4 - Solution directions                                                                               29
4 Solution directions
4.1 Introduction
In the previous chapter we discussed the problems with the current way of developing new
medicines that are expressed as or are the underlying causes of the questions that the minister
asked the Council and for which solutions are badly needed. For the governmental authorities, the
most urgent problem is the high prices – often very high – of new medicines, which are endangering
the affordability of care.
The key problem is that there is no relationship (or there is no longer one) between the
development costs and the high – sometimes very high – price. This means that a decrease in
development costs, for example by reducing the risk of failure or accelerating the development and
authorisation for marketing will not necessarily result in lower costs. That does have to be tackled,
but more than that is needed. The minister’s observation that it is practically impossible for small
companies to bring a medicine onto the market independently shows that the barrier for new
entrants on the market is too high, which obstructs competition. In addition, she has specifically
asked the Council for Public Health and Society which areas non-commercial drug development
would be desirable in.
This means that answers have to be found for the following questions:
— How can the high (and very high) prices be reined in?
— How can the chance of a development project failing be reduced?
— How can the development process be made quicker?
— How can we create room for smaller companies (Dutch in particular) to get medicine onto the
    market independently?
— In what areas is non-commercial drug development desirable?
We will outline some directions that the solutions could take in this chapter. These require efforts
from a variety of parties: not only from the authorities but also from e.g. research institutions, care
providers, care insurers and patients.
4.2 Reining in the high and very high prices
European regulations must be updated
The authorities grant a company a monopoly on an invention, in the form of patent rights. Many
experts believe, particularly in the case of medicines, that the method used for encouraging
innovation (the patents system) creates more trouble than it resolves. They make the case, based
on the interests of public health, for excluding medicines from patenting. This was incidentally the
case until recently in various countries, such as Brazil and India. This only came to an end when the
international TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property
Rights) came into effect on 1 January 1995. That treaty originated in initiatives in the early 1980s by
Edmund Pratt, CEO of the American pharmaceuticals company Pfizer, and John Opel, CEO of the
computer company IBM. The TRIPS Agreement and national patent legislation give countries
options for tackling misuse of patents, for instance through compulsory licences. Countries are
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<pre>30                                                        RVS - Development of new medicines
however extremely reluctant to use such measures because of the fear of trade repercussions
(Boulet et al. 2003).
If medicines are excluded from patenting, alternative public sources of funding will be needed.
Appendix 2 of these recommendations describes a number of development models that present
such alternatives. However, the Council for Public Health and Society believes that it is not feasible
given the current international power relationships – certainly not in the short or medium term – to
exclude medicines from patenting worldwide and to develop new medicines using only public
resources and get them on the market. It is important though that the problems with the current
patents systems should be put on the international agenda, for instance as the Netherlands did
when it had the presidency of the EU in 2016. The additional protection certificates can be given as
an example. The regulations for orphan drugs and authorisation for the European and other
markets need amending. Specifically, the problems associated with data exclusivity are one such
issue. During its EU presidency, the Netherlands already took the initiative in this area. It is
important that these efforts are maintained; they are something for the long run.
The authorities must represent the interests of society and of individuals by using legal
instruments
The tasks of the authorities include keeping healthcare affordable. According to Article 22 of the
Constitution, the government must promote public health. This means that it must exclude
excessively expensive medicines – drugs for which the price demanded is unacceptable for society –
from the insurance packages. At the same time, it must not deny any individual patient a life-saving
treatment. The authorities must use every available legal possibility to that end. In the case of
medicinal products, these are primarily instruments of international regulation. These tools are:
— compulsory licences;
— encouragement of pharmacy preparations;
— allowing patients, on a doctor’s prescription, to purchase medicinal products abroad for their
    own us (for example via the Internet) and have them delivered in the Netherlands;
— tackling abuse of positions of power.
1 Compulsory licences
Article 8 of the TRIP Agreement expressly allows measures that protect public health and Article 31
creates the possibility of issuing compulsory licences. The Dutch Patents Act also offers such an
opportunity. Granting compulsory licences means that other companies are allowed to make the
patented medicines and put it on the market in the Netherlands. This creates competition, which
will make prices drop.
When compulsory licences are issued, there is a requirement though that the authorities must
observe the boundaries set by the Paris Convention and the TRIPS Agreement in particular, which
give fairly detailed limits for issuing compulsory licences.
The requirements include among others:
— that the law must allow for the possibility of compulsory licences;
— that permission to use the patented invention must be examined on a case-by-case basis;
— that the scope and duration of that use must be limited to the purposes for which the licence is
    issued;
— that such use may not be exclusive;
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<pre>4 - Solution directions                                                                                           31
— that such use is non-transferable, except together with that part of the business or goodwill that
     has the right of use;
— that the holder of the original right is paid sufficient remuneration, given the circumstances of
     the case.
It is interesting in this context to note that Belgian law has not based the possibility of compulsory
licences for medicinal products on articles 8 and 31 of the TRIPS Agreement but on articles 8 and 30.
Article 30 states: “Members may provide limited exceptions to the exclusive rights conferred by a
patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the
patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account
of the legitimate interests of third parties”. The reason for circumventing Article 31 is to avoid having
to comply with all the requirements in that article. To date, Belgium has not issued any compulsory
licences for medicinal products.
The Patents Act (ROW) already allows for the possibility of a ministerial order granting a licence
“if it is in the general interest [...], for precisely described content [...] that is subject to a patent” (Article
57 paragraph 1). It may be assumed that the interpretation of ‘general interest’ is wide-ranging and
can extent to public health interests.
As yet, it is the Minister of Economic Affairs who would issue the compulsory licence. The Council
would like to emphasise the point that the authorisation to issue a compulsory licence based on
public health interests should reside with the minister who is responsible for public health.
Countries are often reluctant to issue compulsory licences, partly out of fear of economic reprisals
and partly out of ignorance. As regards the economic reprisals: when Thailand granted compulsory
licences for the period 2006-2007 for two HIV inhibitors and the anticoagulant clopidogrel (Plavix®),
the United States Trade Representative (USTR) – a governmental body that advises the president of
the United States about trade relations – threatened to cancel a trade agreement with the country
(Food & Drug Letter 2007). There is often conflict within a country between the ministers or
ministries of trade and health, given that the trade ministry has to issue the compulsory licences and
may have to face reprisals, whereas the benefits in the form of lower prices for medicines are reaped
by the health ministry (Agarwal and Agarwal 2016).
As regards the ignorance within countries: the World Trade Organization (WTO) has drawn up a
Q&A specifically for medicinal products (WTO 2017a). This states the countries are free to
determine the ground for issuing compulsory licences, based on the Doha Declaration on TRIPS and
Public Health of 2001 (WTO 2017b). The WTO says:
“The separate Doha Declaration explained
First, it emphasizes that the TRIPS Agreement does not and should not prevent WTO members
governments from taking measures to protect public health. It reaffirms the members’ rights to
use fully the provisions of the TRIPS Agreement, which provide flexibility for this purpose.
These important statements are a signal from all WTO members: they will not try to prevent each
other from using these provisions.
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<pre>32                                                         RVS - Development of new medicines
Second, the declaration makes it clear that the TRIPS Agreement should be interpreted and
implemented in a manner that supports WTO members’ right to protect public health and, in
particular, to promote access to medicines for all”.
The above states clearly that countries are entitled for protect their public health interests and that
they may make medicinal products widely accessible. The WTO is clear about intimidation:
countries may not obstruct other WTO members in exercising this right. This means that if they do,
it can be notified to the WTO and sanctions can be imposed on the country in question.
Other international organisations also champion compulsory licences
United Nations
The United Nations Secretary-General’s High-Level Panel on Access to Medicine also champions
the use of compulsory licences in the interests of public health in its 2016 report Promoting
innovation and access to health technologies: “Governments should adopt and implement legislation
that facilitates the issuance of compulsory licenses. Such legislation must be designed to effectuate
quick, fair, predictable and implementable compulsory licenses for legitimate public health needs, and
particularly with regards to essential medicines. The use of compulsory licensing must be based on the
provisions based in the Doha Declaration and the grounds for the issuance of compulsory licenses left to
the discretion of governments” (United Nations Secretary-General’s High-Level Panel on Access to
Medicine (2017).
Compulsory licences actually issued
The majority of compulsory licences for medicines were issued in the period 2001-2006 by
developing countries and countries with a low per capita income, such as Brazil, South Africa,
Malaysia, Zimbabwe, Mozambique and Zambia for medicines against HIV/aids (Beall and Kuhn
2012).
Threatening with compulsory licences is often enough to get a company to concede to an
acceptable negotiating result. It is not known how often this happens, because negotiations with
pharmaceutical companies are usually secret. Nevertheless, a number of cases have become
known. For instance, the USA threatened the German company Bayer in 2001 with a compulsory
licence for the drug ciprofloxacin (Cipro®). Because of attacks involving anthrax bacteria, the USA
wanted to create a stockpile of this drug. In the end, Bayer lowered the price of the drug drastically.
Indonesia, India, Vietnam and South Korea threatened Roche with compulsory licences for the drug
oseltamivir (Tamiflu®) in the period 2003-2006. The result was that Roche agreed that it would help
partners in those coun- tries produce sufficient stocks of the drug to tackle the Asian flu virus
(Reichman 2009). For the same drug, the USA reached an agreement with Roche in 2005 that the
company would build factories in the USA to produce it, so that the country would have access to
the drug in the event of a flu epidemic (Love 2007).
European countries have also resorted to compulsory licences. For instance, Italy granted
compulsory licences in 2005 on the grounds that Merck had been misusing its position of strength in
the market for a number of antibiotics containing the active compounds imipenem and cilastin, and
in 2006 against Glaxo for its refusal to provide a licence for sumatriptan for treating migraines. In
2007 Italy demanded that Merck should issue licences free of charge for finasteride, a drug against
(inter alia) prostate cancer. France imposed compulsory licences in 2004 for diagnostic tests for
breast cancer based on French law, which allows compulsory licences when medicinal products are
insufficiently available for the populace or only available at unacceptably high prices (Love 2007).
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<pre>4 - Solution directions                                                                                33
Calls have recently been made in various European countries for compul- sory licences to be used as
a tool. For instance, the Irish doctors’ organisation asked its government earlier this year
                                                                           9
to issue a compulsory licence for sofosbuvir, a drug against hepatitis C. In the Netherlands, ’t Hoen
et al. pleaded the case in 2016 in the journal NRC for the use of compulsory licences (’t Hoen et al.
2016).
OECD
The Organisation for Economic Co-operation and Development (OECD) stated in its recent report
Key Findings of the 2017 analytical report on sustainable access to innovative therapies (OECD 2017) 22
that it is unethical to withhold effective medicinal products from patients. If price negotiations fail,
the report gives pricing measures and compulsory licences as possible options. These instruments
must not be deployed randomly. Clear criteria must be drawn up in advance, for instance in the
form of limits for cost-efficiency and budgetary impact. This requirement has been met in the
                                                                                                  10
Netherlands; the National Health Care Institute has drawn up clear criteria for the purpose.
It should be noted for the sake of clarity that a single compulsory licence is not sufficient in the
majority of cases. A new medicine is generally protected by several patents, often in the dozens.
This is also referred to as the ‘patent wall’. Companies try to make it as difficult as possible for
                                                                                               11
potential competitors in all sorts of ways. The European Commission is investigating this. Other
instruments are sometimes also used for this, such as signing contracts with suppliers of active
pharmaceutical ingredients, requiring that the company is the only buyer and that it cannot be
supplied to other parties.
A medicine that is produced under a compulsory licence must – like any other generic medicine – be
authorised in the EU and it is also possible in this case that data exclusivity can be an obstacle, as
could any status that the original medicine has as an orphan drug. Other companies are therefore
not likely to ask for market authorisation and production exclusively for the Netherlands. However,
if a generic version is already available elsewhere in the world, the barrier is lower.
2 Encouraging pharmacy preparation
If a pharmacist prepares a medicine on prescription for immediate use by an individual patient
(known as extemporaneous or pharmacy preparation), any patent on the medicine does not apply.
This situation also does not require a licence and marketing authorisation under the Medicines Act
                                 12
(Article 40 paragraph 3 sub a). The exemption also applies for keeping stocks of a medicine and
importing it (exemption to the stipulation in Article 40 paragraph 2). The deciding factor is always
the small scale, which is a consequence of the provisions in European directive 2001/83/EC: the
medicinal products must be destined for being directly provided to the pharmacy’s customers.
Supply to non-customers or forwarding to other pharmacies is not allowed.
The knowledge required for preparing medicines in the pharmacy is available in abundance in the
Netherlands. In 2015, preparations were made according to the directives and instructions of the
professional organisation KNMP (Royal Dutch Society for the Advancement of Pharmacy) in
hundreds of pharmacies (Foundation for Pharmaceutical Statistics 2016). New technology can be
utilised here in the future too, such as 3D printing, allowing medicines to be produced that are
tailored to the patient (Mearian 2016). This is small-scale preparation in its optimum form.
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<pre>34                                                         RVS - Development of new medicines
Pharmacy preparation is suitable for medicines that a pharmacist can reasonably prepare
themselves, for example because the raw materials are commercially available or because a raw
material only requires simple chemical treatment. Facilities are already available in the Netherlands
to allow the quality of the end product to be determined, for example the Laboratorium
Nederlandse Apothekers (Dutch Pharmacists’ Laboratory).
There was recently a furore about the high price of the drug Orkambi® for treating cystic fibrosis.
The drug, a combination of the substances ivacaftor and lumacaftor for treating cystic fibrosis, was
not authorised for the mandatory health insurance package because the manufacturer was
demanding an excessive price and the pricing negotiations had failed (Parliamentary records,
2016/2017). The two active ingredients, ivacaftor and lumacaftor, are both easy to order via the
                                                                                                    13
Internet from China. On the alibaba.com website, more than twenty companies offer ivacaftor and
five or so companies offer lumacaftor15. In 2016, the Indian patent office rejected a patent request
                14
for lumacaftor (PMLive 2016). It is not inconceivable that a generic variant of the drug will be
available within the foreseeable future on the Indian market. A Dutch pharmacy would be allowed
to import the drug for its own patients. Although pharmacists have this right in law, they do not
dare to exercise it out of fear of legal reprisals by manufacturers. This did actually happen in the past
                                                                              15
to a pharmacist from The Hague (Van den Brink and Van der Parre 2012). It is not inconceivable
that an individual pharmacist who actually does make a pharmacy preparation of a patented drug
could be kept tied up in legal procedures by the patent owner company until bankrupt, in order to
scare off others. If the authorities genuinely want to be able to use this tool in practice, they will
have to protect pharmacists against such tactics.
A key point here is that the so-called pharmacist’s exemption has not been (or not yet) included
explicitly in the Patents Act, as a result of which pharmacists are particularly cautious about making
pharmacy preparations of patented drugs. Many other European countries do have this exception in
their patent legislation. In 2012, the Netherlands signed the European Agreement on a Unified
Patent Court. It follows from that agreement that the Patents Act of 1995 needs to be amended,
inter alia so that the pharmacists’ exemption is stated explicitly. A bill amending the Patents Act has
in the meantime been drawn up that includes the pharmacists’ exemption (Article 54d paragraph
   16
e). The Council believes that this bill should be dealt with quickly. At the same time, this could be
an opportunity to give the authorisation for imposing compulsory licences as a result of public
health interests to the minister responsible for public health.
3 Allowing patients, on a doctor’s prescription, to purchase medicinal products abroad for their own
us (for example via the Internet) and have them delivered in the Netherlands
Patients may source medicines for their own use abroad, but they have to bring them in across the
                                                    17
border in person (Article 18 paragraph 6 sub a). They may not order medicines abroad, for example
via the Internet, and then have them delivered in the Netherlands
In March 2017, the Italian minister of public health allowed patients and their doctors to source
medicines from other countries for personal use if patients have no access in Italy to those drugs
because of restrictive prescribing criteria or because they are too expensive for the patient (Bocci
2017). Patients are also allowed to do this is Switzerland, where a number of health insurers even
reimburse such purchases.
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<pre>4 - Solution directions                                                                                35
As stated in the previous section, pharmacists in the Netherlands are already allowed to do this, but
the patient depends on the goodwill of the pharmacist. This issue can be resolved by giving the
patients the right to use a prescription from their doctor to purchase medicinal products themselves
abroad, for example via the Internet, and then have them delivered in the Netherlands. Under
Article 18 paragraph 4 of the Medicines Act, this can be implemented by ministerial order.
4 Tackling abuse of positions of power
Misusing positions of economic power is forbidden. Article 102 of the European Union’s
own Treaty on the Functioning of the European Union forbids misuse of a dominant position. Based
on the Dutch Competitive Trading Act, the Netherlands Authority for Consumers and Markets
(ACM) can take action against abuses of positions of economic power. If a company is guilty of this,
the ACM can impose fines that can be as high as 10% of the company’s net annual turnover.
Patients themselves becomes buyers and/or preparers of medicines
A very different direction in which solutions can be sought, which is entirely separate from the
authorities, is that a patient or group of patients takes action themselves. Some new medicines are
available much more cheaply elsewhere in the world. This applies for instance for Truvada®, a drug
that reduces the risk of HIV infection. In the United Kingdom, the drug costs 400 pounds per month,
whereas a generic version in India costs 40 pounds. The drug is bought a lot via the Internet from
India and Swaziland. The number of new HIV infections in London went down 40% in 2016
compared with the previous year. It is suspected that this is because of the mass purchasing of the
cheap generic drug via the Internet (Wilson 2017).
Based on Article 18 of the Medicines Act, it is currently forbidden to import medicinal products
without an authorisation, and based on Article 67a it is forbidden to offer medicinal products
remotely, but both these prohibitions are difficult to enforce. For a number of medicines, it is
possible that illegal production in the Netherlands could occur, along the lines seen for party drugs.
In some situations, the patients could even prepare their own medicines. The quality of these kinds
of illegal medicines is not known and it could endanger the health of patients.
Allowing patients to purchase medicines for their own personal use via the Internet when backed up
by a doctor’s prescription, as proposed earlier, will drastically reduce the probability of patients
resorting to the illegal circuit. In situations where patients do take that step, facilities should be
made available at which the patients can have the quality of their medicines tested anonymously,
                                                                       18
just as is currently done with hard drugs at e.g. the Jellinek clinic.
Negotiate when medicines have a major budgetary impact
Notwithstanding the above, the authorities must always negotiate with companies to achieve lower
prices if the drugs concerned have a major impact on the budget. In many cases, several similar
drugs may be available or in the pipeline. As stated earlier, the marketing is one of the tools that
companies deploy competitively. Pharmaceutical companies expend over 22% of their turnover on
marketing. This is of course reflected in the pricing. For medicines that have a major budgetary
impact, the authorities can select a single drug from the various alternatives through a tendering
process. Companies can then tender at a lower price because the marketing costs are eliminated:
the pre- scribers no longer have to be convinced. For society at large, this means that the drug
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<pre>36                                                          RVS - Development of new medicines
becomes substantially cheaper. One consequence is that the freedom of choice of the prescriber is
limited, though. For drugs that are therapeutically equivalent, this is acceptable.
Another possibility is that the authorities can enter negotiations with the manufacturer to buy off
the development costs of a new medicine for the Netherlands, based on the scale of the Dutch
market (1% to 2% of the global market). The manufacturer then provides the drug at production
and transportation costs. If a number of similar medicines are on the market, this can be attractive
for both a manufacturer and Dutch society. The manufacturer then gets a proportion of its
development costs back straight away and no longer has to obtain a market share in the
Netherlands, which saves on marketing costs. For society, the benefit is that the drug is cheaper per
dose and can therefore be used widely, for instance in combination treatments or for new
indications. For the manufacturer, this again provides valuable information and they will be
prepared to make financial concessions for that. It can be an attractive alternative to volume pricing
agreements.
Items such as appropriate use and prevention of waste can also help significantly in limiting the
                           19
costs. A good formulary is a tool that helps the prescriber be cost-effective when prescribing
medicines for a particular indication. Other aspects of a medicine, such as the package size and
packaging method, also affect the overall costs of using a new medicine. It is therefore important
that all aspects that are important for cost-effective prescribing and administration of medicines are
included in the negotiations with manufacturers.
4.3 Reducing the risk of failure along the development pathway
Setting limits on the prices of new medicines is immediately a strong stimulus for more efficient
development projects
The greater the extent to which countries set limits on the prices they are prepared to pay for new
medicines, the more companies that want to keep their profit margins up will have to take a more
critical look at the development pathways and the amounts that they are prepared to pay startups
for a particular drug. Startups will in turn have to look critically – even more so – at the drugs they
are going to develop. Whether the animal and other models used are valid and whether there are
good biomarkers will have to be examined more closely. It is a powerful driving force to reduce the
likelihood of failures. It will also have a knock-on effect on research institutions, which will have to
be able to demonstrate more clearly that their invention genuinely works.
Give universities more negotiating power as the inventors
It was noted earlier that a lot of new medicines originate in research at universities that is funded
with public money. They are then often the patent holder, meaning in principle that they have the
power to determine what happens to their invention. However, that power is in the first instance
very limited, because it is uncertain whether the invention does really have any potential. This can
only be estimated once the proof of concept is delivered, once it has been shown that the drug is
effective in a small group of patients (Phase IIa). Universities often do not have the financial
resources to carry out this research and they are therefore forced to sell their inventions at an early
stage in which they do not have much negotiating power. If there is already a proof of concept, the
universities are in a much stronger negotiating position.
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<pre>4 - Solution directions                                                                                37
The Council for Public Health and Society therefore deems it desirable that the authorities should
finance the development of highly promising, potential new medicines for longer, up to and
including the proof of concept. They can do this together with other sources of funding such as e.g.
collection box funds. Startups can also be involved in this. Strict conditions will have to be imposed
on this financing, though. This could include socially responsible licensing conditions, as proposed
by eight cooperating Political Youth Organisations in their manifesto Licence to Heal, Accessible
Medicines (Samenwerkende Politieke Jongeren Organisaties & Partners, 2016). One example that
can be mentioned is Maastricht University Socially Responsible Research and Licensing Policy in the
field of Health, Medicine and Life Sciences (Universiteit van Maastricht/UAEM 2015), which is based
on the Global Access Licensing Framework by the Universities Allied for Essential Medicines (UAEM
2013).
The intention is not that the government should become a provider of risk capital, but that it
ensures medicines are developed effectively and efficiently at an acceptable price. The authorities
must therefore also be highly selective as to which developments it supports.
Involve the patients
An important condition that should be imposed is that all the necessary disciplines work closely
together. Input from the patients is also exceptionally important. The successful development of
medicines against HIV at the end of the 1980s was thanks to close cooperation between an active
patients’ movement, researchers and companies. The War on Cancer at the beginning of the
nineties in the USA was initially a success. This was directed from the US Department of Defense
towards specific targets, focusing not on the scientific interests and relationships of power, but on
the needs of the patients: the patients’ hands were on the steering wheel. The later failure of the
project shows that it is very difficult to maintain that targeted focus and keep resisting e.g. the
interests of the researchers. It is therefore important that the governmental authorities impose
strict conditions on the funding of research in terms of the objectives to be achieved, stopping if it
then goes in the wrong directions. One example of exactly how it should not be done, is the
Innovative Medicines Initiative (IMI), the largest European public-private initiative aimed at
                              20
developing new medicines. It is a cooperative venture between the EU and the European
Federation of Pharmaceutical Industries and Associations (EFPIA). Although €1.6 billion of public
funding is involved, the agenda is determined entirely by the industry and the general public or
patients have virtually no say.
Be prepared to pull the plug
Stopping in good time is in fact the most important thing of all: the authorities must have both the
time and the courage to stop initiatives or research that has become aimless. One example that can
be given is the research into Alzheimer’s disease and Parkinson’s disease that are based on mouse
models. It has become clear in the meantime that these lab animals are not a good model for the
disease process. In addition, the lab animals suffer unnecessarily. Even so, this type of research is
still being carried out in the Netherlands because scientists can publish the results of their research
and their remuneration is based on the number of publications. The study by Macleod et al. has
already been mentioned in section 3.4. They state that 85% of the money spent on biomedical
research is wasted. Financing ‘useless’ biomedical research, useless from the patients’ point of view,
should be stopped.
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<pre>38                                                         RVS - Development of new medicines
4.4 Bundling expertise
To make the above possible, it is important that inventions made by public research institutions are
appropriately patented. At the moment, the requisite knowledge is fragmented, scattered among a
number of Technology Transfer Offices (TTOs). The Council therefore recommends bundling the
expertise into a national TTO for new medicinal products; this case was previously also made by the
Royal Netherlands Academy of Arts and Sciences (KNAW 2014). This institute assesses the
potential of discoveries and ensures that intellectual property rights are acquired for inventions
developed wholly or partly with public money. It also makes sure that licensing conditions are
socially responsible. One hazard of centralisation of expertise is that it is then further removed from
the work floor. Short lines of communication to the researchers in the various research institutions
are crucial. This must be monitored
4.5 Shortening development processes
The problem of the lengthy development processes can partly be resolved by the recommendations
made above. If inventions are patented quickly and properly and highly promising potential drugs
are developed further under strict, targeted conditions and timelines, wholly or partly with public
money, then the development timelines can be shortened considerably. As indicated in Section 3.3,
the widely heard argument that the licensing authorities are a major cause of the lengthy
development projects is unfounded.
For rapid, thorough and effective implementation of clinical research, a good information
infrastructure is needed. The Council pleads the case in its advisory letter Implementatie van e-
health vraagt om durf en ruimte (Implementation of e-health requires courage and space) (RVS
2017b), that the authorities should implement an e-health highway by obliging healthcare providers
and suppliers of information systems to provide open interfaces, make their data available to
patients free of charge, and comply with defined standards and identification requirements. This is
in line with the earlier advice Patiënteninformatie (Patient information) from the Council for Public
Health and Care (RVZ 2014), which makes the case for a personal health record (Dutch: PGD). The
e-health highway and the PGD will give the patient an important, more significant role in the
development of new medicines. Work has in the meantime been started on the PGD in the shape of
                        21
the MedMij initiative.     It is important that the PGD offers patients the possibility of making data
available for clinical research.
Section 3.4 described a number of ethical issues associated with current clinical research, such as
financial links between researchers and the industry or patients who benefit from a new drug when
taking part in a trial and who are then left without it when the trial ends. If patients have the power
to do with their data as they wish, they can impose requirements beforehand on the design of
clinical trials and the use of that data.
4.6 Making space for smaller (Dutch) companies to access the market independently
If the recommendations listed above are implemented so that (Dutch) universities have patents on
new and valuable medicines for which the effectiveness has been demonstrated and reliable and
efficient clinical research can be carried out in the Netherlands, then the preconditions have been
met for letting smaller companies bring new medicines onto the market. As indicated earlier, the
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<pre>4 - Solution directions                                                                               39
supervisory agencies have already licensed a number of new medicines without large Phase III
studies, on the basis of relatively small studies. Studies such as those are within reach for smaller
companies. One problem is still the expertise that is required for the licensing procedure. The
Council’s opinion is that there is a task here for the authorities, principally for the Ministry of
Economic Affairs, in assisting Dutch companies.
The Netherlands has all the ingredients for acquiring a leading position in the world, particularly in
biopharmaceuticals. Biomedical scientific research and the quality of the healthcare system are
high. There are active patient groups, collection box funds, and so forth. Cooperation between
numerous different disciplines across organisational boundaries can allow breakthroughs in
medicine research to be made.
The pharmaceutical industry spent €642 million on research and development in the Netherlands in
2011 (EFPIA 2017). It finances numerous clinical studies, which are a source of income for UMCs in
particular. Of all assessment dossiers for clinical research submitted to the Central Committee on
Research Involving Human Subjects (CCMO), 65% come from the industry (CCMO 2017). The
biopharmaceutical industry in the Netherlands has potential and there is therefore a task for the
Ministry of Economic Affairs in encouraging this branch of the business.
4.7 Finding out when non-commercial development of medicines is desirable
The Minister of Health, Welfare and Sport has also asked the Council for Public Health and Society
whether personalised medicines (such as gene therapy agents) always have to be brought onto the
market by a commercial party via an marketing authorisation and to explore whether greater social
returns can be expected from non-commercial medicines developments.
The Council’s opinion is that experiments into how other non-commercial, socially responsible
methods of medicines development should focus, at least initially, on niche markets. Aspects that
can in particular be considered are drug rediscovery, development of new antibiotics and certainly
also personalised treatments with e.g. advanced therapy medicinal products (ATMPs) such as
somatic cell therapy, tissue therapy and gene therapy.
There are various highly promising initiatives in the Netherlands such as Stichting Oncode Institute
(looking at inter alia drug rediscovery in oncology), the Netherlands Antibiotic Development
Platform (NADP) for the development of new antimicrobial agents, the Fair Medicine Initiative and
Cinderella Therapeutics. In addition there are initiatives such as myTomorrows that are attempting
to get changes to happen within the ‘classical’ system, and there is an initiative to make pharmacy
preparations of biopharmaceuticals possible (Schellekens et al., 2017).
4.8 Summary conclusion
This chapter has stated that it is important that excessively high prices should be reined in. Various
instruments have been listed that the authorities can use. Pressure on prices encourages
manufacturers to look more closely at the development process. In addition, it is important that the
government encourages reliable and efficient clinical research. This creates possibilities for smaller
companies to market medicines independently. In addition, there is scope for non-commercial
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<pre>40                                                                            RVS - Development of new medicines
medicines development in areas such as drug rediscovery, development of new antibiotics and
personalised treatments.
     Notes
9     Irish Medical Association (2017) www.imo.ie/news-media/agm/agm-2017/motions/general-motions-2017/ onder
     GENERAL MOTIONS SESSION 2 FRIDAY 21st APRIL 2.30pm – 3.45pm , motie 33: “The IMO calls upon the Government to
     issue a compulsory licence for Sofosbuvir for public non-commercial use consistent with article 70 of the Patents Act to
     facilitate the importation, distribution and use of lower priced generic Sofusbovir of assured quality”.
10 https://www.zorginstituutnederland.nl/over-ons/werkwijzen-en-procedures/adviseren-over-en-verduidelijken-van-het-
     basispakket-aan-zorg/beoordeling-van-geneesmiddelen.
11 Executive Summary of the Pharmaceutical Sector Inquiry Report http://ec.europa.eu/competition/sectors/
     pharmaceuticals/inquiry/communication_en.pdf.
12 Medicines Act, Article 40: “1 It is forbidden to bring a medicinal product onto the market without marketing authorisation
     from the European Community (as granted by virtue of regulation 726/2004 or by virtue of that regulation combined with
     regulation 1394/2007) or from the College (as granted pursuant to this chapter). 2 It is forbidden to keep stocks of a medicinal
     product for which there is no marketing authorisation, or to sell it, deliver it, provide it to individuals, to import it or otherwise
     bring it into or take it out of Dutch national territory. 3 A prohibition as defined in the first or second paragraph does not
     apply a) to medicinal products that are prepared and handed over by or on instructions from a pharmacist or general
     practitioner as defined in Article 61 paragraph 1 under b on a small scale in their own pharmacy;”.
13 http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText= ivacaftor.
14 http://www.alibaba.com/trade/search?IndexArea=product_en&CatId=&fsb=y&SearchText= lumacaftor.
15 See also the ruling by the ’s-Gravenhage District Court, 20-09-2007 ECLI:NL:RBSGR:2007:BB3975.
     https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBSGR:2007:BB3975&showbutton=true&keyword=ECLI
     %3aNL%3aRBSGR%3a2007%3aBB3975.
16 Bill for Amendment of the 1995 Patents Act regarding the Agreement on a Unified Patent Court and EU Regulation
     1257/2012.
17 Article 18 paragraph 6 sub a: “the importing, exporting or otherwise bringing medicinal products into Dutch national
     territory or taking them from Dutch national territory where such products are evidently intended for personal use by
the individual transporting the medicinal products”;
18 http://www.jellinek.nl/informatie-over-alcohol-drugs/drugs-test-service/.
19 A formulary is a detailed summary of medication advice for a condition or indication upon which care providers have
     eached agreement. www.formularium.nl.
20 http://www.imi.europa.eu/.
21 http://www.medmij.nl/.
22 This document provides a preliminary overview. It does not represent the official views of the OECD or its member
     countries. The final analytical report on the project is to be published by the end of 2017.
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<pre>                                                                                                     41
5 Recommendations
This chapter outlines briefly the vision that the Council for Public Health and Society has of the
Netherlands’ position in the development of new medicines. The solutions that have been discussed
in the previous chapter are also summarised concisely in the form of six recommendations.
The Netherlands as a pioneering country
The title of these recommendations is Development of new medicines. Better, faster, cheaper. As
indicated in the earlier chapters, new medicines are developed at the global scale. The current
method of development for new medicines is threatening to become bogged down: it is grossly
inefficient and the medicines are threatening to become unaffordable. The Netherlands does not
have a large pharmaceuticals industry, but it does have a high-quality, innovative biotech sector.
This offers opportunities. The recommendations below in this advisory document can help
encourage the development of new medicines in the Netherlands, so that the sector can show that
things can be done better, faster and less expensively, even given the current international
frameworks.
Nevertheless, the efforts already made by the Dutch government to ensure the desired changes in
the regulations at European level have to be continued. This is a task for the long haul. This could
cover European patent regulations, data exclusivity rules, orphan drug regulations and the use of
European research funds.
Recommendations
When a company is not prepared (after negotiations) to charge a socially acceptable price for a
medicine, the Council advises the minister to use other instruments such as compulsory licences,
import permits, encouragement of pharmacy preparation, allowing patients to order medicinal
products abroad subject to certain conditions, and tackling misuses of position of power, in order to
ensure that the medicines is made available to the patient at an acceptable price.
1 Make use of legal instruments to improve the negotiating strength.
 When a company is not prepared (after negotiations) to charge a socially acceptable price for a
medicine, the Council advises the minister to use other instruments such as compulsory licences,
import permits, encouragement of pharmacy preparation and tackling misuses of position of
power, in order to ensure that the medicines is made available to the patient at an acceptable price.
2 Use innovative negotiation strategies.
The Council advises the minister to use innovative negotiation strategies in all cases of new
medicines with a substantial budgetary impact, such as tendering and buying off the development
costs, and to include all relevant aspects in the negotiations, such as prescription by doctors in
terms of appropriate use, reduction of waste and a formulary that must be used.
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<pre>42                                                        RVS - Development of new medicines
3 Give research institutions more negotiating power for their patents
The Council recommends that the first phases of clinical research into highly promising, potential
new medicines should be funded if they have been developed and patented by universities and
other research institutions that are funded from public resources. This will give these institutions
more negotiating power with respect to private investors. Impose strict conditions on this financing,
particularly with regard to cooperation, the objectives being set, the timelines, the licensing
conditions to be adopted, and (last but not least) input from the patients. Be tough when halting the
funding of initiatives and biomedical research that is 'wandering aimlessly', i.e. not helping to find
effective treatments, and impose higher requirements on the use of animal models in the lab.
4 Bundle expertise into a national TTO for new medicines.
Securing intellectual property rights demands thorough expertise. The bundling of expertise into a
national TTO can ensure that inventions developed entirely or partly using public funding are
properly patented and licensed in a socially acceptable way. Make sure that this national TTO does
remain close to the actual work floor.
5 Use the e-health highway and personal health dossiers for efficient medicine development
too.
Make sure that the e-health highway and personal health dossiers can also be used for
developing new medicines and for clinical studies.
6 Encourage alternative development models for drug development.
Highly promising new initiatives must be encouraged under similarly strict. conditions as those
stated in the third recommendation about the universities: requirements for cooperation, the
objectives to be set, the timelines, and input from the patients. And above all: discontinue funding
of initiatives that have lost their innovative strength.
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<pre>                       43
Appendix 1
Request for an opinion
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<pre>Appendix 2 – Alternative development models                                                          45
Appendix 2
Alternative development models
The previous chapter described a number of issues in the current system. These problems are
recognised by those in the field and there are various initiatives and ideas for alternative
development models for new medicines (‘game changers’). In this chapter, we will be taking a brief
look at these and examining the pros and cons of each of the options. The principle when doing so
will be the focal point of these recommendations: What can the Dutch governmental authorities do
in order to encourage and accelerate the development of alternative development routes for new
medicines in the Netherlands, so that medicines come onto the Dutch market more cheaply and
more quickly?
ZIN/KCE future scenarios
In June 2016, the Belgian Federal Healthcare Knowledge Centre (KCE) and the Dutch National
Health Care Institute (ZIN) jointly issued a report called Toekomstscenario's voor de ontwikkeling en
prijszetting van geneesmiddelen (Future Scenarios for the Development and Pricing of Medicinal
Products). The report outlines four alternative development models for new medicines in the form
of scenarios. The scenarios were drawn up on the basis of interviews and meetings with experts and
stakeholders from Europe and North America, including patients' representatives, sector leaders,
academics, supervisory bodies, health insurers and governmental agencies. The purpose of this
discussion process was to "search for possible solutions for the high prices of medicines".
We will discuss the four scenarios briefly, placing a number of marginal notes by each of them, given
the focal points of these recommendations.
Scenario 1: public-private partnerships for specific needs
Description
This scenario is derived from the existing practices for governmental orders in research-intensive
domains such as public transport, defence and space exploration. Public parties define a number of
performance criteria for this and guarantee the procurement at a specific price if a developer
complies with those criteria. There are already examples at the international level in the public
health field, in which partnerships have been set up to develop drugs for the third world, for
instance against malaria and river blindness (onchocerciasis).
In the case of new medicines, a public body - which could for instance be the European Union or the
government of a (large) country - draws up the criteria for the performance levels of medicines that
are to be developed to meet those needs, and states what it is prepared to pay for that medicine.
The performance criteria could include the profile, the safety, the efficacy and the clinical
effectiveness.
The public agency then enters a partnership with the drug developers via tenders with enforceable
contractual agreements. These will generally be commercial companies, but independent or
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<pre>46                                                         RVS - Development of new medicines
publicly funded research institutions or combinations are also possible. The drug developer gets
access to the market and a remuneration if it succeeds in developing a medicine that meets the
criteria.
The development process is monitored closely right from the start of development by a platform in
which experts and representatives of both the developers and the public partner take part. Patients'
representatives, funding parties (health insurers) and independent experts can also be involved in
this platform. All the data is available within the cooperative venture. The platform takes decisions
about aspects such as the design of the clinical studies and the outcomes used. The outcomes are
assessed after each development phase and communicated to the outside world. An independent
evaluation committee validates the results. Supervisory bodies such as the EMA are brought on
board at an early stage.
The role of patents and the exclusivity of data will be discussed and negotiated right at the very
start of the partnership. It may be agreed that no patents will be requested and that the data will be
made entirely public.
The performance level requirements of the public agency must be in line with current scientific
knowledge when the partnership commences. The development process must also be flexible. It
must be possible to include new scientific insights and make adjustments in the light of them.
According to those who drafted this scenario, the model is attractive for governmental authorities
because it yields affordable medicines that are the ones patients most need and which best serve
public health interests. It is attractive for pharmaceuticals companies because they do not have to
take such large financial risks; this is in exchange for not being able to set prices freely. After all, the
supervisory bodies and the funding parties are involved in the development from an early stage.
They eliminate the uncertainties regarding licensing approval and insurance reimbursement.
Remarks
Although the title of scenario 1 refers to 'public-private partnership', the system actually most
closely resembles public tendering. As stated in the description, this approach is suitable for large-
scale public bodies such as the European Union or large countries. In practice it means that this
scenario is only achievable for a small country such as the Netherlands in a European or WHO-based
context. It demands a great deal of coordination and integration between the parties. The
international projects for combating tropical diseases that have already been based on this scenario
seem to have been a success. This scenario also seems highly suitable for the development of new
antibiotics, which are badly needed given the increasing levels of resistance to existing drugs. These
new medicines should however be used as little as possible (as a last resort). That makes it
unattractive for companies to develop these drugs within the current system.
Scenario 2: parallel track for drug development
Description
In this scenario, governmental agencies of EU member states set up a parallel track for non-profit
medicines development, in addition to (but independent of) the pharmaceutical and biotech
industries.
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<pre>Appendix 2 – Alternative development models                                                              47
The authorities first make an inventory of the gaps in healthcare and the priorities. They then ask
leading research centres such as academic hospitals and universities about the discoveries,
resources, instruments and capacity they have for developing solutions that provide answers to
some or all of the needs listed in the inventory. If it turns out that there are possible solutions, then
consortiums are set up between the research institutions (not for profit), payers such as health
insurers, government bodies and patients' organisations. These partners undertake to participate
openly and transparently in clinical research projects. Creative funding plans cover the costs of the
R&D efforts. These could for instance involve advance payments or remuneration bands instead of
payments for the use of medicines. Sources such as crowdfunding and social bonds could also be
used.
Intellectual property rights can be obtained early in the development process and shared between
the partners, or the project may simply do without them. The latter approach encourages open
science, cooperation and innovation, because other players are then able to pick up the results at an
early stage and start using them.
As a precondition for this scenario to succeed, the authors note that the system used for resolving
disputes about intellectual property and permits will have to be organised differently.
Remarks
This scenario also assumes cooperation between government agencies, e.g. at the European level.
In addition - as the authors note - it requires changes to dispute resolution related to intellectual
property and permits. Patent law does not provide active protection. Infringements of patents and
contesting such claims can easily be deployed strategically with the aim of hurting the other party -
in this case the government agency. Not taking out patents also has its own risks. The English
discovered this when penicillin was discovered. They did not ask for a patent (after modifying the
molecule somewhat as needed first, of course). English companies were then not prepared to
produce the drug. American companies were, but they then patented the entire production process.
The net result was that the British had to pay high prices for penicillin. Pharmaceutical companies
nowadays protect not only the product itself but also the production process, through many dozens
of patents.
Scenario 3: paying for patents
In this scenario, a number of European countries join forces and set up a 'public fund for affordable
medicines'. Each participating country deposits a fixed percentage into the fund annually of what it
currently expends on medicines. The fund keeps a close watch on the research market looking for
interesting medicines that are in phases II or III of their development and that are aimed at
indications that are clearly among the priorities. The fund buys patents from developers and carries
out the final research phases itself, or gives instructions to public bodies to do so. The fund
supervises the procedure for requesting market authorisation. Manufacturers and distributors can
then compete amongst themselves for the rights to produce, distribute and sell the drug, on the
condition that they must offer the highest quality, safety and accessibility at the lowest cost price.
Remarks
This scenario also envisages a number of countries joining forces. Another point is that the parties,
as described earlier, work 'backwards' when setting the price for new medicines: what might a
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<pre>48                                                          RVS - Development of new medicines
suitable anchor price for this drug be? Particularly for patents on drugs in Phase III, where there is
more certainty that a drug works, the prices asked will be very substantial. The public fund will have
to compete with Big Pharma on this point.
Scenario 4: the public good from start to finish
Description
In this scenario, the patients and society determine what the research must be investigating.
Government agencies regularly publish lists of research priorities that are based on medical needs
that are objectively determined in consultation with patients. The authorities fund all the research
that is required and all the results of that research are public, as is the raw patient data (in
anonymous form). Medicines can no longer be patented in this scenario and pharmaceuticals
companies produce the medicines as generic drugs.
Supervisory agencies are entirely financed from public resources in this scenario and medicines are
approved on the basis of quality, efficacy, safety and added therapeutic value. Studies must be
organised on a sufficiently large scale and last long enough for the clinical risks and benefits in the
longer term to be determined. Medicines are no longer approved on the basis of surrogate
outcomes, but are only approved and reimbursed once their clinical benefits have been
demonstrated in independently performed studies among relevant patient populations.
The authors propose a transitional period in which international trade agreements about limited
property rights, secrecy and commercial confidentiality can be broken open and renegotiated. The
patents system will also be modified step by step and finally (in the case of medicines) abolished.
Remarks
This scenario demands rigorous reworking of European legislation in particular. It also requires
Europe to have the strength and willpower to want to break trade treaties open.
Modellen voorgesteld door de Vereniging Innovatieve Geneesmiddelen
The Dutch sector organisation, the Vereniging Innovatieve Geneesmiddelen (Association Innovative
                                                                             22
Medicines) has proposed three models for discovering new medicines.
Model 1: the public model
Description
This model is virtually the same as KCE/ZIN scenario 4: the governmental authorities pay and do all
the research into new medicines. The model is not worked out in further detail.
Model 2: the patient model
Description
This model is intended for getting new medicines to the patients more quickly. Medicines are
provided to the patient in this model before they are in fact authorised for the market - i.e. not
indicated (or not yet) for a specific condition such as a certain type of cancer. If it then transpires
that the drug is also effective for this condition, the indication can be broadened. If it does not work,
the indication can be restricted again.
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<pre>Appendix 2 – Alternative development models                                                            49
Model 3: the umbrella model
Description
In this model, all patients who could benefit from a particular new medicine are brought together
under a single financial 'umbrella'. This can be done for example by paying a manufacturer a fixed
amount per year, or a fixed amount per patient or group of patients. This model builds upon the
pay-for-benefit agreements or decentralised tailored agreements that can already sometimes be
found. If a drug does not work, society does not have to pay for it.
Remarks
As stated earlier, the public model requires international cooperation between governments. The
second model, the patient model, is essentially about adaptive licensing. The third model is not so
much an alternative development model as an alternative funding model.
Fair Medicine
Description
Fair Medicine is a foundation that aims to get better medicines to the patients more quickly and
more cheaply by deploying a new model. The classical, linear model starts with an inventor
discovering something. A manufacturer then uses money from an investor to develop a medicine
and get it onto the market, after which treating physicians can prescribe it for their patients. In the
new model, the patient, treating physician, clinic, inventor, producer and investor cooperate (see
Figure 2).
Figure 2: The classical model versus the Fair Medicine model
Source: ZonMw, 2016. 'Pearl' award for Fair Medicine, p.2
The various parties form a coalition to which they commit contractually for the entire process; this
will ultimately take the form of an independent company. This is based on four core principles:
1 the Fair Medicine Chain, the coalition of all those involved, based on mutual trust and balanced
    interests.
2 Fair Medicine Distribution: the ownership is based on the contributions and added value actually
    provided, and on sharing the responsibilities, risk and revenues.
3 Fair Medicine Value: the treatment is continually improved thanks to records that the patients
    themselves complete (in consultation with those treating them).
4 Fair Medicine Price: these are transparent development costs and long-lasting margins. The
    participants are open about the costs that they incur and the contributions they actually make.
    Investors earn their investments back, plus a socially acceptable margin based on the sales of the
    drug (after it has been licensed) on the free market. The pricing is determined by the actual
    development and production costs plus a clearly described margin. This price will thus be lower -
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<pre>50                                                         RVS - Development of new medicines
     a lot lower - than the prices of new drugs that are developed using the classical model, which are
     based on maximum anchor prices.
Remarks
Fair Medicine is an interesting initiative. It resembles the earlier scenario of a parallel track for
pharmaceutical development. It does not require amendments to international regulations and the
development costs and the final pricing of the drug can come out significantly lower than in the
current model. However, there is again a danger here of patent law being used to strangle an
opponent in the courts until bankrupt.
In particular the idea of getting the patients themselves (in consultation with those treating them)
to provide data can yield cost savings on the clinical studies. It is however open to question whether
separately recorded datasets are a suitable method for this. We will examine this in more detail in
the next chapter.
Involving patients and those treating them from the very start guarantees that medicines are
developed for which there is a genuine need.
It will have to be seen in practice whether there are enough investors who are prepared to make
capital available at modest margins and whether the various parties can build up enough of a
relationship of mutual trust.
Cinderella Therapeutics
Description
Cinderella Therapeutics is a foundation. It is the sole shareholder of Cinderella Therapeutics BV, a
company that focuses on medicines that the industry does not want to develop further because the
potential for profits is too limited. These are in other words drugs that will just be left 'on the shelf'.
If such a drug is noticed and thought to have potential, a working group or consortium is set up in
which interested clinical researchers cooperate without vested interests. If a valuable effect is found
and large numbers of patients could be treated with it, the drug is made available at cost price.
Remarks
Cinderella Therapeutics focuses on drugs that the industry is not interested in. As the organisation
itself says, it is not a competitor to the pharmaceuticals industry. This also means, though, that it
does not offer a solution to the issue of new medicines that are developed by that industry being
very expensive.
myTomorrows
Description
myTomorrows is a company that operates in seventeen countries, including the Netherlands,
Belgium, France, Turkey and the United Kingdom. It helps doctors and their patients obtain access
to medicines that are not yet licensed. The medicines offered have passed Phase I successfully along
with one or more Phase 11 studies that have also demonstrated their safety and initial efficacy. It is
all done on a named patient basis. This is one of the two possibilities, in addition to the
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<pre>Appendix 2 – Alternative development models                                                           51
compassionate use programme that the European regulations offer for making drugs available to
patients outside the context of clinical studies that are not yet authorised and therefore not yet on
the market. When working on a named patient basis, the treating physician asks the Dutch Health
Care Inspectorate (IGZ) for permission to treat a specific, named patient with an appropriate
medicine under their own personal responsibility. If the IGZ gives permission and the company is
prepared to supply the medicine, the patient may be treated.
myTomorrows offers an Internet-based platform on which these drugs are offered and where
treating physicians and medicine manufacturers are brought together. To that end, myTomorrows
employs a number of doctors and other specialists who determine what medicines and treatment
methods the plat- form offers. In the Netherlands, unlike for example France or Turkey, insurers
reimburse the drugs to a limited extent. The company generates its income from the fact that the
manufacturer pays it a percentage of the sales price of the product when it actually does come onto
the market. In addition, myTomorrows receives a transaction fee from the manufacturer each time
the medicine is handed over to a treating physician.
myTomorrows is starting pilots up in the Netherlands in which patients are treated with non-
licensed medicines that are nevertheless reimbursed. Agreements are signed for this with
governmental bodies, insurers and manufacturers. These agreements cover aspects such as
publication of treatment outcomes and the determination of the pricing after market authorisation.
Remarks
The pilots that myTomorrows is carrying out are a new development model in parallel with the
existing one. The model of open access to the treatment outcomes and agreements about the
pricing before and after licensing has the potential to lower the prices for certain medicines in the
longer term. Pilots in the Netherlands are interesting for manufacturers, because they only
represent 1% to 2% of the global market for medicines.
Netherlands Antibiotic Development Platform (NADP)
The Netherlands Antibiotic Development Platform (NADP) assists cooperation between public and
private organisations in order to promote the development of new antibiotics and alternative
treatments for infectious diseases in people and animals. In a later stage, the platform also wants to
offer management support for the development of new drugs and to act as a TTO. Participants in
the NADP are the Centre for Antimicrobial Research (CARES), the Centre for Sustainable
Antimicrobials (CeSAM), the network organisation Immuno Valley and the Netherlands Centre for
One Health (NCOH).
Remarks
Resistance to numerous existing antibiotics among bacteria is a large-scale problem and new drugs
are badly needed. In order to avoid resistance to these new drugs developing (as far as possible),
these new medicines should be used as little as possible - only as a last resort. From a purely
commercial point of view, this makes development of new antimicrobial drugs awkward. After all,
the 'conventional' system means that a company has to earn back its development costs through
the sales of the new antibiotic and it therefore wants to sell as much of it as possible, whereas public
health considerations mean that it needs to be available but should be used as little as possible.
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<pre>52                                                                   RVS - Development of new medicines
Current business models are inappropriate and alternatives, for example in forms such as the NADP,
are therefore needed.
Summary
The majority of the proposed angles to be used in the search for solutions require changes to
international cooperation or amendments to international regulations. These solutions are a less
good fit for the context of these recommendations, in which the international regulations are seen
as a fait accompli. A number of possible solutions do offer perspectives in that context, such as Fair
Medicine, Cinderella Therapeutics and myTomorrows. These three initiatives cover different aspect
of the development pathways. This is shown in more detail in Figure 3. In addition there is the
NADP, which focuses on R&D specifically for antimicrobial agents.
Figure 3: Positioning of Fair Medicine, Cinderella Therapeutics and myTomorrows in the development process
    Notes
22 Presented at a symposium of the cancer charity KWF Kankerbestrijding on 23 June. In: KWF Kankerbestrijding (Dutch
    Cancer Society, 2016). Eighteen innovative ideas for making expensive medicines accessible.
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<pre>Literature                                                                                                53
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<pre>                                                                                               57
Preparation of advice
The committee that drew up these recommendations comprised Bas Leerink (council member and
committee chair), Jan Kremer (council), Leo Ottes, Willem Jan Meerding and Marina de Lint
(advisers). The committee would like to thank Rick Vreman for his activities relating to these
recommendations.
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<pre>                                                                                               59
Participants in the expert meetings
The Council provides advice independently. Discussions during the preparation of
recommendations are not about obtaining support. The people taking part in the discussions have
made no commitment to the recommendations. The following people were consulted during the
advisory process:
20 June 2016
Drs. Olivier Gerrits                     Achmea health insurers
Prof. dr. Toine Pieters                  Cinderella Therapeutics
Dr. Frans de Loos                        Fair Medicine Foundation
Prof. dr. Hans Büller                    Fair Medicine Foundation
Mr András Kupecz                         Kupecz intellectual property
Dr. Saco de Visser                       Leiden Bio Science Park
Dr. Frank Flier                          Ministry of Health, Welfare and Sports
Dr. Sander Visser                        Price Waterhouse Coopers
Drs. Remco de Jong                       Radboud UMC
Prof. dr. Huub Schellekens               Utrecht University
Prof. dr. Maarten IJzerman               University of Twente
Dr. Cor Oosterwijk                       VSOP (Association of Cooperating Parents’ and
                                         Patients’ Organisations)
8 October 2016
Dr. Hans van Eenennaam                   Aduro
Drs. Wieteke Wouters                     HollandBIO
Dr. Annemiek Verkamman                   HollandBIO
Dr. Frank Flier                          Ministry of Health, Welfare and Sports
Drs. Ingmar de Gooijer                   MyTomorrows
Drs. Ronald Brus                         MyTomorrows
Dr. Bernard Müller                       Treeway
Dr. Inez de Greef-van der Sandt          Treeway
24 February 2017
Prof. dr. J.M. van Gerven                CCMO (Central Committee on Research Involving
                                         Human Subjects)
Prof. dr. Arnold Vulto                   Erasmus University Rotterdam
Dr. Frans de Loos                        Fair Medicine Foundation
Dr. Annemiek Verkamman                   HollandBIO
Dr. Martijn de Jager                     KWF Kankerbestrijding (Dutch Cancer Society)
Dr. Bert Hiemstra                        Medicines Evaluation Board
Dr. Frank Flier                          Ministry of Health, Welfare and Sports
Drs. Ronald Brus                         MyTomorrows
Drs. Pauline Evers                       Nederlandse Federatie van
                                         Kankerpatiëntenorganisaties (Federation of
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<pre>60                                       RVS - Development of new medicines
                            Dutch Cancer Patients' Organisations)
Dr. Karin Grünberg          Nederlandse Vereniging voor Pathologie (Dutch
                            Pathology Association)
Dr. Fred Plukker            Onco Research
Prof. dr. Carel Hoyng       Radboud University
Drs. Ivo Gorissen           Statistics Netherlands
Prof. dr. Nico van Meeteren Topsector Life Sciences & Health
Prof. dr. Toine Pieters     Utrecht University
Prof. dr. Huub Schellekens  Utrecht University
Dr. Paul Korte              Vereniging Innovatieve Geneesmiddelen
                            (Association Innovative Medicines)
Dr. Saco de Visser          ZonMw (Netherlands Organisation for Health
                            Research and Development)
Dr. Martin van der Graaff   Zorginstituut Nederland (National Health Care
                            Institute)
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<pre>                                                                                         61
Other experts who were consulted
Prof. dr. Adam Cohen            Centre for Human Drug Research
Prof. dr. Carin Uyl-de Groot    Institute of Health Policy & Management
Dr. Oscar Smeets                Koninklijke Nederlandse Maatschappij ter bevordering
                                der Pharmacie (Royal Dutch Pharmacists Association)
Dr. Jean Hermans                Koninklijke Nederlandse Maatschappij ter bevordering
                                der Pharmacie (Royal Dutch Pharmacists Association)
Mr. Frans Moss                  Koninklijke Nederlandse Maatschappij ter bevordering
                                der Pharmacie (Royal Dutch Pharmacists Association)
Evelien Scheeres                KWF Kankerbestrijding (Dutch Cancer Society)
Dr. Wouter Eijgelaar            KWF Kankerbestrijding (Dutch Cancer Society)
Dr. René Kuijten                Life Sciences Partner
Dr. Kees de Joncheere           Netherlands Antibiotic Development Platform
Drs. Ingrid Hegger              National Institute for Public Health and the Environment
Dr. Susan Jansen                National Institute for Public Health and the Environment
Dr. Robert Vonk                 National Institute for Public Health and the Environment
Drs. Dominiek Veen              Samenwerkende Politieke Jongeren organisaties
                                (Cooperating Political Youth Organisations)
Mr. Ellen 't Hoen               UMC Groningen
Prof. dr. Frank Miedema         UMC Utrecht
Prof. dr. Wim van Harten        University of Twente
Prof. dr. Johan Polder          University of Tilburg
Drs. Gerard Schouw              Vereniging Innovatieve Geneesmiddelen
                                (Association Innovative Medicines)
Dr. Peter Bertens               Vereniging Innovatieve Geneesmiddelen
                                (Association Innovative Medicines)
Dr. Jan Oltvoort                Vereniging Innovatieve Geneesmiddelen
                                (Association Innovative Medicines)
Dr. Bas Amesz                   Vintura
Drs. Henk Smid                  ZonMw (Netherlands Organisation for Health Research
                                and Development)
Dr. Ineke Slaper-Cortenbach     ZonMw (Netherlands Organisation for Health Research
                                and Development)
Drs. Benien Vingerhoed-Van Aken ZonMw (Netherlands Organisation for Health Research
                                and Development)
Dr. Wilma van Donselaar         ZonMw (Netherlands Organisation for Health Research
                                and Development)
Dr. Erica van Oort              ZonMw (Netherlands Organisation for Health Research
                                and Development)
Drs. Jacqueline Zwaap           National Health Care Institute
Drs. Bart Benraad               Zorgverzekeraars Nederland (Umbrella organization
                                of ten health insurers in The Netherlands)
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<pre>                                                                           63
Abbreviations
ACE      angiotensin-converting enzyme
ACM      Authority for Consumers and Markets
ADA      adenosine deaminase
ADHD     attention deficit hyperactivity disorder
ATMP     advanced therapy medicinal products
CARES    Centre for Antimicrobial Research
CBG, MEB Medicines Evaluation Board
CCMO     Central Committee on Research Involving Human Subjects
CEO      chief executive officer
CeSAM    Centre for Sustainable Antimicrobials
CRO      contract research organisation
EAE      experimental autoimmune ecephalomyelitis
EFPIA    European Federation of Pharmaceutical Industries and Associations
EMA      European Medicines Agency
EU       European Union
FDA      Food and Drug Administration
glyHb    glycohaemoglobin
GMP      Good Manufacturing Practice
GSK      Glaxo SmithKline
GVS      reimbursement system for medicines
HbA1c    haemoglobin A1c
HER2     human epidermal receptor 2
HIV      human immunodeficiency virus
IGZ      Dutch Healthcare Inspectorate
IMI      Innovative Medicines Initiative
KCE      Belgian Federal Healthcare Knowledge Centre
KNAW     Royal Dutch Academy of Sciences
KNMP     Royal Dutch Pharmacists Association
Lareb    Netherlands Pharmacovigilance Centre
MS       multiple sclerosis
NADP     Netherlands Antibiotic Development Initiative
NCE      new chemical entity
NCOH     Netherlands Centre for One Health
NME      new molecular entities
OECD     Organisation for Economic Cooperation and Development
PGD      personal health file
R&D      research and development
RCT      randomized controlled trial
ROW      Patents Act
RVS      Council for Public Health and Society
RVZ      Council for Public Health and Care
SCID     severe combined immune deficiency
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<pre>64                                             RVS - Development of new medicines
TRIPS Trade-Related Aspects of Intellectual Property Rights
TTO   Technology Transfer Office
UN    United Nations
USTR  United States Trade Representative
VWS   Health, Welfare & Sport (Ministry)
WTO   World Trade Organization
ZIN   National Health Care Institute:
ZonMw Netherlands Organisation for Health Research and Development
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<pre>                                                                                                   65
Publications
Ontwikkeling nieuwe geneesmiddelen. Beter, sneller, goedkoper. [Development of new medicines.
Better, faster, cheaper].
Recommendation, number 17-10, November 2017.
Heft in eigen hand. Zorg en ondersteuning voor mensen met meervoudige problemen [Empowered to
gain control. Care and support for people with multiple problems].
Recommendation, number 17-09, October 2017.
Zorgrelatie centraal. Zorgrelatie centraal. Partnerschap leidend voorzorginkoop [A focus on the
healthcare relationship. Partnership the guiding factor when it comes to purchasing healthcare].
Recommendation, number 17-08, October 2017.
De vele kanten van eenzaamheid [The many sides of loneliness].
Exploratory document, number 17-07, July 2017.
Eenvoud loont. Oplossingen om schulden te voorkomen. [Simplicity pays. Solutions to avoid debts].
Recommendation, number 17-06, June 2017.
Zonder context geen bewijs. Over de illusie van evidence-based practice in de zorg. [No evidence
without context. About the illusion of evidence-based practice in healthcare].
Recommendation, number 17-05, June 2017.
De Zorgagenda voor een gezonde samenleving [The care agenda for a healthy society].
Publication, number 17-04, April 2017.
Recept voor maatschappelijk probleem. Medicalisering van levensfasen [Recipe for a social problem.
Medicalisation of phases of life]. Recommendation, number 17-03, March 2017.
Inkoopsafari. Verkenning van de praktijk van zorginkoop [Purchasing safari. An exploration of
healthcare procurement practices]. Exploratory document, number 17-02, February 2017.
Implementatie van e-health vraagt om durf en ruimte [Implementation of e-health requires courage
and space].
Advisory letter, number 17-01, January 2017.
Wat ik met Kerst mis. Een bundel met wisselende perspectieven over eenzaamheid [No Christmas
presents. Bundle showing various perspectives about loneliness].
Bundle, number 16-04, December 2016.
Grensconflicten. Toegang tot sociale voorzieningen voor vluchtelingen [Border conflicts. Access to
social facilities for refugees].
Essay, number 16-03, October 2016.
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<pre>66                                                     RVS - Development of new medicines
Een gedurfde ambitie. Veelzijdig samenwerken met kind en gezin [A daring ambition. Multi-faceted
cooperation with child and family].
Recommendation, number 16-02, May 2016.
Verlangen naar samenhang. Over systeemverantwoordelijkheid en pluriformiteit [Longing for cohesion.
On system responsibility and pluriformity].
Recommendation, number 16-01, April 2016.
Wisseling van perspectief. De werkagenda van de RVS [Changing perspectives. The working agenda of
the Council for Public Health and Society].
Publication, number 15-01, December 2015.
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<pre>67</pre>

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<pre>5</pre>

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<br><br>