Industry Forecast 2013 - Pharmaceutical Executive

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Industry Forecast 2013


Pharmaceutical Executive


Reimbursement rocks

So, after years of bemoaning a cumbersome and risk-averse licensing process for drugs, the industry is discovering that the real challenge is reimbursement. The language of engagement has changed. Innovation defined around the merits of the science is insufficient; it must offer value to the user as well, relying on metrics of performance against existing therapies, clinical standards of practice, and patient-payer preferences. The problem is that, outside of Italy and an elaborate set of algorithms devised by its national drug regulator, AIFA, no one has bothered to define what "value" is; payers by and large want this definition to rest vaguely, in the opaque eyes of the beholder.

A breakthrough on this front is likely this year in the United Kingdom, where the Department of Health is finalizing an effort to refigure the 50 year-old Pharmaceutical Price Regulation Scheme (PPRS) with a new system of value-based pricing that depends heavily on metrics linked to disease states and unmet medical need. While many in industry welcome the idea of greater clarity and transparency to bind the concept of value, precedent suggests that the prudent advice is to be careful what you wish for.

Bending the data glut

A particular concern is the scope and quality of the evidence base, which requires a consensus on how to make sense of mounting volumes of raw data. "We are still data rich and information poor," Neil De Crescenzo, SVP of Oracle Health Sciences, said in an interview with Pharm Exec. However, he contends this great disconnect is gradually being breached, as industry comes to recognize that information, constructively applied, has amazing untapped potential to change patient and provider behavior, while regulators strive to make up lost ground in exploiting IT to speed drug approvals and anticipate and resolve problems once a new drug is introduced to clinical practice. "The desire of regulators to collaborate with industry in applying information to enhance the integrity—and thus the credibility—of the drug approval process is a trend that has been little noticed, but it is decisively important in easing the way to integrating medicines with better public health outcomes," he said. "That's the sweet spot, where both sides should want to be."

Groupthink registration

Over the longer term, FDA and the EMA have to think carefully about how the registration decision will facilitate—or hinder—ultimate access to the patient through reimbursement. The gap between the two has already been partially bridged in Europe through the EMA mechanism of parallel review, which includes not only the regulator and the applicant but national authorities responsible for establishing reimbursement eligibility through clinical and cost effectiveness studies. The next step is a pilot project in 2013 on "adaptive licensing" to consider how a system of periodic checks of a product's performance against its label, throughout the lifecycle, might work.



In the United States, the new Patient Centered Outcomes Research Institute (PCORI) is funding research to create a national infrastructure for the conduct of outcomes studies as well as their application in real-world clinical settings. While PCORI—for now—has no mandate to look at cost, it is relevant to point out exactly who is financing the group and its work plan: insurance companies and the big self-insured employers, who under health reform must pay a special tax as a ratio to the number of people they cover.

Tying registration to the broader perspectives of a community that worries about value and cost can be lauded as a time-saving end to duplicative data dumps, or as a concession to reality in forcing rigor on companies to develop drugs that payers really want. But there are inherent dangers too, the most important of which is the premature rendering of "no go" judgments about promising early stage therapies, even turning science into a game show for budget-obsessed politicians. The expert advice to Big Pharma? Get in and help shape that process, or the process will shape you.


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