Speech at NorWHO, Copenhagen, 20 August 2018

'Please check against delivery'

Thank you for inviting me. It is a pleasure to be here, so close to a memorable day for the World Health Organisation.

Since we are gathered here today I would also like to honour Kofi Annan. He taught us that we all have a responsibility to protect people in his struggle for a peaceful world. He took initiatives to tackle aids and the HIV infection. Especially in Africa. And he also taught us that we do not have to shout to be heard. 

On 1 September, it will be 70 years ago that the WHO started its work. And I find it fascinating how this organisation came about.

In 1946, the nations of the world were meeting in San Francisco to design the Charter of the United Nations. Their focus was on the main problems of that day- preventing war and preserving peace. They did not want to talk about global health--- let alone build a single organisation to protect it.

But three delegates thought otherwise. And they were stubborn. Of course, they were the only three doctors in the room.

Karl Evang from Norway, Smezing Sze from China and Geraldo Souza from Brazil. Simply because they shared a profession, they decided to meet and enjoy lunch together. And by the time of dessert, they were sure that the world needed a new health organisation. They drew its outlines. And then their countries proposed what would become the World Health Organisation.

This lunch started a revolution in global health cooperation. In the 1940s, even basic healthcare was lacking in some developing countries. Nations seemed powerless when faced with contagious diseases. Their main response was to control borders and to put people in quarantine. Now, the doctors gave the world a new organisation to take matters in its own hands. To share knowledge about diseases. To have global standards for medicines. And to have countries get together and deliver vaccines to any patient in need.

Those doctors truly did not believe in defeat. They instead believed in empowering nations and people to overcome problems together. And that's inspiring - because we have come such a long, long way since the 1940s. Yes, there is still a lot of work to be done, but it is also worth to sometimes stop and remind ourselves of the successes that we have achieved. Many diseases that plagued the planet then, have now been eradicated. Today 85% of children in the world gets a vaccination. Infant mortality was 148 out of 1000 in 1955 and is projected to have fallen to 29 in 2025. In the same period life expectancy will have risen from 48 years to 73 years.

I mention this not to belittle the challenges we still have ahead. But because we need to confront those challenges with the conviction and optimism that comes with knowing that we have solved big challenges before.

Effective health care relies on many different actors. The doctors and hospitals that prescribe the care; the pharmaceutical industry that develop and distribute the drugs, the governments that fund the system - sometimes complemented with private insurance schemes. This system is complex. As ordinary citizens - who also have a normal life to live – we will ever be able to fully understand all the details of this system. But when we fall ill, each of us really depend on it to deliver care that is affordable and effective.

My work as competition commissioner in Europe is only one piece in this larger picture. But nevertheless one that matters. Because competition is an important tool to make sure that we get from the system what we need: affordable and effective medicines.

Competition helps push pharmaceutical companies to keep innovating new and effective drugs, and competition helps ensure that when our health care sector purchase medicines they have competitive prices.

Competition and innovation

The first lesson you learn as a competition enforcer is that every market has its own characteristics. That is certainly the case for medicines. We need to make sure both to give companies the incentive to develop new drugs, and to push them to lower their prices.

It is sometimes tempting when we see the high prices of certain medicines under patent protection and wonder whether the system is right.

But we need to keep in mind that behind the high prices are very expensive research, and a fierce race to get new drugs developed faster and better than the competitor.

Pharmaceutical companies do a huge amount of expensive research and innovation. They do a lot of tests at high cost. We can't expect businesses to do so if a competing company can immediately copy and use their discoveries. So it is important to reward innovators for their work. And that reward is the right to sell the drug exclusively over a certain period in time.

Our ground principle is simple. When you come up with a new drug, you get the sole right to sell that drug for a time. During this exclusive time-out, you reap the rewards for your research.

But when your time is up, you must face the competition. Especially from generic versions of your drug.

I don’t have to tell this audience how important generics are in making medicines widely available. Our cases with Lundbeck and Servier have shown that the entry of generics can bring the price of a medicine down by as much as 90%.

Entry of generics

And it is obviously a priority that generics make it to the market.

As competition enforcers, we work to ensure that nothing delays the moment when generic drugs could become available.

Of course, patents protect medicines that are innovative. And when a competing drug hits the market, companies check if their patent is being violated. Settling those disputes is a valid goal. But we have also seen that a settlement hides something else. Sometimes, companies strike a deal to delay the entry of a generic drug and share the profits of the drug that was patented. This seriously harms competition----and is a rip-off for patients who can't get a cheaper alternative.

So the Commission looked closely at the issue in our sector inquiry that ended in 2009. And the Commission also took three decisions on “pay for delay” deals.

Johnson & Johnson and Novartis were fined for postponing the launch of a cheaper, generic version of fentanyl. This pain killer is on the WHO list of essential medicines that all people should have access to.

Lundbeck was fined for delaying the launch of a generic drug against depression. Servier for a medicine to control blood pressure.

We are still investigating whether Teva and Cephalon agreed to delay the launch of a generic drug against sleep disorders. We are making very good progress in that case.

And we see that patients are also claiming their rights. Last week, one company, that had a "pay-for-delay" deal with Lundbeck, announced that governments and patients are going to court. Because they want compensation for the delayed launch of the cheaper anti-depression drug.

Since the sector inquiry, we’ve been monitoring patent settlements in Europe. And we’ve found that the proportion of settlements that could be problematic for competition has fallen by more than half, to a very low level.

As competition enforcers, we don’t only tackle pay-for-delay deals. We want to tackle any behaviour that delays the entry of generics. And that behaviour can take many forms.

A few years ago, Sanofi deliberately scared doctors about the health effects of the generic version of Sanofi’s own drug against heart diseases. Sanofi did so with no scientific reason. The only aim was to discourage doctors from prescribing the cheaper medicine. Like that, heart patients kept on using Sanofi’s more expensive version----the fourth most sold drug in France at the time. The French competition agency fined Sanofi for this behaviour.

Together with our colleagues in the national competition authorities, we will continue to stay vigilant and enforce competition rules to help generics to make it to the market.

Regulation and excessive prices

Sometimes, regulations have the side effect of discouraging new drugs from entering the market. And the best way to solve that issue is not to apply the competition rules, but to change the regulations.

Take medicines for rare diseases. It can make sense to give companies an exclusive right to sell such what is known as "orphan drugs" if that's the only way to make a treatment available to patients. But there's no need to give that protection if pharmacies already have effective alternatives that are in line with general practice, well-known and safe.

That's why the Commission has made it clear that in the future, companies won't necessarily get exclusive rights to sell their product in that case. And like that, pharmacies and other suppliers can compete with their own treatments for rare diseases.

Obviously, the way that our health authorities negotiate with pharma companies determines how many medicines become available. So helping health systems to negotiate prices together and more effectively, can also be a good solution to make medicines available for everyone.

But there are times when competition rules need to deal with very high prices.

Last year, we launched an investigation into Aspen Pharma. We are looking at indications that the company raised the price of five cancer medicines by several hundred percent, after the protection for these medicines expired. We are taking a very close look because these are medicines that patients literally can't live without.

Mergers and innovation

Obviously competition enforcement, cares about the price of medicines But innovation is equally important. That drive for companies to bring better products to the market.

Innovation is a main focus when we look at mergers.

In 2015, Novartis bought a line of cancer medicines from GSK.

Some of the cancer drugs that Novartis bought from GSK were very similar to medicines that Novartis producing. So it was unlikely that Novartis after the merger, would keep both drugs.

But patients need a choice between in treatments. Because sometimes, a similar but slightly different drug may work better for them. Or have fewer side effects. Less competition between drugs also means higher prices for health systems.

So we could only approve the merger after Novartis agreed to sell their cancer treatments and its research pipeline. The results of that decision look promising.

The company Array bought that pipeline of medicines. Now, it has started the last cycle of tests to launch two completely new drugs for bowel cancer. That new competition will improve patients' lives—literally.

Protecting competition is not only about the medicines produced and sold today. It is also about future the drugs that companies have in the pipeline. Even in early development.

Conclusion

Our role is to ensure that the market works. For me this fits with the vision of the three founding doctors of the WHO.

They foresaw that if you truly want to cooperate to improve global health, you need two things. You need nations that are willing to talk and work together to fight diseases. And you need citizens to be informed and trust what their decision-makers are doing.

This is important because no forum for cooperation, no matter how strong and important it is, can survive without the trust of the citizens it serves. Competition must do its bit and we must make sure that our decisions count for consumers.

Because competition rules are about making life better for consumers. So that when they spend their hard-earned money, they get a fair deal.

Thank you.