Better policies needed for socially acceptable prices of expensive prescription drugs

It is necessary to determine more accurately what prices for expensive prescription drugs are socially acceptable. In that way, more health gains for Dutch society can be realized with the same health care budget. This is argued by the National Health Care Institute (ZiN), the Dutch Healthcare Authority (NZa), and the Netherlands Authority for Consumers and Markets (ACM) in a joint advice containing recommendations for the Dutch minister of Health, Welfare and Sport (VWS). The three organizations put forward 6 basic principles for making that social assessment more accurately. In addition, they recommend taking certain measures for increasing competition between drug manufacturers as well as for strengthening market oversight.

Concerns regarding rising expenditures and the asking prices of expensive drugs

Prescription drugs are of vital importance to people’s health. As a society, we are willing to pay a lot for that, and to reward manufacturers for innovations. However, rising expenditures and high asking prices of expensive drugs lead to concerns about the availability of other high-quality care, which has come under more and more pressure. At the same time, it is unclear what costs manufacturers incur. In a motion passed in 2021, the Dutch House of Representatives asked ZiN, NZa, and ACM to conduct a study exploring options on making and keeping prescription-drug prices socially acceptable. The three organizations conducted this study as part of the MAUG program.

Socially acceptable: 6 basic principles

The participants in the MAUG program conclude that society will realize insufficient health gains if we continue to pay for new expensive drugs in the same way as before. Availability of innovative drugs is important, but more health gains can sometimes be realized elsewhere in the health-care system with the same health-care budget. The aim is to make high-quality drugs available at a socially acceptable price. The three organizations have drawn up 6 interconnected basic principles that serve as guidance in that process of determining socially acceptable prices:

1. Health gains come first: if a drug offers more health gains, it can cost more.
2. In cases of serious conditions, prices can be higher than in cases of less serious conditions.
3. Is it not entirely clear how effective a drug is? If so, the socially acceptable price can be lower in that case.
4. The more money society pays in total on a single drug, the lower the socially acceptable price must be.
5. If it is likely that the manufacturer has recouped its R&D costs, the socially acceptable price goes down.
6. In cases of less innovative drugs, the socially acceptable price can be lower.

Update to assessment framework offers concrete price recommendations

In order to be able to give the minister even better advice regarding the admission of new drugs, ZiN will update its assessment framework that it uses in that process. The abovementioned basic principles will be incorporated into that framework, which already play a major role in current assessments, but some of which do not play a role yet in the determination of a socially acceptable price. At the moment, ZiN is working out how those basic principles can be turned into concrete price recommendations. This step is expected to be completed by late 2026. The participants in the MAUG program recommend the minister to follow the price recommendations resulting from the new framework carefully when holding price negotiations with manufacturers. They also recommend explaining to society more clearly why the minister decides to reimburse a drug or not.

Strengthen competition between drug manufacturers

The participants in the MAUG program additionally recommend the minister to take measures aimed at strengthening competition between drug manufacturers. Competition leads to lower prices. However, competition between drug manufacturers does not always start in time. One of the recommendations is prescribing at the European level how manufacturers must carry out studies. That allows different drugs to be compared with each other more easily. In addition, the participants in the MAUG program recommend reimbursing similar drugs in the same manner: either through the hospitals or the public pharmacies. That prevents unwanted financial incentives and is better for negotiating positions. They also recommend improving how price negotiations are organized. At the moment, these are performed by different stakeholders, which weakens negotiating positions.

Maximum prices and stricter oversight if competition is lacking

If competition between drug manufacturers is lacking, and prices are not socially acceptable, the government can also intervene by imposing maximum prices and stricter oversight over the drug market. The NZa is exploring whether it is possible to have maximum prices better align with what is socially acceptable. The participants in the MAUG program also request ACM be granted additional powers for combating structural market problems. One such possible power is a call-in power, with which smaller mergers and acquisitions can be assessed. Another possible power is a ‘new competition tool’, which can help boost competition between businesses in sectors where it is currently flagging.

Recommendations with input from citizens and professionals

As part of the MAUG program, citizens and professionals with different backgrounds were asked to share their opinions on what they considered socially acceptable expenditures on drugs. The study ‘Not at any price’ (in Dutch: ‘Niet tegen elke prijs’), carried out by university medical center Radboudumc and commissioned by MAUG, reveals at what point citizens are more willing to accept higher prices, or not. The study also reveals that citizens believe the government should refuse reimbursing drugs that are insufficiently effective or the prices of which are socially unacceptable.

The National Health Care Institute, the NZa, and ACM have brought together their perspectives and expertise: the National Health Care Institute as the regulator of the standard health-insurance package, ACM with its knowledge of competition and free markets, and the NZa with its knowledge of affordability and availability of health care.

See also

• 16-10-2025 Joint report of ZiN, the NZa and ACM ‘Towards socially acceptable prices for expensive drugs’ (title in Dutch: Naar maatschappelijk aanvaardbare prijzen voor dure medicijnen) (in Dutch)
• 19-06-2025 Citizens speak their minds: prescription drugs are important, but not at any price | ACM
• Competition in the pharmaceutical industry | ACM (in Dutch)
• Joint report of ZiN, the NZa and ACM ‘Towards socially acceptable prices for expensive drugs’ (title in Dutch: Naar maatschappelijk aanvaardbare prijzen voor dure medicijnen) (external website) (in Dutch)