Column: Frans de Loos on Fair Pricing

 Fair Medicine recently attended the Fair Pricing meeting that was organised by the WHO and the Dutch Ministry of Health, Welfare and Sport in Amsterdam.Fair Medicine was invited to explain the new business model and to participate in workshops and discussions on how the Fair Medicine model will contribute to the fair pricing of medicines in the future.
It was great to see that so many parties were motivated to take up the challenge to understand and define what fair pricing of medicines is, and look for solutions when it is clear that unfair pricing limits the availability of medicines for those who need them.

Prices that are too high can be a problem, but prices that are too low can cause problems as well. Low prices are not fair for the industry if the price does not allow a fair margin that provides a sustainable business opportunity, causing companies to withdraw from the market. This often results in only a single supplier staying in the market, posing a danger that the supply cannot be guaranteed. Prices that are too high, on the other hand, are not fair for the patient. After all, what good is it if we can develop new innovative drugs, but even patients in high-income countries cannot afford them, let alone lower income countries.

I would like to focus on one remark that struck me when we discussed the solutions for fair pricing. The discussion dealt with whether governments should take a bigger role in the development of medicines. One of the representatives of a European government claimed that she would not dare to propose that more public money should be spent on development of medicines in her country, as it is too high a risk to invest into that industry.

I would like to advocate a bolder approach, and indeed take the risk and use public money to develop the medicines we need. In fact, I believe that we have no choice as a society. In the current situation, we leave the risk to the industry and investors. They make the choice as to what products will be developed, and they make the choice how the product is priced in the market. Of course, they calculate the risk borne by the industry into the price of the product, as no company can afford to do otherwise. But is the risk fairly calculated, and do we get the right products to the market? As a society, we just don’t know and we have no influence.

So since we are paying for the risk borne by the industry anyway, let us be brave and use public money to invest into the right products, understand what the risks really are for the pharmaceutical industry, and regain control! It is the responsibility of us all to invest in a sustainable and affordable supply of medicines.


Frans de Loos
Director Fair Medicine