Drug prices in Europe are soaring — and are only expected to rise

Drug prices have rocketed in Europe, with cancer and rare disease medicines in particular pushing up costs, according to a new report from health insurance bodies.
The research, compiled by the European Social Insurance Platform (ESIP) and the Medicine Evaluation Committee (MEDEV) and shared exclusively with POLITICO, shows that European countries including Germany, Spain, Belgium and Latvia are spending more on drugs — but this is because of pricier medicines, rather than more drugs being bought.
While demographic trends, including aging populations and more people with multiple chronic diseases, “would suggest an increase in volumes of reimbursed medicines,” the main driver of pharmaceutical expenditure “appears to be higher prices,” the report said.
The new report comes despite concern in the pharmaceutical industry that the proportion that national governments are spending on medicines is falling.
In France, “five years ago, drug spend was 14 percent of the total health care spend. Today, it’s 9,” David Loew, Ipsen’s CEO, told POLITICO earlier this month.
“The problem is, if we don’t find efficiencies in the health care system and we only slash on drug cost, you’re not going to get access to innovation and this is where we see that jam.”
However, the report shows that absolute spending on medicines is nonetheless increasing across the board. This was particularly pronounced in 2023, when some countries saw a year-on-year rise in drug spending of between 4 percent and 13 percent.
In France, for example, reimbursed pharmaceutical expenditure amounted to €38.5 billion in 2023, an increase of 8.5 percent compared to 2022. In Belgium, drug spending increased 9 percent between 2021 and 2022 to €6.5 billion; and in the Netherlands it increased nearly 4 percent to €8 billion over this period.
ESIP and MEDEV in the report urge policymakers at the European and national levels to “not allow the erosion of our publicly funded health care systems by implementing policies that over-incentivise pharmaceutical developers resulting in ever-increasing, unaffordable prices.”
The EU is currently overhauling pharma legislation in an attempt to balance the monopoly incentives for industry against improved access to pharma’s novel medicines. Under the current laws, some payers argue that market incentives to develop drugs for rare diseases, for example, have been abused by the industry with many drugs categorized as treating rare diseases by, in effect, salami-slicing each disease.
Instead, the proposed new legislation — which countries are currently debating and which is expected to be negotiated between EU institutions next year — should steer research and biomedical investment towards areas of greater, unmet needs, the report recommends.
“These should be defined in close collaboration with the competent authorities, whose mission and role are to monitor and respond to the actual therapeutic needs of the population,” it says.
National health care systems will face “ever-increasing sustainability challenges” if the growth rate trend in drug costs continues, ESIP and MEDEV warn, adding that pharma expenditure is expected to continue to rise in coming years.
Cancer drugs, including rare disease medicines, are the main drivers of expenditure, especially in hospital settings.
Elsewhere, immune drugs, medicines for metabolic diseases and diabetes are also among those with rising costs.
It calls for more competition for drugs that treat rare diseases, to make sure cheaper copycat products enter the market as soon as market protections expire.
“As public authorities, our members strive to offer the best possible health for all within competing national budget priorities,” said ESIP Director Yannis Natsis.
“To this end, innovation needs to be evidence-based and affordable otherwise the financial sustainability of our health and welfare systems is at risk.”
Additional reporting by Helen Collis and Rory O’Neill.