Bridging the value gap
Formulary Development Pharmacist for NHS England in the Surrey and Sussex Healthcare NHS Trust, Omar Ali talks to Nick de Cent about how pharma companies can navigate the “value” landscape.
What are payers looking for when pharma companies launch a new product onto the marketplace? It’s all about the “value gap” concept and trading uncertainty for price, says Formulary Development Pharmacist at the NHS and Cost Impact Modelling Advisor for NICE, Omar Ali.
However, despite the fact that the major pharma companies currently all have market access teams, the system isn’t working well in England. “It’s not only not working for the payers; it’s not even working for pharma,” he claims.
“Commissioning through evaluation” is the new buzz phrase, and a potential way forward, he suggests. “Where I’m not sure of an outcome, I’m looking for a reduced price, or else you can reduce the uncertainty with more data,” he declares. “If you don’t reduce the price, we need more information.”
Frequently, there is a kind of “stalemate” in negotiations between pharma manufacturers and payers, Ali suggests. For instance, a pharma company may wish to launch a new product, which it describes as “innovative”; meanwhile, the payers have yet to see the benefit. There may be claims about the product that remain unsubstantiated; for instance, some of the claimed USPs (unique selling points) may not have any evidence to support them.
In a situation where a pharma company keeps “banging on” with the same irrelevant evidence, we say “No”, Ali emphasizes. However, he suggests that there is potentially also a way forward. “We can say to the pharma company ‘Can we evaluate this over a fixed time period?’”
NICE (the National Institute for Health and Care Excellence) is already taking this approach at national level but, as the NHS marketplace creates more complexity in the system, pharma companies increasingly need to pay attention to the local dimension as well when it comes to market access. “Each regional payer may differ,” says Ali.
So what will smooth the way? Sharing the risk with the payer is certainly one thing that pharma companies can do to help facilitate the process. Often this means entering into a “co-agreement” whereby the manufacturer lets the payer have the “innovative” product at the same price as existing products – the “standard of care” price – until the new product has been evaluated. “The payer’s risk is reduced because the payer pays what it would have done for the previous product.”
Furthermore, any agreed price increase must match the effectiveness of the new product. If it’s truly innovative, then payers may be prepared to accept a higher price. In contrast, if there’s only an incremental benefit, then payers should only be prepared to pay an incremental price, according to Ali.
In order to support their claims for a new product, pharma companies should seek to run an evaluation process in conjunction with NICE or the relevant regional organization. It should keep within license, within the relevant clinical groups, and within the patient group for which the company intends to seek reimbursement.
Most importantly, pharmashould concentrate on patient outcomes. Ali reinforces the point: “It’s entirely about outcomes.”
This approach offers a more formal, objective basis for evaluation. Otherwise, trying new drugs is just anecdotal and based on the consultants’ opinion".
“The idea is just to get some more data", Ali explains. In the past, companies offering new drugs would have simply requested clinicians to try the drug. The new process introduces a more controlled framework. “This approach offers a more formal, objective basis for evaluation. Otherwise, trying new drugs is just anecdotal and based on the consultants’ opinion.”
Additionally, a time-limited evaluation is also important. This ensures that payers and patients are protected from trials extending into longer-term usage in cases where no benefit has been demonstrated.
With data available from a local evaluation process, a pharma company is then able to take this data and use it as evidence with other payers, he suggests.
Ali’s perception of how well this innovative evaluation process is understood among pharma companies is that KAMs (key account managers) at local level are well aware of the issues. However, at national level, pharma leadership “is not yet entirely on board with this”. He suggests that the KAMs “need to bridge the gap in understanding at national level within their companies”.
He warns that change is also long overdue and that pharma companies must embrace this new model. However, he admits that there will be little appetite for change so long as pharma companies feel they can maintain the status quo. Nevertheless, change will come as a result of “strong evolutionary pressure”.
He acknowledges: “While they still think they can sell, they will stick to the old model. It’s when they realize that the system is not working that they will change.” So, what will prompt this change? “Non-reimbursement,” Ali stresses.
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