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)