lunes, 8 de enero de 2018

I invite (pharma industry) and you pay (Health Servicies, taxpayers)

"They will not be considered as compensation in kind for the purposes of article 44.2. of the tax law, the studies arranged by institutions, companies or employers and financed directly or indirectly by them for the updating, training or retraining of their personnel "... (1).

On December 30, the BOE published a modification of Article 44 of the Personal Income Tax Regulation, which considers that the payments made by pharmaceutical companies to physicians and other professionals to attend congresses and training activities are exempt from taxation. They are not considered payments in kind, they are not considered additional income. They are considered training expenses of the company in which they work, that is, of the Health Service. But why? Because, according to this regulation, these are expenses financed by employers. These are expenses financed indirectly by the Health Service, by the State, even though they are paid through a pharmaceutical company. It is the State that is financing, because it gives the pharmaceutical company the possibility of collecting a very important "indirect tax", the surcharge that it puts on medicines thanks to the monopoly of patents and the exclusivity of data. With this surcharge, the laboratories finance the training expenses of the health professionals, finance research expenses, but they are left with much more money for doing these tasks. It is a perverse and inefficient system.

In this model, pharmaceutical companies "invite", decide which doctor goes to Congress, which doctor goes to this or that course of research. Doctors should ask the laboratory for the favor of inviting them or their residents to the courses and congresses. The State, health services, taxpayers, ultimately, pay. But the doctor feels grateful to the laboratory, which is the one that has invited her or him. The doctor is not even aware that it is his health center, his Health Service, which is paying. Now the RD 1074/2017 clarifies it.

It is a perverse system, because the employer, the Health Service loses the ability to direct the training process, the priorities, the contents... In fact, it is the laboratories that condition or decide programs and speakers. In addition, the professional does not feel well treated by his Health Service, his employer, and believes that it is the laboratory that cares about him. And when one receives a favor, tends to be grateful, tends to prescribe the products of who invited him, even if unconsciously. In this way, hyper-prescription of more expensive drugs which may not be indicated is encouraged. On the other hand, many professionals do not accept that the laboratory invites them, considering it contrary to their professional ethics, and can not access the training activities they need, because their employer has "delegated" to these companies. The industry captures in this way a strategic dimension of the health organizations, the continuous training of its personnel, and conditions the behavior of professionals and managers.

But the system is not only perverse. It is enormously inefficient. The state, governments, health systems, give pharmaceutical companies the ability to collect the "tax" of the over-price that patents allow, supposedly to pay for the research and training of their professionals. But companies spend much less than we give them and the rest goes to profit. Indeed, in Spain, in 2016, the total sales of medicines at laboratory prices were €15.59 billion (2). Following the criteria of Dean Baker, Co-Director of the Center for Economic and Policy Research (3), we can estimate that, if the drugs were paid at the price of generic, we would have spent 30%, €4.68 billion. It means that the "over-price" we pay is €10.91 billion. But the companies only spent 908 million euros in research (4), and 501 million euros in training and financing of scientific societies and associations of patients (5). It is a lot of money, but pharmaceutical companies still profit much more, €9.50 billion, which could go to more training, more research, or other very necessary purposes of Health Services (adequate staffing, adequate remuneration, appropriate technology , health promotion programs, social services, etc.). *

Would it not be reasonable to change this model for another in which prices are paid based on effective market competition, without the monopoly of patents (generic price), and R & D and training spending will be paid directly by Health Services? I think the answer is yes. The way out of the current spiral of excessive prices is "delinkage" (to delink prices and financing of research). (6)

Thus, the research would address the health priorities of patients and populations, and not the commercial interests of the laboratories. The research would be cooperative and open. And the results of the research would be used without monopoly, with which the prices of medicines would not be exorbitant and would not put at risk the accessibility and stability of health systems.

In the same way, the training would be managed by the teaching committees of the health centers and the Health Services, according to the needs of the patients and the health institutions, without interference from the commercial interests of the industry. 

The change of model will not be easy nor from one day to the next. It will be a process in which the first step is to become aware of the problem (high prices cause thousands of patients can not access the medication they need and, at the same time, exorbitant prices jeopardize the viability of health systems) and of a possible alternative. From there, regional and national governments, as well as the EU authorities, must take measures to change the situation. Health professionals can also decisively influence with their opinion and attitudes in changing the model. The UN Secretary-General’s High Level Panel on Access to Medicines Report (7) has showed interesting steps to move forward.

Current expenditure on drugs in Spain (2016), and alternative model (in million euros)

Current Model, with indirect financing of training and R&D
Alternative Model, with direct financing of training and R&D
Expenditure on drugs, at Ex Factory Price, paid by Health Services and Patients

Sale price if there is free competition (generics)

Over-price (indirect tax through the Patente Monopolies
Expenditure on R&D

Expenditure in payment of courses, congresses, scientific societies




Profits for laboratories

Savings for the Health System (for contracting more professionals, adequate working conditions, R & D, health promotion,  etc.)


*In the EU-28 savings will be more than €70 billion, and in the US more than $183 billion, annualy.