Pay for performance contracts for Avastin in Germany

Dear All,

Roche has offered performance based contracts to German hospitals whereby money is paid back when the drug does not work. It appears that the details are not in the public domain. A recent article in the Sueddeutsche Zeitung comments on that news and describes how several stakeholders perceive that strategy as quite problematic as in their view it may set the wrong incentives for hospitals due the potential risk of suboptimal treatment. At the same time the legal basis is questioned as the treatment is paid by the sickness funds and therefore funds shouldn't be given to the hospitals, argue several health insurance representatives. This for sure is a bold move from Roche in order to stop product from loosing ground, but at the same time is not the first pay for performance scheme in Germany. It will be interesting to see how that case unfolds.



German Law Has Companies Weighing Whether to Sell New Drugs in Europe's Largest Market

Dear All,

there is a very interesting podcast on the AMNOG implications and recent developments from the Burrill report.



Market Access: are we mounting the horse from the wrong end?

Dear Readers,

I cannot resist writing one more time about the entire market access discussion currently ongoing everywhere as I believe many of those numerous articles and reports are missing the point. It is sheer amusing - at least to me - to see the continued flood of articles, consultant presentations, blogs, congress announcements, workshops, summits, reorganizations, speeches etc. all over the place basically suggesting as to how the industry just needs to throw a few more people with fancy titles here and there coupled with slight organizational changes onto the problem and involve stakeholders and, guess what, talk actually to patients and perhaps even payers etc. and all of a sudden like Alice in Wonderland everything will be good after all. The uncomfortable truth is it won't be. All this “noise” is only good for one thing, paying the bills of the consultants - which is fine too, as I have been one myself so I can understand, but it will not address the problem the research based pharmaceutical industry and its employees are facing. Without a substantial increase in R&D productivity, the pharmaceutical industry's survival (let alone its continued growth prospects), at least in its current form, is in great jeopardy.

Of course you need experience in areas such as HE, Outcomes Research, Pricing, Economics, Policy, Advocacy etc and all needs to work in sink and early on and with the payer in mind, and yes, most people have understood that by now. So the problem is essentially not in the capabilities, although some are more advanced than others, but rather in the company cultures.

In my view, and in order to get back into business, the industry needs to have a more critical look at itself. Some old fashioned ways of doing things will have to be revisited, most proceses are probably too slow, too bureaucratic, and several companies have cultivated a culture that is not suitable for mistakes or for trial and error. Nobody takes the smallest decision anymore without x t-cons and endless cc lists in the email distribution. We also need to stop looking at the short term financial results only, investors need to be made understood that this is a business model for the long run - in that regard I speculate that some companies that are not registered at the stock exchange might have it easier.

The next important thing is a matter of greater transparency and honesty, internally. How often did you sit in meetings about value stories, and value propositions and this and that and you were thinking this product is actually not up for today’s challenges with the dataset you may have in front of you but nobody wants to be the messenger. Sounds familiar, I thought so. And let's face it if you need a major workshop and intensive external “coaching” to help define the value of your product - well there mostly actually is little to none. If it was really good, it would have been obvious from the start. So maybe we ought to stop beating around the bush and move on if there is nothing to be done anymore... it hurts, understandably, as a lot of sunk cost is associated with it. But this is the same as subsidizing the brown coal in the Ruhrgebiet in Germany over decades…, eventually it was dead, and all knew it was going to be an outdated model, the earlier they would have understood that the better it would have been for all involved.

So how can we get that RD productivity up and bring out the desired and needed (think of cancer, Alzheimer’s etc) next generation products with true distinctive medical benefits? Frankly I don't know, maybe we should ask the scientists. Is it that we have hit the wall with what we can scientifically achieve, is our understanding of human biology and mechanisms simple not sufficient? Or did we organize ourselves in a way that hinders progress?

From my experience I have at least some vague ideas in relation to the later:
It comes again back to culture; scientist, like all creative people alike, need an environment that encourages collaboration, which allows for trial and error, that lets you be different if you want to be, have the freedom to investigate, have the possibility of fast and flexible joint ventures with who ever needed. Maybe we need looser and better partnerships, a closer link to Universities, labs, start ups etc... But this all requires a lean, innovative can do culture with an entrepreneurial spirit. However, what we often find is that scientist, and others, are bugged down by inefficiency, over complication, paper stuff, by old style autocratic leadership style, wrong leaders and managers that micromanage every little move and piece of work and therefore will not allow science to flourish. Or as Steve Jobs put it once, “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”(Fortune, Nov. 9, 1998)
We might also want to stop seeing our competitors only as that but rather form intelligent partnerships, develop things together when appropriate, occasionally jointly understand which drug and where does mostly benefit the patients rather than only detailing each other out.

New break though medicines are the challenge of the future and as part of it you need business, science, economics savvy and pragmatic people who can understand the advantages and limitations of the science and the payers side in order to lead development and hence the market access strategy of such novel drugs, however once you have a looser in your portfolio it will stay a looser whatever resources you throw at it, that is the big change that has come around. Yet many people, to me sheer surprise, seem to have not yet fully understood that.

Discovery in human biology and medicine needs a flexible and opened minded environment, so why not work on that end first, talk to each other earlier, try to build frameworks of collaborations and organizations that foster scientific progress and find truly promising drug candidates (and be ready to kill those early that are not delivering) rather than wasting time on these endless surface based market access discussions that often jump the horse from the wrong end. Let’s rather talk about how to become an agile, innovative and forward looking industry that will be admired for its break through products. An organization that fosters a culture of true innovation, evolution, entrepreneurship and with a focus on distinctive, head to head evidence generation – that is where I think the “market access” movement should be starting to put the focus on to begin with.