Positioned near the geographic centre of the EU, the Benelux region – comprising Belgium, the Netherlands and Luxembourg – plays a prominent role in Europe’s pharmaceutical industry. The arrival of a high number of biotech startups over the last decade, followed by the European Medicine Agency’s recent relocation from London to Amsterdam, is expected to secure a strong future for pharmaceutical innovation and manufacturing.
While Luxembourg’s pharmaceutical market is very small, Belgium and the Netherlands have populations of 11.59 million and 17.53 million, respectively. Despite challenges with their pricing and reimbursement systems, the opportunities for launching new medicines are plentiful.
In January 2022, Belgium’s population density was 377 people per square kilometre, making it one of the most urbanised countries in the EU. However, there is a significant variation in density across the country, with the southern region being more sparsely populated. Life expectancy is in line with EU averages, at 84 years for women and 79.2 for men.
Almost all Belgians are covered by a compulsory health insurance scheme and they have good, subsidised access to a range of high-quality healthcare services. It is not necessary to obtain a GP referral to access specialists.
A range of statistics point towards the robustness of Belgium’s health infrastructure. The number of pharmacists is high, at 123 per 100,000 people – one of the highest densities in the Organisation for Economic Co-operation and Development (OECD).
The number of practising nurses is also above the OECD average. The concentration of practising doctors has been growing at a concerningly slower rate in Belgium than in other EU countries, although the number of medical graduates has recently seen a significant increase.
Belgium’s current pricing systems have made the market a favourable one for pharma companies for many years. Maximum ‘ceiling’ prices are set by the Ministry of Economic Affairs, based on ex-factory prices in other EU countries, as well as the price of similar pharmaceuticals in Belgium and the expected economic impact of the medicine.
Belgium’s prices are within the EU average range and there is no formal generic substitution scheme, unlike many other countries, making the penetration of generic drugs relatively low. The prescription drug market in particular is dominated by branded products.
Healthcare expenditure has been rising quickly. The total spend was $52.304 billion in 2022, a year-on-year increase of 7.2%. Belgium’s current approach to avoid overspending on healthcare requires doctors to ensure a certain percentage of annual prescriptions are for low-cost drugs.
According to GlobalData, the prospect of upcoming parliamentary elections next year could trigger a renewed focus on cost containment and/or the promotion of generic and biosimilar medicines.
Unfortunately, the reimbursement process is complex and often lengthy. It operates with a positive reimbursement list system, based on five pre-set reimbursement bands, according to the therapeutic class and benefits of the drug.
Drugs must go through the Commission for the Reimbursement of Medicines (CRM), which can take 180 days or more, followed by the minister of social affairs. The system’s shortcomings have been recognised by the minister of health, and the good news is that a reform is under way to develop an early access system that will get new therapies to patients faster.
Managed entry agreements are already in place for a large number of innovative medicines. Intended for situations where the cost-effectiveness of a new product is uncertain, these agreements enable temporary reimbursement for between one and three years (followed by the possibility of renewal), with a final decision deferred until the expiration of the agreement.
When it comes to pharmaceutical markets, there are many similarities between Belgium and the Netherlands. Like its neighbour, the Netherlands is highly urbanised – with almost three-quarters of the population living in urban areas.
Life expectancy, at 83.1 years for women and 79.7 years for men, has been rising gradually year on year, aside from a dip during the pandemic. By 2040, the percentage of the population aged 65 or more is expected to reach 26.4%.
The Netherlands has a widely acclaimed healthcare system, based on universal coverage. According to GlobalData, the country has one of the highest rates of healthcare expenditure as a percentage of GDP in Europe, at 10.1%. Out-of-pocket spending is lower in the Netherlands than in most other EU countries, which is an advantage for the pharmaceutical industry.
According to GlobalData, “the strong healthcare infrastructure, high-quality research and development base, and political will to reward innovation make it one of the more important European destinations outside the top-five markets”.
Reimbursement is based on ‘clustering’ principles, whereby interchangeable drugs are grouped into clusters, for which a single reimbursement price is calculated. Products with no therapeutic equivalent are subject to international reference pricing.
The Netherlands uses a reference price system to set ceiling prices, with Belgium, France, Norway and the UK as references. According to GlobalData, this system is the country’s primary cost-containment mechanism, although generic substitution is also widespread.
Luxembourg has one of the strongest healthcare systems in the world, with the highest expenditure per inhabitant in the EU.
However, with a population of 0.64 million, the small size of the market has forced Luxembourg to import all its medicines from other nations, mostly Belgium. This is because pharma companies do not have the incentive to launch drugs directly in the country and there is no international reference pricing system in place.
Maximising medicine access
As demand for medicine increases in Benelux, pharmaceutical companies require effective ways of accessing these important mid-size markets with their new, innovative treatments.
Abacus Medicine Pharma Services (AMPS) partners pharmaceutical companies to develop cost-effective and efficient strategies for launching and distributing specialty medicines across Europe, bringing extensive experience and deep insights of Europe’s dynamic pricing and reimbursement systems.
In addition to helping companies identify and execute the best route to market, AMPS can support them with integrated medical affairs, supply chain solutions, and options for quality and technical compliance.
To learn more about how to launch, promote and distribute medicine in the EU, please download the case study below.