When does your employer pay you for your toil? For the Brits reading this post it is likely to be the 25th of each month; I’ve been paid on this day since my first post-graduation job as a research microbiologist in 1995. Non-UK resident readers will have a different nationally recognised date. In Germany it is the 30th and in Portugal it can be any day between 1st to the 8th of the month. Our U.S. friends often get paid weekly; imagine that monthly paid folk! Think about how that would change the way you manage your money such as deciding when to pay the mortgage. If you have a regular pay structure, you can manage your finances with a degree of confidence.
Uncertainty around when, how or even if things are paid is never a good thing, especially if you are investing heavily and not seeing your return for years to come. This is exactly how global pharmaceutical businesses find themselves when faced with the UK and a future scheme called value-based pricing (VBP).
The current UK pricing system sees a standard cost effectiveness threshold applied to all new products with a profit cap of around 30 per cent; a value based system would in principle allow different price thresholds depending on the relative need for the drug. So new medicines in their first indication designed to treat diseases with unmet need would be awarded a higher threshold and can be given a higher price. It has also been reported that higher thresholds will be given for medicines that have evidence demonstrating ‘wider societal benefits,’ such as people being able to return to work and be economically productive. Medicines without this type of supporting evidence, in less severe diseases or where therapies already exist, will get a lower threshold and obtain a lower price.
The new VBP system was originally meant to be effective from January 2014 but has now been delayed until autumn 2014 at the earliest. A further consultation period is expected to be undertaken and many suggest that it will be watered down from the original aims. It is all confusing and apparently disorganised, with some pretty basic questions that I posed in a VBP blog post 18 months ago still going unanswered.
So why is this Englishman being so UK centric? The UK isn’t after all the biggest pharmaceutical market, maybe 10th in the world and half the size of our neighbours France or Germany. But as cited in Aurora’s NHS business unit’s director’s previous VBP post, UK branded medicine price is used as a reference by some 40% of the global pharmaceutical market – so what happens here sends ripples across the globe. The world already looks at the UK’s National Institute of Health and Care Excellence (NICE) decisions as a benchmark for health technology appraisals (which look at clinical efficacy and cost-effectiveness). In the future, NICE will also be conducting the VBP assessments.
We know that what happens in Blighty will have a knock on effect elsewhere.
I’ve been talking to our GLOBALHealthPR partners about this topic and each country around the world has a different way of pricing and assessing medicines. As we look into the future, these systems are becoming ever more fragmented. In the UK this year, as in years past, pharma companies are launching really innovative medicines, which are proven to transform a person’s life. The problem is many are being told they aren’t recommended for use as they are not deemed ‘cost effective.’ This effectively halts access and the medicine will only be used in a handful of cases where a doctor puts in an individual funding request, which involves paperwork galore.
So what can be done as we all work hard to make access to innovative medicines a reality?
Well until we all fully understand how NICE intends to undertake an assessment, it’s a difficult call and things remain uncertain, however the wider societal benefits that a medicine brings will be crucial. Creating evidence that is concisely communicated to all the right stakeholders will be the name of the game. This evidence could be gathered in a host of ways such as during clinical trials or say collected in first launch markets, with the data being rapidly shared with later launch markets. This will require delivering tools to measure patient experience and adding services that capture data around the impact of the use of a medicine. This can ultimately be used to support funding decisions which may occur at the national, regional or local level. Digital solutions can make this seemingly daunting task completely manageable.
Whatever happens, the medicines access game is changing – it’ll just be better when everyone knows the rules, and like pay day we would all like that to come along quickly.
If you’d like to speak to our UK partner, London-based Aurora, about VBP, health technology appraisals and the strategies and tools they are already delivering to support access to innovative medicines, contact the team on +44 20 7148 4170, ask for Neil Crump, Aaron Pond or Rachel Terry.