In many European Union (EU) member states, public health systems cannot pay the huge prices for vital new medicines. The pharmaceutical industry obliges states to price secrecy and profits from it. The smaller the market, the more expensive the drugs.
Every morning before going to kindergarten, three-year-old Milda has to put on a motorized vest that shakes her for half an hour. She does not protest, because she is allowed to watch cartoons on the tablet during the procedure.
The girl suffers from cystic fibrosis (cystic fibrosis), a hereditary disease that causes the bronchial tubes to not clear mucus properly. The vest, which the child wears twice a day for half an hour, helps to remove the mucus and prolongs its life.
Many children with cystic fibrosis used to die before reaching adulthood.
There is a medicine that would have helped Milda much better than the vest and would have extended her life by at least 20 years. The drug is called Kaftrio, the sole manufacturer is Vertex, a pharmaceutical giant based in Boston, USA. It is also available in the EU.
Milda lives with her parents in Klaipeda, Lithuania, a member of the EU. However, in Lithuania this medicine is not available on prescription. The authorities are negotiating, but the price the company is asking for is huge.
Theoretically, the parents could get the medicine abroad, but they cannot pay for it even though they both work, the father is a surgeon and the mother is a make-up artist. Because - it costs 17.000 euros per month. That's 204.000 euros for just one year.
Goal: Equal access to medicines in the EU
The fate of patients like Milda clearly shows how unequal life chances are to this day within the EU.
"Where you live in the EU should not determine whether you live or die," EU Health Commissioner Stella Kiriakides said last year. All patients in the EU should have "early and equal access to effective medicines".
But the EU is far from this goal - shows the research of the European journalist team "Investigate Europe", on which the German public services NDR, WDR and Zidojce Zeitung worked for months.
Under the microscope: 32 new expensive medicines
The first step was to identify new drugs on the market that are actually better than the old ones.
Every year, the pharmaceutical industry puts about 40 new drugs on the market, most of them at extremely high prices. But only a few of them really bring improvement for patients.
At the request of journalists, the independent Institute for Quality and Efficiency in Health Care (IQWiG) selected 32 drugs of all new drugs approved in the last five years that have a "significant benefit" for patients. Most of them are anti-cancer drugs, but the list also includes drugs against migraine, cystic fibrosis and diabetes.
Journalists then investigated the availability of these expensive drugs in each of the 27 EU countries, i.e. whether they are paid for by the national state health system.
Out of a total of 32 medicines, only in Germany and Austria are all medicines covered by health insurance. In Estonia, Latvia and Lithuania there is a shortage of about 30 percent, in Cyprus 50 percent, in Malta as much as 59 percent and in Hungary as much as 75 percent of those medicines.
Pharmaceutical companies are obliged to keep prices confidential
In order to achieve the highest possible prices, pharmaceutical companies often use a strategy that is simple and effective: they bind individual states and health insurance companies in contracts - to keep prices secret.
States are doing this in hopes of curbing the rising costs of new drugs. But the prices of these drugs are rising everywhere, in both rich and poorer countries - and pharmaceutical companies make huge profits from health systems for which employees pay contributions and which are co-financed by the state.
The only time pharmaceutical giants negotiated with the entire EU was over the Covid vaccine. But - the prices were secret even then.
Pharmaceutical companies usually put their drugs on the market in Denmark and Germany first - because there they can set the official prices themselves at first. In practice, Denmark sets some "voluntary" price limits, and Germany checks each drug one year after its introduction and can then demand price changes.
Meanwhile, other countries use those initial high prices as a benchmark for their own official prices. What happens next in Denmark and Germany is shrouded in secrecy. Danish hospitals procure the most expensive drugs with secret discounts, but this does not show up in Euripides, the European price database, a Danish official confirms.
In Germany, the situation is even more opaque. It vetoed the World Health Organization's resolution on price transparency and is not even a participant in the Euripides price database.
According to the OECD, no other country in the EU spends as much money on pharmaceuticals as Germany: the cost of new patent-protected medicines has doubled between 2013 and 2022 – from 13,9 to 27,8 billion euros.
Part of the secret pricing business is this: Pharmaceutical companies effectively get billions from states as "interest-free loans" because most states pay them the higher official drug price at first. Then, over time, companies discreetly pay back the difference between the official and secretly negotiated lower price. In Belgium alone and in 2023 alone, there was a difference of 1,5 billion euros.
"We always ask the companies - tell us, please, the real price in Germany. - They say they don't know," one European negotiator, who requested anonymity, told Investigate Europe.
And a man who works for the Hungarian subsidiary of a multinational drug manufacturer says openly: "For a company like Novartis or Pfizer, the Hungarian market is insignificant."
The selling price is 40 times higher than the production price
However, the journalists tried to determine the prices for several EU countries - for example, the aforementioned drug Kaftrio for cystic fibrosis produced by Vertex: through mandatory available data on the company's sales, the number of patients and health insurance data.
According to those calculations, Italy paid around 70.000 euros per patient, France 66.000 euros, Latvia 135.000 euros, and the Czech Republic 140.000 euros. Therefore, the smaller and poorer the country - the more expensive the medicine.
At the same time, the New York Times writes that the production costs of this drug, for example, in 2022, for annual needs per patient, amounted to only about $5.700. And scientists from Britain say that the selling price is 40 times higher than the production price.
When asked by a journalist to comment, Vertex says that the prices are "incorrect" and stressed: "Prices are not determined unilaterally by the manufacturer, but are negotiated confidentially with the health authorities in each country." In addition, "the prices are justified" because "the drug was researched for 20 years" and "cost more than ten billion". And "the biggest part of the profit goes to further research".
However, journalists state that the drug Kaftrio in the USA under the name Trikafta was developed with public funding, i.e. from tax money, by a smaller company - which was eventually bought by Vertex.
Huge profits of the pharmaceutical industry
The pharmaceutical industry constantly argues that the prices of new drugs correspond to the value they have for affected patients and the healthcare system as a whole.
An analysis carried out by the consulting firm EY indicated the average profits of pharmaceutical companies: global pharmaceutical companies achieved an average profit of 2020 percent in 25,7. This is far above all other industrial sectors. Even the big banks can only dream about it.
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