Description: A pilot scheme in Utrecht where hospital pharmacies produce personalised prescriptions locally, thus circumventing patent law and saving costs. Funded by insurance companies.
Start date: Launched in 2017.
A system whereby personalised biological medicines are produced locally in hospitals. This circumvents patent law and allows faster innovation, free from the regulatory burdens of marketing approval. It also reduces the cost of medicines very substantially.
Currently this system is being tried in the Netherlands. It is funded by Dutch insurance companies.
In theory this system could provide a complement to the patent system; it would provide a check on pharmaceutical prices in the relevant areas.
There are many different words for this kind of drug production:
Scope: Magistral production would focus on biological drugs. It could be expanded to some chemical synthesis too. It would not be appropriate in cases where drugs either require complex manufacturing processes or are used in a very wide-spread manner.
Access: Medicines would get cheaper under this scheme, as there would be no premiums associated with patents for the drugs produced in this way. Distribution is not directly incentivised by this system.
Innovation: The incentives to innovation are somewhat linked to health impact. Putting this level of production and innovation into the hands of doctors themselves makes use of a human incentive to make patients better.
Efficiency: Collapsing the distinction between healthcare providers and manufacturers creates a direct incentive for cost-effectiveness. Making these personalised medicines in a magistral setting is much cheaper and somewhat more effective than buying the drugs through a traditional system. This mechanism is decentralised but only indirectly market based: producers and innovators are those employed by the state in public hospitals.
Governability: The major challenge for this system is how the safety and sterility of drugs would be ensured. New regulatory mechanisms would be needed to ensure this, and it is unclear how they would operate.
Political Feasibility: The pilot is running successfully in the Netherlands. It is not clear to what extent it can spread further afield. In particular, once magistral production reached a certain scale, it would be efficient for hospitals to specialise. This might threaten magistral status and leave hospitals open to patent litigation. Regulatory uncertainty is thus another obstacle to this scheme.
This is the only proposal of its sort that we have considered.
Governments and regulatory bodies
Stakeholders on board:
University of Utrecht
Dutch insurance companies
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