Bad medicine

Safety hurts. At least, that is one way of describing the great divergence between medicine importers and the health authorities. Reggie Fava has no doubts over the cause of the gradual dissipation in medicine stocks and the increase in prices of medicinals

Reggie Fava, the former president of the Chamber of Commerce, says that the bulky and expensive documentation is the nucleus of the rise in prices for medicines, but denies outright any form of abuse or cartels between importers.
The rise in prices of medicines became so accentuated that parliamentary secretary Tonio Fenech seemed determined to toy with the idea of reintroducing price orders, a dirty word last heard of back in the eighties. It’s a word which Reggie Fava, the 72-year-old director of Chemimart pharmacy chain, finds scandalous: “I was scandalised. The word price orders to me means “abuse” – an abuse on whom a price order is enforced. Price orders are not a solution – to me as a businessman it is an archaic word. I’m not even prepared to discuss such a proposal. It hasn’t even been mentioned in discussions with government.”
And yet, the prices of medicines have encountered a hefty 9.79 per cent increase over April 2003 prices, until last January. A governmental working party has found variations on medicine prices ranging from 20 per cent to as much as 150 per cent since EU membership, mainly drugs with high volume sales.
Observers claim importers, some 87 wholesalers on the island, have hiked up certain products’ prices ahead of the end of a derogation on the registration of medicines: a bulky set of documentation for each product which has to be analysed by the Malta Medicines Authority. Unless the authority gives a positive verdict to the benefit-risk comparison, the drug cannot be marketed in Malta.
Fava and so many importers of medicines have taken great issue with the onerous registration of medicines which have to be supplied to the authority. Prior to EU membership, all that was required to import a medicinal product from anywhere in the world was a certificate from the country of origin. Today the new system requires for each product a marketing authorisation, based on scientific dossiers containing solid scientific data on the history of the product.
“What we want is a registration system that is efficient and not costly. We don’t want a system that does not take into account the realities of a small market like ours. Today we have enormous costs to register our products and it is untrue that we are passing on these expenses to the consumer. But neither us nor the producing companies we represent are charity organisations – at the end of the day everyone has to lay down their mark-up, and one way or another this will be reflected in the price, it is obvious.”
Not only does registration cost, but it was such a demanding process that the EU decided to grant Malta a derogation from having to supply all the documentation for a list of some 6,000 medicines which had been imported to Malta up until membership. Many claimed the list was over-inflated, but Fava claims all the medicines on the list have entered Malta.
Instead the EU granted Malta the ability to employ a simplified registration, a provisional marketing licence on all medicinal products which had been on the market before November 2002.
The crux was that, by the end of 2006, importers had to supply the necessary dossiers which document the tests and history of these medicines substantiating the quality, efficacy and safety of these products. Lengthy stuff, costly for medicine producers who have to provide the assessment of documentation to the Maltese authorities. So costly, they might as well not even market the drug in Malta.
Some claim that the reason why prices are being hiked up is that certain importers know that the medicines will no longer be on the pharmacy shelves come 2007 – when the derogation’s time is up and nobody will have fronted the high costs of registration, the medicines will no longer be there.
“I don’t want the allegation,” Fava says about prices being hiked up almost double. “I want proof. I have seen no list indicating such prices. We have assured our cooperation to government to see whether any abuse exists and we will expose anyone abusing the law,” the assured businessman says. Despite acknowledging that since EU membership some prices have increased while others remained constant, he says the Chamber is not representing anyone who is actually abusing the law.
“In no way can I say that anyone is abusing – it could be the case – but we do not represent these people! We represent the honest businessperson, who follows normal business practices. And we have offered government our full cooperation in taking steps against whoever is abusing, if there is anyone who is abusing. There are surely a lot of accusations. There were cases on the local media of particular items which had increase by Lm1 to say, Lm3.35. What probably happened was a mistake by some pharmacist in pricing the item. It’s a mistake that can happen, but easily enough they spark off a whole clamour of unjust accusations. Nobody yet says what type of service our sector gives to the community – nobody mentions the costs we incur as importers when products expire and we have to remove them from the shelves.”
I ask Fava whether importers hiked their prices ahead of the derogation’s deadline, seeing that once the products will never be registered given the high costs, they might as well raise the prices before they are out of stock.
“I cannot exclude this. What I can say is that we warned of what would happen beforehand. We showed the road ahead and proposed our solutions, and ensure competition can increase and not decrease. We want to have just competition and provide quality medicine.”
What so many wholesalers and the GRTU and the Chamber of Commerce warned the government of, was that registering every single product with the medicines authority was going to be too costly for them and the producing companies to market their medicines in Malta. The costs are too much, and the market is too small. It costs tens of thousands for a producing company to assess the documentation of a drug to the Maltese authorities.
When I point that sales of medicines runs into the millions, while registration costs are much less, just some Lm300,000 overall, Fava sounds out an irked protest.
“The sale of medicinals may be substantial. But the turnover for each individual product is insignificant. I can tell you that producing companies supply us with their products as a favour: our consumption amounts are too small, our market is too small, and the authorisation costs are too expensive. If our products start decreasing and competition between importers start decreasing, we will be left with just one type of product on the shelves.
“The problem is that the expensive costs of registration, coupled with the small size of our market, does not make it feasible for foreign companies to send over their products to Malta. We want to be able to have honest competition between ourselves. That is why I see red when I head the word cartels – as importers we only get together in moments like these. The notion of cartels is a flight of fancy – we never got together to make either arrangements or price-fixing.”
So do importers really need to supply all this information? The MMA wants all the documentation of these medicines to be analysed in order to ascertain the benefits of the drugs outweigh the risks. But companies have to pay thousands of liri to supply the documentation for the products, and in some cases to translate the documentation itself into either Maltese or English.
The government also wants every single medicinal product to carry a market authorisation number, another point of divergence with wholesalers. The number ensures the traceability of a product, but the process is too cumbersome. The Chamber have proposed a system that allows control without having to affix the market authorisation number on every single medicinal product.
The MMA says registration in the post-EU world only serves to ensure greater safety and better checks on medicines marketed in Malta, claiming it has already encountered cases where the indications, warnings and contraindications on these products are sometimes not in line with guidelines and may be fewer than those approved in other European countries.
“There are less products because certain foreign companies have chosen not to register their products here because it is expensive,” Fava says about the foreign producers who have to pay tens of thousands to provide an assessment of documentation to the Maltese authorities.
“There are others who did not have the necessary documentation to register the product because these products had been registered in the originating country for the past 40 years, so they did not have the necessary documentation. The EU rightly decided that, since these medicines’ efficacy had been proven, they would still be allowed to be registered in Malta. Now if we have to start this process anew, we need the documentation necessary to register the products. And failing that, the products will only start to disappear off our shelves. We hope that in the coming days, we will solve this problem. We are sure that this is a problem we will solve. The expenses that had been contemplated will decrease.”
The big bone of contention is whether this could mean more medicines imported to Malta without a thorough analysis conducted by the relevant authorities, in this case the MMA.
Many believe the so-called Luxembourg model is far suitable for Malta. Instead of creating its own registration system, Luxembourg decided to register every product registered in Belgium automatically – it would save it from registering every single product. Organisations such as the GRTU proposed a similar registration system with the UK and Ireland, so that every product already registered in these two states would save Malta the need to register the products.
But that means that all safety, quality and efficacy standards would have already been registered abroad, and would, the authorities claim, ignore particular histories of side-effects of drugs registered in Malta. National authorities are responsible for issuing a summary of the characteristics of each product due to differences in the way medicines affect people in different EU member states. One finds differences in clinical practice, incidence of diseases and even different trends of antibiotic resistance in different EU member states. Take antibiotic resistance – it so happens that in northern countries resistance is less prevalent than in other member states.
In short, should it not be the Maltese authorities who conduct their own analysis of whether a drug registered in the UK or Ireland is also suitable for Maltese clients and patients?
“I don’t want to mention Luxembourg here,” Fava says. “I want to look at my country’s problem. We need to simplify registration – where a product has been on our shelves for the past 40 years and is found in the countries where it was produced, we should not need to present voluminous documentation and costly fees to get the authorisation to market it in Malta. I don’t think a product that has been marketed in the UK, France, Germany or Italy, will need the Maltese authorities’ analysis to say whether it is good for us or not.”
And what if there had been changes in the development of the drug to its consumers? Would it not be right for the Maltese authorities to analyse the documentation of this drug?
“If there are new side-effects to the product it is in the company’s interest to withdraw the product from the market, from the global market because the damages to the company would be enormous. It would mean the demise of the company – the financial damages would be so enormous the company would fly off the face of the market.
“It’s not that we don’t want a serious system of registration. We need it because it is necessary, especially since there are pharmaceutical companies in Malta who need to register their products. The decrease in products are caused by the system of registration we adopted – that is the nucleus of the problem, and the problem to which we are trying to find a solution. The model we are trying to follow is one that ensures practicality, one tailor-made to our small size, and our limitations for a market of 400,000.”
The Chamber of Commerce’s healthcare sector is already carrying out a study over how fees should decrease. “The fees as originally presented were acknowledged to be too expensive for a market of our size. The licensing system was altogether too costly.”
I ask Fava whether a proposal to have decreased registration costs coupled with a fee for inspection costs, which are currently carried out for free by the government, was accepted. “I wouldn’t say the inspection costs could be an issue. What is essential to me is that the costs of market authorisation are revised. At this stage there is a good will from government, who appreciates that we cannot pay what we cannot afford.”