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On the grapevine

Is your pharma client's relationship with stakeholders, regulators and the government as strong as it should be? If so, there are real opportunities for pharma to leverage products and services that will help the NHS deliver in priority areas...

A grapevineThe pharma industry is traditionally an attractive sector with above average returns on investment (RoI) for shareholders. Manufacturing competition from China, India and Eastern Europe and rising patent challenges from generics firms are making it a tougher sector in which to do business, and a number of changes currently taking place in the UK could also impact on pharma companies' abilities to continue making strong profits.

In order to compete effectively in a changing marketplace, pharma marketers need to build relationships with stakeholders, regulators and the government that are as strong as those they currently have with local customers and prescribers.

Value-based approaches
The most significant change currently taking place is the Department of Health's (DoH) decision in August 2007 to renegotiate the Pharmaceutical Price Regulation Scheme (PPRS) halfway through what should have been a five-year deal.

The Association of the British Pharmaceutical Industry (ABPI) anticipates a new seven-year deal will be announced in summer 2008.

However, there may be further changes in the future, as the decision to renegotiate was based on a 2007 Office of Fair Trading report which recommended a value-based approach to drug pricing to ensure that the prices the NHS pays for medicines reflect the therapeutic benefits to patients.

If implemented, a value-based approach would replace the PPRS and lead to sweeping changes in the longer term.

What would this mean for marketers? The NHS would no longer pay premium prices for drugs that are much more expensive, but not significantly more effective, than others. Instead, treatment prices would be incrementally based on the added value they can deliver over and above existing medicines for a particular condition.

In the longer term, pharma would need to move its pipelines away from second generation products with little added efficacy, and deliver genuinely ground-breaking new medicines and innovative approaches to delivering care to patients.

In the shorter term, companies would need to price 'me too' products realistically against existing best practice - including generics where appropriate - to accurately reflect the value they can add for patients.

Central to the DoH's desire to weigh value alongside clinical effectiveness is the National Institute for Health and Clinical Excellence (NICE).

A number of pharma companies have suggested innovative approaches to cost-effectiveness when trying to convince NICE to recommend that the NHS should pay for a particular product. Janssen-Cilag has agreed to a response-rebate scheme which will allow multiple myeloma patients who show a full or partial response to Velcade to continue fully-funded NHS treatment, and patients who show no or minimal response to be taken off the drug with costs refunded by the company.

Novartis has responded to proposals for a capping scheme which proposes that 14 injections of Lucentis for age-related macular degeneration (AMD) should be paid for by the NHS, with any remaining injections paid for by the manufacturer.

From a pharma company perspective, reference pricing is a key issue and could be informing trends towards proposing UK-specific schemes rather than lowering drug prices in the UK.

In March 2008 the NICE Board considered the outcome of a pilot project to provide scientific advice on evidence plans and requirements before companies start phase III development activities. The pilot was carried out with Novartis following a recommendation in the 2006 Cooksey Review of health research funding.

It was judged to be a success, and the NICE Board will shortly consider whether to offer the service to all pharma firms to encourage them to consider value for money earlier in the drug development process.

Earlier discussions could reduce delays to the technology appraisal process that are due to inadequate trial data, and help NICE to make better-informed decisions about the value that medicines bring to patients and the health service.

Devolution has added to the complexity. Working alongside NICE, the Scottish Medicines Consortium (SMC) and All-Wales Medicines Group (AWMG) provide advice on drugs and medical devices in Scotland and Wales. Each organisation has a tailored approach based on the health needs of its local community, and pharma companies need to understand the public policies being implemented in each nation in order that their sales teams can engage effectively with local NHS bodies across the UK.

Patient-focused changes
In 2002, the Treasury invited former banker Derek Wanless to carry out an evidence-based assessment of the long-term resources required for the NHS. The Wanless Report concluded that the UK needs to devote more resources to healthcare in the future in order to meet the needs of an aging population.

The report, together with a Treasury-commissioned update in 2004 and a Kings Fund-commissioned update in 2007, focused on the need to make healthcare services more productive and engage people in improving their own health.

A major review of the UK National Health Service is currently underway, led by surgeon and Brown-appointed health minister Lord Darzi. The review aims to engage with patients, NHS staff and the public to place clinical decision-making at the heart of the NHS, improve patient care, deliver accessible and convenient services, and establish a vision for the next decade of the NHS.

The review will also consider the case for an NHS constitution which, among other goals, but on a recurring theme, aims to secure value for money for the taxpayer.

Central to the review is the DoH's vision of world class commissioning to develop a patient-centered service that is responsive to the needs of local communities. Examples of exemplary commissioning include three PCTs in Birmingham that have joined forces to identify patients at risk of cardiovascular disease and jointly commission a pilot pharmacy screening service to increase access for patients in deprived communities and those with low life expectancy.

Upon publication of the Darzi review, pharma companies will need to consider its recommendations and the opportunities presented by world class commissioning carefully, and communicate clearly how their portfolio of products can play a part in delivering innovative and productive NHS services to patients.

A number of initiatives have been introduced in line with the Wanless Review's recommendation to engage people in improving their own health, with the most prominent being 2007 legislation to ban smoking in public places.

The DoH is now encouraging people to lose weight, smoke and drink less, and live healthier lives.

Across Whitehall, the Department for Work and Pensions commissioned Dame Carol Black, national director for Health and Work, to review the health of the working-age population. Her 2008 review reported that common mental health and musculoskeletal disorders are the main causes of sickness absence, and stated that sickness absence costs the UK over £100bn each year - more than the annual budget for the NHS.

Public health, mental health and musculo-skeletal disorders are core areas that the government will focus on, and there are opportunities for pharma companies that can align themselves with these priorities and help the NHS and those working in public health to meet associated targets.

How can public affairs help?
Public affairs focuses on developing and nurturing strong relationships with stakeholders, regulators and the government, in the same way that pharma marketers build relationships with customers. In the UK, where the NHS is the largest pharma customer in town, building effective links to the DoH and arms length bodies (ALB) which coordinate the health service is at the heart of business success.

For example, hanover has worked with the cholesterol charity HEART UK over a number of years to campaign for access to cholesterol and heart health testing, and for an awareness campaign on dietary fats and cholesterol. HEART UK was a lone voice in this area, but through an integrated campaign of media coverage, parliamentary awareness and pressure, coalition building and partnership with other charities and influencers, and direct meetings with government, the campaign built a strong evidence and support base.

In January 2008, Prime Minister Gordon Brown announced that cardiovascular risk assessment for all 40-75-year-olds would be available on the NHS, and in January 2009 the Food Standards Agency will launch a multi-million pound campaign to raise awareness of the health impact of dietary fats. These initiatives will have a profound effect on the nation's heart health, identifying and informing the millions of individuals with or at risk of cardiovascular disease.

The UK healthcare environment is fast moving. During one week in May the Court of Appeal ruled that NICE should provide pharma firms with executable versions of the economic models used in its appraisals, the Wales Cancer Alliance demanded a national cancer strategy for Wales, and Lord Darzi held a consultation in London on the DoH's proposal to deliver services through polyclinics across the capital.

Public affairs can help the pharma industry to understand this shifting landscape and build effective relationships with stakeholders, regulators and the government. In an increasingly tough marketplace, investing in public affairs can make the difference between failure and success.

The Author
Louise Fish
is an associate director at hanover. Previously, she spent seven years as communications director at the National Institute for Health and Clinical Excellence (NICE). She can be contacted at lfish@hanovercomms.com

2nd September 2008

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