Market Access 2017: A European Perspective

Pharm Exec speaks to Ramita Tandon, Executive Vice President, ICON Commercialization & Outcomes, about how the UK and European regulators' market access plans for 2017 will affect the industry.

PharmExec: How has the Office for Market Access (OMA) begun to impact industry in the UK and how do you see this evolving going forward?

Ramita Tandon: The overarching purpose of the OMA is to help life sciences companies navigate the journey through NICE.  OMA provides advice to help companies understand NICE processes and how NICE links with different parts of the NHS, how to work with NICE to achieve manufacturer aims, and how to navigate the Early Access to Medicines Scheme.

Ramita Tandon, Executive Vice President, ICON Commercialization & Outcomes

We see the OMA acting as a gatekeeper for NICE, potentially prior to horizon scanning, which can direct technologies into the right pathway for market access in England. Early interactions with the OMA serve as an enhanced version of the NICE scientific briefing meetings, allowing manufacturers to benefit from input earlier in the development process to inform evidence generation and market access strategies.  In theory, the OMA will also become a key stakeholder in directing manufacturer proposed technologies to the Accelerated Access Partnership.

NICE, in collaboration with the OMA, is moving toward a more commercially focused model where they will work with industry and stakeholders to identify ‘win-win’ scenarios.  Manufacturers can expect an increasing use of financially-based managed entry agreements to be implemented through patient access schemes (PAS), along with opportunities for earlier interaction with NICE and the NHS to inform evidence generation and commercialization strategy. 

Industry should be prepared to enter into earlier dialogue with the OMA and NICE, using their input to inform clinical development and scenario-based market access strategies earlier in the development lifecycle. Moving forward, interaction between the OMA and industry should help manufacturers better ensure that the evidence being generated will fully demonstrate the value of their innovative technologies.  It will also providing an opportunity to investigate the impact of alternative pricing schemes and their impact on forecasting and commercialization strategy further in advance of launch.

Do you have high hopes, from an industry perspective, for the UK’s Accelerated Access Review?

The goal of the Accelerated Access Review (AAR) is to improve patient access to new and innovative medicines in the UK, shortening the time to market while also ideally improving cost-efficiencies for the NHS.  The centerpiece of the new AAR is the “transformative” designation, which would provide access to the Accelerated Access Pathway in order to speed transformative products to market. The Accelerated Access Pathway proposes to reduce the time to reimbursement access by up to four years, which could be a great boon for both patients and industry in the UK.

Being designated as “transformative” is expected to consider a combination of the following: substantial magnitude of health gain; impact on unmet need; alignment with NHS England’s clinical priorities and other national priorities; impact on system efficiency; potential cost impact, from cost saving to significantly cost increasing; opportunity for clinical pathway transformation; and the innovative nature of the technology. 

Obtaining a “transformative” designation will require cross-collaboration between NHS, NICE, CCGs, providers, physicians and patients, and very early dialogue between industry and all of the relevant stakeholders; it will not be an easy feat. Of the products selected, a range will be included in further decision making that are deemed by other criteria to align with NHS goals, where uptake will be positively impacted by the AAR and have clear and measurable outcomes.

This restricts the potential pool of technologies expected to quality for transformative status to 5 – 10 per year, including medicines, medical technologies, diagnostics and digital products as well as emerging forms of treatment.  Furthermore, the AAR still requires the technology to be assessed by NICE. Rarely do innovative technologies that could enact such change come at a low cost, making it unlikely that they will be cost-effective in the context of NICE’s fairly explicit ICER thresholds. The AAR does provide a provision to account for this based on flexible reimbursement and innovative pricing models – so the reality is more likely a convoluted way of introducing price controls to the NHS, with the benefit to the manufacturer of more rapidly supported access for their technologies.

Manufacturers will have the opportunity to withdraw from the process in the event they are not satisfied with the proposition put forward by the NHS/NICE (it remains unclear who will make the final decision); however, it is important to consider the fact that patients and their support groups will be involved in the process, and pulling out of a scheme which is set up to guarantee access to patients has the potential to be interpreted as a lack of commitment to patient-centric healthcare. 

The AAR also recommends funding for the Early Access to Medicines Scheme (EAMS) for smaller and not-for-profit companies, which may help to support innovation in the UK and provides an opportunity for start-ups and small biotech. However, a budget constrained NHS may look to generate cost savings from older drugs and/or increase fees on manufacturers in order to fund the EAMS and those technologies assigned transformative status and cover the costs of the additional services outlined in the proposal.

With so few opportunities for transformative status available, the anticipated introduction of more implicit price controls, and the potential risks associated with lack of agreement and NHS cost constraints, the benefits of the AAR recommendations for industry as a whole may well be limited.

What can we say at this stage about the market access implications for UK industry of Brexit?

There remains a great deal of uncertainty regarding the UK’s exit from the EU and the nature of the UK’s relationship to Europe in a post-Brexit era. While it is possible that the UK could remain within the centralized procedure of the EMA, Prime Minister Theresa May’s recent speech outlining plans for a “clean” Brexit make this outcome unlikely. Companies would be best served to develop contingency plans for accessing the UK market individually.

In a post-Brexit era, companies will have to actively seek regulatory approval in the UK rather than submitting to the EMA and gaining access to the UK market as one of the member states, requiring additional investments in time and resources to gain marketing authorization approval. Further to regulatory approval, Brexit is not expected to have a large impact on market access pathways, as NICE and the SMC will remain the gatekeepers. However, the ability of UK citizens to access new medications may be delayed if manufacturers primarily target the EU and US and manage the UK regulatory approval and reimbursement in a second wave of submissions, e.g. with Switzerland or Japan.

Outside of the UK, one of the more important elements to consider is the potential knock-on effect of NICE assessments occurring later in product launches.  Many countries consider NICE guidance to some extent when conducting their health technology assessments, and later availability of NICE assessments may well have a mitigating effect on EU uptake in the first years after launch. This may ultimately have a greater impact on industry as opposed to those elements related to market access in the UK specifically.

Within Europe, can we expect steps towards harmonization of market access and HTAs or further fragmentation?

There are already some examples of market access / HTA harmonization at the country level (e.g., NICE in the UK) and regional harmonization for the regulations of medicines within the EMA. The Netherlands and Belgium launched a pricing collaboration last year in order to enhance their negotiating power for orphan drugs, which has subsequently expanded to include Luxembourg and Austria with Ireland scheduled to join in the near future. There is also political will to support a more collaborative European HTA environment with the European Commission funding for EUnetHTA Joint action 3 which runs from 2016-2020.

Despite these trends, it will be challenging to move to a single, harmonized pan-European reimbursement recommendation as frameworks for value assessment and considerations for willingness to would need to be aligned. We see this as a rather herculean task considering the variety of stakeholders and their sometimes disparate decision-making criteria for HTAs.  Additionally, there are valid concerns that a pan-European process could add an additional hurdle/ requirement for industry depending how accepted/ applicable it is by individual markets. Certain aspects of harmonization may be more easily achieved in the near term such as aligning methodologies/processes and evidence sharing; however, the more fragmented nature of market access and HTAs is likely to persist in the near future.

Looking to Germany specifically, are the proposed market access changes there to be welcomed by industry?

The proposed market access changes in Germany represent a bit of a mixed bag for industry. The greater potential to obtain an added benefit rating without “hard outcomes” will surely ease the assessment, where the G-BA has traditionally been reticent to value evidence based on what they consider to be weaker surrogate endpoints. Such a shift in policy and resulting increased probability of favorable outcomes of the benefit assessment and price negotiation could provide a greater incentive for manufacturers to invest in less prevalent diseases and/or therapy areas in which it is challenging to power registration trials to demonstrate an impact on hard outcomes.

Removal of the Mischpries could be beneficial as well, allowing mixed pricing that would enable companies to seek a higher price if they have very strong data in a given sub-group. This would ease the current downward price pressure, especially in light of the way in which the German assessment tends to split the data into multiple sub-groups in which it is often challenging to demonstrate an added benefit, lowering willingness to pay for the asset.

The opportunity for confidential rebates is a potentially positive development for industry as well, allowing for greater protection of the visible price and mitigating the risk of a low visible net price that can be referenced in other markets. However, German authorities may now expect even greater discounts to secure access in a situation where net pricing becomes confidential.

Conversely, some of the proposed changes may represent new obstacles for industry. Currently, the lack of reimbursement restrictions beyond the licensed indication provides physicians a great deal of discretion when prescribing a drug for a particular patient subgroup, regardless of the added benefit rating. Such prescriptions represent a significant percentage of the sales volume, and therefore revenue, for the product. Limiting or removing this physician discretion by imposing access restrictions on the reimbursable population beyond the licensed indication has the potential to significantly impact patient access and product revenues, especially if the G-BA decides to impose restrictions on all groups with no added benefit. While a higher price may be achievable for reimbursement restricted to patient sub-groups with stronger data, the price/ volume trade-off in some cases will not be revenue optimizing compared to unrestricted reimbursement for the licensed population at a lower price.

Although pharmaceutical companies will remain free to set initial prices, the time period in which they can do so will be shortened, and negotiated prices may be retroactively applied if sales exceed €250 million. Furthermore, the re-evaluation of pre-AMNOG drugs seeking new indications will likely limit the ability of companies to expand the labels of older products while maintaining the previously established price, creating additional risk for to revenue over the course lifecycle management. These proposed AMNOG changes in combination with the decision to extend the AM-VSG price moratorium until the end of 2022 are set to negatively impact revenue potential in the German market.

What do you think European market access executives should be focusing on in 2017?

In the near term, market access executives should remain nimble and will benefit from developing contingency plans for the many proposed changes we have discussed. Actively managing uncertainty through scenario-based market access planning prepares market access teams to successfully respond to future opportunities and threats. With the impacts of these proposed changes unlikely to be felt in 2017, there is an opportunity to prepare for a variety of different market scenarios in order to reduce reaction time and minimize any confusion over the appropriate response. As the European market landscape evolves in 2017 and beyond, the appropriate plan can be put into place to maximize product value.

Despite uncertainty surrounding many of the proposed changes, it is clear that payers are under increasing pressure to reduce health care expenditures and are continuing to seek more comprehensive bodies of evidence to support drugs’ efficacy and value. To successfully address this trend, market access executives should also focus on collaborating with cross-functional teams within their organizations to optimize product value across the lifecycle. Ensuring that payers’ evidence requirements are incorporated early in clinical development can help increase the probability of achieving favorable pricing and market outcomes and, ultimately, commercial success.  

Ramita Tandon can be reached at Ramita.tandon@iconplc.com