Italian Consumer Groups Claim 'Cartel' in Drug Pricing

Italian consumer group Codacons has urged public prosecutors to investigate alleged "cartel" practices in pharmaceutical pricing, claiming that the local cost of some leading prescription medicines is twice the level in comparable European Union (EU) states. Italy's competition authorities are already studying the issue, and could expand their survey to the country's entire structure for setting drug prices.

Italian pharmacists determine retail prices following negotiations between government and the industry, but are unable to charge prices above an "EU average." Reference pricing of a sort has been in effect since 1998, organised according to four reimbursement groups including drugs of variable levels of innovation and clinical necessity. However, this system is currently in the process of reform, based on the cost of the lowest-priced generic drug in each category.

The research-based sector is unlikely to welcome any further attempts to cut drug prices in Italy, after a series of cost-cutting measures in recent months. A new mechanism introduced in January imposes a 10% discount on all branded pharmaceuticals with sales rising above the national industry average, a move understood to have heavily affected margins. Further, compulsory generic substitution and widely falling prices are also reported to have worsened the outlook for ethical drugmakers operating in Italy.