Archive for January, 2023

Media Network: Issue 1, 2023

Posted on: January 30th, 2023 by Morgan Arnold

In Conversation with Paul Brand, ITV’s UK Editor

Ellie McGarahan reports

MHP’s Charlotte Grant hosted a Q&A with ITV’s UK Editor, Paul Brand, who broke a series of Partygate exclusives including unforgettable footage of Number 10 staff laughing about parties during lockdown.

On his Partygate video: “We knew we had our hands on something significant, but weren’t expecting the reaction we got. My source was initially unsure on whether to let us publish, but when they heard Boris Johnson deny any wrongdoing, that was the moment they wanted to push the button. As soon as we went public, it was clear that most people felt strongly that the parties flew in the face of the mass sacrifice made throughout the pandemic. It’s rare to get your hands on a story that everyone will have an emotional connection with, but this was certainly one of them.”

On how he and the ITV News team approach stories: “If you watch any other news bulletin you’ll notice that at ITV, we prioritise people’s stories in any discussion of policy. We like to get out on the street, speaking to normal people about how the headlines are having a real, emotional impact on their lives. We now have the hour-long Evening News 6.30-7.30pm to allow for more of a UK-wide, regional focus, with the normal local news taking place after the evening bulletin.”

On the big themes that will dominate the news agenda this year: “We’ll keep covering the cost of living crisis as it continues to bite. People are right to be pleased that the inflation rate is slowing, but we shouldn’t forget that prices are still rising at the same time. As well as strikes, the NHS story will also roll on this year – it’s probably in the biggest state of crisis I’ve seen since becoming a journalist.”

On the next general election: “Many of the stories we cover this year – whether its inflation, cost of living or Ukraine – will begin to be viewed by the public through the prism of the next general election. Labour will by no means have an easy ride when it comes to this – we’re over a year out which means there’s a lot to play for and we could see the polls change dramatically in that time. But what we’ll find is that Labour will get more of a hearing than they did previously, particularly when it comes to being taken more seriously by business.”

How to land a story on PA Media

Interview by James Rollinson

MHP’s James Rollison spoke with Henry Saker-Clark, PA Media’s Deputy Business Editor about changes to the city desk and the stories they are looking to cover in 2023

What do you expect to be the major business stories in 2023?

We are already seeing a lot of news about job losses and redundancies, as businesses try to cut costs ahead of an uncertain outlook. The big US tech companies, such as Microsoft and Meta, are the obvious examples, but we also broke the news that Amazon is shutting UK warehouses alongside plans to cut 18,000 jobs globally. How businesses are adapting to survive the changing financial climate is likely to be a big focus for us over the coming year.

Are you open to background briefings with senior executives?

Yes, absolutely. We are renowned for the accuracy of our reporting, so the more detail we have on a situation, deal, business or person, the better. Off the record briefings are a great way for us to build relationships and ensure the accuracy of stories and can often lay the foundation for features and stories in the future.

What kind of stories do well for you?

Any kind of proprietary data is always a good start, especially if it’s an exclusive. Offering us flexibility also helps, as it means we can time stories to ensure they get the best pick up. Sunday for Monday is usually a good time for lighter stories, and if we’re running something during the week we like to get it up by 9am so news desks have all day to pick up and use the content.

How big is the PA City desk now?

We have four key members. Holly Williams is editor, and also covers macroeconomic stories, and I tend to focus on retail, leisure and hospitality. August Graham usually focuses on energy and commodities, while Anna Wise is been leading our banking coverage. We also work closely with Consumer Affairs Correspondent Josie Clarke and Personal Finance Correspondent Vicky Shaw, as well as Martyn Landi on tech and Industrial Correspondent Alan Jones.

A deep dive into The News Agents podcast

Interview by Charlotte Grant

Over 14 years at the BBC, Dino Sofos helped transform their political coverage, creating the hugely successful formats Brexitcast, Newscast and Americast. Five months after launching The News Agents Podcast, he tells Charlotte Grant about the opportunities.

Who is your audience?

Our audience is make up decision makers, politicians, celebrities as well as a diverse, younger audience so it is a really exciting mix. In the first three months, we had 10 million downloads. We’re now comfortably hitting over six figures per episode – for a daily news podcast, that’s an incredible listenership.

How does that compare to TV?

Those figures aren’t as large as a TV audience, but we know so much about our listeners. We can tell when they skip past ads or drop off. For us it’s consistent – our listeners stay through to the end.  Our social media content also has a real impact. We had Nigella Lawson on in December talking about greed, which went viral and made the front page of the Times.

What guests and stories are you looking for?

Our stories are driven purely by a combination of the news agenda, what’s going on in the world and what we’re interested in. We do have some feature-led content, but it’s got to feel relevant and rooted in reality especially given the Cost of Living crisis.  When it comes to business, we’re looking for CEOs with an opinion, who have something interesting to say.

When should journalists and PRs approach them?

If it’s breaking news and you can offer a great guest or CEO, get in touch as soon as possible. Day to day, we try to get our recordings finished by 1.30pm, so we can publish at drive time.  For forward planning, it’s never too early to get in touch to see if it’s a guest, news line or subject that we could be interested in.

What about paid for content?

Podcast advertising is incredibly effective as it’s so targeted. We do ‘host reads’ (where Emily or Jon voice the advert) so companies can pay for a selection of host reads, which we find very successful.

All change at City A.M.

By Ellie McGarahan and former Telegraph Industry Editor, Alan Tovey

City A.M. will no longer produce a printed edition on Fridays in a move editor Andy Silvester said reflected the structural change to working patterns among the London business freesheet’s readership.

The decision will put City A.M.’s journalism in “the right places on the right days”, according to Silvester. Post-pandemic and with more people working from home on Fridays, the final edition of the week of City A.M. was suffering “significantly lower” circulation, he added.

Online coverage is being beefed up on the Friday, and Thursday’s print edition will have more lifestyle coverage reflecting what’s effectively the weekend starting early. This will mean making sure that Friday reflect this new focus, being a little lighter or leisure focused.

Jack Barnett has also announced that he will pen a weekly column as part of his promotion to Economics Editor. Speaking to MHP, he said it will centre on a different economic trend each week – supply side productivity, growth, inflation – and will feature commentary from industry experts and analysts. Each piece will include two charts to illustrate the trend, taken from investment bank and thinktank research notes.

Further resignations signal discontent at the BBC

By Ellie McGarahan

The BBC exodus continues as three more of the public broadcaster’s most experienced news presenters confirmed they are quitting due to cost-cutting plans which will merge BBC News’s global and domestic rolling news channels.

David Eades, Joanna Gosling, and Tim Willcox are leaving after a combined 53 years of service. Eades departed the BBC earlier this month, and Gosling last week. It is not yet clear when Willcox will leave, and all three have not yet confirmed their next moves.

The BBC is planning to launch the new channel in April, which will serve both domestic and international audiences. It has positioned the merge as a key part of the corporation’s plans to reinvent its television news output to become “digital-first” and “the best live and breaking video news service in the world”. Ofcom is set to make a key announcement on the proposal in the coming weeks.

Movers and Shakers

By Pauline Guènot

Some national change in the retail beat

  • Jonathan Eley, previously Global Retail Editor at the Financial Times, has been appointed Longform Editor – Arjun Neil Alim will cover the Retail beat until Jonathan’s replacement is announced.
  • Isabella Fish recently started at The Times as their new Retail Editor, joining from Drapers.
  • Emily Hawkins, previously Reporter at City A.M., joins the Daily Mail to cover retail and leisure alongside Archie Mitchell.

New Economics faces at Bloomberg

  • Bloomberg appointed two new UK Economics Reporters: Lucy White, previously City Reporter at the Daily Mail, as well as Tom Rees, previously Senior Economics Reporter at The Telegraph.

Busy January for City A.M.

  • Along with Emily Hawkins, Leah Montebello left City A.M. to join the Daily Mail, covering Technology and Media.
  • Jack Barnett has been promoted to Economics Editor, and Nicholas Earl Energy Editor.
  • Chris Dorrell, former Alliance News Reporter, has been appointed Banking Reporter.

Coming soon – MHP’s Media Network filmed podcast

Look out for the MHP Media Network filmed podcast, which will be launching in February. In the first episode, we will be joined by Becky Barrow, News Editor of the Sunday Times, and Anthony France, Crime Correspondent and News Editor at the Evening Standard.

We will be sharing the podcast across our website and social channels, follow us on LinkedIn to keep up to the date with the latest updates.

Consumers remain creatures of habit

Posted on: January 30th, 2023 by Morgan Arnold

There is a collective holding of breath amongst the retail community during ‘Crimbo Limbo’ as we await any unscheduled updates from retailers who may have experienced a nightmare before Christmas. Anticipation was heightened this year given the backdrop of a brutal cost-of-living crisis driven by spiralling energy costs and high inflation.  

But, as Next’s announcement during the first week back confirmed, the concerns were somewhat unnecessary.       

ONS data, which reported a 1% fall in retail sales between November and December, disguised unexpected resilience among UK consumers, something which has been borne out by retailers through this busy reporting period. The slew of trading updates throughout January unveiled a remarkable level of positive news when many had expected a bloodbath of profit warnings.  

Simon English, financial editor at the Evening Standard, made a surprising calculation that underlines the disconnect between macroeconomics and what many businesses are reporting. According to his – self-confessed back-of-an-envelope – maths, across all sectors there were six profit upgrades for every profit warning.  

There are various factors at play here, and not all demand led. For example, as we drift away from peak inflation, retailers are starting to gain more certainty over some key cost lines such as freight, wages and utilities, providing greater visibility and the ability to operate and trade with renewed confidence.  

But shoppers also shopped, bringing some surprising trends. In a world convinced that the pandemic had sounded the death knell for physical retail, it was the shops rather than online where many of the strongest performances were found.  

There are some extenuating circumstances. Royal Mail strikes weakened confidence among customers that their online-bought gifts would arrive in time for Christmas. The colder weather also dragged forward the sale of jumpers and warm clothing for the apparel retailers.  

Nevertheless, at the heart of it lies a creature of habit. A consumer who – in many instances – still wants to touch, feel and experience a product before purchase, particularly if it is to be imminently unwrapped by a loved one. 

Online’s speed and convenience has changed the world of retail forever, but it seems we cannot be persuaded to abandon the high street altogether, and there is somewhat of a ritual to be enjoyed (or endured) by trudging the pavements from shop to shop on a cold December morning.  

Still, the industry cannot get carried away. Whilst the trends are more encouraging, inflation remains at a very high level and consumers continue to face a gloomy outlook, made worse for some by the prospect of remortgaging in a world of higher interest rates. The halo around the Christmas reporting season is also somewhat punctured by data showing that credit underpinned spending for a high proportion of customers.    

So it remains undeniably tough for the consumer and, as we move towards February, the question now turns to the sustainability of demand. Greater visibility will help the industry as a whole, but now – more than ever – it will be those offering true value and a distinct proposition who will remain in the winner’s circle – and not just for Christmas.    

Simon Hockridge is managing director in MHP Group’s Capital Markets division. He has over 15 years’ experience in strategic communications, specialising in the Consumer sector. 

Capital Markets ESG Insights: January

Posted on: January 26th, 2023 by Morgan Arnold

In this latest iteration of the MHP Capital Markets’ quarterly ESG Insights newsletter, we explore the key ESG themes and considerations as we head into 2023.

We also examine how the corporate culture impacts ESG and sustainability in business, from a communications perspective. Finally, we explore the upcoming disclosure recommendations from the Task Force for Nature-related Financial Disclosures (TNFD).

We also feature ProCook as our Client in Focus.

For any questions or feedback please contact us at [email protected]

Mischief wins U.S snack brand, Jack Link’s

Posted on: January 24th, 2023 by Morgan Arnold

Mischief has been tasked with building brand loyalty among snack company Jack Link’s target Gen Z and millennial audience.

The agency’s brief is to deliver comms across consumer PR, social media and paid social, with the core programme activated in the UK and social content rolled out to key EMEA markets.

In addition, Mischief will collaborate with esports organisation Fnatic​​ to promote its ongoing partnership with Jack Link’s.

“We are thrilled to have the team at Mischief on board to help build brand awareness and consideration for Jack Link’s in the UK and our core EMEA markets,” said Inka Weber, marketing manager (EMEA) at Jack Link’s.

“We were really impressed with the team’s strategic and creative approach to our brief and are looking forward to collaborating together.”

Founded in the US in 1986, Jack Link’s is best known for its eponymous brand of beef jerky. Spider PR previously managed comms for the snack company.

The win is the latest for Mischief under the new management team led by Charlotte Brooks, who became the agency’s managing director in September 2022.

Part of the MHP Group, Mischief reported its most successful year in 2022. Its roster of clients includes LEGO, Just Eat, Three, Nestle, LV= and Ocado.

Brooks said: “We have a lot of Jack Link’s fans in the office – from the fitness fanatics to avid gamers – and are naturally thrilled to be partnering with the brand in 2023.

“We have some exciting plans ahead and we can’t wait to bring our strategic thinking and creativity to Jack Link’s – not just in the PR space, but across social and paid media too.”

Power to the people…and the press

Posted on: January 24th, 2023 by Morgan Arnold

Last week investment giant Hargreaves Lansdown eased the way for its 1.7 million retail clients to have a direct say in how the individual companies they invest in are run. This means the 5,800 UK and European stocks on the platform could see a marked increase in votes cast at their AGMs. Company boards should take note.

“the majority of private shareholders…could be persuaded to be more vocal if the process becomes easier”

Motivated private shareholders have always had the means to vote if they really tried – but the process has been clunky, expensive and often involved attending physical meetings in person. This may well be attractive to a semi-retired punter with a taste for free coffee and biscuits, but is hardly a priority for the majority of UK private shareholders – most of whom invest online via their ISAs and SIPPs – but they could be persuaded to be more vocal if the process becomes easier.

Hargreaves Lansdown was not the first mover here, so can look to the experience of AJ Bell, Fidelity and Interactive Investor to gauge the impact – the latter saw a 30% increase in AGM participation among its clients last year prompted by a simple change requiring them to opt-out of receiving alerts on pending votes.

BlackRock is considering an even bolder move, with a trial to offer individual investors in its funds to vote on contested proposals this year through its Voting Choice programme.

Can it move the dial?

What difference can all this make given that institutional investors make up the lion’s share of most companies’ registers? Surely PLCs can continue to pass their resolutions by continuing to focus on engaging with their largest shareholders? Maybe so, but there is another factor at play.

When announcing BlackRock’s plans last November, the asset management giant’s founder Larry Fink spoke of unleashing a “revolution in shareholder democracy”. If this ambition is to come to anything then retail investors will need more than just a slick tech platform to cast their vote. They’ll also need access to timely, independently sourced information to form their view and encourage them to act. And realistically this can only come from one place – the media.

The same is not true for institutional investors who have the ear of companies throughout the year and who often employ armies of in-house corporate governance pros to scour through the resolutions before forming a view.

Institutional investors are often assisted by proxy advisors who proactively flag the most contentious issues, and discourage their clients from selecting the default option of voting with company management. A “red top” alert from IVIS, the Investment Association’s voting service is seldom ignored, and with a 60% market share, research from Institutional Shareholder Services (ISS) can wield huge influence. These services do not come cheap, and it’s hard to imagine Deutsche Boerse-owned ISS giving its product to retail punters for free.

“Newly empowered retail shareholders may be more receptive to their favourite columnist calling them to action, and could be enough to force management teams to rethink”

This is where the role of the media changes. We are already used to reading about potential shareholder revolts – often generated by journalists getting hold of proxy advice – but there is scant evidence that news reports alone have influenced the outcome, given virtually all the votes are cast by professional investors taking professional advice.

In contrast, the newly empowered retail shareholders may be more receptive to their favourite columnist calling them to action, and while they may collectively still only hold a small percentage of the votes, it could be enough to force management teams to rethink. Even if resolutions pass, the Financial Reporting Council’s Code of Corporate Governance recommends that if there is a vote of more than 20% against a resolution, boards should explain themselves. Activists looking to disrupt boards or big-ticket M&A could also find themselves more beholden to the Fourth Estate than ever before.

Should the media rise to the challenge, there are plenty of newsworthy issues to hang stories off as we head into the 2023 AGM season – not least the cost-of-living crisis, which the Investment Association put front and centre in its annual letter to RemCo chairs, with raised eyebrows for any exec receiving a pay rise above inflation and a Red Top for pension contributions out of kilter with the rank and file.

Boards beware – greater media scrutiny is practically a given.

If you would like to speak to MHP about strategic communications advice around this and a range of other boardroom topics, then please don’t hesitate to get in touch.

 

James McFarlane is a Managing Director in MHP Group’s Capital Markets division and has over 15 years’ experience advising the boards of listed companies and private businesses on their critical communications with investors and other stakeholders.

 

 

 

AGMs have always been a rich source of stories for the media. MHP director Alan Tovey, a former business journalist who spent 20 years on national papers, most recently the Daily Telegraph and Sunday Telegraph, examined the dangers around executive pay as boards face investors in this blog.

Heightened Threat of Cyber-Attacks

Posted on: January 17th, 2023 by Morgan Arnold

What is the risk?

We have seen a significant increase in sophisticated cyber-attacks from the last quarter of 2022. These include attacks this week on Royal Mail and the Guardian that prompted the Financial Times front page headline: “Attacks on Royal Mail and Guardian stoke fears over surge in cyber crime”.

For the Royal Mail this resulted in a large-scale system closure. At the Guardian, sensitive and confidential details, including financial and personal data of employees and customers have been taken. This data can be used to facilitate fraud or sold on the dark web. We have also seen a resurgence in ransomware attacks that significantly impact company operations.

Our Crisis & Risk team have worked in recent weeks on cyber-attacks that potentially mirror the assault on the Guardian where it is believed an employee password authentication process was replicated and breached in a phishing attack. These attacks target employees, who allow the criminals access to company systems by accepting requests for access and authentication that are sophisticated and seem authentic. Another recent attack led to a company’s confidential data being removed from their servers, including commercially sensitive details on clients and suppliers. This was then ransomed back to the company and the criminals provided notice of the breach to selected stakeholders.

Why is this a reputational risk?

Data breaches, where customer or stakeholder data has been compromised, have attracted low and diminishing levels of media interest in recent years. However, in recent weeks the impact, such as the damage to overseas mail, and scale of attacks, including the increased number and amount of data lost, has generated significant media interest and prolonged scrutiny from journalists.

Reputational risks originate from:

  • Leaks: Reporting around the attacks has included disgruntled employee commentary and leaks of internally communicated actions or impacts
  • Employees: Cyber-risk is now a duty of care issue as attackers also seek to acquire personal and financial information about employees
  • Customers and data subjects: Trust in your business can be damaged by concerns of fraud and poor security
  • Operations: Disruption or closure of operations impacts customers lives or client and supplier businesses
  • Systems: Scrutiny of the systems you have in place or lack of it.
  • Confidential data: Commercially sensitive information or inappropriate internal messaging and actions become exposed.

Media interest has also focused on claims the increase in attacks is linked to geo-political issues and state actors including Russia and China. Whatever the reality of those claims, businesses risk significant damage to operations, stakeholder trust and wider reputation in the event of a significant and sophisticated attack.

What should you be doing now?

In light of the increased reputational threat, we would urge organisations to:

  • Review crisis protocols and your cyber crisis response team to ensure you have the right people in place and fully trained.
  • Ensure your IT team are reporting potential attacks to legal, communications and HR teams.
  • Draft or review and update your cyber response playbooks, including draft communications to every stakeholder, not just a media holding statement.
  • Identify and understand how customers will contact you, and how that contact will be managed, to avoid further criticism from stakeholders in a breach.
  • Ensure all materials are accessible should you lose access to your server. Alternatives to regular email communication should also be secured.

Critically you must remind staff of the rising threat of phishing and other attacks.

Contact Us

Should you wish to learn more about this risk or would like support, please contact [email protected] or call Barnaby Fry, Head of Crisis & Risk on 020 3128 8761

What’s coming up in European health policy in 2023? Everything EU need to know

Posted on: January 12th, 2023 by Morgan Arnold

The word of the year is: polycrisis

In March 2020, the rest of Europe was transfixed by images of a healthcare system collapsing as COVID cases piled up in Lombardy, Italy, imminently expecting similar scenes to hit their hospitals. Fast forward nearly three years and European healthcare professionals are watching queues of ambulances outside UK hospitals, predicting the same scenario in their countries soon.

Against crisis backdrop, we know that industry voices have a shopping list of asks for European governments: increased investment in innovation to catch-up with the US; cooperative usage of data; novel approaches to technology evaluation and appraisal. Industry leaders say these amount to a call to target wholesale transformation and move to an ‘ideal’ healthcare system, rather than tinkering at the edges.

The polycrisis European health systems face will make it hard for these voices to get a hearing, even as system collapse tells us we need a more radical approach.

As this newsletter covers, 2023 will see varied responses to these issues. While France is pushing ahead with a renewed focus on prevention, Italy has placed a major primary care reform on hold. As Germany is looking to control its healthcare spending, Spain’s Government is pushing through pioneering changes in reproductive health.

This is our most comprehensive newsletter yet – if you have any questions about the topics raised, do get in touch.

Noah Froud, Charlotte Moss and Isabelle Scali

The biggest voice in European health policy: US Senator Bernie Sanders

Vermont independent and Medicare-for-all proponent Bernie Sanders is set to take over the Senate’s Health, Education, Labor and Pensions Committee next month, giving him oversight over key health policy priorities such as drug pricing. What happens in Washington inevitably influences European politics, and there’s potential for appearances by industry leaders in front of the Committee to be picked up by European media – just as Mark Zuckerberg’s were. POLITICO has chronicled how US lobbyists are preparing for challenges given the Senator’s well-chronicled antagonism towards them.

France:

Social Security Financial Bill to cap health products cost to state

The new  PLFSS (“Social Security Financial Bill”), which entered into law in December 2022, came into effect this month, ushering in multiple changes to the French health system. This act offers little flexibility for interpretation during the implementation process. While CEPS (“Economic Committee of Health Products”) will have some decision-making control over establishing reimbursement costs for certain advanced medicinal therapy treatments (AMTPs), most pricing and social regulations under the PLFSS have already been finalised. Excluding COVID-19 spending, budget growth for reimbursement of health products by insurance has been limited to a conservative 3.5 per cent (€244bn), in keeping with previous ONDAM (“National Goal of Health Insurance Spending”) targets. Projections for 2023 forecast a national social security balance of -€7.1bn, from 2022’s budget deficit of -€18.9bn. However, the restricted drugs budget has been decried by some outlets as a threat to industry innovation and barrier to patient access.

New services including ‘prevention appointments’ and screening for sickle cell

Prevention is a central focus in the French Government’s public health strategy. From 2023, ‘prevention appointments’ will be established for citizens at key age milestones (20-25 years; 40-45 years; and 60-65 years). The National Newborn Screening Programme is expanding its systematic testing of 3-day-olds in France to include 7 additional congenital diseases (including homocystinuria [HCY], leukinosis [MSUD], and tyrosinemia type 1 [TYR-1]). At the recommendation of HAS (“High Authority for Health”), screenings for sickle cell disease will also now be conducted across all newborns, including those in low-risk populations. This expansion we be trialled over the next three years. Free and non-prescription access to emergency contraception will now be made available to all women and non-prescription testing for STIs will be fully reimbursed for under 26s. Tobacco prices will also rise substantially as a continuation of the PLNT (“National Tobacco Control Programme”).

France to introduce reference pricing

HAS has made a concerted effort to improve the transparency of their market access decision-making over the past year. Now CEPS (“Economic Committee for Health Products”) will be expecting the same of industry. First, the PLFSS aims to use discount levers (paid to health insurers) to encourage further claims for reimbursement across all eligible indications, moving away from indication-specific claim strategies. Secondly, under new ATMP financing, payments to the manufacturer will now be spread over time, at key milestones based on real-world evidence of treatment efficacy even after reimbursement approval.

Finally, under the PLFSS, CEPS will introduce reference price groups and additional evidence requirements following market access approval. This aims to guarantee proportional reimbursement for product outcomes and encourage use of comparable cheaper alternatives or generics. This follows a similar approach to other EU systems. However, the impact on generics uptake is uncertain without additional patient or prescriber incentives.

Germany:

Cost-containment measures to be introduced

Long since one of the most attractive EU markets for pharmaceuticals, Germany is adopting cost-containment measures that are set to significantly impact industry revenue and R&D in the country. In light of the statutory health insurance system (GKV) facing financial difficulties, the Bill on the Financial Stabilisation of the Statutory Health Insurance System (‘GKV-Finanzstabilisierungsgesetz’) passed through the Bundestag and the Bundesrat in October 2022.

The Bill aims to distribute financial burden across all healthcare players without reducing patient benefits. Changes in reimbursement pricing mean the period in which a pharmaceutical company is free to set its price for new medicines is reduced from 12 to six months. The German Government has also stated its expectation that future price negotiations will also consider price-volume components. Meanwhile, orphan drugs will be subject to the full AMNOG process (including HTA assessment) if their annual revenue exceeds €30 million – a tightening of the current €50 million bar which has drawn concerns from smaller pharmaceutical companies, particularly in the rare disease space. Reactions to the Bill have been mixed, with some stakeholders voicing concerns that the Bill is a quick fix rather than a long-term solution to stabilising GKV finances.

While the rest of 2023 is likely to reveal further cracks in the running of Germany’s health system, the GKV Bill may well have a broader impact for many years to come. Besides the possible stagnation of R&D and innovation within Germany, the Bill could affect innovative therapy pricing beyond its borders, as German pricing is often used as a reference for both EU countries and others such as Canada, South Korea and Japan.

Alert level red

Amid recent mass resignations in Germany’s hospitals, staff have cited a workload so extreme that some were unable to take even a short break or go to the toilet. In a country that spends more on healthcare than almost any other in the world, this is triggering widespread alarm. The Health Minister, Karl Lauterbach, announced a plan to move nurses and doctors around to match demand that has been dismissed as “absurd” by leading clinicians; the Süddeutsche Zeitung stated that the country was witnessing “what it means when a system implodes”.

What lies ahead for Germany’s coalition?

Cost-containment measures can be viewed as a stress test for the so-called ‘traffic light coalition’, with social democratic Mr Lauterbach (SPD) and the liberal Finance Minister Christian Lindner (FDP) both key players. Mr Lauterbach also featured in the news towards the end of 2022 when German police revealed they had thwarted a far-right terrorist group’s plot to kidnap the Health Minister. The planned attack has been interpreted as an extreme response to Mr Lauterbach’s cautious approach to COVID-19 and follows the rising trend of renewed political extremes in countries generally regarded as stable democracies. Suspicion of vaccines and opposition to lockdowns and mandatory mask-wearing have provided fertile ground for healthcare issues to accelerate extreme political movements since the beginning of the pandemic.

Spain:

Overstretched frontline staff

In December, El Mundo spoke with Professor Verónica Casado, former Minister of Health for the Junta de Castilla y León and internationally renowned family doctor. The discussion centred on the apparent lack of doctors across Spain. Professor Casado, however, dispelled this notion and stated that there have never been so many doctors, but the distribution of specialties is “very chaotic” with 18 specialties being classed as “very deficient”. Looking towards 2023, Professor Casado suggested the introduction of a specific MIR (Resident Medical Intern) for the 18 specialties most at risk might be one resolution, but also noted that this is a multi-causal issue. This takes place against the backdrop of a more widely reported issue of many doctors in southern Spain leaving the area in pursuit of better pay and prospects, as well as numerous planned doctors’ strikes.

Sexual and reproductive health policy

Towards the end of 2022, Spain’s Parliament passed a pioneering sexual and reproductive health law. This law removes a mandatory three-day “reflective” period for women who wish to terminate a pregnancy and removes the need for those aged 16 and 17 to obtain the consent of a parent or guardian to abort, which is a first for a European country. Other changes included amends to maternity pay, menstrual products and surrogate pregnancies. The law was adopted with a 190-154 majority with five abstentions, although those against were resolute in their opposition: Lourdes Mendez from the far-right party Vox believes the law “violates the constitution and has turned Spain’s system of values upside down”. The law is now with the upper house for final approval but – given the far-right party Vox won a 15 per cent vote share in the last election – we expect a hostile response from some of the Spanish public.

Italy:

New Government divided on health

Italy’s recently elected Government of right-wing parties, formed by Giorgia Meloni’s Fratelli D’Italia (Brothers of Italy) (FdI) and its junior partners La Lega (the League) and Forza Italia (Come on Italy) (FI) have differing views on healthcare. FdI favour a more centralised system. Their partners Lega and FI favour regional autonomy and privatisation, in the model of Lombardy, which is publicly funded but also supported by the private sector.

Italy’s governance system allows unelected specialists to serve in Government as “technical” Ministers, meaning they do not have a political background; this has allowed the parties to agree on a compromise Health Minister Orazio Schillacci, who is not affiliated with any of the ruling parties. Schillacci previously served on the Scientific Committee at Italian National Institute of Health as a researcher, appointed by Roberto Speranza, the previous Minister, which fed into PM Mario Draghi’s Government’s public health decisions during the pandemic. This may be an indication that they recognise the scale of the challenges ahead and are choosing to take the health brief seriously. However, it could also signal a lack of political ambition. As the Government was elected in September and had to pass a rapid budget by December, there were no new landmark health projects announced. It is yet to be seen what direction the Government will choose to take, preferring to focus now on the cost-of-living crisis through support for families and tax cuts.

Private-public partnerships under scrutiny

According to the bureaucratic structure in place since 1992, healthcare services are regulated by the Government, but the regions have autonomy over budgets, spending and provision. This has led to a patchwork of local systems that have opted for varying degrees of privatisation. It is now understood that the Lombardian private-public model resulted in one of the worst death rates of all the regions during the pandemic. Silvio Berlusconi’s FI and Matteo Salvini’s LI parties have governed the region since 1995 and allowed private and public systems to compete for funds based on efficiency. Praised as one of the most advanced healthcare systems in Italy, it also meant that private firms invested in areas that would generate more revenue, leading to a reduction in hospital beds and a decreased capacity to combat a sudden emergency. This arguably contributed to the area’s poor outcomes compared to neighbours with higher levels of public funding Veneto and Piemonte.

Health spending frozen in real terms

Spending cuts in the previous decade left the Italian health system weak as the country in the G7 with the lowest healthcare funding since 2008, which may have contributed to its status as a country with one of the highest death rates in the EU. Whilst the recently passed budget law in December increased healthcare spending by €2.15 billion for 2023 and a further €2.3 billion in 2024, €1.4 billion of this funding will be going towards covering high energy costs for hospitals, and the remaining money covers inflation, so will not be enough to properly address some of the outstanding issues.

Workforce shortage expected to worsen

There is a chronic shortage of healthcare workers. The ANAAO (National Association of Hospital Assistants), Italy’s largest doctor’s union, estimates that based on current trends of retirements and layoffs, there will be a total loss of 40,000 medical specialists by 2024. Plagued by long working hours, lack of staff, heavy bureaucracy, poor social and economic recognition, and assaults and accidents at work, more staff might opt to head for the door too.

Educational bottlenecks resulted in fewer doctors being trained than were needed in the system, whilst a large number of doctors have retired in recent years. Measures were introduced by the last Government to expand medical school places and training residencies, but it may be another few years before their impact is felt. Additionally, some residencies are undersubscribed, such as emergency medicine, microbiology and anaesthesiology. The new coalition Government repealed the regulation barring unvaccinated healthcare workers from work in October partly to reverse the departure of 4000 healthcare workers, and throwing their COVID-sceptic base some red meat. As in the UK, this has led to a reliance on locum doctors (called “token” doctors in Italy). Schillacci has acknowledged that to some extent, making certain disciplines more attractive to specialise in and stopping the exodus to the private sector will require better pay and flexibility.

Primary care reforms on pause

Italy’s primary care problem has been exacerbated by the pandemic. We’ve noted previously that the EU Commission’s National Recovery and Resilience Plan (NRRP) included €7 billion of NRRP funding toward local health centres known as “community houses,” in which primary care would be supported by enhanced laboratory facilities for testing and diagnostics, enhancing screening capabilities and reducing pressure on hospitals and long-term costs. Schillacci has signalled that this might not be the solution the Government takes, and this will need to be evaluated. As the NRRP money is still largely unspent, and is the only ‘additional’ money available, what Meloni’s Government chooses to do with this will be significant.

Brussels:

European Commission mental health strategy pencilled in for Q2 2023

The EU’s health chief Stella Kyriakides had previously commented in October that the Commission is supporting member states to reform mental health systems and has allocated more than €28 million to mental health actions under the EU4health programme over the last three years. How the Commission plan to build on this with its mental health strategy is currently unknown, but – based on President Ursula von der Leyen’s State of the EU speech last September – it appears to be a top health priority for the upcoming months.

European Council to decide on medical devices transition timeline

Later this year, health ministers will formally vote on the European Commission’s proposal to extend the deadline for the transition period of medical devices regulation (MDR) from 2024 to 2027, following concerns that delays in the regulation’s implementation are creating shortages of devices used by health services.

Orphan products and pharmaceutical legislation?

In November 2022, the Commission promised MEPs that they expect to adopt the proposal for revising the orphan medicinal products legislation in the coming months – albeit without providing a specific date. The current legislation was introduced in 2000 to better incentivise those developing orphan medicines; the Commission evaluated the legislation revision in 2020 but adoption of the proposal has been continually postponed.

Following a similar path of delays, pharmaceutical legislation revision should have been presented in December 2022 but as yet remains unseen. The Commission says the new legal framework will ensure access to quality and affordable medicine but, in its response to the public consultation on the revision, the European Federation of Pharmaceutical Industries and Associations (EFPIA) argue that ensuring faster, more equitable access “cannot be achieved through the revision of legislation and an incentives framework”, and instead must be addressed through stakeholders understanding the root causes of access barriers and jointly finding solutions to these delays.

Isabelle Scali

Associate Director

Former Global Corporate Communications Director at ViiV Healthcare, Isabelle has 20 years of strategic communications experience.

Noah Froud

Account Director

Noah is the brains behind our newsletter, and previously worked for a Member of the European Parliament.  He’s an unashamed health policy nerd and has his finger on the pulse of UK and European developments.

Charlotte Moss

Account Manager

Charlotte is well versed in European policy, having studied Governance, Economics and Development in The Hague, the heart of European justice and political capital of the Netherlands.

Neil Moscovici

Account Manager

Neil holds an MA in Geopolitics and Grand Strategy, and before joining MHP worked for the European Committee of the Regions in Brussels.

Laurence Childs

Account Manager

Laurence joined MHP from the UN Office of Drugs and Crime in Vienna. He holds an MSc in International Health Policy and has a background in market access.

Matteo Bellani

Account Executive

Matteo joined MHP in 2022 from ViiV Healthcare, where he worked in Pharmacovigilance and Regulatory Affairs.  Matteo is a specialist in HIV advocacy and holds a first class degree in Biochemistry.

Tim Snowball To Lead MHP Group’s Public Affairs Team

Posted on: January 9th, 2023 by Morgan Arnold

Tim Snowball will lead MHP Group’s public affairs team, with clients including Impossible Foods, Innocent Drinks, Boehringer Ingelheim Animal Health and Speedo.

Snowball leaves FleishmanHillard after just over five years, having joined in 2017 from PHA Group, where he was head of public affairs. He earlier served as political secretary to Deputy Prime Minister Nick Clegg and as director of communications for the Liberal Democrats.

Alex Bigg, chief executive of MHP Group, said: “Tim has a proven track record of building high-quality teams that deliver impact and value for clients.

“His approach blends policy and political insight with communications strategy and effective messaging, which is vital for the integrated, multi-stakeholder work we specialise in.”

Snowball added: “From a practitioner perspective, MHP has it all; a great team, political connectivity, policy expertise, business acumen, data, and academic insight, and an innovative approach to integrated delivery.”

Snowball’s arrival follows other hires by MHP including Simon Evans from Portland, Peter Lineen from Newmarket Strategy, Stanford academic Alison Goldsworthy, and Yasmeen Sebbana from the Labour Party.