Value Added Medicines (VAM) are new products that are based on existing, proven active ingredients. A VAM could be a new formulation of an existing medicine that enables better outcomes or additional benefits for certain patients. It could be a new therapeutic use for an existing medicine previously developed for a different indication. It could be a combination of multiple existing medicines into one pill, or a medicine paired with a digital device. There are countless possibilities for VAMs, and their potential for patients and health systems should not be underestimated.

Benefits of Value Added Medicines

With healthcare systems across Europe looking for how to cope with the costs of the COVID-19 pandemic, expensive new treatments, and an ageing population, the value proposition brought by VAMs is more important than ever.

Value Added Medicines can address unmet patient needs by moving from one-size-fits-all products to more tailored treatments, which can improve adherence, reduce side effects, and be more adapted to a particular patient’s lifestyle. They can also provide treatment for conditions that have no other approved therapies. Because VAMs are based on existing medicines, they are generally far quicker and less expensive to develop than new, innovative treatments. VAMs can also reduce healthcare system waste by expanding treatment options and avoiding suboptimal medicine use. VAMs therefore represent an effective tool for improving patient outcomes without adding additional stress to healthcare budgets.

Realizing VAM’s Potential

Currently, there is not an adequate mechanism to support the development and use of Value Added Medicines in Europe, despite their potential benefits to patients and payors. To enable off-patent innovation and realize the potential of Value Added Medicines, we encourage lawmakers to take the following actions:

Design a fit-for-purpose regulatory framework for Value Added Medicines

VAMs are based on existing, approved molecules, whose efficacy and safety have already been thoroughly evaluated. Existing regulatory frameworks don’t offer a clear way to build on existing evidence, and developers may waste resources and face additional complexity by using a suboptimal pathway. A fit-for-purpose pathway would cut down on costs and hurdles for continuous innovation.

Recognize VAM as a category of innovation with proportionate incentives

Currently, developers of new, innovative medicines as well as manufacturers of off-patent medicines are offered certain IP protections as an incentive to bring products to market. Since the current framework does not recognize VAMs, there is no equivalent IP protection that serves as an incentive proportionate to the costs of bringing a VAM product to market. To enable developers to invest in VAM, we support recognition of VAM as a separate category of innovation with proportionate incentives.

Recognize and define the value of VAM for healthcare systems

Systems for medicine pricing and reimbursement vary across Europe, but generally incorporate an assessment of a medicine’s value. Many health systems do not differentiate between VAM and generics, since they are both based on existing molecules. The lack of any process to recognize the additional value of VAM and acknowledge the additional development costs compared to a generic leads to the undervaluation of VAM. Without any mechanism to price VAMs differently than generics, it may not be viable for manufactures to invest in their development.

Industry Consensus

The concept of VAM is not novel but an established idea that has been the subject of extensive dialogue within the pharmaceutical industry and with other stakeholders. The sector has reached a consensus on the direction and scope of policy actions and regulatory frameworks needed to stimulate the growth and development of value-added medicines. It acknowledges the necessity for innovative strategies that not only promote patient-centric healthcare but also value creation in terms of therapeutic advancement and economic efficiency.

Learn more about fostering VAM