“We need drug pricing changes” agree Cancer Drugs Fund chief and pharma

Could the pharma industry and the NHS be a step closer to agreeing real risk sharing and flexible drug pricing?

The head of the Cancer Drugs Fund (CDF) says current UK drug pricing regulations are “not fit for purpose” and must change to allow more risk sharing between the NHS and the pharmaceutical industry.

Professor Peter Clark, chairman of the CDF was speaking at the Economist ‘War on Cancer’ conference in London, alongside Paul Catchpole from the UK industry association the ABPI.

The CDF was created to allow access to cancer drugs which failed to pass the cost-effectiveness test set by England’s National Institute for Health and Care Excellence (NICE). But this year dozens of drugs have been ‘de-listed’ because the CDF is exceeding its budget, and re-evaluations have ruled drugs, such as Roche’s breast cancer drug Kadcyla, over-priced in relation to their value to patients.

This has caused huge rows between NHS England, which runs the CDF, and pharma and patient groups. They say England is still lagging behind comparable European countries in terms of access to new cancer drugs.

Despite accusations about pharma over-pricing its drugs from one side, and from the other complaints that NICE and the CDF systems are unfair and inflexible, a solution is being sought.

Professor Clark and Paul Catchpole found common ground in agreeing that flexible ‘dynamic’ pricing and risk-sharing must be introduced.

This would require a change in the current UK pricing regulations overseen by the Department of Health, which allows pharma to set its own prices at launch, but doesn’t allow for price increases after this point.

Catchpole, director of value and access at the ABPI said: “The problem with medicines prices is that they are set [at launch] and they only go down over time – that’s a reality.

“If you really want to link price to value, we need to let prices move up or down.”

He added: “Everybody needs to get behind that if we really believe that. It needs to be a dynamic model that changes over time.”

The comments come as the CDF prepares for a major overhaul, becoming a ‘managed access fund’ more closely linked to NICE. These changes will take effect from April 2016, and will see cancer drugs launched on the National Health Service via the CDF for a trial period, after which they must produce robust evidence of their value to patients, or else see reimbursement removed.

Professor Clark said the point of the CDF was for cancer drugs which NICE has deemed promising, but for which there isn’t sufficient data yet.

“You can’t do that without a flexible pricing system,” he said, emphasising that the current pricing system was “not fit for purpose”.

“The one thing I have learnt in dealing with the CDF is that pharma companies are very imaginative regarding risk sharing schemes on how they can mitigate risk,” adding that the current system blocked these ideas.

While Professor Clark and Paul Catchpole were in agreement on the need for flexible pricing, Carole Longson, executive director of NICE, was far less convinced this would solve the problem.

“I wouldn’t think the solution to all of this is to link price to value,” she said, adding that NICE looked at the range of benefits a drug could offer to patients to assess its value before launch.

 

 

“The concept of dynamic pricing is very compelling, but if we contemplate doing that at scale, it becomes quite a complex initiative”

 

“The concept of dynamic pricing is very compelling, but if we contemplate doing that at scale, it becomes quite a complex initiative.”

The War on Cancer conference also heard lots of other new ideas for how to adapt the system, including the ongoing Accelerated Access Review at the UK level, and the adaptive licensing MAPPs initiative at the European level, which both aim to speed up approval of promising new drugs.

Longson welcomed MAPPs, but suggested it would be difficult to adopt this approach more broadly.

“Can we simplify the models? It could get so complex that none of the players and users of the system can cope with it.”

She did agree, however, that healthcare systems and pharma needed to agree that launching and funding new drugs involved risks, and that the CDF’s managed access concept would address this question.

Professor Clark also acknowledged the limits to what smarter pricing mechanisms could do.

Despite the latest controversial de-listing of drugs, the CDF is forecast to overshoot its 2015-2016 budget of £410 million by £70 million.

This is part of a bigger picture of a growing crisis in overall NHS funding, with England’s health service expected to record a deficit of £2 billion by the end of its financial year.

“However joined up and enthusiastic we get, we have to remember that we are working in a very financially strained environment,” said Prof Clark.

“I don’t think anybody should think it is going to be easy.”

A solution is urgently needed in oncology, in particular, as cancer cases continue to rise, and the CDF expects 40 new cancer drugs indications in the next two years.

“That’s why we we’ve got to get this right pretty soon,” Clark went on, saying he was optimistic a solution was around the corner.

The debate ended on agreement that better data was needed, including real-world evidence (RWE). The new CDF will explicitly use RWE gathered from England’s hospitals to inform its rulings on the clinical value of drugs – however there remain concerns about the NHS’ ability to collect sufficiently robust data.

This system will eventually put cancer drugs under the spotlight, with England’s health system payers able to exert downward pressure on drugs which don’t perform as promised.

Picking up an analogy from an audience question comparing new drugs to cars, Carole Longson responded: “You’re sometimes promised a Lamborghini…but it’s not necessarily the Lamborghini that gets delivered,” adding that the new CDF system would allow everyone to “get real on the promise versus the proof.”

The UK pharma industry has indicated its willingness to try variable pricing, and the inherent risks – but will demand guarantees that prices can go up as well as down before agreeing any new deal.

Cancer charities have also backed major pricing reforms, but will also want guarantees about access to match other European nations.

The DH was contacted by pharmaphorum to comment on the issue, but hasn’t yet responded.

It looks unlikely that the government would be willing to take on the risk of a major increase in drug spending amid the wider NHS financial crisis. Its pharma industry PPRS pricing deal has another three years to run, but the government might be willing to pilot new approaches if it can agree a deal with the pharma industry.

Related articles

Roche bemoans price distortion and ‘Big Bad Pharma’ attacks 2 October 2015

Cuts to Cancer Drugs Fund condemned by charities 7 September 2015

About the author:

Andrew McConaghie is pharmaphorum‘s Managing Editor, Feature Media.

Andrew can be contacted via: andrew@pharmaphorum.com

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