In recent years, the pharmaceutical company AbbVie has maintained a profit margin of over 50 per cent in selling Humira, a drug that rheumatoid arthritis patients use. With this excessive profit margin, the company has globally accumulated an excess profit of 110 billion euros. In response to AbbVie's extreme excess profit, the Pharmaceutical Accountability Foundation (PAF), established in 2018, has filed a lawsuit against the company. André den Exter, Associate Professor of Health Law at Erasmus School of Law, is involved with the Foundation as the chairman of the advisory board. He sheds light on the case.
AbbVie has made a profit of 1.2 billion euros in the Netherlands from the sale of the drug Humira. PAF aims to ensure that medicines and medical technologies are made available in a socially responsible and sustainable manner. The Foundation places great importance on fair pricing and distribution of medicines. It believes that AbbVie has set a price much higher than a reasonable asking price. In a previous article, Den Exter mentioned that economists can now accurately estimate the reasonable asking price of a medicine. A reasonable profit margin can also be calculated. AbbVie's pricing far exceeds what can be considered reasonable.
Unlawful conduct
AbbVie will have to justify its excessive profit margin. Den Exter previously stated that pharmaceutical companies have a duty of care under the unwritten law. "In the lawsuit against AbbVie, the court will have to determine whether the excessive price of the drug Humira has led to health damage by displacing healthcare and whether the company has thus acted unlawfully. The unlawfulness of the action lies in AbbVie's disregard for its societal duty of care and its violation of the right to access medicines at a reasonable price."
Abuse of market power
Charging an excessive price for a medicine can constitute an abuse of economic market power. Den Exter explains that if it can be proven that AbbVie abused its market power, health insurers and hospitals that have overpaid for Humira for years can reclaim their costs from AbbVie. "This would return public funds to where they belong: healthcare."
A call for transparency
PAF feels that supervision of pharmacists' profits is inadequate. Den Exter indicates that transparency is needed to regulate the profits of pharma companies. "Transparency regarding research and development costs, marketing, profits, volumes and prices gives governments and health insurers a better negotiating position in making pricing and price agreements on medicines." Thus, enforcing transparency can lead to agreeing a socially responsible price for medicines.
Access to healthcare is a human right
In addition, a successful case for PAF could mean that similar cases will be brought. "This could lead to the ultimate goal of reasonable drug pricing and hence better accessibility to medicines. There is nothing wrong with making money developing and marketing drugs. But the market price of some drugs is disproportionate to the investments made in their development. Excessively high prices threaten access to innovative medicines." According to Den Exter, everything must therefore be done to make medicines accessible to all. "Equal access to medicines is part of the human right to healthcare, as enshrined in (inter)national law. There is no dispute about that."
PAF's lawsuit against AbbVie took place on 15 May 2024 at the Amsterdam District Court. The Foundation expects a ruling on 26 June 2024.
- Associate professor
- More information
Click here to visit the Pharmaceutical Accountability Foundation site.
- Related content
