After product registration based on the phase 3 Clinical trials, the challenge
of getting reimbursement in the different national settings is a critical
next step. In most European countries reimbursement has become the most
important driver of sale, but unfortunately also the most important limiting
factor for sale of new drugs. Today many pharmaceutical companies are under
pressure, due to decreasing sale as a result of difficulties getting reimbursement.
There are a number of reasons for the changes in reimbursement practice,
which constitute both national and international changes in the ways reimbursement
are achieved. It is important for a pharmaceutical company to adapt to these
changes and if possible convert these changes to a competitive advantage.
This can be done if a proper adaptation to these changes can be accomplished
faster than the competing drug companies. I will attempt to summarise some
of the most important international changes:
1) Awareness of the importance
of the international “Evidence Position”. Due
to the advent of “Evidence Based Medicine” the international
medical community has a acquired a concept of “objective truth”
regarding efficacy and safety of new drugs. Early in the product life cycle
the phase 3 trials are the most important basis for the “evidence
position”. However very soon thereafter, a number of national and
international public bodies will publish their own critical assessment of
the evidence, and it is then considered the “objective truth”.
The “evidence” is then largely out of the hands of the pharmaceutical
2) HTA (Health
technology assessment) is a new decisions paradigm used by most national
medicines agencies. In HTA, medical evidence is combined with health economy.
Using this combination, the “utility” or “value”
of a new drug is compared with conventional treatments. During such assessment
the cost-effectiveness-ratio of the new drug is compared with conventional
treatment. If the added value of the new drug is satisfactory, reimbursement
is granted. However if not, the medical agency will most likely deny reimbursement
or require a price reduction. Alternatively a limited reimbursement is granted
implying e.g. sale to only a small market segment or institution of a cumbersome
person-specific reimbursement process limiting the sale of the drug.
3) In most European countries
regional medical administrative decision makers are increasingly
using HTA-reports or their equivalents to decide which drugs are present
on local “recommendation list” or “approved clinical practice
reports” in that area. The consequence of this is decreased freedom
for the single doctor to prescribe medicine for his patient. This decreases
the effectiveness of the local marketing and sales activities (if it is
not on the list).
4) The above 3 factors are all
implying a strong tendency towards more centralised medical decisions and
involvement of fewer and fewer people –and also involvement of a diversity
of non-medical experts (economists, statisticians etc.)
Which challenges does
this development impose to the pharmaceutical drug company?
A) The price-setting
of a new drug is one of the most critical decisions. The price is always
decided at an early stage, without knowing if the medical agencies will
accept the documented level of cost effectiveness. Proper documentation
of cost-effectiveness has become a very complicated task which requires
a high level of scientific expertise which is not always present –especially
in small countries.
B) In many pharmaceutical companies,
the Reimbursement Application to the national medicines
agency is considered a local national task. This often conflicts with both
the complexity of the task and the expert-resources available. Specialised
clinical trial designs are often needed to properly demonstrate cost-effectiveness,
but such studies might not be performed locally either due to lack of expertise
or due to lack of financial resources.
C) Due to the global trend in
HTA and medical decision making, 70-80% of the data needed
in national Reimbursement Applications is identical. This is due to the
advent of the objective “international evidence position”. When
the prime responsibility for Reimbursement Applications is placed solely
in the local national sales companies it implies that the same work has
to be performed in parallel in many countries (waste of resources).
D) Since proof of cost-effectiveness
has become a major generator of sales, this factor must necessarily be an
integral part of the clinical development programme. The major challenge
here is not the design of the studies, but merely the fact that new ideas
for cost-effective treatments are most likely generated
in the clinical practice setting with national top clinical scientists (in
contrast to a global medical head office which are primarily focussed on
phase 3 trials of the drug pipeline). It is often necessary to perform e.g.
segmentations of the patient population or use meta-analysis or data mining
of existing clinical trials to identify “best clinical practice”.
E) Top clinical scientists
are seldom educated in Pharma economics and cost-effectiveness, and therefore
need some coaching and guidance in order to properly assist in idea generation
of commercially viable new drug uses (not all scientifically interesting
new drug applications are cost effective in Health Economical terms). Such
coaching is more focussed on showing a higher level of efficacy or utility
than average treatment practice, than trying to identify entirely new treatment
F) Due to the dynamic nature
of idea generation (locally in one or more countries) the management of
the clinical development programme must also be very dynamic and continuously
adapt to the changing world of new ideas and the feedback
from all the national reimbursement processes. This requirement of dynamics
constitutes a true organisational challenge.
G) The dynamics also dictate
more active strategies for continuously informing the national
sales companies of “present best practice” e.g. any improvement
in evidence positions, new documentations of cost-effectiveness and new
winning argumentation used in Reimbursement Applications.
The potential role of
Medbusiness can assist your company
with a competitive adaptation to the new paradigm of medical decision making.
Our role might also be at a more international level initiating and coordinating
the adaptation process as such or being operative in selected elements of
such adaptation. Alternative a mixture of the two is a possibility open
to discussion and creative idea generation.
Jørgen Folkersen, MD, Dr. Sc