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Out in the cold

Pharma companies that fail to engage with GP consortia risk being nothing more than onlookers
in the mountains

It's been over six months since the Department of Health published the NHS White Paper, Equity and excellence: Liberating the NHS. We know the big themes:
• Pharmaceutical price regulation scheme (PPRS) replaced with value-based pricing
• National Institute for Health and Clinical Excellence (NICE) to focus on quality standards not health technology assessments (HTA)
• Primary care trust (PCT) commissioners to be replaced by GP consortia.

However, it's much less clear what this will mean for pharma companies and particularly their market access strategies. At first glance it appears to be very good news. After all liberty and access are two terms with surprisingly similar dictionary definitions:
• Liberty – the seeking of equal status or just treatment for or on behalf of any group believed to be discriminated against
• Access – the ability, right, or permission to approach, enter, speak with, or use.

So the choice of 'liberating' as a term may well sum up Andrew Lansley's political intentions as he seeks to be seen to increase early patient access to innovative medicines and treatments. Sceptics may also suggest it's about liberating the Government from the responsibility of saying 'no' to patients – although, perhaps that's an article best sent to The Guardian.

Central to increasing the speed of access to new medicines is removing the NICE HTA two-year (on average) innovation delay. It is fair to say that NICE has not enjoyed overwhelming public support, having had numerous bashings by the British press and patient groups alike. This was probably a bit unfair at times, particularly as NICE HTAs have undoubtedly changed the way people think about medicines.

The words 'value' and 'cost per quality-adjusted life year (QALY)' are now understood and used widely in European healthcare – moving the way we communicate from an debate about safety and efficacy to a conversation about how a medicine improves patient outcomes and represents 'value' to a health economy.

This changing approach represents a more objective way of assessing what a medicines has to offer society. It also eases the transition to value-based pricing; directly aligning price with the benefit delivered. In addition, it sets reimbursement prices based on the perceived or real value to the customer (the NHS), rather than on the cost of the product, its market price, historical price or competitor's prices.

To understand how this new approach would work, we need to answer three questions:
1. Who will define how value is measured?
2. What will these measures be?
3. How will this work across different and diverse therapy areas?

The latest NHS guidance on the matter, A New value-based Approach to the Pricing of Branded Medicinesa Consultation, gives us some clues. It proposes replacing the existing cost effectiveness measure, which values one additional full-year of quality life at between £20,000 to £30,000, with variable cost effectiveness thresholds. For example, a higher cost effectiveness threshold would be applied to medicines that tackle diseases for which there are few drugs or treatments available. Additionally, medicines that demonstrate wider societal benefits, for instance reducing the amount of time a patient spends with a carer, could also be set a higher threshold.

Lower thresholds may be applied to new branded drugs coming onto the market that offer only small 'incremental' benefits to existing treatments.

Under this new system NICE is envisaged as the key source of advice on the relative cost effectiveness of new medicines. However, there is no guarantee that the current arrangement, where commissioners are obliged to pay for a drug if NICE has approved it, will continue when the new system replaces the current PPRS in 2014.

Is this good news for the pharma industry? It's probably good news if you have a strong pipeline of innovative, specialist or class defining medicines. If you're sitting on a pipeline of products that will be third, fourth or 18th to market then the price of your medicines is unlikely to be as high as you might like. However, if you're in this situation don't quit the industry just yet as the removal of the 'NICE approved' stamp is likely to create a more open medicines market.

The devil will, as always, be in the detail but it's clear that local decision makers are still going to want to understand the value story for medicines and a simple drug cost advantage will still be an appealing prospect.

Shifting powerbase
With less top down guidance about medicine choice, local and regional decision makers will have a more important role to play. What's less clear is who these local decision makers will be in two to three years' time.

We know PCTs are going to be phased out with GPs leading commissioning. Technically, the process has started with the launch of the GP Consortia Pathfinder Programme. The programme has identified and will support groups of practices keen to take on commissioning roles straight away. They will show us all how it can be done and share best practice across the GP community.

The move to change commissioning practice has resulted in industry and the NHS asking:
• Practically are GPs going to stop running clinics to commission services?
• If PCTs were closed right now with no hand over at all what difference would it make to patients?

These questions can't be answered in full yet or in a way that is meaningful nationally. However, developing and updating care pathways, administering the process of cash following the patient and ensuring consistent, seamless, high-quality NHS treatment for all patients doesn't sound like a part-time job: GPs will need some support.

Initially, support will come from PCTs that have been tasked with making themselves obsolete. It's likely that this will result in people currently employed by the PCTs, being employed by a GP consortium. Enterprising PCT staff could set up commissioning businesses and contract out the services consortia need. There are also potential opportunities for big private companies, like Kaiser Permanente and United Health, interested in providing commissioning services.

Diverse approach   
It is likely that there will be a diverse approach to commissioning across England, which in turn will result in a commissioning provider market place. In the longer-term a central office located in say Birmingham may well be providing commissioning and many other former PCT functions for GP consortia from Southampton to Sunderland – a super commissioning PCT of sorts looking after a total population of millions. Just as likely are small commissioning offices within GP Consortia that look after the local needs of a relatively small population – potentially less than 100,000 people. This may be a little way off but it's certainly an interesting prospect in terms of economies of scale, meeting different local needs and power to negotiate. What is clear is that a flexible approach will be needed.

Success factors for pharma
Consortia leads and those heading up the planning of commissioning within consortia are going to be critical people for pharma to engage with. How they see and plan for the future will define the local landscape.

Pharma will need to understand this new landscape so it can adapt marketing strategy and salesforces deployment accordingly. The companies who flex fastest are likely to be the ones who gain most from what is likely to be a slightly chaotic period. Additionally, those marketers who are able to think laterally about the influence of less traditional stakeholders, such as MPs, could gain competitive advantage. At a local level MPs can have a lot of clout and a call from a local MP to a local GP about why the latest cancer drug is not being prescribed would have a much greater impact than the same call to a PCT where decisions are made by committee.

To summarise, it's clear we are in for a lot of change at every level of the NHS. The first thing pharma needs to do is to stay on top of how Lansley's vision for the NHS is being translated on the ground. In addition, pharma needs to stay flexible so that different approaches or structures can be implemented relatively quickly in line with unfolding local changes.

In terms of market access communications the need to set out clear, accurate, outcomes focused on a compelling value story for every medicine will remain critical to success.

As such there is an ongoing need for more outcomes focused data at an early stage – how does efficacy equate to positive changes to people's lives and how do we put a financial value to that. With that in mind including outcomes data in phase II and phase III clinical trials will really reap rewards. Action on this now will help companies to attain higher prices later.

Finally, by engaging and working with GP consortia as they take on the challenges of GP-led commissioning will help the pharma industry map the changing local healthcare environment. Standing back to see what happens will leave companies on the fringe of what could be an exciting and ultimately more rewarding NHS environment.

The Author
Chris Bartley is associate director at EURO RSCG Life Medicom

To comment on this article, email pm@pmlive.com

23rd February 2011

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