How can voluntary cross-border collaboration in public procurement improve access to health technologies in Europe?

POLICY BRIEF 21

How can voluntary cross-border

collaboration in public procurement improve access to health

technologies in Europe?

Jaime Espín Joan Rovira

Antoinette Calleja

Natasha Azzopardi-Muscat Erica Richardson

Willy Palm

Dimitra Panteli

economics

Financing, Government – economics

Group Purchasing – economics International Cooperation Cooperative Behavior Europe

This policy brief is one of a new series to meet the needs of policy-makers and health system managers. The aim is to develop key messages to support evidence-informed policy-making and the editors will continue to strengthen the series by working with authors to improve the consideration given to policy options and implementation.

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What is a Policy Brief?

A policy brief is a short publication specifically designed to provide policy-makers with evidence on a policy question or priority. Policy briefs:

• Bring together existing evidence and present it in an accessible format

• Use systematic methods and make these transparent so that users can have confidence in the material

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• Are underpinned by a formal and rigorous open peer review process to ensure the independence of the evidence presented.

Each brief has a one page key messages section; a two page executive summary giving a succinct overview of the findings; and a 20 page review setting out the evidence. The idea is to provide instant access to key information and additional detail for those involved in drafting, informing or advising on the policy issue.

Policy briefs provide evidence for policy-makers not policy advice. They do not seek to explain or advocate a policy position but to set out clearly what is known about it. They may outline the evidence on different prospective policy options and on implementation issues, but they do not promote a particular option or act as a manual for implementation.

Contents

page

Acknowledgments 2

Keymessages 5

Executivesummary 7

Policybrief 9

Findings 13

Discussion 16

Conclusions 20

References 21

Appendix1.Methods 23

Authors

Jaime Espín,AndalusianSchoolofPublicHealth Joan Rovira,DepartmentofEconomicTheory, UniversityofBarcelona

Antoinette Calleja,MinistryofHealth, Malta

Natasha Azzopardi-Muscat,MinistryofHealth, Malta

Erica Richardson,EuropeanObservatoryon HealthSystemsandPolicies

Willy Palm,EuropeanObservatoryon HealthSystemsandPolicies

Dimitra Panteli,EuropeanObservatoryon HealthSystemsandPolicies

Editors

EricaRichardson WillyPalm

Series Editor EricaRichardson Associate Editors JosepFigueras HansKluge SuszyLessof DavidMcDaid EliasMossialos GovinPermanand Managing Editors JonathanNorth CarolineWhite

Theauthorsandeditors aregratefultothereviewers whocommentedonthis publicationandcontributed theirexpertise.

PolicyBriefNo.21

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ACKNOWLEDGMENTS

Theauthorswishtothankthefollowingcontributorsto thispolicybrief,whosubstantivelyenricheditscontent andprovidedtheirexpertise:AlessandraFerrario,Tifenn Humbert,HansKluge,HanneBakPedersen(Division ofHealthSystemsandPublicHealth,WHORegional OfficeforEurope);LoukianosGatzoulis,MichaelHübel, WolfgangPhilip,TapaniPiha,AishaSauer,Jean-LucSion (EuropeanCommission,DGHealthandFoodSafety);

AlisonAnastasi,NevilleCalleja,KarlFarrugia,Antonia Formosa,SylvanaMagrinSammut,StephenMifsud, PatriciaVellaBonanno,IsabelleZahraPulis,MarkZammit (MinistryofHealth,Malta);JamesFitzgerald(Director, HealthSystemsandServices,PanAmericanHealth Organization/WorldHealthOrganization(PAHO/

WHO));EnriqueLimón(SuperBUGSproject,Spain);

FrancisArickx(BelgianNationalInstituteofHealthand DisabilityInsurance,Belgium);ChristineDawsonfromESIP (EuropeanSocialInsurancePartners–ESIP);PeterSchlosser (GDEKKGermany).

ACRONYMS

EMA European Medicines Agency

EPSCO Employment, Social Policy, Health and Consumer Affairs Council ERN European reference network

ESIP European Social Insurance Partners

EU European Union

EUnetHTA European network for Health Technology Assessment GDP gross domestic product

HTA health technology assessment

ICT information and communications technology IPR intellectual property rights

IT information technology

JPA Joint Procurement Agreement MEA managed entry agreements MEDEV Medicine Evaluation Committee

MoCA Method of Coordinated Access to Orphan medicinal products PAHO Pan American Health Organization

PCP pre-commercial procurement R&D research and development SME small- and medium-sized enterprises

TFEU Treaty on the Functioning of the European Union TRIPS Trade-Related Aspects of Intellectual Property Rights UNICEF United Nations Children’s Fund

WHO World Health Organization

Boxes page

Box 1: Methods 9

Box 2: Procurement methods 10

Box 3: BeNeLuxA – collaboration on procurement of

pharmaceuticals for rare diseases 12

Box 4: Joint procurement of vaccines under the

Baltic Partnership Agreement 14

Box 5: EU Joint Procurement Agreement on medical

countermeasures 16

Box 6: Collaboration in Health Technology Assessment (HTA) 16 Box 7: Innovating in public procurement through cross-border

collaboration in the EU 17

Figures page

Figure 1: Activities leading to procurement and access to

health technologies 11

Figure 2: Levels of collaboration in procurement 13

Tables page

Table 1: European experiences of cross-border collaboration

in procurement of health technologies 15 Table 2: Potential gains of collaboration in specific procurement-

related activities 19

BOXES, FIGURES AND TABLES

Policy brief

4 3

How to strengthen patient-centredness in caring for people with multimorbidity in Europe?

How do Policy Briefs bring the evidence together?

There is no one single way of collecting evidence to inform policy- making. Different approaches are appropriate for different policy issues, so the Observatory briefs draw on a mix of methodologies (see Figure A) and explain transparently the different methods used and how these have been combined. This allows users to

understand the nature and limits of the evidence.

There are two main ‘categories’ of briefs that can be distinguished by method and further ‘sub-sets’ of briefs that can be mapped along a spectrum:

• A rapid evidence assessment:This is a targeted review of the available literature and requires authors to define key terms, set out explicit search strategies and be clear about what is excluded.

• Comparative country mapping:These use a case study approach and combine document reviews and consultation with appropriate technical and country experts. These fall into two groups depending on whether they prioritize depth or breadth.

• Introductory overview:These briefs have a different objective to the rapid evidence assessments but use a similar methodological approach. Literature is targeted and reviewed with the aim of explaining a subject to ‘beginners’.

Most briefs, however, will draw upon a mix of methods and it is for this reason that a ‘methods’ box is included in the introduction to each brief, signalling transparently that methods are explicit, robust and replicable and showing how they are appropriate to the policy question.

V

Rapid evidence assessment

Introductory overview

Systematic Review

Meta- Narrative

Review

Rapid

Review Scoping

Study Narrative

Review Multiple

Case Study Instrumental Case Study

V VV V

Country mapping (breadth)

Country mapping (depth)

POLICY BRIEFS

Source:Erica Richardson

Figure A: The policy brief spectrum

How do Policy Briefs bring the evidence together?

Thereisnoonesinglewayofcollectingevidencetoinformpolicy- making.Differentapproachesareappropriatefordifferentpolicy issuessotheObservatorybriefsdrawonamixofmethodologies (seeFigureA)andexplaintransparentlythedifferentmethodsused andhowtheyhavebeencombined.Thisallowsuserstounderstand thenatureandlimitsoftheevidence.

Therearetwomain‘categories’ofbriefsthatcanbedistinguished bymethodandfurther‘sub-sets’ofbriefsthatcanbemappedalong aspectrum:

• A rapid evidence assessment:Thisisatargetedreviewofthe availableliteratureandrequiresauthorstodefinekeyterms,set outexplicitsearchstrategiesandbeclearaboutwhatisexcluded.

• Comparative country mapping:Theseuseacasestudy approachandcombinedocumentreviewsandconsultationwith appropriatetechnicalandcountryexperts.Thesefallintotwo groupsdependingonwhethertheyprioritizedepthorbreadth.

•Introductory overview:Thesebriefshaveadifferentobjectiveto therapidevidenceassessmentsbutuseasimilarmethodological approach.Literatureistargetedandreviewedwiththeaim ofexplainingasubjectto‘beginners’.

Mostbriefshowever,willdrawonamixofmethodsanditisfor thisreasonthata‘methods’boxisincludedintheintroduction toeachbriefsignallingtransparentlythatmethodsareexplicit, robustandreplicableandshowinghowtheyareappropriateto thepolicyquestion.

KEY TERMS

Health technologyistheapplicationoforganized knowledgeandskillsintheformofdevices,medicines, vaccines,proceduresandsystemsdevelopedtosolvea healthproblemandimprovequalityoflives.Inprocurement thismostoftenreferstoinnovativemedicinesasless attentionispaidtootherformsoftechnology(devices, equipmentandhealthinformationtechnology(IT)systems), eventhoughthesenowaccountforaconsiderableand growingportionofhealthcarespendinginEurope.

Public procurementreferstothepurchasebygovernments orstate-ownedenterprisesofgoods,servicesandworks.

KEY MESSAGES

• Thereisagrowinginterestinfurtherdevelopingcross- bordercollaborationinthefieldofhealth,bothata bilateralandamultilaterallevel.Thisissupportedby EuropeanUnion(EU)legislationandpolicies,andextends toimprovingaccesstohealthtechnologies.

• Changesinhealthtechnologiesmarkets,suchasthe generalizationofmanagedentryagreements(MEAs)and theprevailinglackofpricetransparency–particularlyin pricediscounts–requiredifferentapproachestothose appliedinthepast.

• Thereisasoundrationaleforincreasedvoluntary collaborationbetweencountriesintheprocurement ofhealthtechnologies:

 toenhancetransparencythroughbetter informationsharing

 toenablecross-countrylearningbysharingexperience

 tostrengthenbargainingpowerandmitigateoverly hightransactioncostsbypoolingskills,capacities andthroughjointnegotiations

 toensuresustainableaccesstohealthtechnologies bysharingresourcesthroughcross-borderexchange ofproductsinshortsupply.

• However,inpractice,developingsustainablecross-border collaborationinprocurementseemstobechallenging.

ExperiencesinEuropearestilllimitedandtoorecent toreallyallowclearlessonstobedrawnabouttheir effectivenessandimpact.

• Nevertheless,itisclearthatrelatedinitiativeswould requirestrongpoliticalcommitmentandmutualtrust betweenpurchasingpartnersinordertosucceed.It isthereforeadvisablethattheybebuiltprogressively, startingwithcollaborationininformationsharingand knowledgeexchange,beforemovingtowardsjoint purchasingactivities.

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EXECUTIVE SUMMARY

The policy issue: ensuring access to innovative health technologies in a changing market environment.

Technologicalinnovationisoneofthemaindrivers forchangeinthehealthsectorandforimprovingits effectivenessintacklingdiseases.Atthesametime,the increasingpriceschargedfornewtechnologiesareputting pressureonhealthbudgets,whicharealreadysuffering fromfiscalconstraints.Thus,inordertoensureavailability topatients,individualhealthsystemsneedtomeetthe challengeofanticipatingandmanagingtheimpactof technologicalinnovationbyengaginginhorizon-scanning activities,mobilizingcapacitytoassessthevalueofnew technologiesandnegotiatingaffordableprices.

Whilesomeoftheseinnovationscontributetoachieving betteroutcomesandinsomecasesevenmitigatingcosts, forothersaddedvalueiseithernotprovenordoesnot justifyhigherpricescomparedtoexistingalternatives.

Consequently,thereisanincreasingneedforcountriesto accessinformationonanewtechnology’seffectiveness, safety,qualityandprice,inordertoeffectstrategic purchasing.Furthermore,publicpurchasersoftenhave relativelylowbargainingpowerwhenconfrontedwiththe introductionofnew,patent-protectedhealthtechnologies.

Thisisparticularlyrelevantwhentheyarepurchasingfor smallerpopulations,eitherbecausethecountryitselfis smallortheconditioninquestionisrareandthetarget patientpopulationlimited.Inthesecases,itmaybehelpful forcountriestojoinforcesinpublicprocurementprocesses andtoestablishformsofcollaborationacrossbordersto ensureaccesstohealthtechnologies.

Cross-border collaboration in public procurement Thecharacteristicsofmarketsforhealthproductshave dramaticallychangedsincethe1990s.Globalizationhas hadasignificantimpactonthenatureofthesupplychain.

Aseriesofhigh-profileindustrymergershasreduced competitioninmanymedicinesmarkets.Thegeneralization ofintellectualpropertyrights,thegloballywidespread practiceofexternalreferencepricingandtheremoval oftariffbarriersthroughmultilateralandbilateraltrade agreements,especiallyintheEU,haveradicallychanged theinternationalpricingpoliciesofglobalpharmaceutical companies.Furthermore,theSingleEuropeanMarkethas madeitmoredifficultforsupplierstofollowindependent policiesineachcountry.Therealityofparalleltradeand thespill-overeffectsofinternationalreferencepricinghave ledcompaniestodevelopinternationalpricingstrategies, includingconfidentialpricediscountsandmanagedentry agreements(MEAs).Theseinturnforcedpricingand reimbursementauthoritiesaswellasprocurementagencies toacceptpriceconfidentialityonthe(questionable) assumptionthattheycouldobtainlowerpricesthan otherpurchasers.

Cross-bordercollaborationinthefieldofpublicprocurement isoftenputforwardasapromisingstrategytoaddress someoftheexistingimbalancesandchallengesofthe

healthtechnologiesmarket.Intheprocurementof healthtechnologies,therationaleforincreasedvoluntary collaborationbetweencountriesisto:

• enhancetransparencythroughbetterinformationsharing

• enablecross-countrylearningbysharingexperience

• strengthenbargainingpowerandmitigateoverlyhigh transactioncostsbypoolingskills,capacitiesandjoint negotiations

• ensuresustainableaccesstohealthtechnologiesby sharingresourcesthroughcross-borderexchangeof productsinshortsupply.

Theachievementofsustainablepricesthrougheconomies ofscaleattainedbyagroupofentitiesthatpoolallor someofthepurchasingfunctions,orcollaborateincarrying themout,isthemostcommonlycitedgoalforcross-border collaborationinprocurement.However,otherobjectives, suchasimprovingthequalityofpurchasedgoods,ensuring supplysecurityandavailability,andfosteringcertain innovations,arealsoreceivingincreasingattention.

Facilitators and barriers

Althoughthereisalackofconclusiveevidence,itremains clearthatbothwithinandacrossborders,successfuljoint procurementdependsonanumberofessentialpre- conditionstobefulfilledbythepurchasers:

• strongpoliticalcommitment

• trustbetweencollaboratingparties

• goodgovernancethathelpscurbopportunistic tendenciesthatcoulderodethevalueofthe procurementprocess

• pricetransparency

• marketanalysis

• effectivecommunicationbetweeninternaland externalstakeholders

• efficientfinancialmanagement,includingprompt paymentofpurchasesmade

• continuitythroughmulti-yearcontractingthatenables stablesupplysourcesandfostersclosertiesbetween participants

• clarityonmanagementresponsibilitiesforthejoint procurementprocessandtheirremuneration

• sharingofinformationandgoodpractices

• ongoingcommitmenttohonourtheconditions oftheprocurementagreement.

Politicalwillandmutualtrustamongthepartners areobviousconditionsforanyformofcross-border collaboration.Mutualconfidenceandtrustcanbe progressivelybuiltbycountriesstartingwithlessintensive anddemandingcollaborationapproaches,e.g.those implyingonlytheexchangeofinformationandexperiences, time-limitedcollaborations,initiativeslimitedtoone singletechnologyordisease,etc.Thelongevityofsuch arrangementsalsoseemstoinfluencetheireffectiveness.

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Policy implications: supporting cross-border collaboration

Whileactualinitiativesoncross-bordercollaboration inprocurementinEuropearestillfewandhaveevolved onlyrecently,thereisanincreasinginterestinexploring thepotentialofthisoptionasawaytoimproveaccess toinnovativemedicaltechnologiesandcontributeto healthsystemsustainability.Thisisnotonlyreflectedin anincreasingnumberofactivitiesinvoluntarycollaboration agreementsandmovestowardsjointprocurementamong EUMemberStates,butalsoinachangingEUframework thatfacilitatescross-bordercooperationbetween contractingauthoritiesandhelpsclarifytheapplicable lawandresponsibilitiesofthedifferentpartiesinvolved.

Whileitremainshighlychallengingtomakesuppliersadapt tonewwaysofworkingwhichcouldimpacttheirprofit margins,thereisevidencethatcross-bordercollaboration inpublicprocurementcanbeeffective,particularlyfor smallmarkets,inmaintainingaccessthroughpooling resources.Therefore,collaborationsinpublicprocurement, whentheyaretailoredtomeetthespecificneedsofthe countriesinvolved,presentonesolutionthatcanhelpoffset imbalancesinthemedicaltechnologiesmarketandbetter servethegoalsofpublichealth.

Introduction

Technologicalinnovationisoneofthemaindriversfor changeinthehealthsectorandthespeedatwhichit hitsthemarketsseemstobeincreasing.Forindividual healthsystemsitisanimportantgoalandatthesame timeaformidablechallengetoanticipatethischangeand tomanageitsimpact.Healthsystemsneedtomobilize capacityinordertoproperlyassessthevalueofnew technologies,negotiateaffordablepricesandensure availabilitytopatients.Thismaybeparticularlydifficult forsmallercountriesandcountrieswithlimitedresources, aswellasforspecificproducts.Inthesecases,itcouldbe helpfulforagenciestaskedwiththeprocurementofhealth technologiesandrelatedinstitutionstojoinforcesand establishformsofcollaborationwithinandacrossborders.

Thispolicybrieflaysoutthecontextandlegalframework inwhichcross-bordercollaborationbetweenEUMember Statestakesplaceintheareaofpublicprocurement ofhealthtechnologies;discussesexistingexperiences andpractices;andseekstoassesstheirtransferability.

Itbuildsonevidencegatheredinthe2016WHOreport onchallengesandopportunitiesinimprovingaccessto medicinesthroughefficientpublicprocurementinthe EuropeanRegion[1],toidentifysomeofthebarriers andfacilitatorsthatcountriesarelikelytofacewhen seekingtocollaborateinthisareaandtopresentways forward,specificallywithinanEUcontext,thatsupport andencouragecross-bordercollaborationinhealth.Italso presentssomeideasfortacklingthechallengescountries arelikelytofacewhenseekingtocollaborateinthis area,anddetailssomeofthebarrierstoandfacilitators forimplementation.

Policy questions

Thispolicybrieffocusesontheoverallquestion:

“Howcanvoluntarycross-bordercollaboration inpublicprocurementimproveaccesstohealth technologiesinEurope?”

Morespecifically,thefollowingissuesareaddressed:

1. What conditions are needed to make cross-border collaboration in procurement work?

2. For what types of health technology and types of activity would cross-border collaboration be most appropriate?

3. How can voluntary cross-border collaboration in procurement be supported by the EU?

Innovation and access to health technologies Ensuringaccesstoinnovativehealthtechnologiesisan ongoingchallengeforhealthsystemsinallEuropean countries.Theincreasingpriceschargedfornew

technologieshavebeenpushingupthepressureonhealth budgets,whicharealreadyfacinggrowingfiscalconstraints asaresultofthefinancialcrisisandsubsequenteconomic recession.Atthesametime,theeverhigherprevalence ofchronicdiseasesandmultimorbidityarespurringthe

demandforinnovativehealthtechnologiesthatwould enablebettermanagementoftheseconditions.These challengescallforeffectiveandefficientprocurement processes.

Whilesomeoftheseinnovationscontributetoachieving betteroutcomes,andinsomecasesevenmitigatingcosts, forothersaddedvalueiseithernotprovenordoesnot justifyhigherpricescomparedtoexistingalternatives.

Increasingly,countriesareestablishingmechanismsto scrutinizeandassesstheadditionalvalueofhigh-cost innovativehealthtechnologiesasabasisfordetermining priceand/orreimbursement.However,acquiringinformation onanewtechnology’seffectiveness,safety,quality,price andotherrelevantcharacteristics,whichisindispensable totheefficientimplementationofstrategicpurchasing,is bothchallengingandcostly.Furthermore,publicpurchasers oftenhaverelativelylowbargainingpowerwhenconfronted withtheintroductionofnew,patent-protectedhealth technologies.Thisisparticularlyrelevantwhentheyare purchasingforsmallerpopulations,eitherbecausethe countryitselfissmallortheconditioninquestionisrare andthetargetpatientpopulationlimited.Achievingsupply securitytoensureaccessinthesecasesmaybedifficultas well.Thus,accesscanbeendangeredbothinregardtothe affordabilityandtheavailabilityofnewhealthtechnologies.

AccordingtotheWorldHealthOrganization(WHO), healthtechnologyrefersto“theapplicationoforganized knowledgeandskillsintheformofdevices,medicines, vaccines,proceduresandsystemsdevelopedtosolvea healthproblemandimprovequalityoflives”[2].While thisbrieffollowsthisbroaddefinition,relevantresearch andanalysisoncollaborationinprocurementmostoften focusesoninnovativemedicinesandlessattentionispaid tootherformsoftechnology(e.g.devices,equipment andhealthITsystems),eventhoughthesenowaccount foraconsiderableandgrowingportionofhealthcare spendinginEurope.Asaconsequence,theevidenceand

Box 1: Methods

Thispolicybriefbuildsonevidencegatheredforthe2016WHO reportonchallengesandopportunitiesinimprovingaccessto medicinesthroughefficientpublicprocurementintheWHO EuropeanRegion[1].Itusestwomainmethodsforapproaching theideaofcross-bordercollaborationforprocurement.It combinesaliteraturestudywithexpertinterviews.Theliterature reviewfocusedonidentifyingscientificandgreyliteraturethat couldprovideananswertothecentralresearchquestion:How canvoluntarycross-bordercollaborationinpublicprocurement improveaccesstohealthtechnologiesinEurope?Inaddition, semi-structuredinterviewswereconductedtogainamorein- depthunderstandingofhowcollaborationforprocurementhas beensupportedbydifferentinternationalorganizations.Interviews wereconductedwithEuropeanpolicyofficersandprofessionals dealingwithcollaborationforprocurementinMinistriesofHealth.

TheinterviewswereconductedinEnglishbyphoneandemail.

AttendantsattheWHOEuropeRegionalMeetingonstrategic publicprocurementinSeptember2016alsoprovidedimportant informationforthispolicybrief,especiallyforelaborating ongoinginitiatives,whichhavenotyetbeenfullyevaluated.

AfulldescriptionofthemethodsisincludedinAppendix1.

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experiencedescribedbelowrelatemainlytocollaboration inthefieldofmedicines.Althoughlessonsfromthese areascanpartlybeappliedtootherhealthtechnologies, transferabilityissometimeslimitedbythecharacteristicsof differenttechnologytypes.Forexample,medicaldevices aremuchlessstandardizedthanmedicinesandthereis substantiallylessevidenceontheirsafetyandefficacyat thetimeofmarketentry.Healthcareservices,ontheother hand,mustbecustomizedtothecharacteristicsoftheusers anddemandisthereforelessamenabletoconsolidation ofpurchaserorganizationsofdifferentjurisdictionsfor procurementpurposes.

A changing context in pharmaceutical markets Thecharacteristicsofthemarketsforhealthproductshave dramaticallychangedsincethe1990sandglobalization hashadasignificantimpactonthenatureofthesupply chain.Aseriesofhigh-profileindustrymergershasreduced competitioninmanymedicinesmarkets.Nationalhealth systems,ontheotherhand,haveinseveralcasesbecome moredecentralizedinrelationtoprocurement[1].Thishas ledtoasituationwhereknowledgeandpowerdistribution betweensuppliersandbuyersinthehealthcaremarkethave becomemoreunbalancedandasymmetricalinfavourof suppliers.Thegeneralizationofintellectualpropertyrights thatfollowedtheapprovaloftheTrade-RelatedAspects ofIntellectualPropertyRights(TRIPS)agreementandthe globallywidespreadpracticeofexternalreferencepricing, aswellastheremovaloftariffbarriersthroughmultilateral andbilateraltradeagreements,especiallyintheEU,have radicallychangedtheinternationalpricingpoliciesofglobal pharmaceuticalcompanies.Thisisparticularlyrelevant fornewtechnologiesprotectedbypatentsandother exclusivityrights.

Inthepast,pharmaceuticalcompaniesconfronteda country-segmentedmarketandwereusedtocharging eachcountryasmuchasthemarketcouldbearinorder tomaximizeglobalprofits.SouthEuropeancountries,for example,traditionallydemonstratesubstantiallylower pricesforon-patentmedicines[3].ButtheSingleEuropean Markethasmadeitmuchmoredifficultforsuppliersto price-differentiateand,ingeneral,tofollowindependent policiesindifferentcountries.Therealityofparalleltrade wheretechnologiesareimportedfromothercountriesin theSingleMarketratherthandirectlyfromsuppliers,plus thespill-overeffectsofinternationalreferencepricing,have ledcompaniestodevelopinternationalpricingstrategies, includingconfidentialpricediscountsandmanagedentry agreements(MEAs).Theseforcepricingandreimbursement authoritiesaswellasprocurementagenciestoacceptprice confidentialityonthe(questionable)assumptionthatthey canthusobtainlowerpricesthanotherpurchasers.Inthis newscenario,whichfindsmanyapplicationsinEuropean countries,itbecomesincreasinglydifficultforpurchasersto observetherealtransactionpricesofmedicinesand,asa consequence,tomakeinformedandefficientdecisionsand assesstheeffectsofpoliciesandprocurementpractices[1].

Thesenewfeaturesofthemedicinesmarketshaveled toafundamentaltransformationofthecontextinwhich procurementtakesplaceandhaveinfluencedtheincentives andopportunitiesforcross-bordercollaboration.Both suppliersandpurchasersofhealthtechnologiesintheEU havebecomeaccustomedtopriceconfidentiality,andboth industryandpolicy-makersmightrefrainfromengaging incollaborativeinitiativesiftheyperceivesuchinitiatives topresenttheriskoflosingthebenefitstheybelievethey derivefromconfidentiality.

Public procurement of health technologies and its potential

Publicprocurementreferstothepurchasebygovernments orstate-ownedenterprisesofgoods,servicesandworks.

Theprocurementofproductsandservicesaccountedfor 19%ofthegrossdomesticproduct(GDP)oftheEUin 2013[4].Whenusedstrategically,publicprocurementcan serveasamajor,highlydynamicpolicytoolthathasgreat potentialtosteerindustrialpolicy,promoteenvironmental andsocialobjectives,encourageinnovativesolutionsand createmoreaffluence[5].

Therearedifferenttypesofprocurement,whichare summarizedinBox2.

Box 2: Procurement methods

Mosttypesofpublicprocurementcanbeusedformulti-sourceand single-sourceproductsunderdifferentcircumstances,exceptdirect procurement,whichmakessenseonlyforsingle-sourceproducts, asitdoesnotcomparepricesofdifferentsuppliers.

• Open tender:bidsareinvitedfromanysupplier,subjectto thetermsandconditionsspecifiedinthetenderdocument.

Allsuppliersinterestedinthetendermaybid.

• Restricted tender:interestedsuppliersneedtobeapproved inadvance,forexample,throughaformalpre-qualification processthattakesintoaccountadherencetogood manufacturingpractices,previousperformance,financial viability,etc.Theprocessofpre-qualificationisoftenopen toanysupplier.Areverse auctionisa2-stepvariationofa restrictedtender.Inareverseauction,thelowestpricedoffer ispublishedwithoutnamingthebidderandqualifiedbidders areinvitedtosubmitloweroffers.Theprocesscontinuesuntil nomoreoffersaremade.Thisprocurementmethodhasbeen seldomusedformedicines.

• Competitive negotiation:thebuyerinvitesapreselected numberofsupplierstosubmitpriceoffers;negotiation mayfollowtoachieveabetterpriceorparticularservice arrangements.Internationalorlocalshoppingisbasedon thesameprinciplebutnegotiationisnotpermitted.

• Direct procurement:technologies(e.g.single-source products)areobtainedatlistpricesornegotiatedpricesfrom asinglesupplier.Ingeneral,single-sourceproductsmaybe procuredeithervianegotiatedprocurement,directprocurement ortenderingofthesingle-sourceproductandtherapeutic substitutes,soastocreateacompetitiveenvironment.

Source:[1].

However,thevarioustypesofprocurementrelyona commonfoundationintermsofprocess.Thepublic procurementprocessisthesequenceofactivitiesstarting withtheassessmentofneedsthroughawardstocontract managementandfinalpayment[6].Figure1showsfour typesofactivityrelatedtotheprocurementofhealth technologies:

1. Activitiesthatformthecoreprocurementfunctions (medium green boxes)astheyarecloselylinkedtothe economictransactionthatcharacterizesprocurement.

2.Activitiescloselyrelatedtothecoreprocurement functions(white boxes)–mainlygatheringandanalysing informationwiththeaimofimprovingtheeffectiveness andefficiencyofprocurement.

3.Activitiesusuallycarriedoutbytheprivatesector (light green boxes)thatconditionandinfluencethe implementationandoutcomesoftheprocurement process,suchasR&Dactivitiesleadingtotheproduction andultimatelytothesupplyofhealthtechnologies.

4.Regulatoryactivitiescarriedoutbythepublic sector(dark green boxes),whichalsocondition andinfluencetheimplementationandoutcomesof theprocurementprocess.

Anefficientprocurementprocesscanimprovetheprices, qualityandsupplyavailability/reliabilityfromagivensetof suppliers,by:planningandforecastingneedsandsupply;

settingprioritiesasthebasisofrationalchoices;obtaining thebestachievablepurchaseconditions;andmonitoring andevaluatingthewholeprocurementprocessinorderto learnfrompastexperienceandimprovefutureperformance.

Collaboration in procurement Definition

Thereisnosingletermtocovertheactofseveralbuyers collaboratingandpoolingresourcestonegotiateortobuy medicalgoodsandsuppliesatmorefavourableconditions.

IntheEUsetting,jointprocurementisthemostcommonly usedterm.ItisusedintheEUPublicProcurementDirectives todenotethesituationwhereseveralbuyerscometogether, inasingleprocess,togetbetterpricesoraccess.Atthe internationallevel,pooledprocurementisalsoacommonly usedtermforthesameconcept.Othercloselyrelatedterms arecentralprocurement,groupprocurementandgroup purchasing.Jointprocurementcantakevariousformats.

Theoperationaldefinitionforjointprocurementusedin thispolicybriefencompassesdifferentpossiblelevelsof collaboration,furtherelaboratedbelow.

Figure 1: Activities leading to procurement and access to health technologies

Source:Authors’owncompilation.

Market authorization

Price regulation

IPR protection HTA

Reimbursement status

R&D Technology

Needs definition and horizon scanning

Prioritization and selection

Quantification of needs

Payment

Distribution

Monitoring and evaluation Price, quantity and other

terms of the contract Purchasing options

Tenders Negotiation

Direct purchasing

Supply of technologies

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Rationale

Cross-bordercollaborationinthefieldofpublicprocurement isoftenputforwardasapromisingstrategytoaddresssome oftheexistingimbalancesandchallengesofthehealth technologiesmarketdescribedabove.Intheprocurement ofhealthtechnologies,therationaleforincreasedvoluntary collaborationbetweencountriesisto:

• shareexperience,poolskillsandcapacity

• enhancetransparencyandenablecross-countrylearning

• shapethemarketthroughinformationsharingtoavoid asymmetriesofinformationandjointnegotiation

• tacklehighpricesthrougheconomiesofscaleand buildingmarketpower

• tacklehightransactioncostsbypoolingresources.

Theachievementofsustainablepricesthrougheconomies ofscaleattainedbyagroupofentitiesthatpoolallor someofthepurchasingfunctions,orcollaborateincarrying themout,isthemostcommonlycitedgoal.However,other objectives,suchasimprovingthequalityofpurchased goods,ensuringstablesupplyandavailability,andfostering certaininnovationsarereceivingincreasingattention.

Availabilityisbecomingincreasinglyimportant,especially inCentralEasternEuropeanandSouthEasternEuropean

countrieswherelowerpricelevelsgenerateparallel exportationtohigherpricecountriesinWesternand NorthernEurope.Manufacturersalsotendtowithdrawtheir productsfromcertaincountrieswithsmallerpopulations iftheirprofitmarginsaredeemedtoosmalltojustify marketingtheirdrugsthere.Throughjointnegotiations thesecountrieshopetoensuresupplyasmanufacturersare dealingwithalargernetpopulation.Giventhechangesin pharmaceuticalmarketsobservedinrecentyears,thescope forcollaborationbetweenbuyersintuitivelybecomesmore compelling.Althoughsmallorlower-incomecountrieswill bemorelikelytobenefitfromcollaborationinprocurement, collaborationcanalsobeanattractiveoptionforlarge, higher-incomecountrieswhenitcomestosmall-volume products,suchasorphandrugs(forexample,BeNeLuxA;

seeBox3)[1].Itispossiblethatcollaborationbetween large/high-incomecountriesandsmall/lower-income countriesmightalsooccur,spurredonbythemotivesof solidarityandpoliticalinfluenceintheabsenceofdirect economicbenefits.

Different forms

Cross-bordercollaborationinprocurementcantakedifferent forms,withvaryingintensityandscopeofactivities.WHO providesafour-levelclassificationofregionalcollaboration forprocurementexperiencesinhealthtechnology,basedon anincreasingdegreeofcooperation(seeFigure2):

• Informed procurement:countriesshareinformation aboutpricesandsuppliers.

• Coordinated informed procurement:countriesmay alsoundertakejointmarketresearch,sharesupplier performanceinformationandmonitorprices.

• Group contracting:involvesjointlynegotiatingprices andselectingsuppliers.

• Central contracting and purchasing:participating countriesjointlyconducttendersandawardcontracts throughacentralpurchaserworkingontheirjointbehalf.

Thisclassificationconsiderstwobroadpotentialareas ofcollaboration:

• Thecollection,elaborationandexchangeofinformation;

and

• Theactivitiesmorecloselyrelatedtoactualcontracting andpurchasing.

Thus,themodelcanbeinterpretedassuggestinga

‘naturalroute’ofincreasedintensityand/orcommitmentin collaboration,startingbyjustsharinginformationonprices andsuppliers,uptojointprocurementbyacentralized body.Italsosuggeststhatthetypesofcollaborationplaced higherintheclassificationincludetheactivitiespooledat lowerlevels,inlinewiththenotionthatitmayoftenmake senseforcountriestoinitiallyadoptlesscommittedand riskyarrangementsandmovetomoreintensetypesof collaborationdowntheline.Fromthepurchaserperspective, thecore/keycomponentinthechainofactivitiesina procurementprocess(seealsoFigure1)isthemechanism forselectingthesupplier(s)andagreeingonacontract Box 3. BeNeLuxA – collaboration on procurement of

pharmaceuticals for rare diseases

Thisinitiativetojointlynegotiatepricesformedicinesforrare diseaseswasinitiatedbyBelgiumandtheNetherlands(April 2015),andwaslaterjoinedbyLuxembourg(September2015)and Austria(June2016).Thisgroupofcountries,knownas‘BeNeLuxA’, intendstocollaboratemorecloselyacrossarangeofareas:

healthtechnologyassessment(HTA);horizonscanning;exchange ofinformationonpharmaceuticalmarkets,pricesanddisease- specificcross-borderregistries;andpricingandreimbursement, includingjointnegotiation.Theultimateaimistoensureaccess toinnovativedrugs,initiallyorphandrugs,ataffordableprices fortherespectivepopulations.Bybeingabletopresentabigger patientpooltopharmaceuticalcompanies,itishopedtoincrease purchasingpoweranditisalsohopedthatmorecountrieswill jointheinitiative.

Thispilot-projectfollowedthedifficultnationalnegotiationsover certainhigh-priceddrugssuchas,forinstance,theHepatitisC drugsofosbuvir.Throughbettersharingofinformationandcloser collaboration,itisbelievedthatgovernmentscouldobtainreduced butfairprices.Forthepharmaceuticalindustrythebenefitisdirect accesstoalargerpatientpopulationandmorestreamlinedmarket accessastheyonlyneedtoprovideonedossier,notoneper country,managedinacoordinateddecisionprocess.

Thiscoordinatedprocurementreliesonasetofprinciples:setting clear,commongoals;beingclearonthemutualbenefits;a pragmaticapproachfocusingonthedesiredoutcomesandhaving aleanorganizationalstructure;understandingthatcooperation isnotthesolutiontoallproblems;voluntaryparticipation;anda strongpoliticalwill.Theprojecthasnofixed‘roadmap’:thedegree ofcollaborationdependsonwhatisrequiredwithastepwise approachtoparticipation.Thisisakeydifferencecomparedto theEUJointProcurementAgreement(seeBox6),wherethe Commissionleadsonthenegotiationsratherthanindividual countriesandtheframeworkforcollaborationismorefixed.

Sources:[10–13].

withasetofconditions.Infact,publicprocurement includesalargenumberofactivities/functionsandpartners mightcollaborateindifferentclustersorcombinationsof activities.Thismeansthatamuchlargernumberoftypes ofcollaborationisfeasible,beyondthefourconsideredin Figure2.Othermodelsofcollaborationinprocurement havealsobeendescribedbeyondtherealmofhealth technologiesbutwithpotentialforapplicabilityinthisarea aswell,suchas‘piggy-backing’,wherebyacontracting authoritycarriesouttheprocurementonitsownbut allowsothercontractingauthoritiestheoptionofusing thecontract[7].

Ingeneral,importantcharacteristicsthatdefineand differentiatecross-bordercollaborationforprocurement ofhealthtechnologiesare[8]:

• Ownership:thecollaborationmightbelongtothe individual,pooledunits(usually,nationalgovernmental procurementunits)ortoanorganizationspecifically createdbythegovernment(s);alternatively,itmight beownedbyalargerinternationalorganization.

• Financing mechanism:thereareseveralpotential combinationsofexternaldonorsandnationalpartners andofthefinancingstructure,whichimplyvarious modelsofdistributingtheeconomicresponsibility andsolvency.

• Procurement activities:activitiessuchasplacing orderswithsupplierscanbecentralizedorlefttothe pooledunits.Contractingandpurchasingcanbethe responsibilityofacentralunit.Alternatively,acentral unitcannegotiatetheprice(withsomeestimations andresponsibilityforthevolumeofproductsthat eachpartnerexpectstopurchase).

• Timeframe:thecollaborationcanbepermanent oroccasional.

• Range of products or services involved:the collaborationcanincludeallhealthtechnologiesor berestrictedtoaspecificclass,e.g.orphandrugs.

• Purchasing mechanism:thecollaborationcanrely onbulkcontracting,whereonesupplierisawardedall tendereditemsoroptforaframework(time-bound) contract,wherethesuppliersarenotnecessarily awardedaguaranteedspecificquantity.

Findings

European experiences of voluntary cross-border collaboration in procurement of health technologies Publicprocurementforhealthtechnologieshasbeen supportedbytheEU,asoneareaforcross-border collaborationbutimpetusforgreatercoordinationand collaborationbetweenMemberStatesfollowedtheH1N1 influenzapandemicin2010andtheEbolaepidemicin 2014[9].Duringthesepublichealthemergencies,countries werecompetingwitheachothertogetholdofscarce supplies,andpriceswentupinresponse.Toreducethe chancesofsimilareventsoccurringinthefuture,theEU JointProcurementAgreement(seeBox4)wassigned,in ordertomaintainaccesstovaccines,medicinesandmedical equipmentthataddressseriouscross-borderthreats.

However,therewerealsomanyotherinitiativesthathave beenputinplacebyMemberStatessince2010(seeTable 1).Manyofthecross-bordercollaborationsintheEUare verynewandstillevolvinginsomecases,andhavethus Figure 2: Levels of collaboration in procurement

Source:Adaptedfrom[1].

Informed buying

Coordinated informed buying

Group contracting

Central contracting and purchasing

Joint tenders and contract award through a centralized body on behalf of participating countries

Joint price negotiation and supplier selection.

Participating countries agree to purchase from selected suppliers

Joint market research, sharing supplier performance information and monitoring prices

Participating countries share information about prices and suppliers

Information sharing Pooled procurement

Level of collaboration in procurement

14

notyetbeenfullyevaluatedintermsofwhethertheymeet theirobjectives.

Thescopeofmostofthesevencross-bordercollaborations inpublicprocurementidentifiedinthisbriefinvolves

medicines–mostcommonlyinnovativemedicines.Whilethe BalticPartnershipAgreementalsoexplicitlycoversmedical equipment,inpractice,ithasonlybeenusedsofarforthe procurementofvaccines(seeBox4).Thebarrierstojoint procurementencounteredintheinitialattemptsunderthe BalticPartnershipAgreementserveasusefulillustrationsof thechallengesthatneedtobeovercomeinordertoincrease leverageforreducingpricesandensuringavailability.

However,theimportanceofcross-bordercollaborationfor accesstomedicaltechnologiesinsmallmarketsisalsoclear asthesecountriesweresuccessfulinpoolingresources toborrowstocksfromneighbouringcountriesinorderto maintainsupplies.Similarly,theRomanianandBulgarian Initiative(seeTable1),whilehopingtousejointprice negotiationtoreducecosts,willalsoinvolvecross-border exchangesformedicinesthatmaybeinshortsupplyin eithercountry.

Cross-countrycollaborationsintheprocurementofhealth technologieshavebeenrunningforaconsiderablylonger timeoutsidetheEuropeancontext.Twomajorreviewsof jointprocurementexperiencesinotherpartsoftheworld havebeenconducted[8,14].Severaloftheinitiatives identifiedthereinwereconsideredtobefailedorinactiveat thetimeofinvestigation.Whilesomeofthemoresuccessful collaborationsreviewedreflecttheinitiativeofagroup ofcountries(OrganisationofEasternCaribbeanStates PharmaceuticalProcurementService;GulfCooperation Council),themajorityaretheresultofaninternational organizationtakingtheleadandrunningthecollaborative procurementasoneofitsfunctionsPanAmericanHealth Organization(PAHO)RevolvingFund;GlobalTBDrug Facility;UnitedNationsFundforPopulationActivities ProcurementServicesBranch;UnitedNationsChildren’s Fund(UNICEF)(ARIVA).

The current EU framework for supporting voluntary cross-border collaboration in procurement of health technologies General framework on public procurement

TheEUrulesonpublicprocurementareinthefirstplace meanttoensuretransparent,fairandcompetitiveawarding ofpubliccontractsforpurchasinggoods,worksandservices throughouttheEU.Thelegalframeworkwasrevisedin 2014withDirective 2014/24/EU on public procurement, whichrepealsDirective2004/18/EConpublicworks.

Thenewrules,whichhadtobetransposedintonational lawbyApril2016,simplifyprocurementprocedures, makethemmoreflexibleandhelppublicpurchasers toincorporateandimplementstrategicobjectivesfor protectingtheenvironment,promotingsocialintegration orfosteringinnovation.

Directive2014/24/EUonpublicprocurementcoversthe issueofcross-borderjointprocurement.Article39explicitly allowsforcontractingauthoritiesfromdifferentMember Statestoactjointlyintheawardofpubliccontracts.Inorder tofacilitatethiskindofcross-bordercooperationbetween contractingauthorities,theDirectivehelpstoclarifythe applicablenationallawandresponsibilitiesofthedifferent partiesinvolved.Whereprocurementiscentralizedthrough onepurchasingbody,thepurchasingactivitiesaregoverned bythenationalrulesoftheMemberStatewherethecentral purchasingbodyislocated.Ifcontractingauthoritiesfrom differentMemberStatesworktogethertojointlyaward apubliccontract,concludeaframeworkagreementor operateadynamicpurchasingsystem,therespective responsibilitiesofthevariouspartiesneedtobeclarifiedin aninternationalagreementthatiseitherconcludedbetween MemberStatesorbetweentheparticipatingcontracting parties.ContractingauthoritiesfromdifferentMember Statescanalsosetupajointlegalentityundernational orEUlaw,inwhichcaseanagreementonwhichnational procurementrulesapplyisalsoneeded.

Box 4: Joint procurement of vaccines under the Baltic Partnership Agreement

CollaborationundertheBalticPartnershipAgreementwasstarted attheendof2014andthefirstjointprocurementfocusedon vaccines,asallthreeBalticStateshavesimilarimmunization schedulesandthepriceofvaccinesismostlyinfluencedby purchasedvolumesandlong-termdeliveryschedules.

Thefirstopenprocedure(fortheBCGvaccine)wasannounced in2015.ItwasorganizedaccordingtothePublicProcurement LawofLatvia,asLatviawastheleadpartner.Theprocedure wasterminatedinSpring2015becausenotenderwassubmitted.

Astheprocurementtechnicalspecificationsonlyallowedvaccines withvalidmarketingauthorizationinallthreeBalticStates, therewasonlyoneproducerwithasuitableregisteredproduct andhedeclaredseriousproductionproblemswithinthetender submissiontimescale.Thetenderhadtobedrawnupforjoint procurementthroughcompetingwholesalersasthemanufacturer wasnotinterestedinparticipatinginthejointprocurementprocess directlyforsuchasmallmarketandsmallamount–despitethe threecountriespoolingtheirleveragetojointlynegotiateprices withsuppliers.Forexample,thenecessityofproducinguniform packaginginthethreelanguageswasnotconsideredtobecost- effectivebythemanufacturer.

Afterreneweddiscussionsintheworkinggroup,theobjectofthe jointprocurementwaschanged.EstoniaandLatviaidentifieda rotavirusvaccineasthenextmostpromisingchoice(Lithuaniadoes nothaverotavirusvaccineinitsimmunizationschedule).Also,it wasdecidedthatEstoniawillbetheleadpartnerandLatviawill delegatealltheobligationsoftheprocurementprocessupuntil thesigningoftheframeworkagreementtoEstonia.Thejoint procurementforrotavirusvaccinewasannouncedon21October 2016andtheopeningofthetenderswason8December2016.

ThereisalsoanongoingcollaborationbetweenLatviaand Lithuaniafortheprocurementofpneumococcalvaccine.

AnimportantcomponentofthePartnershipAgreementisthe lendingofcentrallyprocuredmedicines,whichenablescountries topreventandalleviateshortagesofmedicines.Since2012,there havebeenseverallendingprocesses,whichhavehelpedcountries tosolveseriousshortageproblems.

Source:EveliBauer.

Article39ofthepublicprocurementDirectivealsostates thatthepossibilitiesforcross-borderjointprocurement shouldnotbeusedforthepurposeofavoidingthe applicationofmandatorypubliclegalprovisionstowhich contractingauthoritiesaresubmittedintheirownMember State.Inthesamesense,cross-bordercollaborationin procurementisnotsupposedtoinfringeonEUcompetition law.RelatedguidelineshavebeensetoutintheGuidelines ontheapplicabilityofArticle101oftheTreatyonthe FunctioningoftheEuropeanUnion(TFEU)tohorizontalco- operationagreements(2010).

Structured cross-border cooperation in health Thedefinitionofhealthpolicyandtheorganizationand deliveryofhealthservicesandmedicalcarearetheexclusive responsibilityoftheMemberStates.Theseresponsibilities includeexclusivecompetenceinthemanagementof theirrespectivehealthsystemsandmedicalcare,and theallocationofresourcesassignedtothem.However, accordingtoArticle168(2)TFEU,theEUhasanobligation topromotecooperationbetweenMemberStatesinthe fieldofhealth.Basedonthis,theEuropeanCommissionhas developedawiderangeofactionsundertheEU’spublic healthprogrammethatorganizeandsupportcooperation activitiesinvariousfields.TheCommission’sCommunication

whichsetsoutafutureEUhealthpolicyagenda,also highlightsthepotentialofimprovedcooperationinthefield ofmedicinesthroughbuildingmechanismsforincreased transparencyandbettercoordinationtominimizeany unintendedeffectsthatcurrentnationalpricingsystems mayhaveintermsofaccessibilitythroughouttheEU.

TheDirective 2011/24 on patient rights and cross- border health caremaybeviewedashavingprovided anewapproachtostructuredcross-bordercooperation betweenhealthsystems,whilefullyrespectingMember States’competenceinorganizinganddeliveringhealth care.ChapterIVoftheDirectivespecifieshowstructured cooperationistobeorganizedinareaslikeEuropean referencenetworks(ERN),rarediseases,healthtechnology assessment(HTA;seeBox6)ande-health.Assomeof thesestrandsfurtherbuildoncooperationstructuresand networksthatinitiallydevelopedasprojects,theycan provideusefullessonsfordevelopingstructuredcooperation intheprocurementofhealthtechnologies.Thisisclearly thecasewiththedevelopmentofavoluntarynetwork connectingnationalauthoritiesorbodiesresponsiblefor healthtechnologyassessmentdesignatedbytheMember States(Article15).ThecreationofERNs(Article12)may alsobearelevanttoolforsupportingcooperationin procurement.Sincetheyparticularlyfocusonrarediseases Table 1. European experiences of cross-border collaboration in procurement of health technologies

Name of collaboration Start date Countries

involved Scope Aspects of procurement covered Central Eastern European and South

Eastern European Countries Initiative

November 2016 Romania, Bulgaria, Croatia, Latvia, Poland, Serbia, Slovakia, Slovenia, Republic of Moldova, FYR Macedonia

Pharmaceuticals Price negotiation

Southern European initiative June 2016 Greece, Bulgaria, Spain, Cyprus, Malta, Italy, Portugal

Innovative medicines Information sharing on prices and markets, collaboration on R&D

Declaration of Sofia June 2016 Bulgaria,

Croatia, Estonia, Hungary, Latvia, FYR Macedonia, Romania, Serbia, Slovakia, Slovenia

Pharmaceuticals Information sharing on prices and markets, with potential for joint purchasing in the future

Nordic Pharmaceuticals Forum June 2015 Denmark,

Iceland, Norway, Sweden

Innovative medicines Horizon scanning, information sharing on prices and markets

Romanian and Bulgarian Initiative June 2015 Romania, Bulgaria

Pharmaceuticals Joint negotiations in purchasing to get lower prices for pharmaceuticals and cross-border exchange of medicines in short supply to ensure continuity of access

BeNeLuxA April 2015 Belgium,

Netherlands, Luxembourg, Austria

Innovative medicines HTA, horizon scanning, information sharing on prices and markets, joint negotiation for purchasing to ensure affordability (see Box 3)

Baltic Partnership Agreement May 2012 Latvia, Lithuania, Estonia

Pharmaceuticals and medical devices

Centralized joint purchasing (tenders, negotiation, payment and distribution) to reduce expenditure and ensure continuity of access (see Box 3)

Source:Basedon[1].

16

factbeanimportantleverforensuringaccesstoinnovative healthtechnologies.AsERNswillpoolpatientswith lowprevalence,complexorrarediseases,theycouldbe instrumentalnotonlyinreinforcingresearchanddeveloping goodpracticeguidelinesbutalsoinexercisingnegotiating leveragewithpharmaceuticalandmedicaltechnology companies.

ThemostconcreteexampleofEuropeanCommission actiononcooperationinthefieldofprocurementof healthtechnologiesisDecision No. 1082/2013/EU of 22 October 2013 on serious cross-border threats to health (and repealing Decision No 2119/98/EC),which wasdevelopedattherequestoftheEmployment,Social Policy,HealthandConsumerAffairs(EPSCO)Counciland theEuropeanParliamentfollowingtheH1N1crisisin2009.

BasedonArticle168(1)TFEU,whichprovidesforEUaction tocomplementnationalpoliciesforcombatingseriouscross- borderthreatstohealth,thisdecisionnotonlyextendedthe scopeforactiontoalsocoverseriouscross-borderhealth threatsbeyondcommunicablediseases(e.g.biologicalor chemicalagentsorenvironmentalevents),italsowidened thecoordinationmechanismstoaddresshealthsecurity crisesatanEUlevel.ItincludesthepossibilityforMember Statestoengageonavoluntarybasisinajointprocedureto procuremedicalcountermeasures(Article5).BySeptember 2016,theJointProcurementAgreement(JPA),specifying thejointprocurementprocedureanditsgovernance,had beensignedby24MemberStates,withSwedenandFinland

Box 5: EU Joint Procurement Agreement on medical countermeasures

TheEUJointProcurementAgreement(JPA)wasadoptedin April2014andcameintoforceinJune2014,whenthefirst 14MemberStatessignedtheAgreement.BasedonDecisionNo.

1082/2013/EU,theJPAseekstostrengthenhealthsecurityinthe EUbyimprovingitspreparednessagainstcross-borderthreats tohealththroughjointprocurementoradvancepurchaseof medicalcountermeasures.Itsdevelopmentwasacceleratedbythe 2009H1N1influenzapandemicwhenMemberStatescompeted toaccessvaccinesuppliesrapidlyandfrequentlypaidrelatively highpricesformedicinestheyendedupnotusing.

TheJPAisavoluntaryagreementtopurchasejointly.The prospectivebenefitsofjointprocurementinclude:betteraccess tomarkets;moreequitableaccessforMemberStatestomedical countermeasures,anti-infectivesorvaccinesagainstcross- borderhealththreats;improvedsecurityofsupply;andmore stablepricing.

Theadministrativearrangementsaresetoutindetailinthe policyinstrument.TheEuropeanCommissionplaysakeyrole, actingasthePermanentSecretariatandasthebodyresponsible forensuringthepreparationandorganizationofthejoint procurementprocedure.Aseparatecommitteeisestablishedfor eachspecificprocurementproceduretodeterminethetechnical specificationsandallocationcriteriaformedicalcountermeasures.

TheformulationallowsMemberStatessomeflexibilitybutalso detailstheprocessesandprocedurestobefollowed.

AfirstcallfortenderforPersonalProtectiveEquipmentinEU hospitalsettingswaslaunchedinMarch2016byfiveMember States(Belgium,Croatia,Cyprus,ItalyandMalta)andthe EuropeanCommission.

Source:[9].

Box 6: Collaboration in health technology assessment (HTA) TheEuropeanCommissionhassupportedcollaborationinHTA acrosscountriessincetheearly1990s[16].In2004,itsetHTA asapoliticalpriority,followedbyacalltowardsestablishinga sustainableEuropeannetworkonHTA.Thecallwasansweredby 35organizationsthroughoutEuropeandledtotheintroduction oftheEuropeannetworkforHealthTechnologyAssessment (EUnetHTA)Projectin2007.Basedontheproject’sresults,the EUnetHTACollaboration2009,theEUnetHTAJointAction 2010–2012,EUnetHTAJointAction22012–2015andEUnetHTA JointAction32016–2020havebeenconsistentlysupportedbythe EuropeanCommission.

Cross-bordercollaborationinHTAisnowanchoredinEUlaw throughDirective2011/24/EUontheapplicationofpatients’rights incross-borderhealthcare.Article15statesthat“TheUnionshall supportandfacilitatecooperationandtheexchangeofscientific informationamongMemberStateswithinavoluntarynetwork connectingnationalauthoritiesorbodiesresponsibleforhealth technologyassessmentdesignatedbytheMemberStates.”The Directivesetsoutboththenetwork’sgoalsandactivitiesforwhich additionalEUfundsmayberequested.Italsoexplicitlyreinforces theprincipleofsubsidiaritybystatinginthefinalparagraphof Article15that“measuresadoptedpursuanttothisArticleshall notinterferewithMemberStates’competencesindecidingonthe implementationofhealthtechnologyassessmentconclusionsand shallnotharmonizeanylawsorregulationsoftheMemberStates andshallfullyrespecttheresponsibilitiesoftheMemberStatesfor theorganizationanddeliveryofhealthservicesandmedicalcare.”

InOctober2016,apublicconsultationwaslaunchedon theInceptionImpactAssessment“Strengtheningofthe EUcooperationonHealthTechnologyAssessment(HTA)”, whichreinforcestheCommission’scommitmenttoenforcing collaborationinHTAandoffersfivepolicyoptions,themost integrativeofwhichproposescooperationontheproductionof jointfullHTAreports.Thiswouldincludetheevaluationofcost–

effectivenessandorganizationalaspects(whicharemoretopical) alongwithclinicaleffectivenessandsafety.Theconsultationperiod endsinJanuary2017.

TheEuropeanCommission’simpactassessmentwasbasedon evidencefromtheEUnetHTAactivitiesofpreviousyears,which showedthatcollaborationinproducingjointmethodologiesand assessmentsthemselvescanimproveboththequalityandquantity ofproducedassessmentswhileavoidingduplicationofwork.

However,evaluativeresearchonthesecollaborativeactivitiesalso showsthatcollaborationinevaluatingeffectivenessandsafety wasnotwithoutitschallenges,particularlywithrespecttothe alignmentoftheprocesswithnationalneedsandprocesses;this primarilyconcernedthetimelyavailabilityofjointassessments,the relevanceofeachjointlyselectedtopicforindividualHTAagencies anddifficultieswithintegratingjointlyproducedreportsinnational templatesandprocedures[17].Jointassessmentproductionneeds tocarefullyconsideritscollaborationmodeltoavoidinefficiencies;

forexample,byinvolvingnomorethanacertainnumberof agenciesindraftingeachreportandincludingothersasreviewers [18].

WhileoneoftheCommission’sgoalsinfurtherstrengthening HTAfrom2017onwardsistoensurethebetterfunctioningof theEUinternalmarketforhealthtechnologies,atthisjunctureit isconsideredunlikelythatnational(orregional)decision-making competenciesonpricingandreimbursementwillchangeinthe nearfuture[17,19,20].

havingexpressedtheirintenttojoinaswell(seeBox5)[15].

WhiletheDecisionleavesquitesomediscretiontoMember Statestodecideonthescopeofproductstoprocurejointly, itisbynaturelimitedtoonlymedicines,medicaldevicesand othergoodsorservicesthatareaimedatcombating“serious cross-borderhealththreats”.Itisthusnotintendedtocover anyhealthtechnologiesbeyondthisscope,forexample,for treatingchronicconditions.

Promoting cross-border cooperation in procurement Inadditiontoestablishingtheregulatoryframeworkwithin whichcross-borderjointprocurementcanbedeveloped, variousEUpolicyinitiativesseektofacilitatecross-border collaborationinpublicprocurement.In2011,theEuropean ParliamentadoptedaResolutiononaSingleMarket forEnterprisesandGrowth,inwhichitcalledonthe Commissiontoexplorehowcross-borderjointprocurement canbefacilitated.Thisispartofawiderattempttoboost innovation,includinginpublicprocurement,underthe Europe2020FlagshipInitiativeontheInnovationUnion.

WithintheEuropeanCommission,DGGrowth(the

DirectorateGeneralresponsibleforInternalMarket,Industry, EntrepreneurshipandSmall-andMedium-sizedEnterprises (SMEs)),issupportingInnovationPartnershipstokeeppublic servicesuptodate.Basedonthepossibilitiesunderthe newEUpublicprocurementlegislation,theCommission promotestheideaofmakingprocurementpracticesmore efficient,includingbystimulatingcross-bordercooperation betweencontractingauthoritiesandfacilitatingjoint procurement.Thisisbelievedtohelplowerpressureon healthbudgets(seeBox7).Also,theimportanceofpre- commercialprocurement(PCP)wasemphasizedasaway tobothinnovateandimprovequalityandeffectivenessof publicservices.Pre-commercialprocurementisintendedfor situationswheretherearenotyetanynear-to-the-market solutionsandnewR&Disneeded.PCPcanthencompare theprosandconsofalternativecompetingsolutions.

Thiswillinturnreducetheriskforthemostpromising innovationsstep-by-stepviasolutiondesign,prototyping, developmentandfirstproducttesting.OnePCPproject isAnti-SUPERBugs,aconsortiumofhealthcareprocurers fromSpain,Italy,GermanyandtheUK.

Discussion

Whileadesireforcross-bordercollaborationinthe

procurementofhealthtechnologiesappearstobegathering pace,asdemonstratedbytheexamplesabove,thebody ofevidenceontheeffectsofdifferentprocurementtypes istooweaktoallowfortheconclusiveidentificationof goodpracticesinvoluntarycollaboration.Thisisrelated bothtotherelativelyrecentestablishmentofmanyofthese initiativesandtothefactthatevidenceinthisareaishighly context-specificandnotnecessarilyapplicabletoother settings[1].

Furthermore,duetothesubstantialchangesinhealth technologymarketsinrecentyears–increasedmarket exclusivity,reducedpricetransparency,generalizationof

Box 7: Innovating in public procurement through cross- border collaboration in the EU

HAPPI European procurement platform:TheHealthyAgeing PublicProcurementofInnovations(HAPPI)isacollaborationof 12purchasingbodiesandinnovationexpertsfrom8Member States(France,UK,Germany,Italy,Belgium,Luxembourg,Austria andSpain),whichissupportedbytheEuropeanCommission.The consortium’saimistoidentify,assessandpurchaseinnovative andsustainablehealthproducts,servicesandsolutions,which willimproveageingwell.Sofar,thepartnershavedevelopedand purchasedover150innovativemedicalsolutionswiththehelp oftheirprocurementstrategy.Itcomprisesearlymarketstudies andcommunicationofthetendertoamultitudeofcompanies includingSMEs.Theuseoffunctionalratherthantechnical specificationsinthetendernoticeswascrucialinthisproject [21,22]

German–Dutch–Austrian cooperation in hospital

procurement:TheGermanPurchasingAssociationGDEKK,which since1998actsasacentralnon-profitpurchasingbodyonbehalf of75municipalhospitalsinGermany,extendeditsgeographical scopetoalsoincludepublichospitalsinAustriaanduniversity hospitalsintheNetherlands.Despitethelegaldifferencesinhealth- relatedprocurement,itisbelievedthatthroughfurthereconomies ofscale,costreductionscanbeachievedforallparticipatingbodies inthisenhancedEuropeancooperationforhealthprocurement.

Theassociationsetupaprofessionalizedprocurementsystem, whichincludesdefiningcommonprocurementneeds,market analysisandestablishingqualitycriteria[22,23].

Anti-SUPERBugs:Thisisaprojectledbyaconsortiumofhealth careprocurersfromSpain,Italy,GermanyandtheUK.Anti- SUPERBugsispartofthepre-commercialprocurement(PCP) initiativefundedbytheEuropeanCommission’sHealth2020 frameworkprogramme.Theaimoftheprojectistoenablesmart informationandcommunicationstechnology(ICT)solutionsto bedevelopedthatwilldetectthepresenceofresistantmicro- organisms,givereal-timefeedbacktotheuserandsharethis informationwiththehealthcareprovider’selectronicrecord systemslinkingtheinfectionwiththeplaceofdetection.The project,whichwaslaunchedinSeptember2016,isexpectedto lastforfouryearsandisfocusedontheacquisitionofresearch anddevelopment(R&D)ofnewinnovativesolutionsbeforethey becomeavailableonthemarket.Thecontractingauthorityshares therisksandbenefitswiththeR&Dservicesprovider.Thismode ofprocurementisanexceptiontotheapplicationoftheEuropean publicprocurementrules[24,25].

MEDEV:TheMedicineEvaluationCommittee(MEDEV)was establishedin1998asastandingworkinggroupoftheEuropean SocialHealthInsuranceForum.Today,MEDEVrepresentsthe drugexpertsandpharmacologistsofnationalsocialinsurance organizationsandHTAagenciesin18EUMemberStates.The principalpurposeofMEDEVistoprovidethenationalhealth insuranceorganizationsandothercompetentbodieswithtimely analysesofdrug-relatedtrendsandinnovationsatbothnational andEuropeanlevel.WhileitfocusesmostlyonHTA,national exchangeofexperienceandinformationalsorelatestothe definitionofparametersforcost–benefitanalysesandinternational priceanalyses.Thegroupalsofollowscross-borderprocurement initiatives.Particularattentionwasgiventotheearlydialoguewith companiesdevelopingorphanmedicinalproducts,theMethod ofCoordinatedAccesstoOrphanmedicinalproducts(MoCA).

Thisdialoguehasmainlycoveredclinicalstudyissuesbuthasalso addressedsomenovelprocurementmodels[26].