After product registration based on the phase 3 Clinical trials, the challenge of getting reimbursement in the different national settings is a critical next step. In most European countries reimbursement has become the most important driver of sale, but unfortunately also the most important limiting factor for sale of new drugs. Today many pharmaceutical companies are under pressure, due to decreasing sale as a result of difficulties getting reimbursement. There are a number of reasons for the changes in reimbursement practice, which constitute both national and international changes in the ways reimbursement are achieved. It is important for a pharmaceutical company to adapt to these changes and if possible convert these changes to a competitive advantage. This can be done if a proper adaptation to these changes can be accomplished faster than the competing drug companies. I will attempt to summarise some of the most important international changes:

1) Awareness of the importance of the international “Evidence Position”. Due to the advent of “Evidence Based Medicine” the international medical community has a acquired a concept of “objective truth” regarding efficacy and safety of new drugs. Early in the product life cycle the phase 3 trials are the most important basis for the “evidence position”. However very soon thereafter, a number of national and international public bodies will publish their own critical assessment of the evidence, and it is then considered the “objective truth”. The “evidence” is then largely out of the hands of the pharmaceutical company.

2) HTA (Health technology assessment) is a new decisions paradigm used by most national medicines agencies. In HTA, medical evidence is combined with health economy. Using this combination, the “utility” or “value” of a new drug is compared with conventional treatments. During such assessment the cost-effectiveness-ratio of the new drug is compared with conventional treatment. If the added value of the new drug is satisfactory, reimbursement is granted. However if not, the medical agency will most likely deny reimbursement or require a price reduction. Alternatively a limited reimbursement is granted implying e.g. sale to only a small market segment or institution of a cumbersome person-specific reimbursement process limiting the sale of the drug.

3) In most European countries regional medical administrative decision makers are increasingly using HTA-reports or their equivalents to decide which drugs are present on local “recommendation list” or “approved clinical practice reports” in that area. The consequence of this is decreased freedom for the single doctor to prescribe medicine for his patient. This decreases the effectiveness of the local marketing and sales activities (if it is not on the list).

4) The above 3 factors are all implying a strong tendency towards more centralised medical decisions and involvement of fewer and fewer people –and also involvement of a diversity of non-medical experts (economists, statisticians etc.)

Which challenges does this development impose to the pharmaceutical drug company?

A) The price-setting of a new drug is one of the most critical decisions. The price is always decided at an early stage, without knowing if the medical agencies will accept the documented level of cost effectiveness. Proper documentation of cost-effectiveness has become a very complicated task which requires a high level of scientific expertise which is not always present –especially in small countries.

B) In many pharmaceutical companies, the Reimbursement Application to the national medicines agency is considered a local national task. This often conflicts with both the complexity of the task and the expert-resources available. Specialised clinical trial designs are often needed to properly demonstrate cost-effectiveness, but such studies might not be performed locally either due to lack of expertise or due to lack of financial resources.

C) Due to the global trend in HTA and medical decision making, 70-80% of the data needed in national Reimbursement Applications is identical. This is due to the advent of the objective “international evidence position”. When the prime responsibility for Reimbursement Applications is placed solely in the local national sales companies it implies that the same work has to be performed in parallel in many countries (waste of resources).

D) Since proof of cost-effectiveness has become a major generator of sales, this factor must necessarily be an integral part of the clinical development programme. The major challenge here is not the design of the studies, but merely the fact that new ideas for cost-effective treatments are most likely generated in the clinical practice setting with national top clinical scientists (in contrast to a global medical head office which are primarily focussed on phase 3 trials of the drug pipeline). It is often necessary to perform e.g. segmentations of the patient population or use meta-analysis or data mining of existing clinical trials to identify “best clinical practice”.

E) Top clinical scientists are seldom educated in Pharma economics and cost-effectiveness, and therefore need some coaching and guidance in order to properly assist in idea generation of commercially viable new drug uses (not all scientifically interesting new drug applications are cost effective in Health Economical terms). Such coaching is more focussed on showing a higher level of efficacy or utility than average treatment practice, than trying to identify entirely new treatment practices.

F) Due to the dynamic nature of idea generation (locally in one or more countries) the management of the clinical development programme must also be very dynamic and continuously adapt to the changing world of new ideas and the feedback from all the national reimbursement processes. This requirement of dynamics constitutes a true organisational challenge.

G) The dynamics also dictate more active strategies for continuously informing the national sales companies of “present best practice” e.g. any improvement in evidence positions, new documentations of cost-effectiveness and new winning argumentation used in Reimbursement Applications.

The potential role of MEDBUSINESS

Medbusiness can assist your company with a competitive adaptation to the new paradigm of medical decision making.
Our role might also be at a more international level initiating and coordinating the adaptation process as such or being operative in selected elements of such adaptation. Alternative a mixture of the two is a possibility open to discussion and creative idea generation.

Kind regards

Jørgen Folkersen, MD, Dr. Sc

HTA as a new driver of sale?