Pfizer CEO Ian Read, and FT pharmaceuticals correspondent Andrew Jack

After opening remarks from Andrew Jack, FT’s prolific pharmaceuticals correspondent, Pfizer CEO Ian Read took the stage at the sumptuous Metropolitan Club in Manhattan for a chat with Jack. The biggest issue facing the pharmaceutical industry today, said Read, is whether society is willing to pay for clinically meaningful products.

That thread wove through many of the panels afterward. Old debates about cost sharing, which focused on the role of insurance providers in managing the out-of-pocket costs of drugs to patients, have shifted into conversations about shared value, which puts the onus on industry to align societal economic needs with positive health outcomes, and profits. Jeff George, global head at Sandoz, described a company program in Ethiopia that voluntarily tests local pharmaceutical products for bioequivalence, to separate the pure from the placebo (or worse). This program helps protect the public health, while also screening out Sandoz’s counterfeit competitors, said George.

The most pressing quandary for Jan Groen, CEO at MDxHealth, a molecular diagnostics company, is “who will pay for companion diagnostics?” outside of the US. David Meeker, CEO at Genzyme, said “society is willing to pay for things that work” – companion diagnostics increase those odds. Responding to a question on the sustainability of ever-increasing prices for products targeting rare and ultra-rare diseases, Meeker suggested that yes, there had to be a ceiling, but he asked attendees how much it had cost to rescue the Chilean miners in 2010. Answer: “I don’t know, and it doesn’t matter,” since the cause was supported by the global community.

Of course, there aren’t some 200 mine collapses and rescues every month, with another 7,000 collapsed mines and trapped miners waiting impatiently to be rescued (or if there are, developed nations don’t hear much about them, and don’t bankroll the rescue operations). But Meeker’s point is well taken; more than $20 million was spent to save the lives of 33 miners, of which $15 million came from Chilean government coffers. Societies will have to make tough decisions, collectively, about the extent to which an individual taxpayer is willing to be his sister’s keeper, if governments plan to continue reimbursing orphan drugs at their current prices. Those decisions will inevitably increase scrutiny on pharma’s profit margins, requiring ever-greater transparency efforts, and a greater degree of sharing, in order to substantiate the price of innovation.

Colin Hill, CEO and Co-founder, GNS Healthcare

The question then becomes, according to Pfizer’s Read, whether productivity – understood as the successful development of safe and effective new treatments, and better health outcomes – matches the spending levels devoted to such efforts. Currently in the US, it doesn’t, said Read, but sharing clinical data with the general public – all the rage in Europe – is not the solution. Read said making this data too accessible jeopardizes the delicate risk/benefit calculation that is, or should be, the sole province of regulators.  “To dump patient-level data on the pavement and allow dozens of institutions to consider, evaluate, and review it, could have huge negative consequences for healthcare,” said Read.

On the other hand, Colin Hill, CEO of GNS Healthcare, a big data analytics company, said that clinical data sets are used by his company – along with data from hospitals, claims data, demographic data, genetic data, and data from electronic health records – to improve health outcomes. “The question is not, what is the best rheumatoid arthritis drug for the price, but what drug will work best for an individual patient at a specific progression of disease,” said Hill. Reliably predicting the right treatment for each patient, the first time, is the key riddle to solve, he said.

Hopefully that treatment is covered on the formulary. Read frowned at what he perceives as a shift in public focus from insurers to drug-makers. Insurance companies dictate expectations to patients and tell them which drugs they can, and cannot, receive. If drug companies did that, “there would be hell to pay,” said Read.

With all of the emphasis on “sharing,” at pharma industry events and in seemingly every new digital technology invented, it has become imperative to take a harder look at exactly what is being shared and with whom, and to identify the shareholders. Unfortunately when it comes to sharing the costs associated with a healthy population, people use their own unique algorithms to determine what constitutes a fair share. Everyone is an interested party.

By Leela Barham.

Value-based pricing (VBP) continues to confuse many in the UK and further afield. The Scottish Parliament’s Health and Sport Committee is the latest parliamentary committee to question civil servants about what it’s all about.  On the 14th May 2013 Scottish Members of Parliament got the chance to quiz Katy Peeters from the Department of Health in England, about plans so far. For those who don’t want to watch the 82 minute session (although I recommend that you do, click here), here are the key take-aways.

The Loch Ness Monster is more likely to be found than VBP
The Scottish MPs were keen to understand exactly what VBP will be, and how it will affect Scotland’s agencies, such as the Scottish Medicines Consoritum (SMC), and Scottish patients.  That they were frustrated, and indeed others within Scotland too, about a lack of detail on the policy that is due to be implemented in around six months, came clearly through.  One view was that the Loch Ness Monster would be more likely to be found before VBP was found.

UK determines the ‘P’, but devolved nations determine the ‘VB’
Much of discussion in the session was trying to disentangle just which bits of VBP are reserved, and hence up to Westminster to decide for the whole of the UK, and which bits are devolved, and allow for Scotland to take their own approach.  The conclusion seemed to be that pricing was reserved but pretty much everything else isn’t.  Keeping pricing at the UK level was justified by Katy Peeters because it “allows us [the UK] to maximise our bargaining power and provides a useful degree of consistency and stability to the pharmaceutical industry”.

Given this, the Scottish Government, and agencies like the SMC, can’t therefore “say, you [industry] do not have freedom of pricing” according to Peeters.

VBP will take a wider view of value
Although the Scottish MPs were unclear exactly how it would be done, Peeters highlighted that there would be a wider assessment of value.  That she said, was “ at the core of value-based pricing…. the idea that we take account of all components of a medicine’s benefits, which will cover privately and publicly funded social care and informal care”.

VBP might mean paying more
Given the wider assessment that is planned under VBP, Peeters said that it was possible that the UK may pay more for medicines. She said that, “With value-based pricing, we are considering paying more for the medicines that bring the health gains that society values”.

But overall, not much will actually change, including retaining freedom of price at launch
Despite all the interest in the impact of VBP, Peeters stressed repeatedly that actually not much will change in the agencies and processes for VBP or even in the Pharmaceutical Price Regulation System (PPRS), which is subject to ongoing confidential negotiations between the Department of Health in England and the Association of the British Pharmaceutical Industry (ABPI).  She said, “the [VBP] system will not look that different from the current system”.  Mostly it seems VBP will mean just a wider assessment of value from NICE for England.  And she added, “The PPRS will evolve from, but would be similar to, the current PPRS.”  Perhaps of greater interest to those in pharma was the re-iteration that free pricing at launch will remain; Peeters said, “a company will be able to propose a price, just as it does now”.

Scotland can take it’s own approach to ‘VB’
Repeatedly Peeters highlighted that it would be for Scotland to decide whether, and how, to import changes aside from pricing under VBP in England up to Scotland.  She said that whether SMC could adopt a wider assessment, “will be a question for the Scottish Parliament and the Scottish Government.”  Further that, “given a particular price, the debate about whether that drug or medicine is a good use of Scottish money would be a question for the Scottish authorities, including the SMC”.  How this freedom for Scotland, and the SMC, will be translated is unclear.

But confusion still reigns
It’s worth ending on a statement from Bob Doris who summed it up by saying “Thank you for increasing my confusion”.

Leela Barham is an independent health economist. You can contact her at leels@btinternet.com

“We have to change the way we develop drugs,” Woodcock stated. The current method is very expensive and doesn’t provide important information on why people respond differently to drug interventions. Sponsors are moving to personalize dose by patient genotype and examine why different drugs are effective for different genotypes of a virus, such as Hepatitis C. But it is “not feasible,” she said, to do a separate trial to determine who should receive a drug, at what dose and with what likely adverse effects for every patient group.

Instead, Woodcock proposed to “turn the clinical trial paradigm on its head” and for research organizations or coalitions to set up ongoing, standing trials to examine patient responses to multiple issues raised by test therapies and biomarkers for certain diseases or conditions. Woodcock cited the I-Spy study launched by the National Institutes of Health to screen new compounds for breast cancer, and similar efforts by disease groups and professional societies to establish networks able to make rapid evaluations of genetic subsets and biomarkers.

Such approaches will support rapid approval of highly effective “breakthrough” therapies, as authorized by the FDA Safety and Innovation Act (FDASIA) to streamline approval of serious and life-threatening treatments. FDA continues to receive and grant requests for breakthrough designations and expects to see more highly targeted and effective drugs come to market, Woodcock noted. These approaches, moreover, are likely to modify FDA’s usual requirement for two randomized, controlled clinical trials to support the approval of new treatments.

Reliable diagnostics are the foundation of these approaches and are desperately needed to make sense of the large volume of information emerging from genomic testing,  Woodcock added. FDA has published guidance on how to develop and gain approval of companion diagnostics to ensure the validity of tests used to make critical treatment decisions. Still in development, though, is long-awaited guidance on drug-diagnostic co-development, a rapidly evolving field that remains hard to define for industry and  FDA alike.

Focus on value

Woodcock also raised concerns that the high cost of many new targeted therapies and related diagnostics may contribute to rising health care expenditures and draw opposition from payers. Unusual for an FDA official, she noted increased resistance to reimbursement for “high tech” therapies and diagnostics that offer only limited gains in efficacy. The new field of targeted therapy needs to focus on “adding value,” she commented; manufacturers should strive to develop combinations of treatments that actually control or cure disease, as opposed to short-term improvements in efficacy.

The emergence of more breakthrough drugs has produced a number of “game changers” that are more effective in treating serious diseases, she pointed out, but noted the need to do more. The future of personalized medicine is to deliver “new treatments at reasonable cost that have significant impact in treating or preventing disease,” she stated. For cancer, the goal is to find out how to alter the course of disease, and not stop at incremental improvements, she observed, adding that a cure for Hepatitis C won’t raise any complaints about cost.

Personalized therapies have to be more effective, less toxic – and more cost-effective – than today’s interventions, Woodcock concluded, for this field to really become a major factor in healthcare.

If you are an Rx regional sales director or a product marketing manager, I have a somewhat provocative question for you:  How exactly are you planning your 2014 Medicaid strategy?

I ask this because as you look over the Medicaid landscape for next year, there is more than a little uncertainty at hand.  With Medicaid about to become the basic health care delivery mechanism of the 2010 Affordable Care Act, otherwise known as Obamacare, you would think this might be a simple matter of reviewing the new federal law for guidance. But if that’s the approach you are taking for your 2014 Medicaid planning, let me be the first to tell you, you are going down the wrong path.

Obamacare is premised on the idea that federal government and state governments will cooperate in the delivery of healthcare to an estimated 40 million new Medicaid patients starting on January 1, 2014, with sign up for these new services scheduled to begin on October 1, 2013.

That is all well and good, so far as a reading of the law goes.  But when you begin to dig into how the states are actually implementing Obamacare, you soon realize the launch of this new law is not going as smoothly as the framers of the measure had hoped.

As of this writing, and according to the Kaiser Family Foundation, there are 26 states that have said absolutely “no” to state exchanges envisioned by Obamacare and are defaulting to a federal exchange; 7 that have said “no” to parts of Obamacare and have negotiated “Partnership Exchanges” with HHS; and only 18 that have declared they will establish state-based exchanges, and cooperate with new law.

If Kaiser is correct in these assessments and given the current US population of about 313 million, this means that approximately 56% (177 million) of Americans live in states that have said effectively said “no” to Obamacare; 10% (32 million) live in states that have rejected parts of Obamacare; and only 33% (104 million) live in states that will have access to Obamacare’s state exchange offerings.

If these statistics startle you, they should.  Thinking about your 2014 “numbers,” how will you manage this situation nationally?  In particular, what will happen in those states that are “defaulting to the federal exchange?”  Here are two key examples you may want to focus on for your answers.

Florida

Florida’s current population is about 19 million.  Right now, 3.3 million Floridians (approx. 17% of the state) are enrolled in FL Medicaid.  It’s estimated that another 1.3 million Medicaid recipients will be added to Florida’s Medicaid rolls once Obamacare is implemented.  This creates a potential situation in which nearly 25% of Florida’s total population is scheduled to be receiving Medicaid Rx care after January 1.  Any Rx sales manager or product marketer who is responsible for the State of Florida has to take notice of these numbers.

So how is the implementation of Obamacare going in Florida?

This past winter, Florida’s governor, Rick Scott, a Republican, publicly broke ranks with his Republican Governor Association colleagues, and announced that he was seeking a “deal” for Florida that would accept the essence of Obamacare, i.e., the federal financial support, while adopting a 100% federal provision of insurance services, all of which sunset and be reviewed after three years.

Seemed like a done deal. But when Gov. Scott took his concept to the Florida legislature, he encountered stubborn resistance from the Florida House of Representatives.  In the end, the governor gave up and the entire Obamacare package was shelved. Florida, it appears, will default to whatever the “federal exchange” may turn out to be.

So, how as a sales & marketing executive with responsibility for Florida do you plan your sales and/or marketing strategy in this huge, heavily Medicaid impacted state?  What drugs will be covered in the “federal exchange?” Will only one drug per category be covered, per the earlier recommendations of the Essential Health Benefits finding put out by HHS? How will you get your drug covered for Florida Medicaid in 2014? How will you get reimbursed? From the state or the feds? And at what rate? Right now, nobody knows the answers to any of these questions.

Let’s look at another important example that is being impacted by Obamacare: Texas.

Texas

Texas is now the number two most populous state in the nation with an estimated 2012 population of over 26 million. It’s also one of the fastest growing states in the nation.  Given all of this, I don’t think it would be an overstatement to suggest that every Rx sales and marketing director in the country wants a piece of Texas.

So let’s consider the impact of Obamacare’s implementation here. Currently, Texas Medicaid beneficiaries number approximately 5 million individuals, or about 20% of the population. An estimated 2.6 million beneficiaries could be added to the Texas Medicaid rolls under Obamacare. That would total 7.6 million people, or about 29% of the State of Texas population.

Unlike Florida, however, Texas has been a steadfast “no” in cooperating with the federal government on the implementation of Obamacare from the start. Therefore, Texas had no debate about setting up a state exchange for new Medicaid patients. Instead, like Florida, a new federal exchange is supposed to be put into operation for nearly 8 million Texans by January 1, 2014.  How this will be accomplished in Austin is unclear at this time.

Again, as regional sales directors or product managers for Texas, how do you plan on “making your numbers” in this huge market for 2014?

Planning Elements for Medicaid Sales & Marketing in 2014

I could go on from here with the specifics of each “no” state, but I think you get the picture.  Just Florida and Texas, alone, both among America’s most populous states, account for nearly 10% of the estimated 40 million total Medicaid expansion this new law is supposed drive come January 1, 2014.  These two states by themselves stand to generate massive Rx sales that will impact anyone’s national sales or product marketing plan.  However, both are essentially blank pages today in terms of how your products will be included on a formulary, what the reimbursement rates will be, who will pay you for their dispensing, and all the rest that goes into making money in a state Medicaid Rx program.

And the same is true for the other 24 “no” states. Nobody has answers. Overall, you are essentially in the dark as to how to plan for about 22 million new beneficiaries with drug coverage.

So how do you to manage your sales and marketing for Medicaid Rx patients in this 2014 environment?

First, you are going to need much better intelligence on what every state has decided to do with its Medicaid Rx program than you have ever had before.  Given 40 million new potential, paying customers, you would be foolish not to demand the best, most complete information available on each state.  If you don’t have that deep info, frankly, how can you establish sales and marketing goals for 2014?

Second, you will need to figure out how each state will actually administer Obamacare. Will it be by default to the federal exchange; the negotiated “partnership exchanges;” or through separate state exchanges? And depending on which policy the state has chosen to follow, what will that mean to you? Every state will do it differently based on their medical culture, the state’s finances, and the level of cooperation medical providers offer in each state. Understanding all of these factors will be imperative.

Third, I would suggest this situation is anything but static (some states may quickly walk away from Obamacare after it starts; others may decide to join; still more could come up with entirely unexpected solutions for their populations).  You will want onsite staff in many of the major state capitols just to keep track of all of this. That could be expensive, but how else are you going to stay on top of all of these developments?

In short, sales and marketing execs are going to have to think way outside of the box in 2014 if they believe their Rx company will enjoy the financial benefits of Obamacare’s new Rx coverage.  And this is certainly not to say that the prospects for monetary gain don’t exist. They clearly do, but only if you can figure out how to convert on this Obamacare opportunity in each state.

All of this said, I believe this particular reimbursement opportunity will be unlike any other the US drug industry has ever faced. The reimbursement uncertainly, intrusive politics, and the shear market chaos that is likely to result will be challenging. But it’s also equally clear that if you stand around, waiting to see “how things develop” under Obamacare, you run the risk of substantial Rx sales and marketing losses for 2014, and beyond.

The choice is clear. You have to engage, come what may. So, what’s your Medicaid Sales and Marketing plan look like for 2014?

Tom Norton is principal at NHD Smart Communications. He can be reached at tnorton@nhdcomm.com

Such reforms are underway in countries far and wide to build real-world evidence on safety and efficacy of new medicines, mainly by way of comparative effectiveness studies against current standards of care. These policy initiatives align with the quandary that cancer physicians face in providing adequate care while faced with the reality of high drug prices for patients. This predicament has recently spawned a constituency of prominent oncologists actively seeking dialogue with drug companies to lower the price on the most expensive treatments, some of which cost over $100,000 annually.

When asked what their primary considerations are in prescribing medicines, 87% said they look at real-world evidence on product safety and effectiveness ‘all the time’ or ‘most of the time’; 94% weighed data on patient quality of life; and 65% assessed figures pointing to product availability and cost. This third consideration showed striking differences across markets, with China highest at 91% and the EU countries at only 50%, highlighting that not all markets are in lockstep in their approach to balancing cost and access.

Differences also surfaced in how oncologists see the implications of health reform on their practices. US doctors cited the highest level with Brazil at the lowest end. The survey warrants further probing to determine how stakeholder dynamics between the four Ps—physicians, payers, policymakers, and patients—will come to shape access parameters in an era of increasingly tough conditions on pricing and rationing of care.

You’d be forgiven for missing it with the vast array of new agencies and the policy documents, guidance, consultations and ‘engagement’ activity they’re doing on in the ‘new’ NHS in England, but on the 4th April NHS England (formerly the NHS Commissioning Board) set out 15 commissioning policies in 250 pages.  They’re important, as they set out the approach NHS England will take when they’re spending some £20 billion plus worth of services.  Not only that, the new Clinical Commissioning Groups (CCGs) who are responsible for the rest of the over £100billion budget of the NHS in England, are likely to take a leaf out of NHS England’s book when they look at investment and dis-investment themselves. 

Medicines in focus
The policies arguably focus on medicines (although other technologies would also be covered, such as devices); ranging from Individual Funding Requests (IFR), funding of NICE guidance, and funding medicines for those patients taking part in and/or following the closure of clinical trials.  Only 6 of the 15 documents are more general, and even then medicines feature as part of the overall package of services and treatments that NHS England will be considering.

Setting the tone
The documents set the tone for how NHS England will approach decisions to invest or even cut services.  Key themes include:

• Value for money dominates. The documents mention whether something is affordable, affordability, value for money, and cost effective/ness no less than 98 times.  The first line of their overarching guidance notes their ‘fixed budget’. NHS England will also take a ‘take it or leave it’ approach to guidance because it’s just too expensive to implement all NICE guidance, let alone guidance from others like the Royal Colleges. NHS England will follow guidance for technologies positively appraised by NICE, because that is a legal requirement.  And price negotiation is listed as an ‘option’ when “useful treatments which are not cost effective or not affordable although they are clinically-effective.” NHS England do say other criterion will apply, but reading the policies it’s hard to see how much they could sway decisions.

• Tough scrutiny when considering investing in new services and treatments. NHS England only want to invest in those services and treatments that are ‘of proven cost effectiveness’.  If that’s missing, then funding will be linked with research to fill that gap.  Business cases and the evidence they draw on need to be viewed with ‘confidence’ by NHS England, suggesting little tolerance of uncertainty.  Those who can’t deliver that to NHS England are unlikely to get the funding that they want.

• Strict rules. NHS England will be strict about requests for funding that may come in via the IFR route for example; clinicians must get the Trust management to sign off on the application and NHS England won’t consider it unless all the i’s have been dotted, and the t’s crossed.  The ‘rule of rescue’ is simply ruled out too.  And if there are more than 5 patients who are alike with treatment costing more than £100,000 (or perhaps £150,000 as both figures are mentioned), no IFR funding will flow; instead it will be considered as part of the usual approach to funding new services.  NHS England is also clear that it will not necessarily be the one to pick up funding of medicines after clinical trials or pay for unproven or experimental treatments.  That’s for those who initiated the trial to do, or at least make it clear to patients what will happen once the trial ends.

• Constrained support for R&D. NHS England say that commissioner support for R&D is ‘highly desirable’ but should be seen in the context of ‘constraints’.  Not exactly a sign that NHS England will be committing much to R&D in the future.

‘Interim’ policies
The NHS England commissioning policies just published are not the last word though.  All of them are marked ‘interim’ and will be subject to further discussion. What that means though isn’t clear (who will they be talking to, and will they listen?), and what could happen is that these simply become the de facto commissioning approaches at the centre of the new NHS in England.

Leela Barham is an independent health economist. You can contact her on: leels@btinternet.com

While provinces in Canada select drugs for reimbursement, the PMPRB establishes the economic benchmark value of medicines once they enter the market. The NPDUIS serves to add an extra layer of analysis to help the Board keep up with trends in where the private sector is investing its development dollars. “The purpose is partly general information, partly to inform payers of what’s coming up. In a few years, these will be the drugs facing review for reimbursement. So for public payers, it can be used as a planning tool, “explains Bernard Lachapelle, President of The JBL Group.

The NPDUIS takes clear aim at novel high cost targets. 37 of the 135 drugs screened in its report are biologics. This compares with no biologics reported in the last installment, in 2011. Biologics, as well as drugs in therapeutic categories with high utilization rates(such as cardiovascular) and areas where cost of medicines are particularly high ( i.e. cancer) were carefully scrutinized in comparison with other medicines, as these are all drugs that can significantly affect drug plans and drive costs.

Of seven drugs mentioned since the last report that have been granted marketing rights by Health Canada, five of them have retained prices within guidelines set by the PMPRB; the drug Pirfenidone is subject to investigation; and one drug had yet to be sold as of March. All the compounds considered in the NPDUIS review are at the later stage Phase III in clinical trials. Other criteria set by the reviewers include drugs that can be used to treat life-threatening conditions, rare diseases and other areas of unmet need, or if they could potentially change clinical practice in a therapeutic area, such as medicines with novel mechanisms of action or new indications. Above all, the drugs must demonstrate one of the following: improved efficacy versus existing drugs, impacts on patient health such as increased life-expectancy or quality of life; new or redefined outcomes; or an improved safety profile.

But while PMPRB and NPDUIS have managed to aggregate these promising late-phase drugs and define how they can change therapeutic landscapes within Canada, Lachapelle points out the report renders no judgment around the cost concerns of the country’s provinces, which ultimately boil down to the question: “What are the long-term budgetary impacts of the introduction of those drugs? All the report talks about is efficacy and safety, so beyond the regulatory standpoint people are left to draw their own conclusions.” The new report suggests the federal government has the expertise to help render some basic conclusions about where the provinces might efficiently spend tax dollars on medicines provided to the public through subsidized benefit programs.  Whether the provinces are interested in applying this expertise – and thus institutionalizing a bigger federal oversight role in drug spending – remains to be seen.

By Leela Barham.

England’s Cancer Drugs Fund (CDF) could be in its final financial year, after running in full since April 2011.  The fund covers the cost of cancer treatments either when NICE has said ‘no’, or hasn’t yet come to a view.  Companies can’t circumvent NICE though; if a company was invited to submit to NICE and refused, it’ll be refused CDF funding for its product too.  The CDF is supposed to be a ‘bridge’ to Value-Based Pricing (VBP), due to be implemented in January 2014.

Why was a fund needed?
The Fund was driven by a heady mix of a desire by the Conservatives to grab votes in the last General Election in 2010, strong political lobbying and perceived weaknesses in how England makes it’s decisions on which products to recommend for use.  The latter really means that many expensive but potentially beneficial products were simply not being recommended by NICE.

Stats illustrate this with NICE saying no in more than a third of recommendations in 87 technology appraisals of cancer medicines since the year 2000.  But that also hides the distinction between ‘recommended’ and ‘optimized’; where optimized means restricted to use in specified circumstances, so not all of the remaining two thirds are recommended to all patients.  Such stats are important; so too are the processes that lead to recommendations being made.  The concerns are many, but for cancer centre on:

• Whether tools like the EQ 5D actually pick up on what matters for those with cancer
• How people in real life trade quality and length of life versus how economic models assume they do
• Whose values count, patients, or the public or even some combination

What did the fund buy?
Up to December 2011 the fund made around 10,000 treatments available to patients, covering 34 products.  Commentators now suggest that it’s now over 28,000 patients who have benefitted.

Too much £?
The Fund is small though, starting with £50 million and now £200million a year.  It amounts to very little when compared with the £5.1 billion spend on cancer by the NHS in 2010/11. Worryingly though, there are reports that not all the money was actually spent last year. It’s not clear if that’s because there isn’t unmet need or if everyone was just overly cautious and didn’t want to bust the budget.

Move to a national approach
Change is abound in the English NHS as a result of the Health and Social Act (2012) and the CDF has not escaped reform either.  The fund is now the responsibility of NHS England, the new national agency tasked with spending some £20billion and overseeing the Clinical Commissioning Groups who will spend the rest of the over £100billion NHS budget. There’s a single approach to making decisions, and there’s a single list of products that will be funded.  That’s quite a change from the regional approach taken up to now, with 10 funds previously in operation across England.  That may be good for some; it’s less likely that there will be a different view depending on where a patient lives.  That may also be bad for others; if a companies drug doesn’t get on the national list, it has no hope to get on a list anywhere else.

And the list is more restrictive now; 28 products versus the 34 reported available under the regional approach.  There is some scope for variation from the list though, with clinicians able to ask for funding for treatments for individuals with rare cancers. Decisions on whether or not to fund these will rest with 4 panels spread across England, but they’ll have to use the same process.

Will VBP fix the problems that led to the fund in the first place?
The answer at the moment is that no-one really knows.  The details of VBP are not yet known, and maybe not even worked out.  The uncertainty that this creates is leading to widespread concerns, and headlines and concerning stats like:

Cancer Drugs Fund: Patients to Lose Out….6,427 patients every year could be denied access to the medicines

Drugs fund axe ‘will hit 16,000 cancer patients’ as experts claim access to medication will be worst in Europe

One thing is for certain though; the success or otherwise of VBP will be measured in access to cancer medicines.

Leela Barham is an economic consultant. She can be contacted via her site or at leels@btinternet.com

There seems no end to demands for data on clinical research, conflicts of interest, company payments, and drug prices.

Although recent legislation and regulations have greatly expanded the range of information that pharmaceutical companies have to unveil to the public, there’s an escalating demand for even more transparency.

The new “Sunshine” law — requiring drug and medical device companies to report virtually every penny they transfer to physicians and teaching hospitals, whether for conducting research, consulting, or providing free lunches — is just the tip of the iceberg.

The theory is that disclosure of financial relationships between manufacturers and prescribers will shed light on medical treatment decisions — particularly for new, more costly medicines versus older, cheaper treatments.

There’s also a broader clamor for transparency in clinical trial activities and study results. After years of reluctance, most pharma companies now post information on active clinical trials on the federal clinicaltrials.gov website. Such listings inform patients of opportunities to enroll in research, and also provide a baseline of clinical studies subject to fuller disclosure of trial result summaries after product approval. Now regulators and health advocates seek to expand disclosure to include findings on all clinical trials, even those for drugs that fail to gain market approval. Leading medical journals are working with European Union officials to promote the AllTrials effort to register and disclose results from all clinical trials around the world. Trial summaries are not enough; safety advocates and industry critics seek disclosure of patient level data and case report forms so that they can verify the sponsor’s research results and product claims.

This call for greater data transparency reflects charges that sponsors have hidden important safety information from regulators and the public. Pharma companies counter that full disclosure can raise patient privacy issues and lead to misinterpretation of findings by non-experts. Abbott’s pharma spin-off AbbVie has filed suit to prevent the European Medicines Agency from releasing patient-level clinical trial data, as has InterMune of California.

Yet, a number of pharma companies are adopting a full disclosure policy, some building on research disclosure requirements set in consent agreements negotiated with the Department of Justice and other federal and state enforcers.

In February, GlaxoSmithKline announced it would release patient-level data as part of a new “openness” policy. In addition to posting notices on new trials and result summaries, the company will make available clinical study reports for all medicines — approved and discontinued — after results are published.

Roche is taking a similar stance, partly in response to criticism over hiding clinical trial safety reports on its Tamiflu influenza treatment. Roche has formed an independent body to assess outside requests for patient data from trials supporting market applications and will make such information available after product approval in the United States and Europe.

Price transparency
An equally important goal of US transparency advocates is to reduce healthcare spending through competition generated by broader disclosure of prices for healthcare services and medical products. The new online “marketplaces” established by Obamacare for consumers to shop for health insurance will feature comparative information on plan premiums, co-pays, and benefits, along with drug formularies and pharmacy coverage policies, to help identify the best deal for an individual on coverage and costs.

Disclosure of information on drug coverage and costs has gained support from a steady supply of reports on pharma pricing issues from federal investigators. One analysis issued in February by the HHS Inspector General found millions in overpayments for drugs covered by Medicare Part B under the current average sales prices reimbursement formula. Another study criticized inadequate conflict-of-interest assessment for members of Medicare drug plan formulary committees, a factor that supposedly could bias committee judgment in drug selection decisions. The Government Accountability Office recently investigated and called for changes in how Medicare pays for drugs used in dialysis treatment.

Consumer advocates and pharma critics maintain that full disclosure of drug prices will lead to much lower costs for patients. Pharma companies counter that such transparency will only boost prices overall, especially for those customers that currently enjoy favorable rebates and discounts. Industry’s biggest fear is that some kind of national formulary will lead to reference pricing, higher rebates, and eventually drug price controls.

Social media exposure
Over the long run, though, much information on pharma research and prices will become public with the expansion of global search engines able to tap into millions of queries and postings on medical treatments and healthcare costs. A recent study by scientists at Microsoft Research, Stanford, and Columbia University, published in the Journal of the American Medical Informatics Association (March 6, 2013), found that Internet searches on drug use uncovered previously unrecognized adverse events. Here, queries from six million people in 2010 searching for information on antidepressant Paxil and cholesterol treatment Pravachol disclosed a greater incidence of high blood sugar in patients taking the two drugs.

It’s not hard to imagine similar analyses of consumer searches for lower drug prices, product safety reports, and complaints about pharma marketing and advertising from health professionals and the public.

The ultimate question is whether such disclosure enhances patient care — or adds to the complexities of innovative research.

Jill Wechsler is Pharm Exec’s Washington correspondent. She can be reached at jwechsler@advanstar.com

Patenting is a political act. Technical details of patent law aside, the Glivec ruling highlights the most contested issue in medicine today:  what constitutes true innovation in an age where scientific advances are transforming the very definition of a drug?  This is a question that extends far beyond patent law into basic value judgments like how society should spend limited resources on medical technologies, in a way that balances patient access with the economic incentives needed to seed their development in the first place.  The external demand for value – the pressure to prove it beyond doubt – is driving every aspect of the pharma supply chain today.  Seeking to raise the bar around the basic patenting criteria of novelty, non-obviousness and an innovative step, as the Glivec decision just did, is but one expression of this broader challenge facing the industry.

India has made a choice — on Industrial Policy grounds.  What is interesting about the 112-page Court judgment is not the cursory review of whether Glivec’s chemical reactant composition delivered an “enhancement of known efficacy” – a requirement for recognition as a patentable innovation – but the emphasis it places on broader issues of policy and economics.  The ruling quotes approvingly from the academic literature that “rules and regulations of the patent system are not governed by civil or common law but by the interest of the national economy.”  More than a third of the text traces the rise of the domestic drug industry, noting that “development of the bulk drugs sector is the most important achievement of the pharmaceutical industry in India,” an outcome it said was made possible by the absence of full patent protection for pharmaceuticals prior to completion of the country’s accession to the WTO TRIPS agreement in 2005.

A finding writ backwards.  The Court’s reasoning is rooted in a complacent approach to the dynamics of market growth and social change, to wit: reproducing other people’s drugs is a business model that works for India; preservation of the generic sector’s license to operate has been in India’s economic interest since confederation, and patent law should simply mirror that commitment.  Left unsaid is whether a court of law is competent to make such assumptions on the basis of past history when the Indian industry itself is undergoing a significant shift toward greater global engagement, with innovation – in process as well as products — emerging as an equally attractive alternative to copying.  India’s burgeoning, up-from-nothing CRO sector is one domestic constituency unlikely to plot new growth from the Court’s arguments. Another likely casualty is the rich infrastructure that surrounds modern drug innovation, from clinical trials, subsidies to academic teaching hospitals, to advanced manufacturing and improvements in supply chain technology.  Much of this investment is likely to continue to transit to more predictable host countries – like China.

No alms for the poor.  Nothing in the Court ruling suggests that the plight of those without access to essential medicines will improve. The decision simply maintains the status quo for Indian generic producers, most of who manufacture primarily for export – because the money is better abroad than at home. As the world’s largest exporter of bulk drugs, Indian producers bear some responsibility for a recent World Health Organization [WHO] survey that found prices for even the lowest-priced generic products sold through the private sector were at least nine to as much as 29 times higher than the agreed international organization reference price, in most WHO regions.  Even in the public sector, provision of essential generic medicines covers only about 42 per cent of the potential target population in developing countries.  Access to medicines is complex – it is a cliché that bears truth. Generic production, particularly for profit, will not by itself deliver what the Court ruling claims is the commitment underlying India’s patent law to “provide drug access to the rest of the world.”

Regional trade is the next phase in the activist war on patents. The Glivec case has shredded much of what was left of the industry’s multilateral IP agenda, a decline that started with CEO acquiescence to the November 2001 WTO Doha Ministerial Declaration on TRIPS and Public Health.  The Declaration, whose principles are embedded in the 2005 Indian patent law, limited the scope of drug patents where public health considerations intervene and thus had the effect of inhibiting enforcement of relevant TRIPS provisions.  In response, big Pharma has moved aggressively to shore up IP protection in key regional trade negotiations, including the pending Trans Pacific Partnership [TPP].  As in any political negotiation involving countries at different stages of development, the high profile given to the Glivec case has put the industry on the defensive in its drive for more uniformity in the standard of protection.  Operating on multiple fronts, activist groups intend to promote the Indian model of “IP flexibility” to allow for compulsory licensing, patent linkage, open pre-grant opposition and a low bar on data protection.

Industry strategy needs a re-think. The Glivec case suggests there is not much heft left to big Pharma’s reliance on insider lobbying and technical expertise to defeat the anti-patent access lobby and governments who apply IP as a discriminatory trade barrier.   Recovery must start with a better message. If what the industry describes as India’s patent “theft” can be justified by activists as providing more access to the poor, then most observers will say it is a vice that is easy to live with — especially when the top five big Pharma patent holders are currently sitting on an idle cash pile of nearly $70 billion.

Work underway in Africa to highlight how IP promotes civic engagement and job-creating entrepreneurship can break the perception that patent rights are a zero sum game, an instrument of power that hoards knowledge rather than liberates it.  More pressure on governments to sit down and negotiate structurally sound tiered pricing arrangements, with proper safeguards, can obviate the need to misapply patent law for pricing and cost containment purposes. Creative use of licensing can be a “win win,” with many examples evident in the HIV space. It’s also worth explaining how the science of drug discovery is changing, where companies – big and small – must collaborate to mitigate the risks from the evolution of knowledge as a “floating asset.”    Patents are a force multiplier – it’s the best solution to the “tragedy of the commons” that plagues many well-meaning drug development initiatives by taking too long to consummate and that often yield little actual value to patients.

Comments?  – contact us.