The Transparency Directive — Is it Working?

Summary

The origins and nature of the Transparency Directive of the European Community (EC) are described. The Directive attempts to make the member nations of the EC clearly identify the methods they use to control pharmaceutical prices, to provide the reasons for official decisions in this area, and to set definite timetables for arriving at such decisions. These matters have long been a point of contention between national administrations and the international pharmaceutical industry.

The Directive, which is legally binding, has been in force since January 1991. This discussion concludes that the Directive has been generally effective in reducing the time taken to approve drug prices, but less so in its other aims. It is stressed that much depends on the way in which rules are applied in practice. Moreover, the onus is on a company that feels it has been unfairly treated to take legal action, a step that may take time and have an uncertain outcome.

Recent developments in national and Community approaches to the control of pharmaceutical expenditure are reviewed. Discontent with current arrangements is widespread and novel initiatives may be favourably received.