TCS Daily

What the Doctor Ordered

By Joshua Livestro - February 3, 2005 12:00 AM

In a recent editorial in the Wall Street Journal, former European Parliament President Pat Cox MEP called on Commission President José Manuel Barroso and his team to "give freedom its hour of expression and allow Europeans to discover and realize their own potential." According to Cox, Europe's floundering economies need the strong competitive boost that an injection of freedom could bring.

He's not wrong there. On virtually any economic indicator imaginable, Europe is falling further and further behind its main economic competitors. It posts the lowest growth rates, the highest unemployment, the fewest entrepreneurs, the smallest amount of venture capital. Crucially, Europe is also losing ground in the battle on R&D spending. Take for example spending on pharmaceutical innovation. At a recent conference, organized by the Brussels-based weekly magazine European Voice, GSK's vice-president of European pharmaceuticals Chris Strutt observed that European hostility to innovation serves as a major stumbling block to the maintenance of a world-class pharmaceutical research base.

Europe's governments, already under pressure from soaring costs of welfare entitlements, fear the costs involved with groundbreaking research. Other stakeholders demand overly stringent and often unworkable quality control systems. The result is the rapid decline of the pharmaceutical research base in Europe. In 1982 Europe was still leading the world in pharmaceutical R&D. By 2012, pharmaceutical R&D spending will fall under 50 percent of US levels. By then, eight out of ten new prescription drugs will be developed in the US. As a result, fewer and fewer products will be launched in Europe first, with many only making it to Europe with considerable delays.

The conference seemed to split along familiar European lines. On the one side were speakers who preferred a low-risk, regulation-intensive approach. They stressed budgetary difficulties and scientific uncertainties. Their buzzwords were coordination, regulation, and solidarity. On the other side of the divide, speakers stressed the inefficiency of Europe's traditional approach of rationing and delaying the introduction of new drugs and new forms of treatment. They raised a fundamental question about the direction of European policy-making. If the EU really wants to provide added value, would it not be better to leave risk-averse policymaking to national governments and focus instead on the promotion of a culture of risk-taking among companies and citizens?

This entrepreneurial view of a European healthcare policy was articulated most eloquently by the Dutch MEP Jules Maaten. He started by emphasizing that his plea for risk-taking shouldn't be mistaken for a call for recklessness. He stressed that, in his view, the EU did have a useful risk-avoiding role to play by preventing the spread of communicable diseases through the stockpiling of vaccines and by providing Europe's citizens with information about potentially harmful habits through labeling.

The core of his speech, however, consisted of a call for the founding of a pan-European single healthcare market based on a culture of risk-taking by both patients and companies. Patients should be encouraged to seek effective treatment across borders. To that end, he suggested that the principle of patient mobility be enshrined in EU legislation. A single market in healthcare services would also encourage risk-taking by pharmaceutical companies. The chance of an increased market share would provide pharmaceutical companies with an incentive to boost spending on R&D. In order to guarantee that companies would have a fair chance of a decent return on their research investments, Maaten also called for a lifting of the ban on direct to consumer advertising of prescription drugs. A single market could only work efficiently if it was also a transparent market.

Obviously, Maaten's call for a culture of risk-taking and entrepreneurship in healthcare provision didn't go unchallenged. Some speakers objected to the mere mention of the word "risk"; others raised technical or principled objections to details of his proposals. But an unexpectedly large number of speakers came out in support of his ideas. There was, for instance, a surprising call for reconsideration of the ban on direct to consumer advertising of prescription drugs coming from Fernand Sauer, director of the Public Risk and Health Assessment department at the European Commission's DG Health. Sauer observed that there was a growing discrepancy between the absence of transparency in healthcare provision and the increasing appetite for it: "This is a left-over from the previous Commission. I for one sincerely hope that this issue will be taken up by Commissioners Verheugen and Kyprianou."

Commissioner Kyprianou himself seemingly remained on the fence in the debate about risk-taking versus risk-avoiding. There was an interesting hint, though, of a possible change in the Commission's approach to dealing with risk in healthcare policy-making. When commenting on the issue of obesity, he observed that he was unhappy about advertisements of fast-food outlets targeting children. Instead of resorting to the traditional Commission measure of the blanket ban, however, Kyprianou opened the door to a different solution by stating he was willing to give the industry one year to develop a satisfactory alternative arrangement. A European commissioner willing to contemplate solving a problem without regulating: it may seem like a small step for man, but it's a quantum-leap in European thinking about healthcare policy. To Europe's ailing healthcare systems, it may be just what the doctor ordered.



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