By Yannis Natsis, 22 April 2015
(Views do not necessarily represent TACD positions)
One has to analyse the future landscape and challenges that the European pharmaceutical industry is facing to better comprehend the political developments in medicines unfolding at the moment on the EU level. According to the WHO, the part of European medicines in global pharmaceutical sales is steadily decreasing. It is anticipated that by 2016 Europe will account for just 18% of global pharmaceutical spending – down from 24% in 2011 – with emerging markets (including Brazil, China, Mexico and South Africa) anticipated to account for 30% and the United States of America for 31% of market share.
In other words, the pharmaceutical industry is under pressure in Europe but that does not seem to stop them from imposing high prices on their products. As a result, the issue of high prices of medicines has been put on the European agenda for good since 2014 and the Sovaldi crisis. EU countries irrespective of whether they are in crisis or not, wish to lower medicine prices simply because they cannot afford them and they know for a fact that many more expensive products are on their way.
High prices of medicines & the Dutch-Belgian initiative on joint negotiations with pharma: a preliminary evaluation
This is at the core of the recent Belgian-Dutch initiative which seeks to obtain significant price reductions by joining forces in the negotiations with pharmaceutical companies. This initiative is particularly pertinent in light of the upcoming Dutch Presidency of the EU during the first half of 2016. As clarified, they intend to negotiate jointly but not to purchase medicines together. In other words, they want to 1) set a single price together, 2) create a precedent for further EU coordination and 3) use this as a template on how to deal with expensive innovative treatments namely on Hep C, rare diseases and orphan drugs.
It remains to be seen what the reaction of the industry will be but based on what we have seen before, industry is usually “allergic” towards any attempt to establish some sort of a single price or to open up the negotiation process by means of some form of bilateral or multilateral cooperation. The thinking behind this proposal is that industry will be forced to accept lower prices because countries will get together.
But what is the added value of this Belgian-Dutch initiative in comparison to current reality whereby individual member states bargain with pharmaceutical companies in secret and in the end, manage to get lower prices on their own? With Sovaldi, for instance, since its release EU countries reached deals for “as low as” 13.000 euro per treatment per patient down from the initial 60.000 euro price tag. The answer is simple: The Belgians and the Dutch are confident that they will be able to achieve even lower prices than that through joint negotiations. So far, so good but it gets more complicated.
What is the trade-off for industry and how does this fit in its strategy for the future?
Firstly, it guarantees market access for the latest treatments which is a top priority for pharma. Speedy access to medicines via quick market approval and the respective pricing and reimbursement coverage is the main theme in Brussels today heavily promoted by the European Pharmaceutical Association (EFPIA) but also by numerous patient groups. Secondly, it guarantees volume i.e. countries offer more commercial scale to companies in return for lower prices and thirdly and most importantly, companies push the legislator towards a more flexible market access & pricing and reimbursement framework in the EU.
Paradigm shift: from safety to early market access
This is where it gets tricky. The view that prevails in some member states today is that the EU framework on medicines is too rigid and has to become more flexible in line with the latest technological developments. They claim that safety is of utmost concern but stress that “maybe we have gone too far in pushing for safety to the extent that we stifle access to innovation”. This adds to the opinion that there is an overestimation of what can be achieved with regulatory instruments. Additionally, they argue that much of the regulation is old and from their perspective it has become too complex, too detailed and with too much focus on procedures instead of real issues. They stress that it is imperative to strike a new balance between patient safety and quicker access for patients to innovations.
The recent Belgian-Dutch announcement builds on this perceived need for a “new balance” and is only part of the bigger puzzle to gradually redesign the entire model of drug authorization and marketing in Europe. This is evident mostly through the European Medicines Agency (EMA) pilot projects on adaptive pathways (henceforth AL). We have written before that AL seeks to completely change the way we think of drug development and market approval with potentially very negative consequences on public health.
Adaptive pathways & the early access debate
There is an obsession with getting new medicines on to the market without considering if they offer any substantial therapeutic advance in comparison to existing drugs on the market. This is something crucial completely missing from the debate. Patient groups are often misled to believe that new medicines automatically equal better medicines; although, this is repeatedly proven wrong by many independent reviews such as Prescrire and the Cochrane Collaboration. On one hand, it is understandable to a certain extent why patient associations depending on the disease they represent, offer their unconditional support to initiatives such as adaptive pathways. What is worrisome on the other hand is that DG SANTE, what would be the equivalent of the Ministry of Health in the European Commission downplays the importance of adaptive licensing and simply refers to it as a learning process, with low-scale pilot projects launched independently by the EMA. One only has to look at EFPIA´s website to conclude that the adaptive pathways project is by no means a small scale initiative. EFPIA names it as one of the main themes during its upcoming annual conference and describes adaptive pathways as “flexible development and access pathways within the current regulatory framework that balance early patient access, public health and societal benefits”. It explains that “it starts with an early authorisation of a product focused on a well-defined and targeted population with a clear safety and efficacy profile”.
Concerns over adaptive pathways
The question is why AL is required in the first place when there are tested fast-track regulatory mechanisms (conditional marketing, compassionate use and accelerated assessment) already in place that guarantee patients’ timely access to drugs. These instruments provide controlled patient access without having exhaustive evidence available at the time of the introduction but these approvals are subject to further work to substantiate the value of the product once in use. This means that the system already acknowledges the need to live with a limited degree of certainty. Moreover, there is no doubt that the existing early access tools can be further improved. Nonetheless, the aim of AL is to provide even earlier and quicker access to new medicines.
Here is where the problems start. This will require systems capable of responding to outcomes, including negative findings since it is based on accepting even more uncertainty. It must be noted that numerous regulatory systems do not operate in this way and serious adaptations will be required. Most importantly, delisting a new medicine, should it provide little value at the requested price is currently not a widespread option due to political and financial reasons. It is a well-established fact that once a medicine is on the market, it becomes far more difficult to monitor and control it let alone to withdraw it. It would take two incredibly important variables that cannot be taken from granted: a) political will and b) the governance capacity to make it happen. Furthermore, the scope of implementation of the adaptive pathways model is not clear. There are suspicions that once it gains speed it will not only be limited to “unmet medical need”. Besides, there is a lot of debate on what constitutes “unmet medical need”.
But adaptive licensing is not only about quick access. It is something much broader as it is synonymous with the life-span approach to medicines. As explained in my blog entry Pharma is moving fast: What is coming up in pharmaceuticals in Europe, adaptive pathways envisages an alignment of the regulatory environment with the reimbursement criteria so as to enable early approval and most notably coverage of a new product for an initially limited treatment population. These products are usually premium-priced drugs; that explains why healthcare payers are quite cautious. They see it –and rightly so- as another way for industry to get its products on the market and to be reimbursed. Industry has made it clear that they do not appreciate the current pricing and reimbursement system because a) there is a lot of divergence due to national competence, b) it is unpredictable as pricing & reimbursement decisions are mostly political decisions and c) of the increased evidence requirements that HTA organizations or payers put forward as additional gatekeepers. That is why adaptive pathways puts a lot of emphasis on early dialogues, horizon scanning, parallel scientific advice and criteria convergence.
In this whole debate, industry pushes patients to the forefront and encourages them to demand access to the new treatments and of course, to have them reimbursed by health authorities. Patients need to be fully aware of the risks that go with accepting increased “uncertainty” which is an integral element of adaptive licensing. It is hard to believe how patient safety will not be undermined when timetables are squeezed and much less clinical trial data is required. A shorter time to the market would possibly be beneficial both for the industry as well as for the patients only as long as sufficient safeguards are in place. If not, all this could lead to an unacceptable lowering of evidence requirements and higher risks for public health.