The availability of novel drugs differs considerably from one Member State to the other, according to the European Federation of Pharmaceutical Industries and Associations (EFPIA). Of 168 new drugs to secure an EU sales permit in 2018-2021 just 31 were on the discount drugs list in Estonia, while that figures was 32 for Latvia, 90 for Finland and 147 for Germany.

There are also differences in terms of how long it takes for new discount drugs to reach pharmacies. On average, a new cancer drug takes 526 days to reach pharmacies in the EU, while this is 708 days for Estonia. There are just six countries where it takes even longer.

Neeme Tõnisson, member of the managing council of the Estonian Medical Association, said that the availability of drugs problem mostly concerns cancer treatment and rare diseases. He said that oncology sees a steady stream of new medicines targeting specific genes. While cancer drugs cannot cure the disease, they help keep tumors in check and prolong patients' lives.

Erki Laidmäe, head of the medicines and medical devices department at the Estonian Health Insurance Fund, said that the problem of drug availability also plagues other smaller and poorer European countries. Most new drugs are available at discount prices in major and wealthy EU states, such as Germany, Italy, Austria and Denmark.

Laidmäe pointed out that pharmaceutical companies are less motivated to market new drugs in smaller states as they yield less profit. That is why they file for the discount much later than in other countries.

Minister of Health and Labor Riina Sikkut (SDE) also said that small Member States are inevitably at a disadvantage when it comes to new drugs. Sikkut said that looking at the duration of the entire process, the lion's share is waiting for pharmaceutical companies to apply for the discount in the first place.

The minister pointed out that it took on average 473 days for a manufacturer to apply for a discount. After that, it took 11 days for preliminary checks, 34 days to get the State Agency of Medicines' position, 37 to get the Health Insurance Fund's assessment, 32 days for discussions in the Committee of Medicines and 119 days for price negotiations between the manufacturer and the Health Insurance Fund.

"It is a matter of market attractiveness for the manufacturer, and Estonia is not the only back marker here. Other small counties find themselves in a similar situation," Sikkut remarked.

Manufacturer: State pricing based on level from ten years ago

Hanno Püttsepp, representative of AstraZeneca in Estonia, said that the reason for the waning availability of new drugs in Estonia is that the state is just not willing to pay enough.

The sentiment was echoed by Riho Tapfer, executive manager of the Association of Pharmaceutical Manufacturers in Estonia (APME), when he said that manufacturers often keep novel drugs off smaller markets because they know countries are not willing to offer discounts and reach a fair agreement with the manufacturer.

For a new drug approved by the European Medicines Agency to reach Estonian pharmacies and be available at a discount, the pharmaceutical company and the Health Insurance Fund must first agree on discount conditions.

The fund first and foremost offers discounts for drugs that either lack alternatives completely or where alternative treatments are not effective and safe enough. Drugs need to be effective and safe, while they also mustn't be too expensive. Drugs are evaluated largely based on their incremental cost-effectiveness ratio (ICER) or how much a country is willing to pay for an additional healthy year, to put in simplified terms.

For the Health Insurance Fund, this cost-effectiveness marker has remained unchanged at €40,000 since 2011, Hanno Püttsepp said. He added that a higher rate of around €100,000 has only been applied in the case of a few rare diseases.

"Estonia's GDP has tripled, prices have grown annually, while the state seems to think medicines should still cost the same as they did in 2011," he remarked.

The manufacturers' representative said that a lot more money needs to be put toward Estonia's medicines budget and healthcare in general to avoid the availability of novel drugs deteriorating further. Data from Eurostat reveals that EU countries spent 10.9 percent of their GDP on healthcare in 2020, while this was just 7.8 percent in Estonia.

Health Insurance Fund: Manufacturers want too much money

But Erki Laidmäe said that the cost-effectiveness rate determines little in reality, and that it is really a simple fact of pharmaceutical companies wanting more money for their products. He added that hiking the rate could simply mean drugs getting more expensive for Estonia instead of improving their availability.

"The root of many problems goes back to pharmaceutical companies wanting too much money for their products. Simply paying more would amount to trying to douse the fire with gasoline," the Health Insurance Fund's representative said.

Laidmäe said that the International Association of Mutual Benefit Societies (AIM), an organization representing health insurance providers, has put together a fair pricing model that considers a drug's development and manufacturing expenses, profit and rewarding innovation. German and Belgian medical insurers have suggested that novel drugs cost more than ten times what they should.

The official added that new drugs aren't necessarily innovative, pointing to a German study from last year, according to which only every fifth new drug was a considerable benefit for patients.

"No policy can be aimed at buying everything a sector manufactures. Our means are limited," he said, adding that a particular drug missing from the Estonian market might not mean it's not available as similar drugs may already be on sale.

Hanno Püttsepp said that it is impossible to gauge how much the availability of drugs could be improved with more state funding as price negotiations constitute business secrets.

He also refuted the claim that manufacturers would simply charge more if the cost-effectiveness ceiling was raised as pharmaceutical firms are not free in their price formation and drugs cannot cost much more in Estonia than in Western Europe.

"Otherwise, wholesalers in Western Europe might be tempted to buy drugs for the German market in Estonia, which could harm local availability," he explained.

Ministry betting on EU pharmaceutical market reform

Riina Sikkut said that she cannot order pharmaceutical makers to treat the EU as a single market and be equally interested in marketing their products in small countries. But the European Union can and has recently come up with a drug market reform proposal.

The EU plans to motivate manufacturers to market their products in all Member States by offering them an extension on market protection.

"While we may wave our arms in the air to attract manufacturers' attention, the change will happen once pharmaceutical companies are given longer market protection if they bring their products to all EU markets. That is what we expect will introduce fundamental change," Sikkut said.

Erki Laidmäe told ERR a month ago that the Commission's drug market reform could motivate companies to bring their products to market, while it is no guarantee that they are willing to reach a favorable pricing agreement. This means that while drugs might be available in pharmacies, their cost could be such as to make very little difference in terms of actual availability.

Riina Sikkut said that while all manner of negative scenarios can be painted, past experience shows that once a drug is introduced to the market, the Health Insurance Fund and the manufacturer reach a discount agreement in nine cases out of ten.

"This is no guarantee that the ratio will stay the same in the future, while we also have no reason to believe that reaching an agreement would somehow be incredibly difficult once a manufacturer seeks to market a new drug."

Erki Laidmäe also said he remains cautiously optimistic in terms of manufacturers being interested in a favorable agreement should the Commission succeed in making them file for the discount in all Member States.

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