Patient Access to Innovative Medicines in Europe a Collaborative and Value Based Approach January 2019 Contents

Patient access to innovative medicines in Europe A collaborative and value based approach January 2019 Contents

Foreword 01 Executive summary 02 Infographic 04 Part 1. Payer challenges to pharma innovation 06 Part 2. Innovating in a more challenging environment 11 Part 3. New approaches to access and pricing 16 Part 4. Succeeding in the new value-based environment 23 Part 5. Next generation market access 31 Abbreviations 36 Appendix 37 Endnotes 38 Contacts 41

The Deloitte Centre for Health Solutions is the research arm of Deloitte LLP’s Life Sciences and Health Care practices. Our goal is to identify emerging trends, challenges, opportunities and examples of good practice, based on primary and secondary research and rigorous analysis.

The UK Centre’s team of researchers seeks to be a trusted source of relevant, timely and reliable insights that encourage collaboration across the health value chain, connecting the public and private sectors, health providers and purchasers, patients and suppliers. Our aim is to bring you unique perspectives to support you in the role you play in driving better health outcomes, sustaining a strong health economy and enhancing the reputation of our industry.

In this publication, references to Deloitte are references to Deloitte LLP, the UK affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche Tohmatsu Limited. Patient access to innovative medicines in Europe | A collaborative and value based approach

Foreword

The European environment for pharmaceutical (pharma) market access and pricing is changing rapidly. European payers are struggling to meet the health demands of their populations. Consequently, health care providers are looking for ways to optimise their expenditure on health care services, and pharma products represent a clearly visible cost payers can attempt to control.

Over the past decade European payers have strengthened their rhetoric on pharma pricing and have implemented policies and pricing arrangements at a regional, country-specific and European level. The ways in which pharma prices are being controlled are many, but overall there is an increasing requirement for pharma companies to demonstrate the budget impact and clinical effectiveness of its products through health technology assessments, budget impact tests and value-based care arrangements.

At the same time, pharma companies are continuing to develop more personalised innovative therapies that can significantly improve patient outcomes. However, this has significant implications for the one-size-fits-all approach to medicating patients. These more innovative therapies have led to increased R&D costs, largely due to the growing complexity of clinical trials and R&D returns are reducing as the potential number of patients a product can treat successfully is smaller. In addition, a shortening of regulatory approval times, through accelerated access schemes for the latest breakthrough innovations, requires pharma companies to generate optimal and robust evidence that satisfies the needs of both regulators and health technology assessment authorities.

For market access initiatives to succeed in this more challenging environment, the pharma industry will need to be more constructive in their dialogue, communicative in their intentions for a product, collaborative with stakeholders, and innovative in the business models they deploy. Pharma can also be a key driver of the move to value-based care by offering new forms of contracting that share cost and risk based on patient outcomes and the quality of services the pharma industry provides. This requires pharma to engage in earlier dialogue with regulators and payers to develop a shared understanding of the clinical and economic benefits of new products, and improve evidence generation during and after clinical trials, through the use of real-world evidence.

Ultimately our report highlights the need for pharma to become a collaborative partner in developing new therapies, build trust and acquire new skills and capabilities to be more agile, technology driven, and tailored in their approach to market access. At the same time, payers need to explore how these new collaborative approaches with the industry can help them use funds more effectively and facilitate better patient outcomes.

Hanno Ronte Elizabeth Hampson Karen Taylor Partner Director Director Monitor Deloitte Monitor Deloitte UK Centre for Health Solutions

01 Patient access to innovative medicines in Europe | A collaborative and value based approach

Executive summary

European payers are responding to significant financial and Increasingly, these policies are being used to emphasise the value societal challenges of pharma products (for example, value-based care (VBC)) by Pharmaceutical (pharma) companies wishing to sell their medicinal requiring pharma to demonstrate outcomes-effectiveness and products in Europe are required to obtain authorisation from the cost-based improvements. EU’s European Medicines Agency (EMA). However, that is only the first step. Europe represents a unique challenge for pharma market Pharma innovation is facing a more challenging market access and pricing activities. Unlike single regulator countries access environment such as the US and Japan, each European country has its own Fuelled by small-molecule blockbuster drugs, pharma has market access and health care system, with different backgrounds, traditionally approached the European market with a volume- population sizes and epidemiological factors, as well as different based business model which aims to reach as many patients payer systems. These differences affect decisions on whether a in a target population as possible. However, scientific advances product will be approved and at what price it will be reimbursed. have enabled a more personalised approach to prescribing. These advances, particularly in genomics and other ‘omics’, are Since the 2008 financial crisis, Europe has endured a decade of allowing patient populations to be stratified, through the use of financial austerity and cost-containment measures. On average bio-marker diagnostic tests, to those who will or will not respond to across 16 European countries, the GDP spent on health care has a treatment. Chimeric antigen receptor T (CAR-T) therapies are the increased slightly from 9.52 per cent in 2010 to 9.74 per cent in latest example of such highly personalised treatments. 2016, while the percentage of GDP spent on pharmaceuticals has decreased from 1.50 per cent in 2010 to 1.36 per cent in 2016. Additionally, pharma products have become more complex. Biologic At the same time, the burden of an ageing population, increases products (large-molecule formulations) are able to treat difficult in chronic diseases and increasing pressure from patients diseases such as cancer and autoimmune disorders better than and pharma to fund products for rare diseases has increased traditional therapies. These highly innovative biologics (such as significantly, putting pressure on European health care systems. immunotherapies) are often priced at a premium.

Efforts used to control drug pricing To increase patient access to pharma innovation, the European As a high percentage of health care costs are fixed and difficult Medicines Agency (EMA) has implemented an accelerated to tackle in the short term, governments have adopted a number approvals process for breakthrough medicinal products. This of aggressive pricing strategies to exert downward pressure on programme allows pharma to enter the European market consumables, including the price they are willing to pay for new and conditionally (for example, using continuous post-approval safety existing drugs. All governments have introduced policies aimed at assessments), after demonstrating adequate levels of safety in changing prescribing behaviour, including generic substitution and the clinical trials process (typically around phase 2). However, the prescribing by International Non-proprietary Names (INN). They are shorter length of trials have created challenges for payers and HTA also increasing the use of health technology assessments (HTAs). authorities who prefer longer-term data to reduce uncertainty The table below highlights a number of other efforts being used to around a pharma product’s efficacy and cost impact. Innovative control pharma spending. pharma products are also facing increasing delays to reach patients; the average length of time from market authorisation to patient co-payments price cuts reimbursement in Europe increased from 233 days (2007 to 2009), to 318 days (2014 to 2016). rebates and clawbacks managed entry agreements

budget caps for individual reimbursement controls and groups of products

tendering and reference pricing selective contracting

limiting medications to changes to distribution specific sub-populations margins

02 Patient access to innovative medicines in Europe | A collaborative and value based approach

With pricing at the forefront of recent political and societal debate, •• Earlier launch planning focussed on dialogue: to understand the payer challenges and other factors discussed above make the the needs of and collaborate with payers to understand their market access and pricing environment in Europe increasingly disease and cost burden; earlier in the R&D process, including challenging for pharma. early dialogue with payers and collaboration with patients to identify unmet needs and real life experiences. Value-based approaches to market access and pricing Approaches to market access and pricing therefore need to •• Innovative contracting: to design contracting and service change. There are a variety of value-based contracting models solutions that meet the genuine needs of the system, payers (financial, outcome and service based), of particular interest to and patients, deploying multi-disciplinary teams with first-class some payers. These agreements, which can be based on cost, collaboration and interpersonal skills backed by strong evidence evidence and risks, require a more collaborative relationship of health system understanding to support the future health between pharma, payers, providers, physicians and patients, in system sustainability. which all members work together to improve patient outcomes and the performance of health care. In some of these approaches •• Real-world value dossier creation: using RWE to develop an pharma provide health care providers with services that decrease in-depth understanding of system challenges, physician and the administrative burden, improve operational and financial patient experiences and the benefits of products and services performance, and improve patient outcomes. However, payers including the ability to demonstrate value in a more holistic way. often prefer discount-based agreements. •• Build trust and understanding: demonstrate that you are a Succeeding in the new market access and pricing collaborative partner in your therapy area by providing patients and environment providers with the tools to understand and comply with treatments, In order to succeed in the European environment, pharma need and assurance on data use, security and privacy. Develop stronger to communicate their intentions for a product more effectively, be relationships with payers based on increased transparency. more collaborative with stakeholders, and innovative in the models they deploy for market access and pricing. More specifically: •• Build the skills and expertise needed for the future: adopt new ways of working and deploy multidisciplinary teams •• improve understanding of the scientific and economic that engage early in the R&D process and have deep technical considerations of both regulators and payers skills such as data analytics, health economics and actuarial modelling skills; combined with creative problem solving, •• utilise early access schemes to gather evidence on a product’s advocacy and communication / engagement expertise. safety and efficacy, and partner on services and technologies in order to develop solutions that clearly demonstrate value Conclusion ‘beyond the pill’ In an environment where payers may soon know as much about real-world medicine effectiveness as pharma, the burden of proof •• develop regulatory and technical standards and skills to ensure for outcome delivery is shifting to pharma companies, and the bar data privacy and interoperability, including registries that allow is rising. However, to solve the challenges facing the health care tracking of outcomes and multi-indication pricing. system, a collaborative approach is required where all players adapt their skills and move away from historic methods of engagement. Next generation market access requires pharma to evolve Pharma should build a tailored approach to contracting and market Continued success depends on the pharma industry’s ability to access discussions, using new technical and communicative skills. adapt and tailor their approaches to pricing and market access. At the same time, payers need to leverage pharma’s significant Pharma companies need to be more agile and enhance their core skills and commercial capabilities to solve their challenges. It is to organisational capabilities to support market access and pricing both sides’ advantage to engage in more dialogue, communicate, in a proactive way throughout the life cycle of their products. share evidence, and take a value-based approach to the use of Moreover, pharma need to understand the new skills and talent medicines across Europe. Without taking these steps, patient access organisations will need to succeed in market access endeavours in to innovations may be undermined, and the health care system risks the future. These core organisational capabilities are: becoming unsustainable.

03 Patient access to innovative medicines in Europe | A collaborative and value based approach

The pharma market access and pricing environment in Europe is rapidly changing

aers are respondin to hara are respondin to

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onstrained health care udgets are Increasing pressure to fund drugs for Increasing nuer of iosiilars elas in patient access following ipacting phara spending rare diseases entering the European arket arket authorisation

As of September 2018: From 2007 to 2017: he averae ent o time ro maret the E has iven orphan dru the E has autorised autorisation to the copletion o desinations iosimiar products postautorisation processes has increased ro das beteen the has iven orphan dru and to desinations the has autorised iosimiar products das beteen spent on the spent on the and eat care has increased parmaceuticas has ro in decreased ro in orldide it is estiated that orpan dru saes ill total to in to in billion b up ro iion in

overnents in Europe have tightened polic towards reiurseent and pricing hara should enhance their core capailities:

Earier aunc pannin ocused on diaoue nderstand eaord vaue dossier creation se to develop a ratio o unavorae to avorae policies paer needs earlier in the process throuh earlier true understandin o sste challenes phsician and patient dialoue ith paers providers phsicians and patients experiences and the beneﬁts of your products and services

nnovative contractin esin contractin and uid trust and understandin e a collaborative service solutions that eet the enuine needs o the partner in our therap areas and build trust sste paer and patient and support its sustainabilit uid te sis and epertise needed or te uture onsider the sills ap ou have beteen technical and ote noration taen ro eloittes annual report Measuring the return ote uropean countries ere included in this analsis Austria eliu inland rance eran reece reland tal etherlands ora oland from pharmaceutical innovation 2018 iures presented are or the oriinal counicative epertise ortual pain eden iterland and he cohort o lare aret capitalisation biophara copanies

04 Patient access to innovative medicines in Europe | A collaborative and value based approach

aers are respondin to hara are respondin to

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ro and the incidence ea sales per asset have o cancer is predicted decreased ro m in to increase b to in

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overnents in Europe have tightened polic towards reiurseent and pricing hara should enhance their core capailities:

05 Patient access to innovative medicines in Europe | A collaborative and value based approach

Part 1. Payer challenges to pharma innovation

Europe is the second largest biopharmaceutical (pharma) market in the world, with the 28 European Union (EU) countries accounting for $211 billion (18 per cent) of the total $1,133 billion market in 2018.1

While countries such as the US and Japan are essentially single For health care providers and payers, expenditure on pharma markets, Europe provides a unique and distinct challenge for the products represents a visible category of cost that they can measure pharma industry. Within the EU, once the European Medicines and control. Governments have introduced a number of policies Agency (EMA) has clinically approved a pharma product, each to manage the cost of pharma products more effectively. As a pharma company has to navigate a range of diverse European result, and despite a rising cost per patient for new treatments, the health care systems (largely split between Social Health Insurance percentage of GDP spent on pharmaceuticals has decreased, as an and National Health Service frameworks); and local regulatory, average for 16 European countries, from 1.50 per cent in 2010 to market access, reimbursement and cost containment mechanisms 1.36 per cent in 2016 (see Appendix).5 before it can launch its products successfully across the continent. These approaches to reimbursement vary from country to country In contrast, the average launch price of innovative pharma and, in some instances, even within countries. This affects the products is rising due to increasing molecular complexity, way pharma products are reimbursed and priced and can lead to changing modality of treatments (such as, combination therapy) pricing variations and disruption to market access for the same and decreasing size of the targeted population (for example, product across Europe. precision therapies). Moreover, the launch prices of cancer drugs have more than doubled over the last 20 years. The escalating cost The financial constraints on pharma innovation of pharma innovation, coupled with EU payers becoming more The market context is changing fast as payers and providers seek budget conscious, is increasing pressure on drug manufacturers to respond to increasing demands from ageing populations living to demonstrate evidenced-based cost-effectiveness and value longer with chronic non-communicable diseases (NCDs) such as through value-based care (VBC) initiatives that shift a higher level cancer and diabetes. The burden of NCDs in Europe is expected to of responsibility and risk to manufacturers. grow as the population continues to age. In Europe, the incidence of cancer is expected to increase by 23 per cent between 2018 and However, pharmaceutical cost containment policies across Europe 2040.2 Similarly, between 2017 and 2045 the number of people are creating points of tension between manufacturers of innovative (aged 20-79) with diabetes is expected to increase by 16 per cent.3 products, payers and providers. This risks stifling innovation and This increasing demand is occurring at the same time as countries could reduce the access patients have to new therapies. are attempting to control health care spending. It also follows a decade of prolonged economic austerity and cost containment Reimbursement and pricing policies implemented by countries across the EU. According to the Over the past seven years, there have been numerous policy OECD, in 16 European countries, the percentage of GDP spent on developments across Europe aimed at influencing pharma pricing health care has slightly increased from 9.52 per cent in 2010 to while improving access to new medicines. However, the balance 9.74 per cent in 2016 (see Appendix).4 of these changes is more heavily weighted towards tightening the control and toughening the rhetoric of pricing and reimbursement at a country-specific and European level (See Figure 1). Our analysis of the wider European market identified a ratio of 2:1 in terms of unfavourable to favourable policies, as the evidence requirements for reimbursement increase and the tolerance for imperfect clinical data declines.

06 Patient access to innovative medicines in Europe | A collaborative and value based approach

iure noin canes to te parma maret access and pricin environment across te E

ess pressure on price ncrease in tresod ru deveopment incentives 2012. Only drugs >€50m subjected to 2017. NICE introduced £100,000- 2018. Financial model for high cost cost-beneﬁt analysis and assessment £300,000 QALY for ultra-orphan drugs drugs introduced of “additional beneﬁt”

uicer process Paac reuation amendment Easier process or orpan drus 2017. NICE Fast Track Assessment 2018. Budget Law introduced allowing 2012. Additional beneﬁt is considered for VAT recovery on paybacks proven at MA if the budget impact is < €30m/year

e E process 2014. UK Early Access to Medicines Scheme (EAMS) started

2013 2015 2017 2019

2012 2014 2016 2018

e process ouer reuations educed dru spendin cap 2013. NICE Highly Specialised 2016. New framework for orphan drugs 2019. Orphan drugs threshold may Technologies Programme formed which gives less ﬂexibility to pharmacos decrease to EUR30m

e price comparison e dru spendin cap ouer process 2012. Reimbursement based on 2014. Pharmaceutical Price Regulation 2017. New aﬀordability test for drugs interchangeable generics Scheme introduced ≥ £20m per year over ﬁrst 3 years

ouer process ouere price reimursement comparison process educede price dru comparison spendin cap 2012. Health economics used in MA 2014.2012. PharmacoeconomicReimbursement based analysis on used 2017.2012. ATUReimbursement reimbursement based capped on at asinterchangeable part of pricing generics process €10,000interchangeable per patient generics per year for drugs that have pre-tax sales of more than €30m per year in France ouer reimursement process 2012. Broader Reference Pricing system ouer process & introduction of price negotiations 2014. Increased re-evaluation of drugs ess pressure on price 2017. Germany. Extended price freeze ositive Negative on reimbursable medicines

Note: Policies covered in the ﬁgure are not representative of all changes occurring across Europe Source: Deloitte LLP, 2019

07 Patient access to innovative medicines in Europe | A collaborative and value based approach

Cumulatively, these shifts place pressure on how pharma products •• In 2014, the Dental and Pharmaceutical Benefits Agency (TLV) in are priced and how pharma budgets are managed within each Sweden implemented the 15-year rule, which cuts the price of country. Indeed, a wide range of policies have been implemented drugs by up to 7.5 per cent for those with little generic competition across Europe, these include: and on the market for 15 years or more. Moreover, the rule is based on the date when a drug (i.e. active ingredient and form) was •• changes to prescribing behaviour including generic substitution first introduced to the market, meaning that it also applies to drugs and prescribing by International Non-proprietary Names (INN) that have been on the market for fewer than 15 years.8

•• price cuts •• In 2017, the National Institute for Health and Care Excellence (NICE) in the UK introduced the £20 million budget impact test for •• managed entry agreements medicines which are predicted to cost more than £20 million in any of their first three years of use. Reaching the threshold results •• reimbursement controls in discussion between NHS England and the manufacturer to limit the impact of the medication on NHS England’s budget.9 •• reference price changes including increases in frequency and changes in the basket of countries •• In 2017, through its yearly Social Security Finance Act (LFSS), France introduced a reimbursement cap of €10,000 per patient, •• changes to distribution margins per year for drugs with pre-tax sales of €30 million per year.10

•• rebates and clawbacks Countries are also increasing their individual capacity and capability to negotiate with pharma on pricing (See Case study 1). •• tendering and selective contracting

•• budget caps for individual and groups of products Case study 1: The Commercial Medicines Unit (CMU) •• patient co-payments providing procurement and tendering expertise to NHS England •• limiting medications to specific sub-populations. The UK’s Commercial Medicines Unit (CMU), formally part of the Medicine, Pharmacy and Industry Group of the UK There has also been an increasing use of health technology Government’s Department of Health, moved into NHS assessments (HTA) to appraise products’ clinical and economic England’s Specialised Commissioning team in 2017.11 The value in order to limit reimbursement levels. Examples include: CMU works in partnership with NHS England and helps the health service with the contracting of medicines used •• In 2014, the UK government introduced its latest Pharmaceutical within England, particularly for secondary care. Moreover, Price Regulation Scheme (PPRS), which allows the Association the CMU provides analysis of expenditure and procurement of the British Pharmaceutical Industry (ABPI) to negotiate the support to providers for a range of medicinal products, prices of branded drugs for a fixed 5 year period on behalf of the including branded and generic medicines. The CMU has a Department of Health (DH). Pharma organisations voluntarily range of tools that it utilises to provide transparency on the sign up to the PPRS. Pricing control practices employed by the tendering and procurement process. These tools include PPRS include budget caps for individual and groups of products. an online pharmacy catalogue and an eTendering system to Between 2014 and 2017, the scheme has limited the growth in track activity and contract negotiations.12 spending by NHS England on medication to an average of 0.9 per cent annually (0 per cent in 2014 and 2015, and 1.8 per cent in 2016 and 2017).7

08 Patient access to innovative medicines in Europe | A collaborative and value based approach

Additionally, smaller European countries have banded together – or are beginning to – in order to increase their bargaining power and share scientific knowledge and methods for economic appraisals (See Figure 2).13, 14, 15, 16

iure rosscountr coaorations ormed to neotiate on parma pricin

e eeu coaoration beinnin in and oriinall consistin o eliu and the etherlands the eeuA collaboration has etended to include uebour Austria and ore recentl reland in he collaboration e iserad roup the roup is a cooperation ais to consolidate the barainin poer o its beteen echia unar oland and lovaia nations to ensure patients have tiel access to n April representatives ro each countr medications and that they are aﬀordable. As of in the roup et to discuss and establish a basis id the nations involved have launched or the countries to cooperate in obtainin pilot proects to cooperate on horion scannin aﬀordable prices for medicinal products within inoration sharin and polic echane oint their respective countries A and increasin the transparenc on the costs and pricin o phara products beteen Combined population size (2018): 63.8m the countries

Combined population size (2018): 42.7m

e aetta ecaration in a alta prus reece tal pain and ortual sined a declaration to eplore strateies to better neotiate the prices o phara products ith anuacturers n reland oania lovenia and roatia as an observer have also oined the roup n a eetin in a the roup areed to continue to or on oint assessents and neotiations eplore neotiations or products alread assessed reinorce inoration echane beteen the countries and analse areas in hich there is roin ependiture

Combined population size (2018): 159.3m

ource eeuA uactive nared iserad orldoeters

09 Patient access to innovative medicines in Europe | A collaborative and value based approach

For pharma companies looking to access the European market, The increasing number of orphan drugs on the market, coupled the pricing environment is becoming significantly more challenging, with an expected rise in drugs granted orphan designation, are especially in terms of achieving a balance between market resulting in payers spending an ever larger proportion of the access and obtaining reasonable prices for their products. drug budget on ‘rare’ diseases that, in aggregate, can no longer This is particularly true for highly innovative products such as be considered rare. Orphan drugs represent a high cost area for personalised medicines and combination therapies. Moreover, the health care and a lucrative opportunity for pharma. For example, banding of countries also raises a number of questions on how in 2017 the average cost per patient (based on list prices) of an negotiations will be conducted in the future and whether they will orphan drug in the US was $147,308 compared to $30,708 for a take into account different pricing reforms and reimbursement non-orphan drug.18 However, many health care providers do not strategies wanted by individual countries. pay these prices due to negotiated discounts.

iure e numer o orpan dru desinations in te and E to

US cumulative total 500 of (2007 to 2017) 400

300

200 EU cumulative total of 100 (2007 to 2017)

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

US designations per year EU designations per year

Note: The EMA defines an orphan drug as a medicine for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition that is rare (affecting not more than five in 10,000 people in the European Union) or where the medicine is unlikely to generate sufficient profit to justify research and development costs. The FDA defines an orphan drug as a drug intended to treat a condition affecting fewer than 200,000 persons in the United States, or which will not be profitable within 7 years following approval by the FDA.

Source: EvaluatePharma, 2018

A rise in the number of products for rare diseases raises Worldwide, it is estimated that orphan drug sales will continue a dilemma for payers to grow, with the market totalling $216 billion by 2022, up from Rare diseases are market segments with high unmet need and $125 billion in 2017.19 Additionally, orphan drugs are estimated to a lack of treatment options. Historically, pharma has sought account for 55 per cent of the cumulative value of the European to develop drugs that can target as wide a patient population pharma pipeline through to 2022.20 The current and forecast costs as possible. However, rapid advances in genotyping and DNA attributed to orphan drugs are creating further pressure on health sequencing have enabled the development of more advanced and care systems in Europe. As a result, payers in Europe are requiring targeted treatments, increasing the focus on developing orphan pharma manufacturers to provide a stronger evidence base over drugs to treat rare disease. Cumulatively, 1,544 orphan drug a longer time period to justify the prices of rare disease products. designations have been approved in the EU over the last 10 years (See Figure 3).17

10 Patient access to innovative medicines in Europe | A collaborative and value based approach

Part 2. Innovating in a more challenging environment

Pharma medical innovations over the last 40 years have been crucial to improving life expectancy and health outcomes for patients across the world. Traditionally, pharma has used a volume-based business model, whereby it produced small-molecule products that could treat as many patients as possible. This model produced numerous blockbuster drugs (a drug whose revenues exceed $1 billion annually), and in the 1990s and early 2000s was highly successful at producing treatments for large patient populations.

The 2000s saw pharma’s R&D focus shift towards large-molecule Indeed, findings from Deloitte’s annual report, Measuring the return formulations (biologics) due to their enhanced selectivity in treating from pharmaceutical innovation 2018, indicate that the cost of disease and improved impact on patient outcomes. However, bringing an asset to market has increased from $1.18 billion in 2010 biologics, which are derived from living cells, are inherently more to $2.16 billion in 2018 for 12 large-cap pharma companies. Over the complex and expensive for pharma to discover, develop and same time, peak sales per asset have decreased from $816 million manufacture than their small-molecule counterparts.21 Advances in to $407 million.22 The average length of time from the discovery of genetics allow patient populations to be further stratified to those a new medicine to its approval has remained at 10-12 years, largely who will or will not respond to a treatment. Consequently, R&D due to the complex regulatory requirements needed for approval.23 costs for pharma are increasing at the same time as the potential target population for new products is reducing, meaning companies Reimbursement thresholds for personalised medicines have to recoup R&D investment from smaller patient populations. Personalised medicine is a treatment and prevention approach Treatment regimes are also changing from the use of single drugs to that takes into account a person’s genetics, lifestyle and diagnosis. combination therapies, and the use of companion diagnostic tests to It allows doctors and researchers to predict more accurately, identify responsive patients early on in the treatment process. through the use of bio-marker diagnostic tests, which treatment strategies for a particular disease will work and for which groups of people. It contrasts with the traditional ‘one-size-fits-all’ approach in which disease treatment and prevention strategies are developed for the average person, with less consideration for differences between individuals (See Figure 4).

iure raditiona vs personaised approaces to te treatment o patients

raditiona approac Personaised approac

Patient group Patient group

Diagnostic/biomarker test helps stratify the patient population based what 100% of patients treated with standard therapy (for example, “drug A”) treatments will work for each patient

Beneﬁt No beneﬁt Adverse event Receives drug A Receives drug B Receives drug C

Beneﬁt provided to a group of patients Beneﬁt provided for all patients

ote his is an illustrative eaple not based on an particular personalised edicine product available on the aret ource eloitte

11 Patient access to innovative medicines in Europe | A collaborative and value based approach

Given the treatment’s complexity and smaller treatment population, More certainty on efficacy over the longer term the cost of research, manufacturing and downstream market prices The regulatory, reimbursement and health economics frameworks of precision medicines tend to be higher.24 Moreover, the clinical in Europe have differing evidence requirements when appraising and budget impact requirements of payers and HTA authorities new pharma products. These differences can result in a product are resulting in some manufacturers struggling to find an equitable receiving regulatory approval but not reimbursement approval balance between budget constraints and uptake of innovation, within a particular market. Around the world, including Europe, despite therapies showing improved patient outcomes. For example, regulators have sought to speed up their assessment processes high cost precision medicines may sometimes fail to meet the cost- through shorter clinical trials to enable patients with unmet effectiveness criteria to qualify for reimbursement. This issue is medical needs access to the the latest pharma innovations. exacerbated in Europe by a lack of consensus on appraisal methods, However, the increase in accelerated assessments has created reimbursement thresholds and what price to outcomes ratio is a situation where the amount of evidence captured may not be deemed cost-effective. This is an issue European countries are substantial enough to satisfy the needs of HTA appraisers working together to resolve, as discussed in this report. (See Figure 5).

iure e needs o patients te parm industr reuators and eat economics odies

lator nee industr noics b eu ds a ne co od r e e n a d h e h s lt e a d e s

ocus on id to lon ter clinical proof of efficacy and safety aster approvals benefit and economic impact clinicall eaninul and statisticall uncertaint o etrapolation ro short significant change compared to the certaint on aret access term benefit to long term impact standard o care use o validated surroate endpoints indication o the ider ellbein o certaint on stable prices that correlated to outcoes to sho lon the patient reard innovation ter ipact ocus on ualit o lie etrics oten based on Avalidated endpoints not captured

iproved outcoes

increased ualit o care

reater enaeent on health

a s tient need ource eloitte

12 Patient access to innovative medicines in Europe | A collaborative and value based approach

The use of shorter trials can result in smaller differences captured The use of adaptive trials, innovative contracting models and data between new and existing products, which is at odds with the acquisition based on real-world evidence (RWE) can have a number of longer-term data required by payers and HTA authorities to positive impacts that serve all stakeholders, which we believe include: demonstrate stronger differences between products and reduce uncertainty about a product’s efficacy. Therefore, innovative •• a stronger correlation between surrogate endpoints and long- products going through accelerated approvals, without additional term impact data collection strategies, may fail to meet the impact thresholds needed to obtain reimbursement. Figure 6 highlights the •• reduced time to gain market access differences between shorter and longer-term trials in capturing and supporting the value of a pharma product. With the increasing •• reduction in the health economics body’s level of uncertainty use of accelerated approvals, a balance is needed to satisfy both over the efficacy and safety of a product regulatory and economic appraisal requirements, requiring more constructive dialogue between regulators and HTA authorities. •• increased confidence in the product by health care providers and patients

•• increased likelihood of reimbursement.

iure oner trias can ao parma to demonstrate te true vaue o teir products

orter tria oner tria

Proved Predicted Proved Predicted

aller arer uncertaint o uncertaint o etrapolation Value captured etrapolation Value captured

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ie ie

oint at hich oint at hich health reulators can be economics bodies can satisﬁed be satisﬁed

ource eloitte

13 Patient access to innovative medicines in Europe | A collaborative and value based approach

More price competition for the most innovative products However, health care payers in Europe have struggled to convince Biologics unlike their small-molecule counterparts, are able to physicians and providers to switch to prescribing biosimilars interact in specific ways with biological systems, thereby providing instead of biologic medications. More recently, individual European more effective treatments for patients.25,26 In comparison to countries have started to support the use of biosimilar medications traditional therapies, biologics are able to treat difficult diseases in order to push both cost savings and changes in physician such as cancer and autoimmune disorders more effectively, and in prescribing behaviours. Examples include: some instances are able to offer cures, such as recently approved CAR-T immunotherapies to treat childhood leukaemia.27 Biologics •• In March 2017, the Austrian parliament adopted a new pricing represent an increasing proportion of pharma’s R&D pipeline, regime for generics and biosimilars. On market entry of a generic totalling 38 per cent of the pipeline in 2017, up from 25 per cent or biosimilar, the manufacturer of the original product will be in 2010.28 Biologics are more expensive than small molecule requested to reduce the price by up to 30 per cent.36 drugs and tend to maintain a price premium for longer after loss of exclusivity due to less competition. Indeed, a small number of •• In September 2017, NHS England issued new guidance which branded large molecule formulations constitute a large proportion aims to have 90 per cent of new patients prescribed the best of prescription drug revenue, making biologics an increasingly value biological medicine within 3 months of the launch of a important category for pharma. In 2016, a leading biologic product biosimilar medicine, and at least 80 per cent of existing patients produced 63 per cent of its parent company’s revenues.29 within 12 months. By 2020/21, the UK has targeted potential savings of at least £200-300m per year.37 Similar to the generics boom in the 2000s, biologic therapies face their own competitive and pricing pressure through biosimilar •• In February 2018, as part of the France’s 2018-2022 National medications.30 However, biosimilars are not identical copies to Health Strategy, the country aims to reach 80 per cent biosimilar the originator biologic molecule and, unlike generics, are more penetration by 2022 – which represents an increase from the complicated to manufacture, require more rigorous testing and previous year’s 70 per cent target.38 research than simply copying the original drug, and tend to be authorised and approved at a slower rate. They are therefore As a result, it is becoming more difficult for pharma in Europe to much more costly to bring to market than generics; this means sustain stable prices for their biologic originator products after there have been fewer competitors and historically have obtained patent expiry and recover the higher R&D costs required to smaller discounts compared to the originator, leading to fewer produce them. incentives for health care providers to switch patients.31 Innovation struggles to reach patients Nevertheless, following the publication of the EMA’s Guidelines on In Europe, pharma products are also struggling to reach patients similar biological medicinal products in 2004, there has been an quickly, with the gap between market authorisation and patient increasing emphasis on the use of biosimilar products due to the access widening. Research conducted by the European Federation savings they can provide for the continent’s health care systems. of Pharmaceutical Industries and Associations (EFPIA) analysed As of September 2018, the EMA has authorised 48 biosimilars the length of time it takes pharma products to reach patients after for use in Europe.32, 33 By comparison, the US FDA implemented obtaining EU marketing authorisation across a range of European a regulatory framework much later, in 2010, with final guidance countries between 2007-2009 and 2014-2016.39, 40 Deloitte analysis issued in 2015. As of September 2018, the FDA has approved 12 of the data set found that of the countries covered in both EFPIA biosimilar products.34 One such biosimilar entry was reported analysis (i.e. the 2007-2009 and 2014-2016 data set), the average to have saved €85 million annually across 17 EU countries since number of days it takes to complete post-marketing authorisation 2011. 35 processes has increased from 233 days for products covered in the 2007-2009 analysis, to 318 days for those covered from 2014-2016. The largest increase in the number of days it takes complete these activities was seen in Portugal (an increase of 288 days), Ireland (an increase of 251 days), and Austria (an increase of 241 days) (See Figure 7).

14 Patient access to innovative medicines in Europe | A collaborative and value based approach

iure e averae ent o time eteen parma maret autorisation and patient access is increasin and

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15 Patient access to innovative medicines in Europe | A collaborative and value based approach

Part 3. New approaches to access and pricing

Because of the challenges presented by the current European market, the approaches to pharma market access and pricing are changing. The market context dictated by regulators and payers requires pharma to demonstrate the long-term value of its products and contribute to the health system in clinical, operational and financial outcomes, thereby fueling a greater emphasis on VBC.

In turn, regulators and payers in some markets have become more Accelerated approvals allow pharma to derive revenue faster receptive to new models of regulatory approval and pricing and Leading regulators across the world have implemented processes how innovation can reach patients faster. that speed up the appraisals, approvals and market access for pharma products (See Figure 8). 41, 42, 43 For pharma products, these include:

•• accelerated approvals for breakthrough products

•• new models of contracting

•• a requirement for greater service participation.

iure e parma acceerated access scemes across te ord

n he overnent published its Accelerated Access E he A has an accelerated approval evie hich aes recoendations to ae it easier or process that ais to revie patients to access innovative edicines edical technoloies aretauthorisation applications as part o diagnostics and digital products, in order to improve efficiency and the centralised procedure that are o aor patient outcoes ecoendations include interest or public health or innovative ithin earl dialoue and reater support ro innovation bodies their therap area Accelerated assessents shorten evaluation ro das to shortened prearet authorisation clinical developent concurrent reulator and A processes pre-EMA reimbursement, flexible pricing and conditional entry periods ina n ec the hinese A adoption support and uptae incentives announced the olloin priorit revie and approval easures in order to encourae pharaceutical innovation in hina he measures stated that drugs that fulfil one of the olloin criteria ill be considered or priorit he A has several process in place to speed revie and approval up the availabilit o drus that treat serious diseases his includes a drugs with significant clinical value such as innovative drus that have not been ast rac process to acilitate the developent launched in or outside o hina drus that and expedite the review of drugs to treat conditions deplo advanced anuacturin ith an unet need technoloies innovative treatent ethods reathrouh herap process to revie drus and have significant treatment advantage hich deonstrate substantial iproveent over drugs with significant clinical advantage in other therapies treatin diseases such as A tuberculosis Accelerated Approval process or serious conditions rare diseases or alinant cancers ith an unet edical need to be approved based on surroate endpoints riorit evie desination in hich the A ust apan ince the apanese A has be triallin its aiae accelerated approval schee or tae action on an application ithin onths i the innovative drus and edical devices he schee allos anuacturers based on preestablished drug can provide significant improvements in the conditions to ain earl approval or their products i the achieve reasonable standards o saet dianosis and treatent o a condition and efficacy in exploratory clinical trials.

ource eloitte A A lobal oru A Accelerated access revie

16 Patient access to innovative medicines in Europe | A collaborative and value based approach

The underlying aim is to increase patient access and adoption Interest in and use of accelerated approval schemes has been rates for new therapies developed by the pharma industry by growing among manufacturers due to the early market access and using the approvals process usually reserved for breakthrough revenue they can provide. For example, between 2014 and 2017: products or those with an unmet medical need. Accelerated pathways fundamentally change the model for approvals from one •• the EMA received 78 requests for accelerated appraisal, accepted that is rigid in its approach to one that is agile, adaptive, iterative 50, with a peak of 17 approvals in 2015, and denied 28. Moreover, and allows pharma to generate early revenue if they successfully the agency recommended 52 per cent (26 pharma products) of navigate the process (See Figure 9). In these schemes regulators these approved appraisal requests as medications45 are willing to assess clinical efficacy and safety data during exploratory trials and grant manufacturers’ access to the market •• the FDA, through its Breakthrough Therapy scheme (combining based on conditions, such as being able to continue to assess data from the FDA’s Center for Drug Evaluation and Research efficacy and safety data while the product is on the market.44 and Center for Biologics Evaluation and Research) received 500 These market access conditions are important as manufacturers requests for appraisals, accepted 191, with a peak of 59 in 2017, and payers can negotiate prices and reduce long-term risk based and denied 248. Moreover, the agency recommended 49 per on a product reaching certain milestones: for example, providing cent (94 pharma products) of these approved appraisal requests better patient outcomes in comparison to a competitor or reducing as medications.46 payer and provider costs.

iure e caracteristics o te standard and acceerated access modes o parma reuator approva

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atients in randoised control trials or other interventional studies atients in observational studies reistries etc

atients treated no active surveillance

ource ichler etal eloitte

17 Patient access to innovative medicines in Europe | A collaborative and value based approach

Innovative contracting The number of cases submitted in Europe was highest in Italy Innovative contracting is an evolving paradigm in pharma pricing (88), followed by the UK (70) and then Sweden (68), and lowest which facilitates VBC, of which there are a variety of different in Slovenia (1), followed by France (3), and Belgium (4). Innovative models (see Figure 10). Globally, from 1995 to 2018 the number of contracting was primarily used to support therapies in oncology, innovative contract cases submitted totalled 477, with 283 (60 per endocrinology and neurology, accounting for 50, eight and six per cent) of these in Europe. cent, respectively, of submitted cases.47

iure pes o innovative vaueased contracts

Agreements to increase ﬁnancial certainty reements to increase outcome certaint

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ource eloitte

18 Patient access to innovative medicines in Europe | A collaborative and value based approach

Given the significant financial constraints on European payers, there In Europe, the study showed that there has been a gradual has been increasing emphasis to move away from the traditional shift in alignment towards aspects of VBC, in particular towards volume-based pricing of pharmaceuticals to ones based on health outcome-based payment approaches, albeit to varying extents in outcomes, risk sharing and cost containment. Analysis by the Economist the countries covered (see Figure 11).48 These variations may be a Intelligence Unit in 2016, commissioned on behalf of Medtronic, reason why the uptake of innovative contracting has been slow and evaluated the presence of VBC systems across 25 countries. generally occur at a local rather than national level.

Figure 11: Alignment with value-based care, by country

Alignment with Enabling context, Measuring Integrated and Outcome- value-based policy and outcomes and patient focused based payment healthcare institutions costs care approach for value in healthcare

France Moderate Moderate Moderate Moderate Very high

Germany Moderate High Moderate Low Very high

Poland Moderate Moderate Moderate High High

Spain Low Low Moderate Moderate Low

Sweden Very high High Very high Very high Very high

United High High High Very high High Kingdom

Australia Moderate Moderate Moderate Moderate High

China Low Low Moderate Moderate Low

India Low Low Low Moderate Low

Japan Moderate Moderate Moderate Very high Low

United States Moderate Moderate High Moderate Moderate

Source: Economist Intelligence Unit, 2016

19 Patient access to innovative medicines in Europe | A collaborative and value based approach

Approaches to contracting vary in their scope and execution Although a variety of contract models have been proposed by and can be tailored to the specific needs of the product and pharma, payers may still be unwilling to participate in discussions. the launch market. The rise of innovative contracts shows that Factors that may detract from the feasibility of VBC and innovative payers, providers and manufacturers are developing closer contracting include a lack of transparency and trust between relationships and more constructive dialogue, and are moving pharma organisations and payers, the administrative burden away from traditional price/volume agreements. The success of associated with VBC, and a perception that increased contractual the more innovative contracting models relies on the ability of complexity increases payer risk. the manufacturer to provide solutions that address a genuine challenge for the payer, are easy to administer, and built on aligned Moreover, payers should also consider indication-based pricing interests and use realistic payment terms. The more progressive (IBP), whereby a pharma product can have different prices approaches range from the bundling of additional services on top depending on the value it provides for specific medical indications. of products in order to support providers in achieving efficiency Within the US a sense of the value IBP can offer payers and the improvements and pathway cost reductions,49 and the use of pharma industry is gaining traction. However, within Europe there outcomes-based approaches that link reimbursement to the health has been little discussion on IBP. outcomes of a patient (See Case study 2).

Case study 2: Examples of outcomes-based •• Payment-by-results: where payments payment approaches to the manufacturer increase or There are a variety of outcomes-based approaches decrease depending on patient implemented across the world. Below are a few examples of outcomes. For example, in 2018, AstraZeneca, a global some of the contracting schemes. These include: pharma manufacturer, and Harvard Pilgrim Health Care, a large not-for-profit health services company in •• Cost-sharing agreements: where full or partial discounts the US, signed a deal for an outcomes-based approach are offered for the initial cycle of treatments, such as the over their asthma and chronic obstructive pulmonary use of Sunitinib, a drug used for patients with metastatic disease drug, Symbicort. The agreement sees Harvard renal cell carcinoma treated by the NHS. Under this Pilgrim monitoring whether asthma-related symptoms scheme, the first treatment cycle of 6 weeks (costing an for patients on Symbicort are in line with the clinical trial average of £3,139 per patient) is provided free via a patient results provided by AstraZeneca. If the occurrence of access scheme. Subsequent cycles are funded by the NHS worsening symptoms/exacerbations requiring medical until disease progression.50, 51 intervention exceed predetermined thresholds based on the clinical trials data, Harvard Pilgrim will be charged a •• Risk-sharing agreements: where a partial or full lower amount.53 Also in 2018, Harvard Pilgrim reached price discount is offered if patients do not respond to a outcomes-based agreement with Alnylam Pharma to treatments. For example, through the use of a genetic provided its rare disease therapy, ONPATTRO, for patients test, a manufacturer was able to offer a non-small cell lung with polyneuropathy of hereditary transthyretin-mediated cancer drug to Spanish payers based on a risk-sharing (hATTR) amyloidosis.54 agreement. In a study involving 41 patients, the agreement used genetic-testing to define the patient population, where patient outcomes were evaluated at week eight and week 16 of the treatment. If the treatment failed, the total cost would be reimbursed to the payer. Compared to traditional payment methods, the payer saved 4.5 per cent on overall treatment costs when assessed at week 16 of treatment and saved €36,000 in total (approximately €880 per patient).52

20 Patient access to innovative medicines in Europe | A collaborative and value based approach

Requirement for greater services participation According to data from Eurostat, 49 per cent of the EU population As demonstrated in our 2018 report, Medtech and the Internet of self-reported the use of prescription medicines in 2014, with Medical Things, the successful implementation of services can the highest usage among those 75 years of age and above, at transform an organisation from a supplier of innovative products 87 per cent.57 Given the pervasiveness of pharma products into an innovative partner for health care delivery, rewarded for among European populations, there is a significant opportunity improving health care performance.56 With the rhetoric around for the industry to offer services that support patients and VBC continually developing, the life sciences industry as a whole health care providers with drug administration, monitoring is being required to build closer relationships with payers that go and self-management, pre-, peri- and post-treatment support, beyond purely supplying products. complementary therapies, and patient rehabilitation and education programmes (See Figure 12).

iure ervices can e used to support patients and eat care providers in a numer o as

ru administration Education non-hospital based · education ia mobile apps administration (eg home web portals and ace-to-ace inections and sel administration) sessions home drug deliery · amily and carer education patient adherence support groups

Driing outcomes onitorin and se eaiitation manaement mobile apps demonstrating home isits eercises patientproider portals · remote ollow-up mobile apps · gamiﬁcation of health goals Patients telemedicine Driing medical IoT compliance

dditiona terapies Pre peri and post behaioural therapy treatment support (eg cognitie behaioural telephone support therapy) and monitoring dietary support peer networks

ource eloitte

21 Patient access to innovative medicines in Europe | A collaborative and value based approach

A number of pharma companies already provide services that ...the successful implementation of deliver additional value to the organisations they are working with. However, due to the different requirements from country to country services can transform an organisation and sometimes between country-specific providers, initiatives often from a supplier of innovative products occur locally or regionally, and rarely at national level. Service design requires pharma to not only think differently about how they charge into an innovative partner for health care for their products but also about the way in which they collaborate delivery, rewarded for improving health both internally and externally. It also requires a greater level of understanding of the local health care system and the partnership care performance. pathways available (See Case study 3).

Case study 3: Louisiana Department of Health The state is seeking alternative seeking Netflix type subscription model for contracting models to improve patient hepatitis C drugs access to innovative new treatments, In the US, the state of Louisiana has a high burden of improve patient outcomes and get the most out of its hepatitis C, with an estimated 35,000 people living with the hepatitis C budget. The proposed model sees the selected disease and the state’s spend on treatment circa $35 million pharma organisation providing unlimited access to its annually. Given their current budget, the state has enough hepatitis C medication in exchange for an annual fee. The to cover fewer than 3 per cent of Medicaid patients and 1 Louisianan Department of Health is aiming to have the percent of prisoners with the disease. model in place within the next year and a half, following federal approval of the scheme. Some of the most innovative treatments for hepatitis C can cure the disease but come at a high per-patient cost. It would Ten other US states have also expressed interest in mirroring cost an estimated $760 million for the state of Louisiana to the subscription model should Louisiana be successful in provide its hepatitis C population with the latest treatments. gaining approval.58 As result, the state reserves these treatments for the most severe cases.

22 Patient access to innovative medicines in Europe | A collaborative and value based approach

Part 4. Succeeding in the new value-based environment

For pharma to succeed in the current European market, the industry needs to be more constructive in their dialogue, communicative in their development intentions and market access strategies for a product, collaborative with stakeholders, and innovative in the models they deploy for market access and pricing.

Early dialogue can allow pharma to understand better the Achieving early dialogue discussions with HTA and payer authorities needs of regulators, payers, patients and HTA authorities is a more difficult and nuanced task due to the differing assessment Given the differing evidence requirements of the EMA, HTA and criteria used across European countries and the past requirement payer authorities (such as NICE in the UK), products that have been for manufacturers to contact appraisal authorities separately when approved for the market by regulators sometimes fail assessments seeking parallel scientific advice with the EMA. However, in 2017 used to decide reimbursement. Early dialogue allows pharma to this was changed, and the EMA introduced parallel consultations understand better the scientific and economic considerations to replace the scientific advice procedure, allowing consultations to of the regulator and HTA and payer authorities early on, and to occur at the same time between the regulator and the economic build and capture these parameters within the design of a clinical assessor. It is too early to assess the effectiveness of this initiative trial and downstream pricing negotiations. Early dialogue allows but it does represent a significant step forward. manufacturers to: Prior to this, individual countries worked on a number of initiatives •• increase the likelihood of product approval and pilots to support early dialogue, including the establishment of the European Network for Health Technology Assessment •• form a stronger basis for downstream discussions on pricing (EUnetHTA) in 2005. The EUnetHTA is a network of 80 organisations and reimbursement representing the 28 EU countries. The network collaborates on initiatives such as facilitating the efficient use of resources available •• provide better planning for a product’s life cycle for HTA, creating a sustainable system of HTA knowledge sharing, promoting good practice in HTA methods and processes, and •• promote the collection of high-quality data supporting the use of early dialogue discussion with pharma and medtech across the EUnetHTA network (See Figure 13 overleaf).60, 61 •• build a better view of sustainable value Early dialogue allows pharma to •• reduce the burden of a clinical trial on the patients involved. understand better the scientific and Early dialogue, especially with the regulator, is an established economic considerations of the regulator method pharma has used to increase the likelihood of market approval. Between 2013 and 2017, the EMA saw a 33 per cent and HTA and payer authorities early increase in the number of requests for scientific advice, with on, and to build and capture these 62 per cent of scientific advice applicants receiving positive opinions of their product in 2017.59 parameters within the design of a clinical trial and downstream pricing negotiations.

23 Patient access to innovative medicines in Europe | A collaborative and value based approach

iure Ear diaoue and oint advice initiatives occurrin across Europe

E Ear apestr Piot euator advice orum

E oint E oint advice dvice

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Regulatory / scientiﬁc advice iaoue E

Pre 2005 2005 2009 2010 2011 2012 2013 2014 2015 2016 2017

E Ear iaoue Ear iaoue EE Piot E Parae on Scientiﬁc Advice

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ote date shos ear in hich process initiated ource eloitte

24 Patient access to innovative medicines in Europe | A collaborative and value based approach

However, the number of requests for parallel scientific advice and consultation remain low (see Figure 14), and when early dialogue is initiated, manufacturers may still be opting to seek dialogue with individual HTA and payer authorities.62, 63

Figure 14. The number of scientiﬁc , and parallel scientiﬁc and consultation requests received by the EMA, 2015 to 2017

2013

2014

2015

2016

2017*

0 100 200 300 400 500 600 700

Number of requests

Scientiﬁc advice request Parallel scientiﬁc advice and consultation requests

Note: Parallel scientiﬁc advice and consultations have been combined for 2017, of which there were 22 and 7, respectively. The parallel consultation procedure was introduced in 2017 therefore there is no data on parallel consultations prior to this year. Source: EMA, 2018

25 Patient access to innovative medicines in Europe | A collaborative and value based approach

There are a number of early dialogue options for pharma at a national, joint-national and multinational level (See Figure 15), and, as discussed earlier, a number of innovative contracting models that pharma can use.

Figure 15: Early dialogue options available to pharma

Responsible Negotiation Advantage Disadvantage Considerations on Who to engage (e.g.) authority Level when to engage

HTA authority National •• Depth of advice to tackle •• Small market proportion •• Influence HTA •• UK: NICE country-specific issues authority has over •• Companies unlikely to change •• Germany: G-BA other agencies •• Ability to change standard of development programs to •• France: HAS care suite one market •• Quality of advice •• Italy: AIFA •• Close work with agency to set •• May be difficult to engage if a •• Cost of engagement out criteria well renowned assessor due •• Sweden: TVL •• Availability of HTA to time constraints (i.e. NICE assessor and G-BA)

•• May lack specific therapeutic knowledge

Regulator and Join-national •• Depth of advice to tackle •• Discussions may be dominated •• When there is •• UK: NICE and MHRA HTA authorities (parallel) country-specific issues by regulator or one HTA body expected to be • Germany: G-BA and a difference • • Potential to drive convergence • No guarantee of the BfArM • • between evidence between regulatory and HTA convergence of requirements requirements •• France: HAS and requirements between the ANSM •• Potential to save time by regulator and HTA •• Italy: AIFA combining meetings body •• Sweden: TVL and MPA

•• EMA

Regulator and Multi-National •• Potential for large market •• Due to so many participants •• For multi national •• EUNetHTA and EMA HTA authorities penetration there is may be little time product launches through initiatives to discuss specific details such as the Shaping •• Able to provide a broad •• For rare disease important to individual European Early perspective on evidence products as benefits agencies Dialogues (SEED) requirements across multiple will be similar across project and parallel countries •• Potential for small HTA all nations consultations process, assessors to lose their • Ability to engage multiple HTA respectively • voice and follow the stricter assessors at once saving time assessment criteria used by and expense more established assessors •• Ability to understand areas in which there is divergence between HTA bodies and what is driving them

Source: Deloitte LLP, 2019

26 Patient access to innovative medicines in Europe | A collaborative and value based approach

Better use of early access schemes can improve pharma Other schemes in Europe allow the pharma industry to access market access a market pre-authorisation and derive revenue from a product, There are also a number of approaches that pharma can use to though usually for a short period of time. For example, the French gain access to a market pre-authorisation. These are often aligned Temporary Utilisation Programme (ATU), which can be used for to the compassionate use of a product at both an individual individuals or cohorts of patients, allows the manufacturer to set and cohort level. Eighteen of the 28 EU member states have the price of the product freely for one year – an extension of one nationalised regulations in place that are well-defined.64 year is also possible. However, if the product is launched, and a difference in price is found, the difference must be paid back. Some of these initiatives allow pharma to access markets through An overview of the schemes can be found in Figure 16.67 the donation of medication for at-risk groups of patients, such as the UK’s Early Access to Medicines Scheme and the German Compassionate Use Programme, but these initiatives carry no revenue for the donating organisation.65, 66

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cceerated reuator areted preautorisation access decision main

o evenue Potentia or revenue

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amed patient ndividual Access Authorisation

ource eloitte

27 Patient access to innovative medicines in Europe | A collaborative and value based approach

Given the increasing amount of personalisation in pharma products and the smaller number of patients targeted for specific Case study 4: Voluntis therapies, the use of pre-authorisation access schemes can allow collaborations with pharma pharma to gather evidence on a product’s safety and efficacy, on mobile technologies gauge a market’s receptiveness towards adoption early on in a Voluntis is a mobile technology developer that has product’s life cycle, and provide patients with access to the latest collaborated with a range of large pharma organisations medications. In Europe, there are a variety of schemes available, to create clinically approved mobile applications for and there is widespread recognition of their importance to patients and physicians. The therapeutic areas in which patients. However, to use them successfully, pharma should: apps have been produced include:

•• collaborate more closely with patient advocate groups and •• Diabetes: Voluntis collaborated with Sanofi and the doctors early in the development of a medicine to better French diabetes research institute (CERITD) to create understand the medicine’s appeal a mobile application to better treat patients suffering with type 1 and 2 diabetes on a basal-bolus regimen. CE •• define outcomes measurements that can be captured through approved in 2013,70 the application, Diabeo, provides early access which can be used to support accelerated patients with decision making support and helps calculate regulatory approval and economic assessments used by HTA personalised doses of insulin.71 The app also allows and payer authorities patients to be remotely managed through connections via telemedicine with healthcare providers.72 Clinical evidence •• define inclusion criteria for compassionate use with patients, shows that the technology provides a substantial doctors, regulators and payers (if applicable) improvement to metabolic control in chronic, poorly controlled type1 diabetic patients without requiring •• accept that entering into early access schemes has risks such additional medical time and higher costs.73 It also created as the continuation of a programme should reimbursement be Insulia, for people with type 2 diabetes on a basal declined and increased transparency in a product with health regimen, that also has the CE Mark and was FDA-cleared care providers and patients, although potential benefits include for distribution in the United States. possibly reducing the long-term risk associated with a product.68 •• Oncology: Theraxium Oncology is a solution that is Service and technology partners can help pharma designed to help empower patients to self-manage their demonstrate value beyond the pill symptoms through a mobile application and allows care In some European countries there are greater requirements for teams to follow the progress of patients through a web pharma organisations to provide services that better support application. The clinical algorithms supporting decision patients, providers and payers. To this extent, the pharma making are consistent with US and EU guidelines industry has developed, or is looking to develop, partnerships with for symptom management in oncology. The mobile technology organisations which can provide services beyond the pill, application allows patients to identify, qualify and as outlined in our 2017 report, Pharma and the connected patient.68 report their symptoms, take action to self-manage their symptoms through personalised recommendations, With VBC and RWE becoming increasingly prominent, partnerships know when they need to contact their care team, with technology organisations are occurring at all junctions and gain knowledge about their condition. For care of the pharma value chain, from drug discovery to sales and teams, the data fed to the web application allows them reimbursement. to quickly identify the patients who need the most attention, take quick action when needed, arrange Some partnerships have led to the creation of mobile apps follow-up meetings with patients and coordinate care that are able to support patients better with their illness while more effectively with other team members. Voluntis’ simultaneously providing live feedback on their condition and oncology solutions have been used by both AstraZeneca behaviours to them, their carers and clinicians coordinating their and Roche to support patients undergoing treatment for care (See Case study 4). ovarian and breast cancer, respectively.74

28 Patient access to innovative medicines in Europe | A collaborative and value based approach

Other partnerships focus on the application of big data analytics Partnerships with technology and service-based companies have and artificial intelligence (AI) to improve internal decision-making. the potential to disrupt the market and fuel change; they also For example, in 2016 IBM Watson and Pfizer partnered to use offer a number of benefits to the pharma industry and health care IBM’s cognitive technologies (i.e. machine learning and natural stakeholders alike that can improve market access and pricing language processing) to accelerate drug discovery by allowing them discussions if developed early on in the life cycle of a product (See to analyse and test hypotheses from large amounts of disparate Figure 17). These collaborations require not only that external data sources rapidly.75 Other opportunities arise from the need to organisations come together but also that internal business units improve operational and financial performance of a health care work towards the same goal. system by the life sciences industry collaborating on services, such as programmes to reduce prescribing errors (Case study 5).

Case study 5: Pfizer and University of Leicester Results from the trial showed: Hospitals collaborate to reduce prescribing errors The National Patient Safety Agency (NPSA) estimates that •• a 50 per cent decrease in medication avoidable harm from medication costs the NHS over £750 errors made by the junior doctors who took part million annually in England. A 2009 study funded by the General Medical Council (GMC) found that junior doctors •• by the end of the four month trial, the junior doctors in their first and second years in practice make twice showed the same performance improvements as those as many errors in prescribing as consultants, nurses or with 12 months of clinical experience pharmacists. In 2013/14, Pfizer and University of Leicester Hospitals collaborated on the Effective Performance Insight •• the potential to achieve £308,928 cost saving from for the Future (EPIFFANY) project, which aimed to improve avoidable medication errors prescribing competence, performance and attitudes towards safe prescribing and patient care among junior doctors. •• the potential to avoid 489 inpatient bed days.77 Two cohorts of junior doctors were rotated through the programme which comprised of four teaching components Following the success of the project, EPIFFANY is preparing that incorporated real clinician and patient feedback.76 for a national upscale across three further sites in the East Midlands, in order to evaluate the programme and to see ways in which it can be improved.78

29 Patient access to innovative medicines in Europe | A collaborative and value based approach

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30 Patient access to innovative medicines in Europe | A collaborative and value based approach

Part 5. Next generation market access

The unique challenges facing European payers will determine the extent to which pharma are able to adapt and tailor their approaches to market access and pricing and continue to thrive. Pharma companies should be more agile and develop and enhance their core organisational capabilities to support market access and pricing in a proactive way throughout the life cycle of their products. This includes, developing a deeper understanding of payer needs, using RWE to capture a product’s value, managing patient data effectively, and building trust with patients and payers.

Earlier launch planning focussed on dialogue Real-world value dossier creation: use RWE to understand Pharma should have a greater understanding of the specific needs system challenges, physician and patient experiences and and priorities European payers have when considering product the benefits of products and services development. For example, understanding at the outset of product RWE represents a shift in the way pharma products are assessed development the disease and cost burden individual European for both clinical- and budget-effectiveness. At its best, and through payers are facing. Pharma should, at critical milestones in the R&D working closely with payers and regulators, RWE can improve the phase, plan and discuss the clinical need for a new product with access patients have to new medications, while simultaneously payers across Europe. Engaging with payers earlier will allow them improving outcomes and allowing a pharma company to assess to target the right markets for their products and engage with the value of its product outside tightly controlled clinical settings patients and providers in much more constructive, collaborative (See Case study 6). and valuable ways. This should also help pharma develop products that meet the priorities of the health care system and the unmet Moreover, RWE is a technology and data-driven solution that also needs of patients. allows pharma organisations to gain an in-depth understanding of health system challenges, physician and patient experiences, Innovative contracting and the benefits of their products and services, to the patient Understanding the clinical and financial needs of payers early on populations they serve, including the ability to demonstrate value in the R&D process allows pharma to model, test and negotiate a in a more holistic way. variety of potential contracting solutions. Not all payers in Europe will be looking for innovative outcomes-based contracts when Understanding the clinical and financial reimbursing a product, as they may favour more financially driven contracts such as volume- and portfolio-based contracts. Only needs of payers early on in the R&D through constructive dialogue can pharma adapt their pricing process allows pharma to model, test strategies to meet the needs required by the market they are looking to access. The success of innovative contracting will be contingent and negotiate a variety of potential on pharma developing and deploying multi-disciplinary teams that contracting solutions. can collaborate effectively with European payers to solve their most pressing issues and support their long-term sustainability.

31 Patient access to innovative medicines in Europe | A collaborative and value based approach

Case study 6: GlaxoSmithKline (GSK) utilising RWE to Through this open study design the speed up patient access and improve the health of trial was able to capture 2,800 patients, Manchester’s population including over a quarter of Salford’s COPD Running from 2012 to 2016 the Salford Lung Studies (SLS), patient population and 4233 asthma patients. Additionally, funded by GSK (a global pharma company) and made the study used no placebo (the comparison was against possible by the use of in integrated primary and secondary the patient’s usual medication), the patient’s own physician electronic health record developed by North West EHealth as the clinical investigator and an electronic monitoring (a clinical trials platform service provider), investigated system (linking primary and secondary care electronic health the impact of its asthma and COPD medication Relvar in records) to notify physicians of serious adverse events. This a 12 month phase IIIb clinical study (pre-licence). Utilising real-world population based approach to the study resulted early dialogue discussions with NICE and the Medicines in a number of key improvements over traditional methods and Healthcare products Regulatory Agency (MHRA), the of clinical trials, including: study team were able to design a trial, that if successful, would satisfy the safety and data collection needs of both •• increasing patient retention with only 7 per cent of COPD stakeholders.79 patients dropping out compared to up to 30 per cent seen in traditional studies of similar duration80 In a move away from traditional highly controlled studies, GSK worked with 80 primary care providers in Salford and •• improving patient access to new medications. South Manchester and took a RWE approach to the study. Asthma and COPD patients were eligible based on a GP The study was also able to show how effective Relvar was in diagnosis without the need for spirometry and without real life by reducing the annual rate of acute exacerbations stringent monitoring of whether a patient was taking their of COPD by 8.4 per cent when compared to the standard medication correctly. treatment and improving control in asthma patients, where the odds of achieving or improving control was double in the group initiated on Relvar compared with the usual care group.81

Build trust and understanding: be a collaborative partner in groups highlighted a willingness to collaborate in the creation your therapy areas and build trust of apps with pharma. However, only 15.1 per cent of the patient The corporate reputation of pharma has been poor historically groups we surveyed had been involved in co-creating a pharma and remains a challenge. Research by PatientView, who conduct an health app to date.83 annual study into the corporate reputation of pharma at a global and selected country level, found that in the UK, the percentage Improving early patient engagement and feedback through of patient groups who rated the pharma industry’s corporate meaningful collaboration with patients and physicians is a key reputation as “excellent or ”good” reached an all-time high of capability required by pharma to ensure they create products 29 per cent in 2017, up from only 25 per cent in 2016.82 A poor truly needed by the end user. The most innovative of these reputation among patients and patient groups can detract from approaches sees pharma organisations providing patients and patient engagement initiatives. Indeed, research from our 2017 health care providers with the tools to understand, manage and report, Pharma and the Connected Patient, showed that patient seek treatment for the conditions that are affecting them or their groups trust in apps produced by different developers ranked apps patients better (See Case study 7 overleaf). Moreover, pharma developed by pharma and biotech companies as the least trusted. needs to ensure that data acquired from patients are handled in They were also less willing to share data from their health apps an ethical way, patient privacy is protected and data are stored with pharma compared to other developers. Despite this, patient securely as to not undermine patient trust and engagement.

32 Patient access to innovative medicines in Europe | A collaborative and value based approach

Case study 7: Leo Pharma and the Leo Innovation •• Studies&Me: a digital recruitment Lab building therapeutic trust through technology and qualification platform for clinical Leo Pharma is a global pharmaceutical company that studies. The platform is aimed at specialises in developing products and services for patients people living with a skin condition and allows them to find with skin conditions such as psoriasis. In 2015 it established a clinical study based on information in their user profile the Leo Innovation Lab, an independent unit of the company and store-and-forward evaluations carried out by that is primarily focused on making a difference to people a qualified dermatologist.86 living with skin conditions by developing e-Health and add-on devices solutions.84 •• PsoHappy: a global study that aims to measure the happiness levels of people living with chronic conditions, With Leo Pharma and subsequently the Innovation Lab including psoriasis and atopic dermatitis.87 The initiative wholly owned by the Leo Foundation, the organisation has provides reports on the research to date, with the latest a corporate structure without shareholders and profits released in September 2018.88 are directly reinvested into developing new solutions. This allows the organisation to be more agile and fosters •• Flaym: an online community and mobile app for psoriasis an environment in which innovation can thrive and ideas sufferers with over 5,000 members currently registered. be rapidly prototyped, allowing closer relationships with It allows those with psoriasis to share experiences on living the users of their digital products to be built.85 The Leo with their condition.89 Innovation Lab has developed a number of solutions for people with chronic skin conditions. These include: •• HelloSkin: an ecommerce platform designed to provide patients with skin conditions such as psoriasis, eczema, •• Imagine: a digital platform to improve prevention, acne and dry skin with transparent information about monitoring and diagnosis of chronic skin conditions. the most effective ingredients for their condition, and By taking pictures with their smartphone, the users access the best skin products on the market to treat their can track their skin lesions as they change over time conditions. The app allows patients to shop by need, type through an app. This enables users to draw correlations and ingredient, and the information and advice provided with lifestyle triggers, assess the efficacy of treatments through the app are vetted by medical experts.90 and consequently find the optimal treatment and life style change as rapidly as possible. The project is also •• Klikkit: an Internet of Things tracking and monitoring harnessing image data to develop sophisticated AI that system, designed to help patients follow treatment plans. can assess flare-ups of the condition and within seconds The Klikkit platform is built from a smartphone app determine the nature of a skin lesion. Currently, the (available on both iOS and Android), a range of attachable platform has succeeded in diagnosing psoriasis with smart buttons, and a remote monitoring Klikkit dashboard. an accuracy of 91 per cent. The platform aims to help users overcome challenges such as forgetfulness or the fear of side effects. It also enables payers and providers to gain real-time insights on adherence to medication and remote interventions on patient populations.

33 Patient access to innovative medicines in Europe | A collaborative and value based approach

Moreover, pharma should build stronger relationships with On the advocacy and communication side, deep listening skills, payer authorities in order to move away from transaction based empathy and design skills are needed to: interactions to ones that are based on long term partnerships, which promote collaboration and improve patient access to •• listen to payer concerns, and generate, identify and capture medicines. To be successful, this requires increased transparency health care insights on a European and country-specific level, and between pharma and payers that clearly outlines the needs and understand therapeutic alignment to an organisation’s expertise constrains of both organisations. •• design evidence-based contracting strategies and market access Build the skills and expertise needed for the future: options tailored to the specific needs of European payers Consider the skills gap you have between technical and communicative expertise •• scenario plan and progress though pricing negotiations to create As the volume of health data grows exponentially, the success of win-win solutions pharma’s commercial activities will require new and enhanced skills and capabilities and embrace new ways of working. Specifically, •• work and engage effectively with a broader range of pharma needs to develop capabilities in collecting, storing and stakeholders, such as service and technology providers, to collect analysing patient data and use this information to develop evidence to understand key payer challenges, and develop and solutions tailored to patient needs. deliver solutions that meet patient and system needs.

To access the necessary skills and talent will require pharma Realising these core capabilities will allow pharma to better companies to partner with others to jointly create and define the strategic, tactical, technical and societal steps their demonstrate value across a spectrum of areas, from deep organisations should take to ensure value is delivered across the technical expertise to communication and advocacy (See Figure life cycle of their products. 18). Pharma should also consider whether capabilities can be carried out internally, locally or centrally and which must be As the volume of health data grows outsourced to partner organisations. exponentially, the success of pharma’s The success of pharma market access strategies will be contingent commercial activities will require new on the development and deployment of multi-disciplinary teams that engage early in the R&D process and have deep technical, and enhanced skills and capabilities and problem solving, advocacy and communicative expertise to tackle embrace new ways of working. country specific health care challenges.

On the technical side, the generation, collection, processing and analysis of RWE to generate payer insights requires:

•• analytical skills such as data cleansing, data analytics, machine learning and AI in order to capture, analyse and generate insights in real-time that can be used to support individual or groups of products, and support patients, health care payers and providers

•• health economics and actuarial population modelling skills to enable more constructive discussions with HTA and payer authorities, design solutions for particular populations, and develop risk-based innovative contracts.

34 Patient access to innovative medicines in Europe | A collaborative and value based approach

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35 Patient access to innovative medicines in Europe | A collaborative and value based approach

Abbreviations

AIFA: Italian Medicines Agency (Agenzia Italiana del Farmaco)

ANSM: French National Agency for Medicines and Health Products Safety (Agence Nationale de Sécurité du Médicament et des Produits de Santé)

ATU: Temporary Authorisation for Use (France)

BfArM: The Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte)

EMA: European Medicines Agency

FAGG: The Federal Agency for Medicines and Health Products (Federaal Agentschap voor Geneesmiddelen en Gezondheidsproducten)

G-BA: The Federal Joint Committee (Der Gemeinsame Bundesausschus)

HAS: The High Health Authority (La Haute Autorité de santé)

MAPPs: Medicines Adaptice Pathways to Patients

MBE: Medicines Evaluation Board

MHRA: The Medicines and Healthcare products Regulatory Agency

MPA: The Medical Products Agency

NICE: National Institute for Health and Care Excellence

QUALY: Quality-adjusted life year

RIZIV-INAMI: National Institute for Sickness and Disability Insurance (Institut national d’assurance maladie-invalidité)

SEED: Shaping European Early Dialogues for health technologies

TVL: The Dental and Pharmaceutical Benefits Agency (Tandvårds- och läkemedelsförmånsverket)

ZIN: National Health Care Institute (Zorginstituut Nederland)

36 Patient access to innovative medicines in Europe | A collaborative and value based approach

Appendix

Within this report, when the average of 16 European countries is discussed, the countries included are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK. For the European average relating to pharmaceutical expenditure as a percentage of GDP in 2010, data from 2013 was selected for the UK as it was the earliest available year.

37 Patient access to innovative medicines in Europe | A collaborative and value based approach

Endnotes

1. World industry outlook: Health care and Pharmaceuticals, The Economist 19. EvaluatePharma World Preview 2018, Outlook to 2024, Evaluate Ltd, 2018. Intelligence Unit, 2017. See also: http://www.eiu.com/industry/Health care See also: http://www.evaluategroup.com/public/Reports/EvaluatePharma- World-Preview-2018.aspx 2. Globocan 2018: Estimated Cancer Incidence, Estimated number of incident cases, Globocan, 2018. See also: http://globocan.iarc.fr/Pages/burden_sel. 20. Rare diseases. Orphan drug market, Pharma World, 2018. See also: http:// aspx www.pharmaworldmagazine.com/rare-diseases-orphan-drug-market/

3. International Diabetes Federation. IDF Diabetes Atlas, 8th edn. Brussels, 21. Will Biologics Surpass Small Molecules In The Pharma Race? Belgium: International Diabetes Federation, 2017. See also: http://www. BiopharmaTrend, 2018. See also: https://www.biopharmatrend.com/ diabetesatlas.org. post/67-will-small-molecules-sustain-pharmaceutical-race-with-biologics/

4. Health spending, OECD, 2018. See also: https://data.oecd.org/healthres/ 22. A new future for R&D? Measuring the return from pharmaceutical health-spending.htm#indicator-chart innovation 2017, Deloitte, 2017. See also: https://www2.deloitte.com/uk/ en/pages/life-sciences-and-health care/articles/measuring-return-from- 5. Pharmaceutical spending, OECD, 2018. See also: https://data.oecd.org/ pharmaceutical-innovation.html healthres/pharmaceutical-spending.htm 23. Biopharmaceutical Research & Development: The Process behind New 6. The Imperative of Addressing Cancer Drug Costs and Value, National Cancer Medicines, PhRMA, 2015. See also: http://phrma-docs.phrma.org/sites/ Institute, 2018. See also: https://www.cancer.gov/news-events/cancer- default/files/pdf/rd_brochure_022307.pdf currents-blog/2018/presidents-cancer-panel-drug-prices 24. The Economics of Precision Medicine, International Risk Governance Center, 7. Pharmaceutical Price Regulation Scheme (PPRS) 2014: payment percentage EPFL, Lausanne, 2018. See also: https://irgc.epfl.ch/files/content/sites/ for 2018, Department of Health, 2017. See also: https://assets.publishing. irgc/files/Publications/IRGC%20(2018).%20The%20economics%20of%20 service.gov.uk/government/uploads/system/uploads/attachment_data/ precision%20medicine.%20Workshop%20report.pdf file/668673/PPRS_Payment_percentage_2018.pdf 25. Biologics & Biosimilars, PHRMA. See also: https://www.phrma.org/advocacy/ 8. Price reduction according to the 15-year rule, TLV, 2017. See also: https:// research-development/biologics-biosimilars www.tlv.se/lakemedel/prissankning-enligt-15-arsregeln.html 26. Realizing the Promise of Biologics, Harvard Health Policy Review, 2017 9. Changes to NICE drug appraisals: what you need to know, NICE, 2017. (Volume 17, Issue 1). See also: http://www.hhpronline.org/articles/2017/4/9/ See also: https://www.nice.org.uk/news/feature/changes-to-nice-drug- realizing-the-promise-of-biologics appraisals-what-you-need-to-know 27. Biologics: Driving Force in Pharma, Pharma’s Almanac, 2017. See also: 10. Market access in Europe: balancing access and affordability, PMlive, 2017. https://www.pharmasalmanac.com/articles/biologics-driving-force-in- See also: http://www.pmlive.com/pharma_intelligence/market_access_in_ pharma europe_balancing_access_and_affordability_1184275?SQ_DESIGN_NAME=2 28. Pharma R&D Annual Review 2018, Pharmaprojects® | Informa, 2018. See 11. Commercial Medicines Unit – move to NHS England, NHS Procurement, also: https://pharmaintelligence.informa.com/resources/product-content/ 2017. See also: https://nhsprocurement.org.uk/commercial-medicines-unit- pharma-rd-annual-review-2018 move-to-nhs-england/ 29. AbbVie’s Humira Revenue Up 15% (Despite Patent Cliff Fears, Seeking Alpha, 12. Commercial Medicines Unit (CMU), UK Government, 2011. See also: https:// 2017. See also: https://seekingalpha.com/article/4066896-abbvies-humira- www.gov.uk/government/collections/commercial-medicines-unit-cmu revenue-15-percent-despite-patent-cliff-fears

13. BeNeLuxA collaboration, Beneluxa, 2018. See also: http://www.beneluxa. 30. Drantisaris et.al., Drug tendering: drug supply and shortage implications for org/collaboration the uptake of biosimilars, 2017. See also: https://www.ncbi.nlm.nih.gov/pmc/ 14. Visegrad Bulletin 5, Vicegrad Group, 2017. See also: http://www. articles/PMC5628685/ visegradgroup.eu/visegrad-bulletin-5-2 31. Biosimilars action plan: Balancing Innovation and Competition. 15. Sarantis Michalopoulos, Euactive, 2018. See also: https://www.euractiv.com/ FDA, July 2018. See also: https://www.fda.gov/downloads/Drugs/ section/health-consumers/news/eu-southern-alliance-on-drug-pricing- DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ expands/ ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/ UCM613761.pdf 16. Press release - La Valletta Declaration Committee met in Lisbon, Infarmed, 2018. See also: http://www.infarmed.pt/web/infarmed-en/home/-/journal_ 32. Guideline on similar biological medicinal, European Medicines Agency, content/56/281/2614977 2005 (2014 revision). See also: http://www.ema.europa.eu/docs/en_GB/ document_library/Scientific_guideline/2014/10/WC500176768.pdf 17. EvaluatePharma Orphan Drug report, Evaluate Ltd, 2018. See also: http:// www.evaluategroup.com/public/Reports/EvaluatePharma-Orphan-Drug- 33. European public assessment reports, European Medicines Agency, 2018. Report-2018.aspx See also: https://www.ema.europa.eu/en/medicines/download-medicine- data#european-public-assessment-reports-(epar)-section 18. Ibid

38 Patient access to innovative medicines in Europe | A collaborative and value based approach

34. Biosimilar Product Information, FDA, 2018. See also: https://www.fda.gov/ 50. Sunitinib for the first-line treatment of advanced and/or metastatic renal cell drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/ carcinoma, NICE, 2009. See also: https://www.nice.org.uk/guidance/ta169/ approvalapplications/therapeuticbiologicapplications/biosimilars/ chapter/3-the-technology ucm580432.htm 51. Adamski, Jakub & Godman, Brian & Ofierska-Sujkowska, Gabriella & 35. Drantisaris et.al., Drug tendering: drug supply and shortage implications for Osińska, Bogusława & Herholz, Harald & Wendykowska, Kamila & Laius, the uptake of biosimilars, 2017. See also: https://www.ncbi.nlm.nih.gov/pmc/ Ott & Jan, Saira & Sermet, Catherine & Corinne, Zara & Kalaba, Marija & articles/PMC5628685/ Gustafsson, Roland & Garuoliene, Kristina & Haycox, Alan & Garattini, Silvio & Gustafsson, Lars. (2010). Risk sharing arrangements for pharmaceuticals: 36. New price cap for medicinal products, International Law Office, 2017. See potential considerations and recommendations for European payers. BMC also: https://www.internationallawoffice.com/Newsletters/Health care-Life- Health Service Research. 10:153. 10.1186/1472-6963-10-153. See also: Sciences/Austria/Preslmayr-Attorneys-at-Law/New-price-cap-for-medicinal- https://www.researchgate.net/publication/202314971/download products 52. Clopes et al, Financial consequences of a payment-by-results scheme in 37. Commissioning framework for biological medicines (including biosimilar Catalonia: gefitinib in advanced EGFR-mutation positive non-small-cell medicines), NHS England, 2017. See also: https://www.england.nhs.uk/wp- lung cancer, Journal of Medical Economics, 2016. See also: https://www. content/uploads/2017/09/biosimilar-medicines-commissioning-framework.pdf tandfonline.com/doi/full/10.1080/13696998.2016.1215991

38. Reprint with permission. GaBI Online – Generics and Biosimilars Initiative. 53. Harvard Pilgrim signs outcomes-based contract with AstraZeneca France aims to reach 80% biosimilar penetration by 2022. [www.gabionline. for Symbicort, Harvard Pilgrim Health care, 2018. See also: net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 https://www.harvardpilgrim.org/public/news-detail?nt=HPH_ Sep 28]. Available from: HYPERLINK “http://www.gabionline.net/Policies- News_C&nid=1471916509161 Legislation/France-aims-to-reach-80-biosimilar-penetration-by-2022” www. gabionline.net/Policies-Legislation/France-aims-to-reach-80-biosimilar- 54. Alnylam Announces Alignment on Value-Based Agreements with Leading penetration-by-2022 Health Insurers and Launches Comprehensive Patient Support Services for ONPATTRO™ (patisiran), Alnylam, 2018. See also: http://investors.alnylam. 39. EFPIA Market Access Delays Analysis, EFPIA, 2018. See also: https://efpia.eu/ com/news-releases/news-release-details/alnylam-announces-alignment- media/412416/market-access-delays-2017-final-140318.pdf value-based-agreements-leading

40. Patients W.A.I.T Indicator, EFPIA, 2010. See also: https://www.efpia.eu/ 55. Flume M et.al, Feasibility and attractiveness of indication value-based media/15510/patients-wait-indicator-report-2010.pdf pricing in key EU countries, 2016. See also: https://www.ncbi.nlm.nih.gov/ 41. Fast Track, Breakthrough Therapy, Accelerated Approval, Priority Review, pmc/articles/PMC4864834/ FDA, 2018. See also: https://www.fda.gov/forpatients/approvals/fast/default. 56. Medtech and the Internet of Medical Things: How connected medical htm devices are transforming medtech, Deloitte, 2018. See also: https://www2. 42. Accelerated assessment, EMA, 2018. See also: http://www.ema.europa.eu/ deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences- ema/index.jsp?curl=pages/regulation/general/general_content_000955. Health-Care/gx-lshc-medtech-iomt-brochure.pdf jsp&mid=WC0b01ac05809f843a 57. Self-reported use of prescribed medicines by age, Eurostat, 2017. See also: 43. Regulatory Update from MHLW/PMDA, PMDA, 2017. See also: https://www. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Self- pmda.go.jp/files/000221880.pdf reported_use_of_prescribed_medicines_by_age,_2014_(%25).png

44. PMDA Puts Regulatory Approval on a Fast Track, Global Forum, 2018. 58. Louisiana seeking ‘subscription model’ for hepatitis C drugs, AP News, 2018. See also: https://globalforum.diaglobal.org/issue/may-2018/pmda-puts- See also: https://apnews.com/50d4713d213640318d71b12c5173f41a/ regulatory-approval-on-a-fast-track/ Louisiana-seeking-’subscription-model’-for-hepatitis-C-drugs

45. Deloitte analysis of EMA Annual reports 2014, 2015, 2016 and 2017 59. Annual Report 2017, European Medicines Agency, 2017. See also: http://www.ema.europa.eu/docs/en_GB/document_library/Annual_ 46. Frequently Asked Questions: Breakthrough Therapies, FDA, 2018. See report/2018/04/WC500248201.pdf also: https://www.fda.gov/RegulatoryInformation/LawsEnforcedbyFDA/ SignificantAmendmentstotheFDCAct/FDASIA/ucm341027.htm 60. About EUnetHTA, EUnetHTA, 2018. See also: https://www.eunethta.eu/ about-eunethta/ 47. Performance Based Risk Sharing Database (PBRS). The Comparative Health Outcomes, Policy, and Economics (CHOICE) Institute, University 61. Early Dialogues, EUnetHTA, 2018. See also: https://www.eunethta.eu/ of Washington School of Pharmacy, August 2018 See also: http://depts. services/early-dialogues/ washington.edu/pbrs/ 62. Ibid

48. Value-based Health care: A Global Assessment, Economist Intelligence Unit 63. Multi Stakeholder: Late & Early Dialogue, European Medicines Agency, (Commissioned by Medtronic), 2016. See also: http://vbhcglobalassessment. 2017. See also: http://www.ema.europa.eu/docs/en_GB/document_library/ eiu.com/ Presentation/2017/10/WC500236324.pdf

49. Integrated Health Solutions, Medtronic, 2018. See also: http://www. 64. Balasubramanian et.al, An overview of Compassionate Use Programs in the medtronic.com/us-en/health care-professionals/services/integrated-health- European Union member states, 2016. See also: https://www.ncbi.nlm.nih. solutions.html gov/pmc/articles/PMC5116859/

39 Patient access to innovative medicines in Europe | A collaborative and value based approach

65. Early Access to Medicines Scheme (EAMS), ABPI. See also: https://www.abpi. 81. GSK announce positive results from the COPD Salford Lung Study org.uk/what-we-do/collaboration-and-partnership/value-and-access/early- published in the NEJM and presented at European Respiratory Congress, access-to-medicines-scheme-eams/ GlaxoSmithKline(GSK), 2016. See also: https://www.gsk.com/en-gb/media/ press-releases/gsk-announce-positive-results-from-the-copd-salford-lung- 66. Compassionate Use Programmes, Federal Institute for Frugs and Medicinal study-published-in-the-nejm-and-presented-at-european-respiratory- Products, 2018. See also: https://www.bfarm.de/EN/Drugs/licensing/ congress/ clinicalTrials/compUse/_node.html 82. UK patient groups say that pharma should do more on being transparent, 67. Early Access Programs in Europe: Differences and Opportunities in PatientView, 2018. See also: http://createsend.com/t/j-2EB334546F8C1B6C Germany, France and the UK, Health Advances Blog, 2018. See also: https:// 2540EF23F30FEDED healthadvancesblog.com/2018/06/07/early-access-programs-in-europe- differences-and-opportunities-in-germany-france-and-the-uk/ 83. Pharma and the connected patient: Deloitte, July 2017, see also: https:// www2.deloitte.com/content/dam/Deloitte/uk/Documents/life-sciences- 68. Early Access to Medicines In Europe: How to make compassionate use health-care/deloitte-uk-pharma-and-the-connected-patient.pdf become a reality for all in need, Eurordis, 2017. See also: http://www. ema.europa.eu/docs/en_GB/document_library/Presentation/2017/10/ 84. Leo Innovation Lab, About, 2017. See also: https://leoinnovationlab.com/ WC500237756.pdf about/

69. Pharma and the connected patient: How digital technology is enabling 85. Ibid patient centricity. Deloitte, 2017. See also:https://www2.deloitte.com/ 86. How it works, Studies&Me, 2018. See also: https://studiesandme.com/how- content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/gx- it-works lshc-pharma-and-connected-patient.pdf 87. Psohappy, 2018. See also: https://www.psohappy.org/ 70. Our Digital Theraputics, Voluntis, 2017. See also: http://www.voluntis.com/ 88. Psohappy, January Blues. See also: https://www.psohappy.org/january-blues 71. Ibid 89. Flaym, Feature, 2018. See also: https://www.flaym.io/features 72. The Diabeo Software Enabling Individualized Insulin Dose Adjustments Combined With Telemedicine Support Improves HbA1c in Poorly Controlled 90. About HelloSkin, HelloSkin, 2018. See also: https://helloskin.co.uk/ Type 1 Diabetic Patients, Charpentier G et al, Diabetes Care, 2011. See also: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3041176/

73. Charpentier G et al, The Diabeo Software Enabling Individualized Insulin Dose Adjustments Combined With Telemedicine Support Improves HbA1c in Poorly Controlled Type 1 Diabetic Patients, Diabetes Care, 2011. See also: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3041176/

74. Theraxium Oncology, Voluntis, 2018. See also: http://www.voluntis.com/ oncology/

75. Pfizer to Accelerate Research with Watson for Drug Discovery, IBM. See also: https://www.ibm.com/products/watson-drug-discovery/features

76. Leicester’s ePIFFany project successfully reduces junior doctor prescribing errors, University of Leicester, 2014. See also: https://www2.le.ac.uk/ offices/press/press-releases/2014/may/leicester2019s-epiffany-project- successfully-reduces-junior-doctor-prescribing-errors

77. Joint Working: EPIFFANY –Preparation for National Upscale, Pfizer, 2017. See also: https://www.pfizer.co.uk/joint-working-epiffany-preparation-national- upscale#2

78. EPIFFANY (Effective Performance Insight for the Future) education programme, The AHSN Network, 2017. See also: http://atlas.ahsnnetwork. com/epiffany-effective-performance-insight-for-the-future-education- programme/

79. Collier S et.al, Monitoring safety in a phase III real-world effectiveness trial: use of novel methodology in the Salford Lung Study, 2016. See also: https:// onlinelibrary.wiley.com/doi/full/10.1002/pds.4118

80. GSK’s real world study exemplifies trial design of the future, Center Watch, 2017. See also: https://www.centerwatch.com/news-online/2017/03/06/ gsks-real-world-study-exemplifies-trial-design-future/

40 Contacts

Authors Elizabeth Hampson Karen Taylor Amen Sanghera Director, Monitor Deloitte Director, UK Centre for Health Solutions Analyst, UK Centre for Health Solutions Tel: +44 20 7007 8169 Tel: +44 (0) 20 7007 3680 Tel: +44 20 7007 4559 Email: [email protected] Email: [email protected] Email: [email protected]

Contacts

Thomas Croisier Hanno Ronte Partner, Life Sciences and Health Care, Monitor Deloitte, France Partner, Life Sciences and Health Care, Monitor Deloitte, UK Tel: +33 1 58 37 92 87 Tel: +44 (0) 20 7007 2540 Email: [email protected] Email: [email protected]

John Haughey Mike Standing UK and NWE Life Sciences and Health Care Leader EMEA Life Sciences and Health Care Leader Tel: +44 20 7303 7472 Tel: +44 20 7007 3178 Email: [email protected] Email: [email protected]

Dr. Gregor Elbel Colin Terry Partner, Life Sciences and Health Care, Deloitte, Germany Partner, Life Sciences R&D Advisory, Deloitte MCS Ltd, UK Tel: +44 (0) 20 7007 2540 Tel: +44 20 7007 0658 Email: [email protected] Email: [email protected]

Alexander Mirow Elisabeth Aloy Partner, Life Sciences and Health Care, Monitor Deloitte, France Director, Life Sciences and Health Care, Monitor Deloitte, Switzerland Tel: +33 1 58 37 96 09 Tel: +41 58 279 6831 Email: [email protected] Email: [email protected]

Gonzalo Casino Federico Rigato Director, Deloitte Consulting, Spain Senior Manager, Deloitte Consulting, Italy Tel: +34 932533695 Tel: +39 0283323218 Email: [email protected] Email: [email protected]

Acknowledgements Contact information Ushma Soneji, Emma Dabbs and Juan Salcines Gomez-Pardo Deloitte UK Centre for Health Solutions, 1 New Street Square, of Monitor Deloitte, and Mark Steedman, Francesca Properzi, London, EC4A 3HQ Matthew Thaxter and Pratik Avhad of the Deloitte Centre for Health Solutions UK. Special thanks to the valuable contributions provided by Deloitte practitioners and teams across the world. Important notice

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