The Department of Health published its initial consultation on value-based pricing

Dear All,

this was just released by the Department of Health in the UK.

best wishes

Patients to benefit from new drug pricing system
16 December 2010
Department of Health
Proposals that will in future enable more NHS patients to access innovative medicines were set out by Health Secretary Andrew Lansley today. The plans for pricing drugs according to how they benefit patients, the NHS and wider society were published in a consultation: A new value-based approach to the pricing of branded medicines.
The consultation looks at how a medicine’s value can best be measured and reflected in the price the NHS pays for it. The new arrangements would mean that more licensed and effective drugs will be available to NHS patients and clinicians at a price that reflects the value they bring.
While the current system of pricing medicines has tried to achieve a balance between reasonable prices for both the NHS and the pharmaceutical industry, it does not sufficiently promote patient access or innovation effectively.
Health Secretary Andrew Lansley said:
“I want to ensure patients have access to the right medicines and treatment. I do not want in future for the effect of the medicines pricing system to be the denial of effective and appropriate treatments to NHS patients. So we need to change the way drugs are priced and ensure value for money for the NHS. Doctors should be able to focus on what matters most – achieving the best health outcomes for their patient, not debating the relative value and price of a drug.
“Value-based pricing will ensure that the price the NHS pays for medicines are based on an assessment of its value, looking at the benefits for the patient, unmet need, therapeutic innovation and benefit to society as a whole.
“I look forward to working with the NHS and the pharmaceutical industry to develop a system that encourages medical research and rewards truly innovative breakthrough drugs.”
As an international leader in the evaluation of drugs and health technologies, the National Institute for Health and Clinical Excellence (NICE) will continue to have an important advisory role in the new system, including in assessing the clinical benefits of new medicines and giving authoritative evidenced-based advice to clinicians.
Value-based pricing will be introduced from 2014 following the expiry of the current Pharmaceutical Price Regulation Scheme arrangements at the end of 2013.
This consultation invites contributions from all interested parties towards the development of the future model of drug pricing.
Notes to editors
1. The consultation on the new drug pricing system, A new value-based approach to the pricing of branded medicines, can be found at:
2. The current Pharmaceutical Price Regulation Scheme runs for the period of 2009 to 2013.
3. NICE produces a range of evidence-based guidance on the treatment and prevention of ill health. Its appraisals of drugs and other technologies look at all available clinical evidence, including data submitted by the drug’s manufacturer and the most recent clinical research. Following evaluation, NICE provides guidance to the NHS on how a particular drug or technology can best be used in the NHS. Please see www.nice.org.uk for more information.
4. For further information, please contact the Department of Health press office on 020 7210 5221.


The year of change for Pharma

Dear Readers,

We are close to the end of a for sure turbulent year in the pharmaceutical sector, so it’s time for some reflection on the most important developments. Pricing professionals will remember what I called “The perfect pricing storm” in Europe in 2010. The crisis arrived via the CEC Region and other shaken markets such as Spain - almost all countries introduced new measures of cost containment and anti crisis packages throughout the year that resulted in significant price cuts and change in international price referencing rules and frequency. Some countries took an incredible hard stand in that regard by for example refusing to accept company pricing sources in their calculations coupled with other ad hoc changes. Greece was an entire mess, to say the least, and still certain rules have to be sorted out as for example the formula to price referencing of orphan drugs. Mr Witty, from GSK at a recent healthcare conference, remarked in that that regard: "We cannot address budget challenges and the impact of the financial crises using blunt tools such as international reference pricing. Such short-term responses will damage the innovative capability of Europe,".

The dawn of Risk sharing and alternative pricing
Risk Sharing, market access agreements, alternative pricing, or however we want to call it, is on the rise and many meetings and conferences took place on the matter throughout the year. It is clear that new concepts were required in order to overcome the problems caused by international price referencing – currency fluctuations during the year made things even worse – and to manage cost per QALY threshold issues in the UK. Italy simply made performance/outcomes based agreements mandatory for any Oncology drug. A lot of progress has been made but people are still not sure where this is all going. In my view it will be an important opportunity to do things different because one thing is clear after such a tough year, business is going to be very different from now on.

Value based pricing on the horizon
The other major development is the announcement of the UK government to reform the PPRS and to introduce value based pricing by 2014 and to “depower” NICE to some extend. The industry proceeds with caution with respect to VBP - i.e. engages in further discussions with various parties but not necessarily taking a strongly proactive/driving approach at this time as it seems. There appears to be a lack of consensus on what payer goals with respect to VBP. The primary obstacle for moving forward with VBP would appear to be not the concept but the implementation - i.e. the methodology. Therefore being aware of and wherever possible involved in further discussions regarding methodology will be key to the manufacturers having a good understanding of, and ideally influencing, this debate.

Relative efficacy/effectiveness assessment
In November an interesting meeting took place on the topic in London. It was a debate over the issue of relative efficacy/effectiveness assessment at launch and the role and process of the various stakeholders. EMEA supports a further collaboration between regulators and HTA agencies and somewhat expressed that they could play a role in rel. efficacy assessments whereas the industry speakers made clear that they see no role for EMA in the assessment of relative effectiveness and that it should remain a national matter as this requires a consideration of country specific factors: relative efficacy and effectiveness assessments must be separate from regulatory approval. It seems that in short term a movements towards a pan EU relative effectiveness assessment are not very likely, however central relative efficacy assessment might become a possibility. HTA agencies, namely NICE, outlined that the assessment for relative effectiveness is of course key as part of a drugs cost effectiveness evaluation however that methods need to be further developed. In that regard it was interesting to hear from a German representative of a regional health insurers association that Germany is not expected to do much economic evaluation as there will be an assessment of added therapeutical value done by IQWIG institute, it appears that the ministry of Health not GBA is now charged with the responsibility to develop a methodology. Orphan drugs will not be exempted form that evaluation if the expected sales volume is more then €50 million. Drugs can be priced freely in the first year than the assessment of added therapeutic value takes place. A product deemed not to offer additional value will automatically be put into the therapeutic reference price system, if additional value is assessed manufacturers can negotiate price with sickness funds, if no agreement is reached sickness funds will apply international reference pricing (average of the 5 major EU markets)

It is quite clear that some HTA agencies struggle to find their role in a changing environment, especially NICE - value based pricing will be implemented by 2014 - depending on the system and methodology that maybe an opportunity or further complication the business in the UK, Risk is that such a system however set up will be "exported". Belen Garijio, European President Sanofi Aventis, stated that the problem is much bigger, one of financing problems and decreasing R&D productivity of pharma. She also sees innovative pricing and risk sharing as a viable business strategy however fundamental question are not resolved in her view, such as how will society fund high cost, step by step innovation medicines in end of live situations?

Market access - revisited
The new concept – or shall I say buzzword – of Market Access has now arrived even in the smallest company. In fact it all started with a varying terminology around one single problem: Scarce healthcare resources and their allocation over competing treatments/technologies/drugs: “access”, “payer relations”, “health economics assessments”, “pricing and reimbursement issues”, “HTA”, “relative effectiveness” , “cost-effectiveness”… are the words we heard a lot... So in the end it is a new name for an essentially “old” thing. Today 'market access' is more than ever about real life evidence creation such as clinical data, at and after launch (relative effectiveness) as well as cost-effectiveness and value based pricing (if we want to use that term alreday). Therefore to me nothing is really new, apart from implementing a more coordinated approach that entails: Go/no go (early payer engagement); Reimbursement with evidence development; Risk Sharing, Alternative Pricing and Bilateral Agreements and last but not least an “orchestrated” approach of functions such as Pricing, Health Economics, Patient Advocacy, External Affairs & Communications etc..
I am sure a lot of reorganizations and title shuffling will be continuing in 2011 coupled with announcements of further workforce reductions in order to meet the challenges of the future healthcare environment. What is imperative however is a stronger focus on the science front and better ways of creating an environment that allows to create the R&D productivity that is needed to sustain an industry that has already brought so many benefits to patients. Capabilities to look at, and build, the pipeline from an early stage for distinctive value and being able to create the data that substantiate that value will be as important as the ability, on both sides - industry as well as health authorities, to come to more innovative commercial and/or performance based agreements. The companies who will master these points through intelligent and modern organizational and capability building exercises will be at the forefront, regardless of what you name that “baby”.

With that I thank all the readers for their time and interest, your loyalty to the blog – we have grown quite a bit this year, for the many encouraging comments, articles, news etc that you have sent.

I am wishing everyone a wonderful and relaxing holiday season and a fresh start in 2011.

Keep in touch!


German Bundestag approves AMNOG - end of free pricing

The German Bundestag approved yesterday the new health bill AMNOG (known as Arzneimittelmarkt-Neuordnungsgesetz). This is a significant change for the introduction of drugs in Germany. Among other measures it ends the period of free pricing in Germany and secondly it introduces the concept of benefit/cost assessments into Germany after all.
Health minister Philipp Roesler said the law will create the right balance between granting access to new drugs and controlling costs. "We don't want drugs to be more expensive in Germany than elsewhere," he added.
The magic bullet control drug prices in Germany is supposed to be an early benefit assessment conducted by IQWIG - methodological details not yet fully known. The law maintains free pricing in the first year of the product launch but imposes a benefit assessment of new drugs within three months of commercialization in order to set a price as of the 13th month of sales. Drugs evaluated as of additional value are allowed to negotiate price setting with the statutory health insurance funds while those deemed as of no added value will be automatically included in Germany's therapeutic reference pricing system.
A lot will therefore depend as to how the benefit assessment will be conducted but first indications in the area of oncology (although IQWIG has not yet evaluated cancer drugs) where apparently overall survival is deemed the only acceptable endpoint, indicates that the institute might take a strong stand on the assessment of benefits.
Germany is in for an interesting ride but also significant EU wide implications can be expected from the new price setting process and results.
We count on readers from Germany to keep us up to date.
A cynical few might be that pricing and health economics professionals will now experience a golden professional future in Germany ...


Andalucia to set own drug prices?

Dear All,

P&R starts to become even more difficult in some markets with discussions of different prices per Region - here some latest news (in Spanish only) from Spain where apparently the Andalusian government might attempt to fix Andalusian prices ignoring the capacity of the ministry of health in that regard.



Risk Sharing @ ISPOR Prag

Dear Readers,

just a quick "advertisement" that Olivier and I will do again a workshop on Risk Sharing during the ISPOR conference in Prag. The last one was well attended and we got great feedback from everyone, so I hope to see many participants and count on you to spread the word a little. I will be giving an introduction from the perspective of a "practitioner" and Olivier will walk you through some technical concepts - no fear all in a very simple and fun way. See you at ISPOR: Tuesday, 9 November 2010, 16:00-17:00
best wishes


NICE's new role?

Minister confirms NICE will be sidelined in drug evaluation

from inpharm.com

Published on 26/10/10 at 09:29am

NICE's London offices: Lord Howe admitted the cost-effectiveness body will be moved away from single health technology assessments towards the formulation of quality standards

A health minister has confirmed NICE will be “moved” from its current central role in health technology assessment to make way for value-based pricing of medicines.
Health Minister Lord Howe was speaking at a conference co-hosted by industry bodies the ABPI and the BIA on the future of innovation and drug research and development.

NICE has long been seen as a barrier to access by the pharma and biotech industries, and now the Conservatives have confirmed their plans to muzzle the clinical effectiveness watchdog.

NHS bodies are currently obliged to follow (or at least consider) NICE ‘guidance’ but the changes will mean its cost-effectiveness reports will in future be purely ‘advisory’.

When asked if NICE’s role in HTA was to be removed, Lord Howe admitted that the cost-effectiveness body had become “redundant” and would be “moved gradually away from single health technology assessments towards the formulation of quality standards.”

Lord Howe was careful to say that the work NICE does to evaluate clinical cost-effectiveness will remain “very, very important”, but added: “in terms of cost-effectiveness, even though we will rely on NICE’s advise, we will move onto our own value-based pricing system [VBP].”

Speaking at the same event David Willetts, minister for universities and science, said the Department of Health was looking for a “change in NICE” and, having previously discussed the issue with health secretary Andrew Lansley, Willetts added: “I know that he [Lansley] wants NICE to have a more advisory role as VBP comes into place.”

Value-based pricing for UK pharma
The health minister was keen to confirm that the existing pricing agreement, the PPRS, would be honoured until it ends in three years’ time.

Lord Howe said: “So that there is no doubt, the current terms of the PPRS pricing system will be upheld in full until it comes to an end in 2013,” but after this it will be replaced by the government’s evolving definition of value.

He stressed however that the coalition government wants to ensure that patients and the NHS are allowed access to the medicines they both want and require.

“We need a much closer link to the price the NHS pays and the value that a new medicine delivers,” and Lord Howe said that the new system of value-based pricing, to be introduced after the PPRS expires in late 2013, will deliver this.

Lord Howe told Pharmafocus that the details were still to be “ironed out” as to what will define ‘value’ in this context, but he did express the need that its definition must be broadly agreed by pharma, patients and the NHS.

The ABPI has confirmed that it is in close talks with the minister to ensure the ‘best deal’ for pharma and for patients.

Ben Adams


"Dynamic Pricing" Would Use CER To Save Medicare Costs

October 06, 2010

Despite barriers built into the health reform law to prevent use of comparative cost analyses to set Medicare reimbursement rates, allowing such analyses could enable billions in savings, according to an article in the October issue of Health Affairs.
"The time is ripe for Medicare to use comparative effectiveness research to reach a new paradigm, which would include equal payments for services that provide equivalent results," consultant Steven Pearson proposed during a Washington, D.C., conference hosted by Health Affairs Oct. 5. Pearson, who is president of the Institute for Clinical and Economic Review (ICER) at Massachusetts General Hospital's Institute for Technology Assessment, coauthored the paper on the proposed pricing scheme with physician Peter B. Bach, Memorial Sloan-Ketteringm Cancer Center, New York.

Innovative Treatment Coverage For Three Years

Under the "dynamic pricing" model envisioned by Pearson and Bach, CMS would cover and
reimburse an innovative new technology or new drug therapy under Medicare the same way it does now, but only for three years. During that time, manufacturers and clinicians would have to carry out research to compare the performance of the new treatment to a traditional approach. If evidence showed that the treatment did not offer clinical advantages, then CMS would cut the price to the level it pays for
the equivalent, conventional treatment. But if the evidence showed that the new intervention was superior to the traditional method,then Medicare would continue to pay the higher rate. The model would apply to both medical devices and drugs, Pearson said, and it would be similar to the coverage-with-evidence-development model that CMS used for positron emission tomography for cancer back in 2009.
The new model would save money by avoiding continued high payments for technologies or therapies for which there is insufficient evidence to show their clinical worth versus traditional approaches.
Pearson cited Medicare coverage of drug-eluting stents as one example of when higher prices were set for an innovative medical technology even though there was little or no evidence to show that the newly covered technology was superior, or even equal to, a less expensive traditional option. If dynamic pricing had been used in cases such as this, manufacturers would have had three years to prove their product's superiority over older therapies, or if they could not, the new treatments would be reimbursed at a lower rate, at the end of that period. "We would use the pricing analysis mechanism of Medicare" to achieve the lower costs results offered by dynamic pricing, Pearson said.

Industry Opposition And New Legislation Foreseen

Because dynamic pricing might ultimately result in lower Medicare reimbursement for
treatments that fail to prove their superiority in comparative studies, Pearson said he believes that the model is likely to be contested by device and drug manufacturers. Another challenge would be the need to amend the Affordable Care Act to allow the approach,Pearson noted. As was pointed out in a separate study presented at the Health Affairs briefing by Harold Sox of Dartmouth Medical School, there are several places in the Affordable Care Act stipulating that the Patient-Centered Outcomes Research Institute (PCORI) is not allowed to use cost considerations in designing comparative effectiveness studies. Similarly, the health reform law prohibits comparative effectiveness studies from being used by the Medicare program to set reimbursement rates. However, the prohibitions in the law do not restrict a private individual or institution from using clinical comparative information developed by PCORI to make their own private analyses of which technologies may be effective, and save money at the same time, Sox said.
"The public is paying for [comparative effectiveness research], and these measurements are a public good," Sox remarked.

[Editor's note: More news on the medical device and diagnostics industries is available each week in 1 'The Gray Sheet.' Visit our website to sign up for a free trial, or call 1-800-332-2181.]

- Sue Darcey (2 s.darcey@elsevier.com)


New Drugs Stir Debate on Rules of Clinical Trials

from The New York Times

September 18, 2010

Growing up in California’s rural Central Valley, the two cousins spent summers racing dirt bikes and Christmases at their grandmother’s on the coast. Endowed with a similar brash charm, they bought each other matching hardhats and sought iron-working jobs together. They shared a love for the rush that comes with hanging steel at dizzying heights, and a knack for collecting speeding tickets.

And when, last year, each learned that a lethal skin cancer called melanoma was spreading rapidly through his body, the young men found themselves with the shared chance of benefiting from a recent medical breakthrough.

Only months before, a new drug had shown that it could safely slow the cancer’s progress in certain patients. Both cousins had the type of tumor almost sure to respond to it. And major cancer centers, including the University of California, Los Angeles, were enrolling patients for the last, crucial test that regulators required to consider approving it for sale.

“Dude, you have to get on these superpills,” Thomas McLaughlin, then 24, whose melanoma was diagnosed first, urged his cousin, Brandon Ryan. Mr. McLaughlin’s tumors had stopped growing after two months of taking the pills.

But when Mr. Ryan, 22, was admitted to the trial in May, he was assigned by a computer lottery to what is known as the control arm. Instead of the pills, he was to get infusions of the chemotherapy drug that has been the notoriously ineffective recourse in treating melanoma for 30 years.

Even if it became clear that the chemotherapy could not hold back the tumors advancing into his lungs, liver and, most painfully, his spine, he would not be allowed to switch, lest it muddy the trial’s results.

“I’m very sorry,” Dr. Bartosz Chmielowski, the U.C.L.A. oncologist treating both cousins, told Mr. Ryan’s mother, Jan. He sounded so miserable that afternoon that Mrs. Ryan, distraught, remembers pausing to feel sorry for the doctor.

Controlled trials have for decades been considered essential for proving a drug’s value before it can go to market. But the continuing trial of the melanoma drug, PLX4032, has ignited an anguished debate among oncologists about whether a controlled trial that measures a drug’s impact on extending life is still the best method for evaluating hundreds of genetically targeted cancer drugs being developed.

Defenders of controlled trials say they are crucial in determining whether a drug really does extend life more than competing treatments. Without the hard proof the trials can provide, doctors are left to prescribe unsubstantiated hope — and an overstretched health care system is left to pay for it. In melanoma, in particular, no drug that looked promising in early trials had ever turned out to prolong lives.

PLX4032 shrinks tumors in the right patients, for a limited time. But would those who took it live longer? No one knew for sure.

“I think we have to prove it,” said Dr. Paul B. Chapman, a medical oncologist at Memorial Sloan-Kettering Cancer Center who is leading the trial. “I think we have to show that we’re actually helping people in the long run.”

But critics of the trials argue that the new science behind the drugs has eclipsed the old rules — and ethics — of testing them. They say that in some cases, drugs under development, PLX4032 among them, may be so much more effective than their predecessors that putting half the potential beneficiaries into a control group, and delaying access to the drug to thousands of other patients, causes needless suffering.

“With chemotherapy, you’re subjecting patients to a toxic treatment, and the response rates are much lower, so it’s important to answer ‘Are you really helping the patient?’ ” said Dr. Charles L. Sawyers, chairman of human oncology at Sloan-Kettering. “But with these drugs that have minimal side effects and dramatic response rates, where we understand the biology, I wonder, why do we have to be so rigorous? This could be one of those defining cases that says, ‘Look, our system has to change.’ ”

Dr. Richard Pazdur, director of the cancer drug office at the Food and Drug Administration, said in a recent interview that the new wave of drugs in development — especially for intractable cancers like melanoma — might require individual evaluation. “This is an unprecedented situation that will, hopefully, be increasingly common, and it may require a regulatory flexibility and an open public discussion,” he said.

And doctors say that for them, the new wave of cancer drugs is intensifying the conflict between their responsibility to their patients and their commitment to gathering scientific knowledge for generations of the critically ill.

Of course, no single pair of patients can fairly represent the outcomes of a trial whose results are not yet known. Rather, the story of Thomas McLaughlin and Brandon Ryan is one of entwined paths that suddenly diverged, with a roll of the dice.

At times beseeching and belligerent, Mr. McLaughlin argued his cousin’s case to get the new drug with anyone he could find at U.C.L.A. “Hey, put him on it, he needs it,” he pleaded. And then: “Who the hell is making these decisions?”

He believed he should trade places on the trial with Mr. Ryan, who was pursuing his contractor’s license and had just bought a four-bedroom home in Bakersfield. “Brandon has everything going for him,” he told his Aunt Jan.

But Mr. Ryan told his mother he was glad that Mr. McLaughlin, who has a young son and daughter, was the one getting the promising drug. “Tommy has the kids,” he said. “They need him around.”

Path to a Second Trial

The debate over the controlled testing of PLX4032 began in June 2009, around the time Mr. McLaughlin awakened with what felt like an explosion under his right armpit.

The drug, manufactured by Roche, the Swiss pharmaceutical giant, was designed for melanoma patients whose tumors carry a particular mutation, and the company reported that month that nearly all 32 such patients in the drug’s first clinical trial, called Phase 1, had seen their tumors shrink.

The reprieve was all too brief: most saw their tumors begin to grow again within the year. Still, The New England Journal of Medicine called the drug “a major breakthrough” for people with advanced melanoma, whose median survival is eight months after diagnosis. A second, or Phase 2, trial, aiming to validate the results in more patients, was already in the works. And in meetings that summer, several oncologists urged Roche to seek accelerated approval from the F.D.A. The agency allows a manufacturer to sell a drug based on early promise so long as it proceeds with the traditional controlled trial comparing it with the standard treatment.

But with patients already begging doctors for the drug, it seemed unlikely that anyone would join a trial with only a 50-50 chance of getting PLX4032 once it was already on the market. Unless the trial was conducted before approval, it seemed, there would be no chance to get definitive data on its effectiveness.

Some melanoma specialists familiar with the drug would have traded the data for faster access to the drug. “I know all that I need to know based on the results we already have,” said Dr. Keith Flaherty of Massachusetts General Hospital, who led the early clinical testing. “My use of this drug is not going to be informed by testing it against a drug we all hate and would rather never give a dose of again in our lives.”

The standard chemotherapy used in melanoma, dacarbazine, slowed tumor growth in 15 percent of patients for an average of two months. By contrast, PLX4032 had halted tumor growth in 81 percent of patients for an average of eight.

It was conceivable that when the cancer started up again, it would progress much faster in patients who had taken the new drug, wiping out any extra time they might have gained. But even if so, many doctors believed that if the drug provided relief by shrinking tumors — like the one Mr. McLaughlin soon learned was pressing against a nerve in his arm — that would improve their patients’ lives.

The trial, moreover, would cost $100 million and delay the possibility of F.D.A. approval by at least two years. To some doctors, it seemed a waste of time and resources that would be better used for trials testing what everyone most cared about: how to prolong the remissions.

There was reason to believe that combining PLX4032 with other drugs — some from competitors — would make it more effective. But researchers had to rely on Roche for permission until the drug was available for sale, and the company had not been forthcoming.

Dr. Chapman of Sloan-Kettering came up with a new tack: an unconventional bid to speed the drug’s approval, rooted in the observation that patients weeks or days from death could get out of bed and off oxygen when given PLX4032, sometimes for months. The doctors working with the drug referred to this as the Lazarus effect; it was unheard of with dacarbazine.

A trial that cataloged PLX4032’s effect on the well-being of the sickest patients, Dr. Chapman argued, would probably yield fast, tangible results. For him, it represented a chance to give patients symptomatic relief, even if the drug turned out not to prolong life.

“Even without a survival benefit, maybe we could show that it helps people,” he urged. “If you could get Aunt Sadie to the wedding and off of oxygen, that would be great.”

But company officials feared that might lead to approval for only a narrow group of the sickest patients. The surest way to get the F.D.A’s endorsement for a broader market was a controlled trial. And with its competitors rushing to get similar drugs to market, the findings of such a trial might give Roche an advantage in marketing its version as the only one proven to prolong survival.

On Sept. 1 last year, the company submitted its plan to the F.D.A. for the traditional, randomized, controlled trial of PLX4032. It would involve 680 patients, half of them in a control group. Dr. Chapman would be the lead investigator for more than 100 sites in the United States, Europe and Australia. Because of the different ways the drugs were dispensed — one by mouth and one by infusions — doctors and patients, it was decided, would both know who got which drug.

The following week was when Mr. Ryan learned that his cousin might have a health problem. He called Mr. McLaughlin from a job site in Colorado, to tell him about his new Dodge Ram, a truck he knew Mr. McLaughlin had long coveted.

He invited Mr. McLaughlin to come stay with him: there was plenty of welding work, and he could help break in the truck. But Mr. McLaughlin, who had no health insurance, had finally visited a doctor about the pain under his arm. It was melanoma, and he would need surgery to remove some lymph nodes.

“Wow,” Mr. Ryan said, suddenly silent. “You have cancer?”

Two Men’s Struggles

Mr. McLaughlin’s surgery, it seemed, had come too late. In the weeks following, small tumors popped up across his body, including one on his collarbone and one on his triceps.

When Mr. Ryan discovered a swollen node under his own right armpit in October, his mother was not taking any chances. She begged him to go to the emergency room in Colorado. Even so, when the verdict was melanoma, both families were shocked.

Was it genes? Their mothers, after all, were sisters. But there was no history of cancer in the family.

Environment? The boys had fought, played and competed with each other since childhood: who could hold his breath the longest, do the highest cannonball dive, suck down a Slurpee fastest, win their grandfather’s approval? They had ranged across California on iron-working jobs, eating the same food, drinking the same large quantities of beer, promising, in a rare moment of seriousness, that each would bury the other with his hardhat when the moment came. Coincidence?

Compared with most cancers, melanoma strikes a disproportionate number of young people; it is the sixth most common cancer in the United States.

There was no way to know.

Last Thanksgiving, Mr. McLaughlin greeted Mr. Ryan with the usual bear hug. “Looks like we’re doing this together,” he said.

Not ones for excessively talking things over, they left it at that.

Yet both cousins, like the other family members, believed then that Mr. Ryan stood a far better chance of surviving the disease than his cousin. His cancer was rated Stage 3, with no evidence yet that it had spread to distant parts of his body. Mr. McLaughlin, at Stage 4, had a tumor ominously near his liver. And Mr. Ryan had health insurance, while Mr. McLaughlin had none.

It was the mutated gene that the U.C.L.A doctor found in Mr. McLaughlin’s cancer cells in December that turned his luck around. Called B-RAF, it goes awry in half of the 68,000 Americans who develop melanoma each year, for reasons not well understood, signaling cells to grow uncontrollably.

The mutation meant that he would be eligible for PLX4032’s new trial, so the cost of the drug and doctors’ visits would be paid by Roche. And it turned out he would get the pills even before the controlled study began, on a small test of the drug’s interaction with common drugs like caffeine and cough syrup. Judging by the response of patients to PLX4032 in the first trial, Mr. McLaughlin was almost certain to respond. But the medication, the doctors at U.C.L.A warned him, might cause a rash and fatigue and would probably make his skin extremely sensitive to the sun.

“They told me to get a job where I could be inside all the time,” Mr. McLaughlin told Mr. Ryan with a grin; perhaps no one else could better understand how ridiculous it seemed for someone who had spent his whole life outdoors.

Because the slots in the trial were reserved for patients with the most advanced cancer, Mr. Ryan was not eligible — yet. But because he had few symptoms, it hardly seemed to matter. After surgery to remove his cancerous lymph nodes and radiation, he was preparing to return to work.

“Dude, I had ALL of my lymph nodes out,” Mr. Ryan boasted to his cousin over a Mexican-style Christmas dinner at their grandmother’s home in Santa Maria, not passing up an opportunity at one-upmanship. “How many did you have out again, 11?”

Mr. McLaughlin, fingering the tumor that felt like a knot under his arm, might not have been in top form that evening. But he mustered a scoffing reply: “So you had all of them taken out and only four had tumors?”

The following week, he took his first pills.

But even as the tumor on Mr. McLaughlin’s collarbone began to melt away, a faint spot on Mr. Ryan’s lung began to grow.

A Life-or-Death Debate

The discontent among some oncologists over the design of the PLX4032 trial spilled over at a scientific meeting sponsored by the Melanoma Research Alliance in late February.

The ethical review boards at dozens of prestigious cancer research institutions had signed off on the trial, and the leading melanoma oncologists had embraced it: after all, it was the only way to get the most promising drug available for their patients.

But with the trial now under way, a few attending the Las Vegas meeting had already had to tell patients they had been assigned to the trial’s chemotherapy control group. And some had begun to question whether an ethical code that calls for doctors to be genuinely uncertain about which of a trial’s treatments will be more effective had been breached when it came to PLX4032 versus dacarbazine.

After Dr. Chapman presented the recent data from the drug’s promising first trial to a packed room, Dr. Neal Rosen, a friend and Sloan-Kettering colleague, stood up.

“Excuse me,” Dr. Rosen said with unusual formality. “But if it was your life on the line, Doctor, would you take dacarbazine?”

The room was silent.

“My goal,” Dr. Chapman shot back, “is to find out as quickly as possible in as few patients as possible whether this works. If we never know, then we’re never going to be able to build on anything.”

One of the melanoma field’s senior clinicians, Dr. Chapman had lived through trial after trial of drugs that failed to live up to early promise. Almost every oncologist knew, too, of a case nearly 20 years earlier when bone marrow transplants appeared so effective that breast cancer patients demanded their immediate approval, only to learn through a controlled trial that the transplants were less effective than chemotherapy and in some cases caused death.

“Making patients’ tumors go away is gratifying,” Dr. Chapman told critics. “But that’s not the business I’m in. I’m in the business of making people live longer. That’s what I want to do.”

Several of the most veteran melanoma doctors agreed with him. But others argued that oncologists had an ethical obligation to push both the F.D.A. and Roche to make the drug more immediately available.

Some of the strongest criticism came from laboratory researchers who study the biology of the disease and see the drug as fundamentally different from its predecessors. The previous red herrings, they argued, never had such a high response rate. Few other drugs had shrunk tumors in as high a percentage of patients with melanoma or any other solid tumor as PLX4032 had in its first human trial.

“Many of my colleagues who are outstanding clinical investigators have been able to convince themselves that this is a fair thing to do,” Dr. David E. Fisher, a leading melanoma biologist at Massachusetts General, said of the controlled trial. “My personal view is it’s nuts. I don’t know anyone who hasn’t shuddered at the concept that we can’t let patients on the control arm cross over because we need them to die earlier to prove this point.”

In the meantime, some doctors were searching for other trials that could help patients worsening in the chemotherapy group of the Roche trial, even at the risk of undermining its results. Several lobbied to get such patients slots on a new trial of a PLX4032 competitor, manufactured by GlaxoSmithKline.

“It’s much easier to tell patients, ‘We’ll try this for six weeks; if it’s working, great, if not, we’ll shift you right away to the other trial,” said Dr. Jeffrey A. Sosman of the Vanderbilt-Ingram Cancer Center in Nashville. “That’s how I’m going to be able to live with the randomization.”

The reason to prevent patients in the chemotherapy group from subsequently getting PLX4032 was to ensure a clean comparison. But who could prevent them from trying treatments that might well help them live longer? At least one melanoma patient left Sloan-Kettering’s care to join the Glaxo trial at New York University.

In April, Mr. McLaughlin donned a bandanna, a sun hat, a long-sleeved shirt and pants and went to a job building fences on a nearby ranch. The pills, he had vowed, would not prevent him from working outside.

Mr. Ryan’s health, by contrast, was declining. He returned from work only to sleep. Often, when his mother called, he was too tired to come to the phone. “Sleeping, Mom,” he would text her. Or “You have no idea what this feels like, Mom.” Or just, “I hurt.”

His doctor in Bakersfield moved up a scheduled scan.

At the same time, a debate grew heated over Roche’s decision to withhold PLX4032 from many patients not eligible for the trial because they had already been treated with chemotherapy.

The F.D.A. regularly approves such programs, known as “compassionate use,” for promising experimental drugs. But Roche feared a prospective trial candidate might undergo chemotherapy just to qualify for compassionate use and get PLX4032 with no strings attached.

In an emotional moment, Dr. Donald Lawrence of Massachusetts General Hospital e-mailed colleagues about Roche’s decision last spring, under the subject line “moral outrage.”

“Just had yet another conversation with a [patient] with a B-RAF mutation who will die in the next month or so because he can’t get PLX4032,” he wrote. “I feel we need to muster the support of our patients and lobby both Roche and the F.D.A. Compromising the Phase III trial is not justification for withholding an effective drug from dying patients.”

But Dr. Michael Atkins, director of the cancer clinical trials office at Beth Israel Deaconess Cancer Center in Boston, urged him to consider what he thought was the greater good: “Even though it is painful, I think completing a clean Phase III trial and determining if there truly is a survival benefit for PLX would have major value for the field and future patients.”

A Bitter Blow

On the morning of May 12, Mr. Ryan and his mother drove to U.C.L.A. The cancer had spread throughout his body. Yet that weekend, the family was filled with hope. Dr. Chmielowski had found the same gene mutation that Mr. McLaughlin had in one of Mr. Ryan’s tumors. He was finally eligible for the trial.

But the computer made its assignment the following Tuesday, making sure that he would not be getting his cousin’s “superpills.”

Mr. Ryan’s mother picked up the call while her son was undergoing radiation for the tumor on his spine. He was on oxygen.

“I’m sorry,” Dr. Chmielowski repeated as she cried into the phone.

There must be someone higher up to whom she could talk, she said.

There was not, he told her. It was completely random. No one could change it.

“Who else has this drug?” Mrs. Ryan demanded. “We will go wherever we have to go.”

There was nowhere to go, the doctor explained. Once Mr. Ryan had been randomly assigned to the control group at one place, the other hospitals testing the melanoma drug would not give it to him. U.C.L.A. had turned away such patients, too.

The doctor did not tell Mrs. Ryan about the Lazarus effect — that for someone as sick as Mr. Ryan, PLX4032 was probably the best chance to control his symptoms while doctors searched for something better.

The doctor could not know, of course, whether Mr. Ryan really would have fared better on the Roche drug, or whether Mr. McLaughlin’s disease would have been held in check just as well with the chemotherapy. Obeying the trial’s protocol meant withholding the drug from patients like Mr. Ryan, and that, Dr. Chmielowski would later explain, “is awful.”

He told Mrs. Ryan, if the chemotherapy could stabilize her son for just a month or so, there were two new trials opening that might help him.

“What gives them the right to play God?” Mrs. Ryan exploded at home later that night. “It doesn’t make sense to say, ‘We want you for a statistic’ instead of giving them a chance at life.”

Mr. Ryan started his infusion the next day. But a week later, he was hospitalized, unable to breathe on his own and in horrible pain.

“Bud brownies,” Mr. McLaughlin prescribed when he arrived to visit, having already signed himself up for medical marijuana use. “You get out of here, and I’ll make them for you.”

He rated the nurses, trying to make Mr. Ryan laugh.

“Maybe you should just say you want to split some of your pills with her and she’ll hop into bed with you,” he suggested after one left the room. A few minutes later, “No, that one’s a little cuter.”

Then he reminded his cousin of the time Mr. Ryan had thrown a bolt up to where he was sitting atop a wall for a welding job adjacent to a golf course. Mr. Ryan missed his mark by several feet and the bolt landed on the other side, shattering the windshield of another contractor’s truck.

“I’m like, ‘You just tagged that guy’s freakin’ truck,’ ” Mr. McLaughlin recounted for the other family members in the hospital room. On his side of the wall, Mr. Ryan had picked up a stray golf ball. “And then the guy walks out and Brandon goes, ‘Looks like those golfers hit your windshield.’ ”

In his hospital bed, Mr. Ryan was beginning to smile.

“And the guy gets in the truck,” Mr. McLaughlin finished, “and takes off for the golf course.”

Two weeks later, at his cousin’s funeral in mid-June, Mr. McLaughlin placed Mr. Ryan’s hardhat in his coffin and helped carry it to the grave.

Mr. McLaughlin has now been taking PLX4032 for nine months. He is awaiting his next CT scan.


Win win with stakeholders...

I am just reading one of the local pharmaceutical newspapers and stumbled over an article from a Director at Madrid's Institute de Empresa.
She was talking in an interview about the new organizational models and market access, stakeholders and how different everything would be if we we would know our customers and institutions and learn how to work with them etc. I couldn't help thinking that she has no idea. As if country managers and government affairs people within the pharma industry wouldn't know their institutions, their customers, their hospital administrators etc. Of course they do, it is outright funny to see how many people now come up with courses, analysis, consulting projects etc..... repacking the obvious under the catchword of market access concepts...
Instead it is actually rather simple in my mind, of course the industry needs to adapt organizational models but is it not so that we need to speak much more about advancing the science, developing outstanding products? What if we had another Aspirin, Glivec, Statins, even Viagra, if we would achieve many years of survival gain in the common cancers... would we really have to do that much market access and stakeholder win win talk?? I doubt it very much. So instead of blowing hot air it is time to focus on the science, focus on measuring and demonstrating value - that little business school course could than remain rather empty..

An interesting article regarding R&D productivity:


Risk Sharing, Innovative Pricing or Market Access Agreements?

Dear Readers,

This fall has continued to be determined by discussions around health policy and HTA / pricing developments. It seems everyone is trying to find the “holy grail” in solving the fundamental issue, which however is all to often forgotten in the debate: managing scarce healthcare resources and deploying the given resources in a way that maximizes health overall. Some economists may also have to be reminded what the discipline is all about after having immersed themselves (probably too much) into the microeconomic analysis of single technologies or products.
I just came back from a conference on Risk Sharing and Innovative Pricing – although I prefer to call it “Alternative Pricing” or an even better term is “Market Access Agreements”, as Prof. Monder Thoumi named it – that was held in Washington DC, organized by NextLevel Pharma.

There were several very interesting presentations over the two days, although the entire risk sharing topic has not very much advanced and the call is still out whether this will be a straw fire or a long term way of solving access matters and the problem of evidence gaps at time of launch. However one talk on value based pricing particularly reminded me of the fundamental question of economics (the allocation of limited resources) – a topic certainly of interest at the moment as various health authorities are embarking or at least discuss the potential implementation of VBP systems. So is VBP a way of solving the matter of allocative efficiency or is it just another wrong answer to the economic problem as is the allocation of budget according to the cost per QALY threshold, as Prof Gafni put it in his excellent speech.
I personally think that over time some more elements of competition need to be restablished in the health care market. I am always surprised about the ease with which people seem to agree to delegate fundamental decisions that may affect you as a citizen entirely in the hands of centralized authorities. I am referring here to certain HTA agencies as well as to the discussions about a relative effectiveness assessment at EU level. Isn’t it much nicer if every country decides on its on what is good and worth without being dictated by some EU office clerks...?

Now obviously the concept of opportunity cost should come into the equation when valuing single technologies however in my mind this should be left to the individual country as to how to do it. Appreciation for the degree of innovation may vary substantially and so does willingness and ability to pay for certain health technologies, also ways of financing and especially the approach to free up resources from old to new may play an important role. In that regard I advocate for stoping to try to export one or the other agencies' method and think about alternative ways of doing the job.

Last but not least, a while ago I posted a question on linkedin about VBP and for what its worth am posting the answers I received from several of you. Thanks again!

Best wishes


Methodology on value based pricing?

Dear all,
there is an increasing debate around the introduction of value based pricing systems for pharmaceuticals in certain markets, some more detailed and methodological while others are very fluffy and vague. What in your opinion would be a fair and sound methodological concept for the establishment of value based pricing for both industry and health authorities/society?


“Dear Ulf

The value based pricing assume that we can identify the benefit of a medicine and that we can value that benefit. the next step is can we afford it. This is the endless debate of all HTA and pricing committees. There is no perfect method.

From companies perspective the French way is not bad based on the revenue generated by pharma companies in France.

From NHS perspective if their primary goal is cost containment NICE threshold is quite good but it might not be the best for patients.

The exemple of the Swed is probably at this time the best compromise as they look at society perspective and they adopt no threshold but a very flexible attitude and they open the door for conditional pricing with evidence development once product is launched. They accept that there is no gold standard but they do all effort to find a reasonable assessment of the product added value from an effectiveness and cost perspective. Including accepting to provide you a price while you sell and accumulate information to find the actual value.

This could be debated for hours on what is the best way to define acceptable vaklue based pricing. You need first to define the objective you want to achieve as a country when paying for medicine; the affordability what is the budget you as a country can allocate to medicine; then you need to define what is the level of revenu/incentive that will allow invester to be ready to invest in pharma companies.

A satellite question become are there room for companies to improve their efficience and then reduce their drug prices while not affecting the benefit? This goes for R&D, Marketing and sales and admin.

Another discussion is more important in my opinion what is the appropriate pricing process for medicines?

There are diffferent ways to define a pricing process one is the cost plus. The cost plus assess the cost of developing and commercialising a good and then we apply a margin as profit. This is more or less how are priced all health care goods. GP visit, DRG for hospital etc. There is no value pricing in the GP visit.

Another way is willingness to pay. How much customers would be ready to pay for such good?

If there would be a value pricing for the GP this would mean that for a visit he will charge you according to the health production. If he diagnose a myocardial infarction provide you anticoagulant and antiarhythmics one could say he save your life and you need to pay him the price of your life. On the other hand if you got a simple flue he will be of little help and you will pay him a couple of €. This would be the value pricing for the GP visit.

Why and how this debate is happening now?

In fact all of this started with the OFT in UK. They believe free pricing is a none sens and that prices should be set according to the value and not be free. NICE could assess the value and the department of health set a price based on NICE value assessment. This is the value based pricing discussion versus free pricing. They expect that medicine will be equally available to everyone at the right price, that prices will go down and that the discussion about access and inequity will be addressed this way.

But there is another debate on value based pricing versus cost plus pricing. Some German at GBA believe that value based pricing is pushing prices too high and there is no reason to go that way only for medicine, while most of health care goods are driven by a cost plus like pricing process. So they wanted that a discussion is open to reinvent the way pharmaceuticals are priced and that value based pricing is abandonned.

As you could see there are hugge consequences around the pricing methodology and in my opinion the pharma industry is not taking the right angle because they do not actually address the mode of pricing such as cost plus or value pricing or willingness to pay or affordability or a mix. In fact pharma industry is rather discussing the process to quantify value assuming value pricing is the unique option.

As a matter of consequence the debate is moving in other rooms where the pharma industry is not present.

I am writing an article on this topic and I will organize a meeting on Dec on this topic in Paris for our market access day. There will be international expert in this field and I expect it to be very attractive. I will send you an invitation in due time. I will also send you my paper once finalised.

Kind regards “

“Ulf - very interesting question, since I see people throwing the term around all the time without really knowing what they actually mean by it! In any case, my definition is the price which accurately reflect the economic value of all measurable benefits of an intervention. Important questions to ask are to whom do the benefits accrue and how do they value those benefits, as well as who is bearing the cost. As we know, in the UK, they have deemed the benefit of interest to be the QALY, and they have an explicit value for it, but this is in my view an oversimplification of what benefits actually hold value. In some countries it may be cost offsets, or indirect costs. Fundamentally I think of it as the price at which you can truly say "you got what you paid for" - hope that helps!!”

“Hi Ulf, I missed the chance to comment on this question on Linked-in.

I noticed in Linked-In people have different definitions of value-based pricing means. In my experience (HE researcher)it means pricing that reflects value for money. As such the methodology for value-based pricing should reflect what payers use for making funding decisions = cost-effectiveness. The reasoning fior value based pricing is that in restrictive markets (UK, Cda etc,.) the market uptake for a product will not follow a smooth price/demand curve but instead demand will have thresholds (cost-effectiveness) where formulary/guideline/co-pay restrictions are applied. It is important to identify these thresholds and the prices at these thresholds.

So we build a simple CEA model and look at pricing at CEA thresholds ($20K, 50K, 100K per QALY). The most appropriate threshold depends on the clinical need and value of the product. But overall, it gives a range for price that reflects how the product will be assessed by payers. We have applied this in over a dozen products including a number of rare diseases therapies.”


Head of Pricing & Reimbursement, Germany

Dear All,

please find below an interesting opening in Germany. The contact for this opportunity is Christine Sands (see below post)



Our client is a globally focused research driven pharmaceutical company. Headquartered in Germany, their operations are underpinned by a commitment to excellence in all aspects of their operation. They are driven by a desire to focus on the creation of novel solutions in a team orientated and ambitious and positive environment. The client has affiliates in 34 countries and is seeking to expand its presence in Europe by means of further internationalisation, development and business evolution. The strategy is driven forwards by a management team that is committed to the ensuring that they retain their scientific focus whilst ensuring that they are able to compete effectively in a global market place.
The company has production sites in seven countries which supply the global market and are committed to ensuring that every external interaction generates a positive impression.
On a scientific level they are known as specialists in a number of therapeutic areas including the pain/analgesics and CNS. They are also involved in the development and production of novel drug delivery systems. The focus in R&D is centred on a quality lead approach which seeks to ensure that all development activities meet the highest global regulatory standards. The client markets its products all over the world. At the same time they in-license products in target indications and out-license their own successful products. In 2004 they employed more than 2,000 people in Germany alone, this figure rose to 5,200 FTEs on a global basis. As a sign of their international penetration and reach the client now market their products in over a 100 countries.
It is vital that we source individuals who keen to develop themselves and their career and who can operate effectively in a goal-focused and solutions orientated environment.


The Head of Pricing & Reimbursement is responsible for managing the strategic pricing and reimbursement of our client, reporting to the Head of Global Market Access. This means ownership for the pricing & reimbursement strategy for our client’s global brands and management of all their prices. This requires a clear perspective of value argumentation, evidence requirements and knowledge on trading off risks and opportunities in the European health markets. The Head of
Pricing & Reimbursement is responsible for supporting the senior commercial leadership team in decision making and supporting our client’s subsidiaries. The role will directly manage one Pricing & Reimbursement Manager (position vacant) and potentially additional team members.

Key Responsibilities:

• To develop and implement international pricing strategies, taking ownership of developing the strategy, updating documentation and aligning the strategies with the commercial centre and international teams;
• To support assessment of the value argumentation to payers, co-developing the value story, evidence and gap assessments with HEOR, Medical and Marketing colleagues;
• To assess and advise the commercial senior leadership team on the commercialization of our products particularly with regards to: the impact of international pricing & reimbursement systems on marketing and market access strategies; the assessment of pricing and market access risks arising from price changes, particularly focused on EU vs local opportunities and
risks; communication of pricing and reimbursement strategies to senior management;
• To lead the recently implemented global price management process and global market
access strategy process;
• To support market access strategies with pricing studies, advise on projects that support the value argumentation and be the contact lead for all pricing and reimbursement related issues;
• To advise on the price potential for business development opportunities;
• To ensure the cross functional cooperation with our product teams regarding all questions about pricing and reimbursement and value argumentation.

Skills & Experience required:

• University degree in the medico-pharmaceutical field, natural sciences and/or business management, master degree in economics or statistics desirable
• A minimum of 5-10 years' experience in pricing in the pharmaceutical industry or a relevant consultancy firm
• Demonstrated expertise with pricing and reimbursement of pharmaceuticals with in depth knowledge of European pricing and reimbursement systems
• Health care industry experience and in-depth knowledge of the pharmaceutical business including R&D, clinical and marketing
• Strong ability to assess the economical and healthcare political environment and a keen sense to anticipate new trends and market opportunities
• An excellent written and oral command of English
• High degree of computer literacy and knowledge of computer modelling
• Excellent analytical skills, judgment and problem solving skills

Our client offers an exciting and challenging role in a future-oriented environment as well as excellent possibilities for personal and professional advancement.

Christine Sands | Project Manager | AspirionPharma

T + 44 (0) 132 230 3483

M + 44 (0) 789 670 0589

F + 44 (0) 132 230 3033




Avastin patient access scheme too complicated, says NICE

from www.inpharm.com

Avastin patient access scheme too complicated, says NICE
Published on 25/08/10 at 09:56am
NICE is set to say no again to Avastin for use in patients with colorectal cancer.

Avastin was first launched in the UK in 2005, but was eventually rejected by NICE two years later, a block on NHS use that continues to this day.

Now the drug looks set to be rejected by NICE once again, with the watchdog saying a ‘patient access scheme’ offered by Roche in January to help cut costs is too complicated and may not offer value for money.

The review is looking at Avastin (bevacizumab), in combination with chemotherapy (oxaliplatin and either 5-fluorouracil or capecitabine) in metastatic colorectal cancer (mCRC).

The patient access scheme would have supplied Avastin at a fixed cost of around £20,800 per patient for one year, with a further 12 months of treatment free of charge, and with the cost of chemotherapy agent oxaliplatin also paid by Roche.

Roche then added to this an additional upfront payment to the NHS for each person starting first line treatment with Avastin. Despite these efforts, NICE’s committee has concluded this scheme too complex to accurately assess its cost-effectiveness.

NICE concluded: “The committee felt the proposed patient access scheme was complex and the administrative costs were likely to be higher than in [Roche’s] calculations. It was therefore uncertain what the impact of the scheme would be on the cost-effectiveness of bevacizumab.”

Sir Andrew Dillon, chief executive of NICE, said that it has already approved several treatments for mCRC, including Merck Serono’s Erbitux as a first line treatment, indicating that patients do have a number of choices beyond Avastin.

Dillon added: “We are disappointed not to be able to recommend bevacizumab as well but we have to be confident that the benefits justify the considerable cost of this drug.”

Charities disappointed

Mark Flannagan, chief executive of UK charity group Beating Bowel Cancer, said: “This preliminary decision by NICE is a great blow to patients with advanced bowel cancer.

“While we understand that it may not be a suitable treatment for all advanced bowel cancer patients, Avastin has been shown to increase survival by an average of five months, and can offer patients a better quality of life at a time when every day counts.”

A spokesperson for Bowel Cancer UK said that it was “naturally disappointed” that Avastin was turned down by NICE in its preliminary guidance. The charity added that it hopes the introduction of the new Interim Drugs Fund in October and the Cancer Drugs Fund next April will “enable patients and their clinicians to gain greater access to effective treatments like Avastin on the NHS”

The spokesperson concluded this should be done in order to “create a fairer, more timely and more efficient system that puts patients’ health needs first”.

New cancer funding

The Cancer Drugs Fund (CDF), an election pledge of the Conservatives, is targeted to add an extra £200 million to this process. In August, the health minister Lord Howe said that this figure was “aspirational” and is subject to a spending review in October.

In July the coalition government introduced an ‘emergency’ Interim Drugs Fund (IDF) to help ‘top up’ the CDF before it comes into force next year. This IDF will be worth £50 million to primary care trusts across the country.

Both funds are intended to be used to ‘by-pass’ NICE restrictions on certain cancer drugs and allow greater patient access to oncology treatments.

This additional funding could potentially help Avastin gain access to the UK market even if NICE does not approve of its use in the NHS. The industry is however still in the dark on the specifics of how these funds will work and how they can be accessed effectively.

Ben Adams


CBI’s Risk-Sharing and Innovative Contracting for Bio/Pharmaceutical conference, 20-21 October 2010 in London

Dear All,

summer is almost over and it's time to get back to some business. I would like to highlight an interesting upcoming event in October.

CBI (The Center for Business Intelligence) is organizing a Risk-Sharing and Innovative Contracting for Bio/Pharmaceutical conference scheduled for 20-21 October 2010 in London at the Hilton London Canary Wharf. They have received much excitement from the market thus far.

I am providing the link with more detailed information.

Best wishes


NHS missing out on cancer drug payments

By Emma Wilkinson Health reporter, BBC News

Cost-sharing schemes for expensive new drugs are becoming increasingly common
The NHS may be missing out on millions of pounds of reimbursement for cancer
drugs because of onerous paperwork, say researchers.
Schemes to share the cost of expensive new drugs with pharmaceutical companies
are becoming increasingly common. Yet a survey of 31 English health trusts
showed up to 50% of the costs had not been recovered.

The Department of Health said it was working to make the schemes as simple as possible.
Writing in Clinical Pharmacist, Steve Williamson, consultant pharmacist at Northumbria Healthcare NHS Foundation Trust, said he welcomed wider access to cancer drugs.
But added that the complexity of reimbursement procedures risked making
schemes unworkable.
Continue reading the main story
“Start Quote
We're delighted to have these schemes because they allow patients access to drugs but they have not been executed very well”
End Quote Steve Williamson Study leader
With more of these deals being put in place, the NHS is coming under increasing pressure to track patients, fill in the correct forms and meet the deadlines set by pharmaceutical companies, he said.
The survey asked pharmacists for details of refunds on four of the first so-called 'patient access schemes'.
It included bortezomib for multiple myeloma, in which the NHS is entitled to a refund if patients do not respond to treatment, and sunitinib for kidney cancer, where the first cycle is free followed by a discount.
The responses showed that for these two drugs, refunds may not have been received in up to 50% of cases.
Seven-in-10 respondents said that they did not have capacity to take on any more schemes.
Potentially millions
The researchers said missed payments were in the thousands, and could even add up to millions.
Mr Williamson said the NHS needed to set some basic templates for how such schemes should work rather than each company coming up with their own paperwork.
And he said there needed to be more flexibility, with time-limits on reimbursement.
"The bottom line is we're delighted to have these schemes because they allow patients access to drugs but they have not been executed very well.

"For example with bortezomib, in principle this is a very good scheme because if it doesn't work you get the money back, but if for some reason you miss making one claim within the timeframe allowed it costs £12,000."
Survey co-author David Thomson, lead pharmacist for Yorkshire Cancer Network, said: "I would continue to support any mechanism that improves patients' access to effective cancer drugs at cost-effective prices to the NHS.
But he said an "inappropriate amount of NHS staff time" is being diverted from clinical roles into dealing with bureaucracy.
He also raised concerns that proposals for a £200m cancer drug fund for treatments not available on the NHS would further increase bureaucracy.
A Department of Health spokesman said it continued to work with the pharmaceutical industry to make the schemes as easy as possible to implement.
"We have - through the National Institute for health and Clinical Excellence (NICE) - now set up an expert advisory panel with strong NHS representation which is consulted when schemes are proposed and which provides advice to the department on their implementability.
"Primary care trusts and hospital trusts need to agree locally between them how any rebates paid by drug companies are dealt with."


Oncology drug price cuts announced in Italy related to perfomance based schemes

The Financial Times reported yesterday the potential reduction of oncology drug prices in Italy starting in 2011 after an initial analysis of registry data from the outcomes based schemes implemented in Italy since 2006/2007. Italy is one of the most active markets for risk sharing agreements, and has been launching performance based risk sharing schemes in the recent years. Guido Rasi, dircetor of AIFA, the Italian drug agency stated that according to this preliminary analysis of two year data selected drugs could be reduced by 30 to 40 percent. The full data is expected to be publsihed in the next few month. Among the drugs that could be affected by the plans are in my view Tarceva, Dasatinib, Sutent and Nexavar, of all which have been subject to the risk sharing agreement since 2006/2007 - especially since the FT cited Guido Rasi that price cuts were likely on the first batch of drugs authorized in these pay for performance schemes.


Cutting drug prices hampers new development: study

(Reuters) - Cutting pharmaceutical prices in the way European governments are doing now will severely reduce the number of new drugs making it to market, according to a study of the sector by a Berlin-based business group.


A report by the European School of Management and Technology Competition Analysis (EMST CA), and commissioned by the drugmaker Novartis, said there was a direct link between strict regulation and low innovation in the sector.

New medications likely to be hit hardest under tough pricing regulation include antibiotics, as well as treatments for heart disease and immune system disorders such as multiple sclerosis and chronic meningitis, it said.

The report comes as governments across Europe are seeking to slash drugs prices as they reign in spending to try to tackle runaway budget deficits.

Germany's government approved a draft bill on Tuesday which aims to eventually save some 2 billion euros ($2.4 billion) each year on the cost of patented drugs by breaking up drugmakers' pricing power, and Greece has also moved to slash drug prices by more than a fifth on average.

"Our study shows the consequences that pricing and reimbursement regulation can have on pharmaceutical innovation. It also shows that, incorrectly applied, regulation can reduce the value of pharmaceutical projects and curtail the resources available to carry them out," Hans Friederiszick of ESMT CA said in a statement with the report.

"Rational investors will naturally look for the most profitable investment choices, which is why regulation has a direct impact on the number and characteristics of the medications developed."

This means the more innovative drugs were like to get the most attention he said, whilst important areas like the development of new antibiotics may get left behind.

Drugmakers, such as GlaxoSmithKline and AstraZeneca are already cutting back on research and development (R&D) as they try to position themselves for a huge "cliff" of patents on big-selling drugs that are set to expire over the next five years.

The EMST report said that while European governments predominantly see pharmaceutical pricing models as a way of controlling public health costs, they may not realize or acknowledge the implications for product value, and therefore for the development of new drugs.

It said that internal reference pricing (IRP) -- a system used within Europe whereby prices in one country are taken as a reference point for others in negotiations -- could result in an almost 12 percent drop in prices.

Beyond that, another pricing system called external price benchmarking (EPB) -- a model widely used across OECD countries -- can lead to an almost 6 price drop.

"Having some regions of the world under IRP and others under EPB magnifies the problem, since internal prices are then exported to external markets, leading to a 19.8 percent drop in portfolio value," the report said.

Reference pricing is common throughout the Europe Union and even beyond, with countries including Japan and Canada also taking account of European prices when deciding reimbursement.

(Editing by Louise Heavens)


Methodology on value based pricing?

Dear all,
I just posted below question on linkedin and would be delighted to hear your opinion.

"There is an increasing debate around the introduction of value based pricing systems for pharmaceuticals in certain markets, some more detailed and methodological while others are very fluffy and vague. What in your opinion would be a fair and sound methodological concept for the establishment of value based pricing for both industry and health authorities/society?"


The Perfect 'Pricing' Storm

Dear Readers,

so much is going on these days that it is difficult to decide what to discuss here (although a nice problem to have ;). We are having the "Perfect Storm" on the pricing front, first with Greece's major cuts, many companies now are withdrawing products, exchange rate devaluations with international price referencing consequences, than followed by Spain price cuts and other measures, twice actually, now Italy and France as per FirstWord article below. In addition to that the German health minister has brought foreward the new proposal of the reform of the drug law (Arzneimittelgesetz) that also will have major implications if approved. It will now go through discussions and voting in the Bundestag.


France, Italy announce drug pricing cuts
by Lianne Dane

France and Italy announced plans to reduce healthcare spending, with a particular focus on cutting drug prices in a bid to close budget shortfalls. France plans to reduce drug prices by 100 million euros ($122 million) this year, while the Italian government aims to cut off-patent generic drug prices by 12.5 percent from June 2010 until the end of the year.

Other measures introduced in Italy include the establishment of a drug tendering system beginning in 2011 where reimbursement of generics will be limited to the least expensive medicine within four therapeutic categories.

Commenting on France's decision, Noël Renaudin, an official in the health ministry, said "we have to stop the infinite growth in prices for drugs. It’s no longer reasonable.” The announcements follow a recent decree by Greek authorities to lower drug prices by about 25 percent in the country. Citigroup analysts predicted that drug price cuts in Europe's five largest economies could measure between 5 percent and 10 percent.

Commenting on the news, an international health policy expert from the London School of Economics, Panos Kanavos, said “in the face of adversity, commodities like drugs are an easy place for decision-makers to start [cutting] …. and there is considerable scope to cut in many cases." GlaxoSmithKline CEO Andrew Witty noted that "a few European countries hit us every year with big price cuts. I’m not terrified.”


NICE backs Iressa after Astra sets fixed cost

from Reuters 27.05.2010, Ben Hirschler

AstraZeneca Plc's cancer pill Iressa has been recommended for use in the National Health Service (NHS) after the drugmaker agreed an unusual fixed cost deal.

The arrangement highlights the mounting pressure on firms to agree favourable "patient access schemes" in order to win approval from the National Institute for Health and Clinical Excellence (NICE), which decides if drugs are cost effective.

Iressa will be supplied at a fixed cost of 12,200 pounds, irrespective of the duration of treatment, and there will be no charge for patients who are treated for less than three months.

"It has been designed to ensure value for money for the NHS and to enable the budget impact to be predicted more accurately," said AstraZeneca spokeswoman Abigail Baron.

While NICE does not negotiate or set prices, it does take special offers into account when deciding whether to recommend drugs for reimbursement on the NHS.

In future the watchdog could play a more direct role in determining prices under government plans to move to a system of "value-based pricing."

NICE said on Thursday its draft recommendation on Iressa, which is also known as gefitinib, was open to consultation before publication of final guidance later this year.


The agency had asked AstraZeneca in January for information on Iressa. This was provided along with the new pricing offer.

Lung cancer is one of the most common cancers in Britain, with around 38,000 people diagnosed every year. The most common type is called non-small cell lung cancer.

Iressa -- a once-daily pill -- was approved by European regulators last July for adults with locally advanced or metastatic lung cancer whose tumours have an EGFR mutation.

A mutation in the epidermal growth factor receptor (EGFR) is a characteristic occurring in around 13 percent of lung cancers in Europe, and studies have shown these types of tumours are particularly sensitive to Iressa.

The European regulator's decision effectively revived the fortunes of a drug that had been largely written off after it failed to show significant benefits in the overall population of lung cancer patients in a clinical tests five years ago.

In Britain, NICE has already recommended various injectable treatments for lung cancer, but Carole Longson, health technology evaluation centre director at NICE, said Iressa offered an advantage because it is taken in tablet form.

Separately, NICE said it had also recommended Roche's

established cancer drug Xeloda as a first-line treatment for inoperable advanced gastric cancer, when used in combination with platinum-based chemotherapy.

Gastric, or stomach, cancer affects approximately 8,200 people in Britain every year.

(Editing by David Holmes)


New reference pricing rule in Greece

After much debate the Greek Ministry of Economy, Competitiveness & Shipping has announced a new reference pricing law for pharmaceuticals. The struggling Greek economy is looking for opportunities to realize savings in the health care sector and has introduced a decree of mandatory price reductions. Depending on wholesale price reduction from -3% to -27% (drugs of over €100.01) will be implemented. Orphan drugs and blood derivates are excempted from that decree. This is supposed to be a temporary measure. At the same time a referencing rule of the lowest three countries in the Eurozone is being discussed and for orphan drugs three lowest plus Uk. I must say it is very confusing..it will be interesting to follow how this unfolds.


New "Health Pact" in Spain

The Spanish health minister, Trinidad Jiménez, announced after the last Interterritorial Council meeting in Madrid a new agreement ("gran acuerdo") that will help to save 1.500 million Euros for the Spanish health system. Major parts of the savings are supposed to come from pharmaceutical expenditure cuts via measures such as:

- New therapeutic reference price system for drugs more than 10 years on the market
- Price decrease for generic medicines (25% on average)
- Price freeze / cap for medications for minor symptomatic treatments

Several other changes are also being implemented especially in relation to equality of access and efficiency of the system. The PP (Partido Popular)at the same time announced that economic evaluations will have to become a key component in order to sustain the Spanish NHS and urged the creation of a Spanish NICE...

Right after Germany's announcements a week earlier, Spain has now followed suit in targeting pharmaceutical expenditures as a main source for cost savings. Farmaindustria, the local industry association, is deeply concerned about the effects on R&D activity as well as employment in the sector - so far one of the remaining ´locomotives´ for growth in a widening economic downturn.

For the Spanish speaking readers I post below link with some more info on the topic.


The End of Free Drug Pricing in Germany?

Dear All,

below article from invivoblog is a nice summary of the issue that was widely discussed yesterday in the German press. I would just like to add that several health ministers before him have made the attempt to implement price regulations, therefore it remains to be seen what the legal framework is but I am amazed about the tone the Minister used in the press and the selective targeting of pharmaceuticals... the other thing is that IQWIG and is cost-benefit asessment has not produced much so far. All in all will have to see what is coming but certain is that things are changing in Germany...


from http://invivoblog.blogspot.com/

According to local press, Germany's health minister Philipp Roesler is about to open fire against the branded drug industry with a proposal to break the sector's so-called 'price monopoly' and force them to negotiate lower prices directly with insurers.

Until now, Germany has been one of Europe's last bastions of "free" upfront drug pricing. Sure, the hurdles come afterwards, but both there and in the UK drug firms have--until now--been allowed to set more or less the price they like for new drugs.

"Focus" magazine reported on Saturday that Roesler would impose upon the branded sector fixed price ceilings for their products, should they not come to an agreement with the insurers. Either way, he's gunning for annual health care cost savings of €2 billion.

Direct price negotiations between insurers and drug firms have been legal since 2007. Unsurprisingly though, few if any branded companies have engaged in price-centric dealmaking (or indeed any dealmaking). Most prefer instead to focus on providing other benefits such as supporting compliance.

Meanwhile, as we reported in-depth last year in IN VIVO, the country's largest insurers have already squeezed out over €500 million in savings from the generics sector through inviting best-deal bids for two-year 'preferred supplier' contracts. That trend looks set to continue as firms compete for the next round of contracts.

This is also very likely what's prompting Roesler to try twist the branded sector's arm into likewise negotiating more competitive deals with insurers. We can't imagine that Christopher Hermann, chief negotiator and deputy CEO at the country's largest insurer, will have much to complain about. Frustrated up until now by the branded sector's reluctance to negotiate on price, he nevertheless appeared to see this coming when, back in early 2009, he told us: "I expect contracts around on-patent drugs to become more numerous, as in the next months and years there will be more contracts between health insurance funds and independent doctors' associations in Germany."

His point: insurance funds' negotiating clout is increasing as they wield more and more influence over precisely what drugs doctors prescribe (even though they're not allowed to dictate what drugs are prescribed, as they are in the case of generics).

Lesser of Two Evils?

If Roesler's plan is put into action, drug firms are unlikely to be able to afford to resist, given the alternative: imposed price ceilings that could impact prices not only in Germany, Europe's largest market, but also more broadly across Europe given that Germany service as a reference price market in several other (fixed-price) countries. Negotiating with sick funds may offer industry a little squeeze-room, for instance to provide or fund supplementary services. Such agreements also exempt them from an assessment by IQWiG, Germany's cost-benefit watchdog.

Indeed, another element of Roesler's plan--due to be presented this Wednesday--will allegedly require drug firms to submit, in parallel with a new drug application, a benefit-assessment study of their product, showing which patients the product will serve and which comparator drugs, if any, are already available.

None of this is particularly surprising in today's era of government spending cuts and (continued) targeting of drug manufacturers to make their quick-wins. But whilst it tastes bitter, it may also be an (the last?) opportunity for firms to avoid government-imposed price cuts.

Indeed, Novo Nordisk's CEO Germany, Willi Schnorpfeil , told us in mid-2009 that he would like to see a de-regulated market in Germany with price negotiations between drug firms and payors permitted from day one, as soon as a drug is authorized. Such a system—replacing the current set-up of free up-front pricing with complex rebate solutions and, potentially, centrally determined cost-benefit assessments slapped on thereafter--would allow faster market access to be a negotiating factor, too, he argued


Cost of Cancer

Dear All,

please find below link of an interesting piece of work on the cost of cancer in the UK.




Survey points to an increase in spending on pharmacoeconomics

... am sure that will be very welcomed news by the consultants among the readers ;)

Pharmacoeconomics to Get Bigger Budgets, According to Preliminary Survey Results
Marketwire News Releases
Published: 02/15/10 12:12 PM EST

Cutting Edge Information Reports Findings From Ongoing Study
RESEARCH TRIANGLE PARK, NC -- (Marketwire) -- 02/15/10 -- This year, drug makers' pharmacoeconomics groups will spend more money than ever before -- a clear sign of the function's growing importance to success in the pharmaceutical and biotechnology sectors.
Early results from Cutting Edge Information's (http://www.cuttingedgeinfo.com) ongoing survey, "Improving Pharmacoeconomics and Health Outcomes," show that 2 out of 3 respondents will increase pharmacoeconomics spending throughout 2010. Zero respondents plan to reduce their budgets.
"As governments and payers worldwide keep a close eye on climbing healthcare costs, drug brands need to prove more than efficacy and safety," said Jason Richardson, president of Cutting Edge Information. "They need to show cost effectiveness."
Pharmacoeconomics, the intersection of health outcomes and financial considerations, has grown in prominence as costs and reimbursement issues pose challenges to drug makers. Just two years ago, the majority of surveyed companies waited until Phase 3 trials to launch their pharmacoeconomics work. Nowadays, teams kick off studies in Phase 2 and even in Phase 1, and more money is flowing to these early-stage endeavors.
Teams do this early work to ensure that they collect the right data, which eventually goes before regulatory agencies and payer organizations to establish a drug's overall benefit -- and win placement on payer formularies.
According to Richardson, "Neither patients nor bottom lines benefit from therapies that get buried."

The survey, open until February 19 at http://www.cuttingedgeinfo.com/surveys/pharmacoeconomics/pharmacoeconomics.htm, identifies how pharmacoeconomics strategies are changing to meet the growing demand for health outcomes data. Findings will allow survey respondents to:
-- Benchmark spending and staffing levels
-- Learn how top companies customize pharmacoeconomics strategy to meet
the needs of individual brands
-- See how the function has grown by coordinating with numerous other
internal functions
-- Understand the growing importance of health outcomes liaisons and
risk-sharing agreements
-- Discover how effective pharmacoeconomics teams measure ROI through
quantitative and qualitative assessments and prove their value to
their organizations

In exchange for completing a survey, respondents receive a complimentary copy of the results when they become available.
"This study will provide pharmacoeconomics professionals with ammunition to promote their groups and gain the resources necessary to best support brands," said Shaylyn Pike, lead analyst for the study. "Without an effective pharmacoeconomics strategy in place early in development, brands can launch at a disadvantage."

Stephanie Swanson
Email Contact

Oncology Market Access Summit Europe

Dear Readers,

a lot is going on in the Oncology environment at the moment. There is plenty to be discussed regarding health economics & pricing, market acess and patient advocay etc. and therefore I have accepted to speak at this event. It should become an interesting meeting as it is focussed on Oncology matters only therefore I thought I bring it to your attention in case you haven't seen it yet.


Oncology Market Access Summit Europe: 13th-14th April, London
eyeforpharma's Oncology Market Access Europe Summit brings together a top selection of pharma specialists and experienced professionals to share their knowledge and views on dealing with the challenges and opportunities presented by the massive growth of oncology treatment. Join our event and gain insights into enhanced market access strategies, innovative pricing agreements and effective stakeholder communication. This two day meeting is about hearing from a range of companies, learning from case studies and exchanging best-practice ideas. I look forward to seeing you there!
Camilla Ohlsson
Download the full programme here


European Medicines Agency launches consultation on its Road Map to 2015

New strategic vision continues previous Road Map initiative, setting out the Agency’s priorities for the next five years

The European Medicines Agency has launched a three-month public consultation on its Road Map to 2015, coinciding with its 15th anniversary on 26 January 2010
European and international partners, stakeholders, including patients’ and doctors’ organisations as well as pharmaceutical industry, and the public are invited to make their views known on the Agency’s future strategic vision, set out in the document ‘The European Medicines Agency Road Map to 2015: The Agency’s contribution to Science, Medicines, Health’. Comments should be sent using the Agency’s comments form by 30 April 2010 to mailto:roadmap@ema.europa.eu.
Building on the achievements made by the previous Road Map initiative between 2005 to 2010, the focus of the new Road Map to 2015 is on continuous high-quality delivery of the Agency’s core business in an increasingly complex regulatory and scientific environment. In addition, the document proposes three priority areas for future actions to strengthen the Agency’s role in protecting and promoting human and animal health in the European Union. These include:
Addressing public health needs by: stimulating research and medicines development in areas of unmet medical needs or for neglected and rare diseases; facilitating new and innovative approaches to the development of medicines; implementing effective preparedness plans to deal with public health threats.
Facilitating access to medicines by: addressing the high attrition rate during the development process of medicines; improving the Agency’s model for the assessment of benefits and risks of medicines; improving the quality and scientific and regulatory consistency of the medicines review process.
Optimising the safe use of medicines by: strengthening the evidence base on the benefits and risks of a medicine following its authorisation; applying novel pharmacovigilance methodologies and risk minimisation tools; by taking patient experience into account for improved decision-making; becoming a reference point on information about medicines evaluated by the Agency.
European Medicines Agency launches consultation on its Road Map to 2015 EMA/54050/2010 Page 2/2
Aiming for a wide consensus amongst its partners and stakeholders, the Agency will hold a number of workshops and face-to-face discussions as part of the public consultation process. The Agency will provide regular updates on the progress of its Road Map to 2015 until its final adoption through its Management Board, expected for December 2010.
1. The European Medicines Agency Road Map to 2015: The Agency’s contribution to Science, Medicines, Health is available here: http://www.ema.europa.eu/htms/general/direct/roadmap/roadmapintro.htm
2. The Agency’s comments form is available here: http://www.ema.europa.eu/pdfs/general/direct/directory/comments_roadmap2015.doc
3. The European Medicines Agency Road Map to 2010: Preparing the Ground for the Future is available here: http://www.ema.europa.eu/pdfs/general/direct/directory/3416303enF.pdf
4. This press release, together with other information on the work of the European Medicines Agency, can be found on the Agency's website: www.ema.europa.eu
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Martin Harvey Allchurch or Monika Benstetter
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