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Planning overhaul

FarmIndustria move sends marketers back to the drawing board
Pharmaceutical companies in Italy have learned that they will be unable to pay the travel expenses of doctors attending meetings or congresses from January 1, 2007, plunging many of next year's marketing plans into disarray.

The decision by Italian industry association FarmIndustria to suspend temporarily payment of travel expenses means marketers are having to re-write their plans for the next 12 months, now taking into account that the seminars and congresses they had planned, either in Italy or elsewhere in the world may not yield the attendance they had hoped for.

While the move may not have been wholly unexpected - along with countless other Member States, FarmIndustria has been tightening its Code of Ethics - it does place further restrictions on the steadily shrinking marketing activities pharma can undertake.

When news of the suspension broke, the market in Italy was still reeling from the third successive drug price cut of 2006. Cost-containment has become the mantra of the Ministry of Health: since 2002, prices have been cut by 17 per cent. Other measures that have also taken their toll on companies operating on the Italian peninsula include the reclassification of reimbursement categories and the introduction of price caps, which are dependent on product class.

The big cost-containment lever in Italy is compulsory price cutting and reference pricing, said James MacDonald, marketing director at Ferring Italy. When government spending on drugs goes up, prices are cut, he added.

However, as MacDonald explains, it is not hard to launch a product in Italy and the healthcare community is responsive. Italian doctors are still very open to rep visits, especially on a scientific and educational basis. They generally like innovative products and early uptake is good.

When it comes to cost-containment, however, MacDonald says that doctors are poorly incentivised compared to Northern EU countries, although health authorities are trying to change this.

Competing on price
While he admits that the reference pricing regime in Italy is not as stringent as in neighbouring Germany, it has significant implications for new drugs, where an extremely high premium is put on clinical gain.

This, in turn, makes it less feasible to introduce a line extension, as a different method of delivery is not deemed to be of sufficient clinical benefit. As a result, line extensions in Italy are seldom commercially viable. Any new method of drug delivery that does not carry with it major clinical benefits is, therefore, forced to compete on price alone, which can make the cost of bringing a new formulation to market prohibitive when considerable sums have already been invested in developing the new method of delivery.

In part, this is owing to the absence of a robust national office for health technology assessments, which is seen by critics as a major hurdle in the search for innovative drugs.

All issues from product approvals to pharmaco-vigilance and pricing fall under the remit of the Ministry of Health's pharmaceutical agency (AIFA) but, as with other Member States, Italy does not have a bespoke cost-effectiveness and clinical excellence body, such as the UK's National Institute for Health and Clinical Excellence.

With government retaining so much control over drug prices, the industry had hoped the lines of communication between the two parties, opened up by Francesco Storace in his short tenure, would bear fruit. However, this was short lived and pharma must wait to see what will happen under incumbent Health Minister, Livia Turco.

It is too early to tell, MacDonald noted. But the signs show that the nominally left-of-centre politics will not really change the overall imperative, which is to contain costs generally in the economy and specifically in healthcare.

2nd September 2008

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