NHS watchdog is winning the price war with drug companies

Dear Readers,

I would like to close posting for this year with yet another interesting article around NICE and patient access schemes. 2009 has certainly been "The" year of Risk Sharing and alternate pricing discussions.
This is also a good opportunity to thank you all for the many messages I have received and the overwhelmingly positive feedback on the blog (although posting has been slow at times due to my crazy schedule) and the workshop on Risk Sharing that Olivier and I have facilitated at ISPOR in Paris. Many thanks also to all of you who pointed out interesting articles and issues; please keep it up. Guest post are equally welcome, if you have written an interesting piece of discussion and/or any opinion you may have on our day to day business please send it along.

With my very best wishes for the holiday season!
Merry Christmas

from The Independent
By Jeremy Laurance, Health Editor
Monday, 21 December 2009

Manufacturers forced to negotiate cost deals to gain approval for cancer medicine

Pharmaceutical companies are being forced to cut the price of high cost cancer drugs for the first time as a result of a tough new approach by the NHS medicines watchdog, the National Institute for Clinical Excellence (Nice).
In the latest example, Nice has today announced approval of trabectedin, a drug for soft tissue sarcoma, a rare cancer that can occur anywhere in the body, after the Spanish manufacturer, PharmaMar, agreed a deal which could halve the cost to the NHS.
It is the third time in the past year that companies have lowered the price of cancer drugs in order to get them approved by Nice. Similar deals were done in August with the makers of a drug for kidney cancer and in June for multiple myeloma.
One drugs expert said: "Whereas in the past companies went off in a huff when Nice refused to approve their drugs because of their high cost, now they are returning to the negotiating table to work out an acceptable deal."
The drug, trabectedin, is the first new treatment for soft tissue sarcoma in 20 years. Clinical trials show it can extend life in patients with advanced sarcoma from an average of eight to nine months to 12 to 13 months.
About 2,000 people a year develop the cancer in the UK, of whom 500 to 600 have an advanced form.
Trabectedin costs £3,500 to £5,000 per infusion, which is given every three weeks to one month. Nice initially rejected the drug as being too expensive for the benefit it brings.
That forced PharmaMar to resume negotiations with the Department of Health over the price. The company subsequently agreed to cover the costs of the drug for any patient who needed it beyond five treatment cycles, effectively limiting the cost to the NHS to £17,500 to £25,000 per patient, compared with £40,000 to £60,000 for patients who survive the average 12 months.
Carole Longson, director of the Health Technology Evaluation Centre at Nice, said the reduction in the overall cost of trabectedin had meant Nice was now able to recommend the drug.
"We are delighted the independent appraisal committee has been able to recommend trabectedin. Treatment options for this type of cancer are limited. [This] represents a step forward in the care of this group of patients," she said.
"Sometimes [the price of new drugs] is just too high for the degree of benefit they demonstrate. In these circumstances, companies can consider and present a new value proposition if they wish to. We would certainly encourage companies to help make their products cost-effective for the benefit of individual patients and the NHS as a whole."
For much of its decade-long existence Nice has been held to ransom by the drug industry, which has relied on patients, charities and medical organisations to lambast it each time it rejected a drug because of its excessive cost. Nice is prevented from negotiating with drug companies on price by its constitution.
In January the Government reached a new deal with the drug industry under the Pharmaceutical Price Regulation Scheme, which gave it the right to negotiate "patient access" arrangements to cut the cost of drugs to the NHS.
At the same time, Nice was ordered to increase its cost limits for new drugs for end-of-life conditions, from an estimated £30,000 per quality-adjusted life year (qaly) to £40,000-£45,000 per qaly.
Roger Wilson, director of Sarcoma UK, said: "Nice is now essentially an NHS price control mechanism. What we are seeing now is every technology appraisal of a new drug being refused at the first stage. Nice presents an open invitation to the company to go to the Department of Health and say we want to negotiate on a patient access scheme."
In August, Pfizer agreed a similar deal to win Nice approval for its kidney cancer drug, sunitinib (brand name Sutent). Under the deal, Pfizer said it would pay for the first cycle of treatment, worth around £3,100, for all patients.
In a separate case, Celgene, the manufacturers of lenalidomide (Revlimid) for multiple myeloma, agreed a price-limiting deal to win Nice approval under which the company will cover the cost after two years of treatment.
Andrew Wilson Webb, head of the Rarer Cancers Forum, said the new strategy was "a naked government ploy" to reduce the cost of drugs by squeezing pharmaceutical company profits.
He added: "In that sense I am all behind it. But the impact on drug company profits could lead to the withdrawal of research from the UK. If we got to the situation where clinical trials were no longer run in the UK, patients could suffer."


MS drugs scheme fails to deliver results

The MS scheme was the first implemented Risk Sharing scheme in the UK, the article highlights nicely the difficulties with perforance based schemes in difficult disease areas..

from the Financial Times

By Andrew Jack
Published: December 3 2009 01:56 | Last updated: December 3 2009 01:56

A pioneering scheme designed by the government to impose a money-back guarantee on pharmaceutical companies if their drugs did not adequately treat patients has failed to provide any clear conclusions more than seven years after it was launched.
In an article published on Wednesday in the British Medical Journal, a team of medical academics concluded there was no evidence to date that five drugs given since 2002 to multiple sclerosis patients were cost-effective.
The long-awaited study was the first public analysis of a “risk-sharing” programme established by the Department of Health and a series of pharmaceutical companies after the government’s medicines watchdog advised against use of their products by the National Health Service.
The findings of the research, led by Mike Boggild, a consultant neurologist from the Walton Centre in Liverpool, raise questions about the growing number of other pharmaceutical risk-sharing schemes subsequently agreed between drug companies and government.
They also stirred further criticism of the National Institute for Health and Clinical Excellence , which assesses the cost effectiveness of new drugs, and the willingness of the NHS to follow its recommendations.
After Nice rejected the drugs Avonex, Betaferon, Rebif and Copaxone as poor value for money in 2002, the drug companies discounted their products to between £5,800 and £8,000 ($9,600 and $13,326) on condition that the price could change again after as little as two years if results were 20 per cent more or less effective than claimed.
However, it took until 2005 before the 5,500 multiple sclerosis patients necessary to assess the drugs had been recruited, and the data was only finally released this week, more than two years after the first evaluation period ended in 2007.
Echoing criticisms raised when the scheme was first launched, Dr Boggild said it was hard to assess the cost-effectiveness of multiple sclerosis drugs because of the difficulties in comparison with lack of treatment and because their effect can only be observed over long periods.
“There would have been easier diseases to study with this sort of study,” he said.
The Multiple Sclerosis Society, a patient group, criticised the “belated” publication of the data, called the scheme “ineffective” and highlighted that the ability to gain access to the drugs varied widely across the UK, and was among the lowest levels in Europe.
“This is a deeply frustrating situation,” said Simon Gillespie, chief executive.


New report on big pharmas' reputation

Dear All,

just came across a report announcement from firstword.

With all what is going on in the industry it sounds like an interesting piece of work looking at the various aspects in a somewhat different and holistic fashion.