Dutch Price Moves Threat To Industry

A Dutch Cabinet announcement on drug price cuts severely threatens the pharmaceutical industry, a spokesperson for the Dutch drug industry association Nefarma told the Marketletter.

The cabinet is proposing a separate pricing policy specifically for drugs, to bring their prices into line with neighboring European countries and produce a saving of 700 million guilders ($445 million). The government is seeking these price cuts to limit the increase in health sector spending to a target 1.3% in 1998 compared with average annual 2.3% rises seen over the past decade.

Nefarma argues that not only does the Cabinet move disregard an agreement reached with the pharmaceutical industry, which in June 1994 agreed to lower prices by 5% on the promise that any future price moves would involve "timely" discussions with the industry, it also contravenes European Union policy.