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Seismic shifts: Hepatitis C and payers

How hep C is causing paradigm changes in payer behaviour

Sovaldi pack shot

Thirty years ago, I listened to a visionary lecture delivered by virologist and consultant clinical scientist Professor Liz Boxall on a little known condition, emerging predominantly in Southern Italy.

Hepatitis C was, she said, the virus that was 'keeping her awake at night' because of its potential to match HIV/AIDS in terms of its threat to humanity and impact on healthcare resources, if prevention and treatment strategies were not urgently developed.

Prof Boxall's prediction never left my psyche and it's brought to mind whenever difficult decisions about investing public money in high-cost drugs have to be made.

But are we, as an industry, doing enough to support politicians, payers and the public in understanding both the value behind the acquisition cost and how medicines can be afforded when the NHS faces its greatest ever financial challenge?

Sovaldi changes the rules of market access
The NICE technology appraisal of Sovaldi, and the subsequent 'request' by NHS England to delay the NICE statutory 90-day implementation on the grounds of affordability within existing resources will be reflected upon in years to come as indicative of a seismic shift in the rules of the market access 'game'. Overall affordability and allocative efficiency will figure increasingly highly in payer criteria - and indeed already has when it comes to specialised and rare disease medicines.

The sort of payer thinking seen within NHS England on these issues is certainly not limited to the UK, with the overall affordability challenge and thinking spreading across Europe, producing previously unthinkable payer solutions to enable access to treatments. Joint procurement strategies for funding new hep C drugs were proposed by several EU member states seeking to share the challenge and, as they saw it, provide a way of forcing industry's hand to reduce price.

Procurement strategies for noncommodity market drugs such as those for HIV and recombinant therapies for anaemia such as the erythropoetins have already been implemented in England over the last three years, but to date this has not expanded into a pan-European initiative.

Payers are acutely aware that there are many more Sovaldi-type decisions to be made

The irony is that despite industry threats to disinvest in the UK because of its poor market access reputation, in recent years IMS Health data show that UK new chemical entity launch performance is now closer to the EU average as other countries adopt the behaviours of UK payers. So, will global pharma threaten to disinvest in Europe at a time when the BRIC countries are not delivering on their growth promise?

A European high cost drugs procurement strategy?
The threat of an EU-wide procurement strategy was not simply posturing by those countries considering it. Even though on this occasion the threat was not followed through; the spectre of EU-wide procurement on very high cost drugs is now out there, and may well be resurrected as the need arises. As an industry, we owe it to the patient populations we serve to get the debate about our pricing strategies and the value of transformative medicine out in the open. Analogues such as Glivec (imatanib) which transformed outcomes in CML need to be utilised to demonstrate that tough investment decisions by payers do pay off. We must also support payers in making these tough decisions, not only through robust health economics and accurately costing existing Standard of Care, but also by building payer outcomes in at clinical trial design stage, accelerating the alignment of real world evidence (RWE) to trials and using predictive analytics to enable payers to have confidence in the patient population cohort in which additional investment is needed.

So, if EU member states can align to procure collaboratively, perhaps we as an industry can align to get transparency and insight into our pricing strategies and embrace the affordability challenge facing all of our customers. From a market access solutions perspective, our role is to predict such behavioural change in the payer community and support our clients to develop strategies during the two year prelicence window. RWE investment by pharma is a strategy that must be brought into the mainstream in life cycle planning and payers need the reassurance that the tough decision to invest will be justifi able and hard outcomes (morbidity, mortality) will be realised sooner rather than later.

IMS Health market data shows that in the next 5 years 40% of value growth will be specialty* at a global level, and in Europe 94%** will be. This trend will continue, along with pharmacological innovation in rare diseases. Payers are acutely aware that there are many more Sovaldi-type decisions to be made in the harsh glare of the public eye, and that the mechanisms they use to inform those hard decisions are going to have to change too. Questions are being asked about how fi t-for-purpose NICE's methodologies are when it comes to evaluating stratified medicines, often in complex, small patient cohorts. The end-to-end review announced in 2014 by Life Sciences Minister George Freeman is evidence that these challenges are being heard by politicians. Different approaches to evidence are needed - health economics outcomes research and RWE will surely have a part to play, but the onus will firmly be on industry to 'do something' about price.

* IMS definition: Specialty products defined as medicines that treat specific, complex chronic diseases with four or more of the following attributes: initiated only by a specialist; require special handling and administration; unique distribution; high cost; warrant intensive patient care; might require reimbursement assistance

** Source: IMS Market Prognosis, September 2014; IMS Institute for Healthcare Informatics, October 2014

Article by
Angela McFarlane

is a Senior Principal, Market Access, at IMS Health. She can be contacted at AMcFarlane@uk.imshealth.com

25th March 2015

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