NICE Aricept rejection forces focus on health technology assessments

After the decision by the High Court in the UK to uphold the National Institute for Health and Clinical Excellence's (NICE) ability to restrict access to dementia drugs for certain groups of patients, pharmaceutical companies are mulling their options.

The decision not to approve the Alzheimer's disease drug Aricept (donepezil) for use on the NHS leaves pharmaceutical companies with the very real possibility of losing significant revenue streams from drugs required to demonstrate value for money during health technology assessments (HTA).

The NICE ruling also brings into sharp focus the problems faced by other healthcare systems in the rest of the world, as other European countries and the US may seriously consider adopting the UK's medicines cost assessment system.

NICE first proposed restricted patient access to Aricept which treat mild-to-moderate Alzheimer's disease in March 2005. In response, the manufacturer, Japanese pharmaceutical company Eisai, along with US giant Pfizer and UK-based Shire, launched an appeal which led to last week's summary judgement.

The court rejected the claim made by Eisai that NICE had not taken into account the costs of long-term care and that it had acted "irrationally" in its assessment procedures. The court did find, however, that NICE had breached the disability act by making its tests difficult for people whose mother tongue was not English.

The court ruling has limited the access of pharmaceutical companies to the lucrative and growing dementia and Alzheimer's disease markets. Both therapeutic areas increase as the world's ageing populations increase. The global Alzheimer's medicines market will increase 35 per cent over the next ten years, with a new generation of drugs set to reach the market in 2009.

A 2006 Visiongain report revealed that the market value for the Neurodegenerative market was worth over USD 16bn in 2006, with revenues growth anticipated to exceed USD 18bn in 2007.

Datamonitor analysts say that consultants in the UK may continue to prescribe NICE-rejected drugs off-label in defiance of NICE guidance. They added that the decision will probably encourage the overseas adoption of assessment bodies similar to NICE to increase the focus on HTAs to ensure value for money.

Healthcare spending is now of great concern to countries with ageing populations and many are considering forming HTA bodies, such as NICE. For example, Germany, which has the largest expenditure on medicines in the EU (EUR 23bn annually), has recently empowered its own agency, IQWIG,  to impose HTAs.

A greater threat to revenue streams is identified in the US, where drugs cost much more than elsewhere. The US government is weighing up changes to existing medicines cost/benefit assessments in order to bring the cost of such treatments down.

For example, US-based pharmaceutical company Wyeth has said that four out of five attempts to launch new medicines on the US market had been delayed by the FDA over safety concerns. For example, its menopause hot flushes treatment, Pristiq, was delayed by regulators who demanded more data.

Elsewhere, the world's second-largest pharmaceutical company GlaxoSmithKline (GSK) saw a GBP 4.6bn fall in its market value in one day after safety issues regarding its flagship diabetes treatment, Avandia (roseglitazone), were published in the New England Journal of Medicine (NEJM).

Also, on 9 August pm trading, UK pharmaceutical company AstraZeneca (AZ) saw its market value fall GBP 1.3bn when the FDA said it would have to review the safety of its blockbuster antacid treatments Nexium (esomeprazole) and Prilosec (omeprazole).

The FDA, which has been under increasing pressure to improve drug safety, is now increasingly issuing companies with approvable letters which do not fully approve a drug for marketing. The concomitant launch delays and extra spending on further clinical trials can make investors jumpy and lead to financial uncertainty.

The origin of the FDA regulatory tightening was the 2004 withdrawal of Merck & Co's pain drug Vioxx (rofecoxib), which has been responsible for cardiac injuries and death and the resulting highly publicised court claims for compensation.

Collins Stewart analysts said that the FDA is now far more risk-averse to safety and certainly more vocal on issues it believes need to be brought to the attention of the public.

Critics of the increased regulatory caution blame a key piece of US legislation which will decide on increases to FDA funding.

Nomura analysts have said that investors should focus on biologicals, such as protein-derived drugs and vaccines, as they are less likely to suffer regulatory blocks.