Pharmaceutical Executive Europe - January 2008 - (Page 26) 26 Pricing and Reimbursement January 2008 Pharmaceutical Executive Europe coming off-patent in the next few years, to be replaced with lowercost generics, will provide some significant savings, but the these could be negated by a number of combined factors: the ‘greying’ populations, who consume multiples of the overall healthcare budget; low gross domestic product (GDP) growth; new diagnostic and care technologies; and the increasing number of healthcare employees with increasing salaries. Cause for concern According to DrugResearcher.com,2 anti-cancer treatments form the largest category of agents in late research/early stage development, with twice the number of products, 88, as the second largest category (anti-infectives/viral products, with 44). In addition, IMS has reported that they anticipate some 55 new anti-cancer drugs to be launched in the next five years. The price of anti-cancer products means not only that there will be resistance to reimbursing them all, but also that they are likely to be more rigorously assessed. The inevitable tensions that follow could play out as they have been doing in the UK, where the payers have been denying reimbursement to some anti-cancer treatments using the National Institute for health and Clinical Excellence (NICE), which determines which cancer drugs represent good value for money using health economic methodology to produce cost-effectiveness and quality adjusted life year (QALY) calculations. Currently, the UK is the only major country and NICE the only agency in Europe to refuse reimbursement of cancer treatments using the combination of clinical and economic assessment directly. Even following a positive ‘recommendation’ by NICE, some Trusts — the bodies that act as the local payers in the UK — are still failing to fund valuable cancer treatments. This has led to the term ‘postcode prescribing,’ which means that the treatments your doctors can prescribe for you depends on where you live and where you receive treatment. There are also cases of where cancer patients, who, having been denied these treatments, want to pay for them from their own pocket, but are then obliged to pay for the total cost of all their care!. Could this situation occur elsewhere? Many believe that it could, for the simple reason that all the major countries are employing cost-containment mechanisms to reduce access to reimbursement for all products that do not offer a comparative benefit over current treatments. The French National Authority for Health (Haute Autorité de Santé) and the German Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG) have formed official relationships with NICE to discuss and develop methodologies. Fortunately for the pharmaceutical industry, the populations in France and Germany are not as accepting as those in England, and are likely to produce a significant backlash should they be denied access to any life-saving agents, in particular, anticancer treatments. What we will likely see in the shorter term, however, is pressure on the industry to reduce the price of their new products to ensure reimbursement. Germany, for example, uses a local reference pricing system whereby all agents are listed in various categories based upon their structure. Any products that share a specific ATC code — referring to the World Health Organisation’s Anatomical, Therapeutic, Chemical Classification system, a system of referencing that is primarily used to reference price products — are reimbursed at or below the reference price. Initially this was only for ‘off patent’ drugs, but in some cases this has been extended to include those newer drugs with a patent, producing what is called Jumbo groups. Could we see some form of therapeutic reference price on the horizon for cancer products? As far as a public response to such moves, they only want access to treatments and will care little about the return on investment for the pharmaceutical companies. The secret of niche Some companies appear to have accepted their fate and are continuing as usual. Others have accepted the challenge and are looking at innovative strategies to protect their investments. Two companies, Bayer and Pfizer, have employed a strategy of targeting indications of high unmet need in a niche cancer populations: Pfizer with Sutent (sunitinib) and Bayer with Nexavar (sorafenib). Both have targeted the initial indication of advanced renal cell carcinoma. The advantage of selecting a small population or niche indication is manifold: the R&D costs are quite small and the process is fast, as it is relatively easy to identify the few experts in a niche area who will be eager to support such research. With advanced renal cell carcinoma — as it covers only 2% of treated cancers once launched — the overall budget impact of funding the treatment at a high price with full reimbursement will not be significant in any one country. Another advantage of this approach is that market adoption is again very inexpensive as the ‘expert(s)’ are few in number and will support any new effective product, thus ensuring easy access to guideline and formulary listing and positioning. Companies with drugs in development for cancer indications should seriously consider adopting the niche market strategy approach, rather than the traditional ‘common disease strategy.’ The costs of undertaking a large common disease development programme are high, and there is competition with other companies to recruit more patients than before, to demonstrate a ‘significant’ benefit over current market treatments. Furthermore, once the development programme, that has been eating into patent life, is finished and the product is approved for marketing only, you find that other companies’ products, also recently launched, are competing with it for market share, and the differences between them all is considered by the agencies responsible for pricing, reimbursement and market adoption to be marginal at best. http://www.vfa.de/en/articles/art_2005-01_001.html http://www.vfa.de/en/articles/art_2005-01_001.html http://www.drugresearcher.com
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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