Pharmaceutical Executive Europe - January 2008 - (Page 24) 24 Healthcare Cost Assessment January 2008 Pharmaceutical Executive Europe Value-based pricing means that the price of the drug would be determined strictly by its value in its target patient population. As proposed by the OFT, two levels of assessment would be put in place. The first one could be a lighter and quicker version of the current NICE evaluation, done just before launch (by definition a temporary assessment based on a limited evidence set). The second, conducted up to several years post-launch, would additionally take into account the real-life experience with the drug, as well as any new clinical trial data (hence leading to a more complete picture of the value of the product). In addition, risk sharing agreements may occasionally be put in place when potential benefits exist but cannot yet be supported at launch — financial adjustments are made post-launch depending on whether benefits materialise or not. Given the issues inherent in implementing NICE’s guidance, would the proposal make things better or worse in practice at the local level? If the new scheme takes off, it may take substantial effort and time to win hearts and minds. But, in our view, the value-based pricing and risk-sharing approaches should make it easier for local payers to fund a therapy based on its cost effectiveness. This is because the ‘extra thinking’ behind pricing should reassure payers that they are not paying for unproven benefits, which reduces the financial risk for them. In conclusion, payers and their advisers are increasingly important customer groups to attend. Our discussion of trends in cost effectiveness assessments and issues associated with their implementation has highlighted some of the complexity involved. One can expect pharmaceutical development and marketing strategies to become more and more sophisticated to address this complexity and fulfill the needs of the three Ps: patients, prescribers and payers. References 1. The Pharmaceutical Price Regulation Scheme: An OFT Market Study, UK Office of Fair Trading, 2007. 2. The survey is from the report, Market Access and Entry Strategies for New Biologicals in the UK — Case Study: Cancer Treatments, part of Beatriz Señan Castellano’s Master’s degree in Bioscience Enterprise at the Institute of Biotechnology and the Fitzwilliam College of the University of Cambridge. François Lucas acted as the company supervisor during Castellano’s internship at Pope Woodhead. The survey, carried out in April and May 2007 in the UK, involved individual interviews of twelve payers/advisers and eight representatives of the industry. This was a relatively small size study, hence, arguably, not ‘statistically’ representative of the views held by the groups interviewed. However, there was good internal consistency in the findings; there was also good consistency between this survey, reputable sources such as the OFT and the author’s experience of the topics. Recommendations for pharma Demonstrating rationally a new drug’s value for money is increasingly a ‘must’ for pharma. A value proposition should be defined as early as possible in the development process and used to focus the minds on obtaining the supportive evidence. This evidence should substantiate incremental cost-effectiveness versus likely comparators in the target patient population(s). The postlaunch evidence that the drug is effective and safe in real life should be part of the development plan rather than an after-thought. Evidence of cost effectiveness is, of course, not enough to ensure market access at the local level. During our investigation of the local issues around access to expensive drugs in the UK, it emerged that political, emotional and pragmatic aspects (in particular budget availability) could become overriding factors. The pharma company needs to communicate the product’s value to local payers and influencers in a way that addresses their emotional and political needs; for example, by raising understanding of the unmet needs from the patient’s point of view, and defining how short-term savings can be leveraged at the local level (these savings may not be considered in the cost effectiveness evaluation, and they have a strong ‘political’ impact on local decisions). Opportunities also exist for post-launch programmes that can make cost-effective but expensive drugs more palatable to payers. For example, initiatives that encourage compliance and appropriate use, or mitigate risks, allow the company to obtain real-life evidence and increase the local perception of a favourable risk/benefit ratio. About the Author Dr François Lucas is head of practice (marketing insights and strategy), principal consultant, Pope Woodhead and Associates (UK). François’s expertise lies in helping clients dig deep for market insights to truly understand the needs of their customers and the emotions that influence their choices. François has worked in the pharmaceutical and medical device industries for the last nine years, helping clients to optimise their market access/entry strategy, and communicating the product’s value effectively to healthcare professionals and payers. Prior to this, he was a research scientist for 13 years, publishing in a number of scientific and trade publications and lecturing at university level.
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 Contents From the Editor News and Analysis Calendar Corporate Strategy: Walking the Line Executive Profile: The Pharmacist’s Friend Q&A: An End to Drug Counterfeiting Healthcare Cost Assessment: Ready to Make NICE? Pricing and Reimbursement: Through the Reimbursement Barriers Generics: India Inc. The Mix: New Models of Excellence Last Word: Mid-size Matters Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 1) Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 2) Pharmaceutical Executive Europe - January 2008 - Contents (Page 3) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 4) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 5) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 6) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 7) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 8) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 9) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 10) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 11) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 12) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 13) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 14) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 15) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 16) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 17) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 18) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 19) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 20) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 21) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 22) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 23) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 24) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 25) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 26) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 27) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 28) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 29) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 30) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 31) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 32) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 33) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 34) Pharmaceutical Executive Europe - January 2008 - Last Word: Mid-size Matters (Page 35)
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