Gaining market access by providing value for money

Cost-effectiveness research will become more important as EU responsibility for the pharmaceutical sector moves to the Health and Consumer policy directorate, Lynne Taylor and Peter Mansell report.

Consumer advocates and industry critics have welcomed the new European Commission’s decision to switch responsibility for the pharmaceutical sector from DG Enterprise and Industry to the Health and Consumer policy directorate, DG Sanco.

Critics have long claimed that pharmaceutical policy, as an integral part of public health policymaking, should be driven by medicines access and safety issues. Under the current arrangements, they argue, patients’ needs are secondary to those of the industry. In most EU member states, government health departments and ministries have responsibility for pharmaceuticals policy, they add.

Accessibility and sustainability

The Health Commissioner-in-waiting, Maltese politician John Dalli, says his priorities will be accessibility to healthcare and the sustainability of the sector. But some industry commentators are concerned that the sector’s new public health-focused masters may not give equal priority to the industry, not only as a source of effective new medicines but also as a contributor to positive national trade balances and substantial levels of employment and investment in EU-based research.

There are also fears that progress towards adoption of the European Commission’s long-delayed “package” of pharmaceutical legislation will fall further behind under the new arrangements.

Of the package’s three initiatives, those aimed at tackling drug counterfeiting and improving pharmacovigilence are moving forward. However, the third—a directive that seeks to liberalize the provision of drug information to patients—has been held up by continued opposition from most EU Health Ministers, the Committee of the Regions and consumer groups, who see its proposed benefits as lying entirely with the industry.

But many MEPs are now voicing frustration with the continued deadlock. The Parliament’s Environment, Public Health and Food Safety (ENVI) committee finally began work on the directive in early December, and the new rapporteur on ENVI, Swedish MEP Christoph Fjellner—who calls the current situation “utterly unacceptable” and accuses the member states of “burying their heads in the sand”—has now drafted a report on the issue.

The committee is expected to produce an opinion early this year, with a first vote later in the spring, Irene Sacristan-Sanchez, deputy head of the pharmaceuticals unit at DG Enterprise and Industry, told a meeting in London in December.

The role of HTAs

But the crucial challenge for drugmakers going forward will be proving to cash-strapped European governments that their products are actually providing value for money.

Increasingly, governments and payers around the world are investing in cost-effectiveness research or adopting the decisions of Health Technology Assessment (HTA) bodies such as the National Institute for Health and Clinical Excellence (NICE) in England and Wales and Sweden’s medical products regulatory agency, the Lakemedelsverket.

A number of international organizations are spreading the word about HTA and looking for common ground. There is talk of standardizing HTA principles and methodologies.

Given industry’s vocal frustration with some of the HTA models now applied as a tool of reimbursement policy in countries such as the UK and Germany, a measure of standardization may seem desirable, at least in terms of providing consistency and predictability from market to market.

Standardization versus centralization

But that depends on who is doing the standardizing and what kind of level playing field is envisaged. While industry accepts that pharmacoeconomic assessment is increasingly a fact of life, it does not want to end up with a regional or global version of the UK’s National Institute for Health and Clinical Excellence (NICE).

Standardization does not have to mean centralization. Nor does globalization of HTA have to be about one-size-fits-all assessments of cost-effectiveness.

That is why the industry is so keen to draw a firm line between evaluations of relative effectiveness – also a function of HTA – and the imposition of cost-effectiveness criteria as a condition of market access.

When the Obama administration in the US allocated US$1.1bn for comparative effectiveness research (CER) in the American Recovery and Reinvestment Act, the pharmaceutical industry insisted it had no objection to CER as a tool for informing treatment decisions. But it took umbrage at this research being used prescriptively to limit treatment options or drug coverage, particularly on the basis of cost.

As things stand, though, countries without the resources to construct their own HTA models may be looking to bodies such as NICE for direction. The UK agency is well aware of its international clout. Since 2008 it has been offering policy consulting in markets outside the UK through its NICE International arm.

Defining the evidence base

When HTA is brought into the picture early, and is essentially driven by payer efforts to rationalize healthcare expenditure, that is when industry needs to get involved in defining and contributing to the evidence base.

For industry, HTA needs to come with the assurance that technology assessments are attuned to the full extent and complexity of product value. That has to include the protracted, risky and expensive development process required to get a product to market in the first place.

Against this background, it is widely claimed that many new products now coming through are of only marginal effectiveness, with true breakthroughs becoming less frequent. There needs to be more research into these claims to ascertain if this is in fact the case, says leading health economist John Hutton, of the University of York, who specializes in economic evaluation of medicines.

The industry needs to be investing not just more, but more smartly, in R&D, says Hutton, although he acknowledges that no one can legislate for this. “R&D is a chancy business,” he says.

Beyond the blockbuster era

However, one leading researcher has told regulators in Brussels that they need to do more to ensure that European patients get the treatments they need. As innovative drugmakers move away from the “blockbuster” era, they need more time to discover new applications for compounds going through R&D, said Dhavalkumar Patel, of the Novartis Institutes for Biomedical Research.

“In future, medicines need to be more personalized and should be tailored to reflect age, gender and ethnicity,” Patel said. But this will require a longer period of data exclusivity—during which time a product’s quality, safety and efficacy data is protected from use by potential competitors—than the maximum of five years currently permitted in the EU, he said.

The US grants 10 years’ data exclusivity, plus a possible three further years for any new indication for an already-authorized molecule, while the EU currently awards just one extra year’s exclusivity for such new indications, said Patel, who stressed that European researchers need more time to develop new uses for their drugs.

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