14.11

2017
The Challenges of Market Access
Written by Dr Niamh O’Reilly

With little over a month to go until the end of 2017, now is timely to revisit market access as an issue that saw much attention focused on reimbursement delays in Australia, as well as some complex negotiations, which at times fuelled controversy during the year. Most likely market access challenges will continue to be a focus for pharmaceutical and biotechnology companies into 2018 and beyond.

Among various reimbursement challenges that raised an eyebrow was one case involving a company’s refusal to access a substantial 90% reduction in the reimbursed price for their therapy as this would not be commercially viable and could jeopardise their global pricing. However, among reimbursement obstacles identified, it has also been noted that pharmaceutical companies in Australia are not offering their “best price” early in reimbursement discussions due to their international head offices’ pricing policies, which leads to reimbursement delays (1).

In another case, reimbursement approval for a “revolutionary” therapy that would reduce the number of self-injections from two per day to one per week came through five years after product registration.

Taking market access challenges one step further, what about innovative therapies that do not fit into any existing funding mechanisms and so face an almost impossible reimbursement barrier? One could argue there should be as much focus on establishing new funding pathways for these therapies as there is on the Pharmaceutical Benefits Scheme (PBS) process.

Reimbursement pathways – which way?

While regulatory approval pathways are for the most part globally harmonised, reimbursement pathways vary among countries and are often complex and unpredictable (2). Product sponsors provide comprehensive clinical and economic evidence as part of a health technology assessment (HTA) used by government as the (usual) payer when deciding whether or not to fund a therapy. However, often there is difficulty in capturing many value aspects of medicines during the assessment process, which makes the longer-term health outcome and economic benefits of therapies less obvious (3).

Reimbursement may also follow a different pathway depending on the type of therapy. For example, the PBS has a rigorous assessment process for evaluating the cost-effectiveness of medicines and hence the value of innovative therapies, which considers clinical effectiveness, other health outcomes such as quality of life and associated costs. Yet blood products such as recombinant clotting factors are subject to a tender process in Australia for which the key focus is minimising price. This creates considerable challenges in demonstrating therapy value because while procurement tends to minimise the cost to government budgets, it is not a mechanism for recognising and rewarding therapy innovation. Indeed, tendering typically restricts choice of therapy for prescribers and patients.

In general, Australia’s reimbursement environment has caused frustration among pharmaceutical companies’ due to the cost-effectiveness hurdles of demonstrating value at prices often lower than a sponsor company’s global floor price (2, 4, 5). Many companies have also been impacted by “comparator erosion”, which is when a new therapy is priced against a generic product or relatively old therapy with a low price (2,5). Yet there is acknowledgement among stakeholders, namely, government, the Pharmaceutical Benefits Advisory Committee and the pharmaceutical industry of the need for a collaborative approach to improve reimbursement evaluation processes so that new therapies are affordable and accessible to patients (6 – 8).

Communicating therapy value

In recent years, advances in drug discovery and research have led to the development of innovative yet often expensive therapies. Sponsor companies absorb the risk and high cost of the drug development process, which can be offset with higher therapy prices and so the onus is on them to demonstrate the value of their product to achieve timely reimbursement (3). However, this may be difficult where no comparator therapy exists, the current comparator is an old therapy or a generic medicine (2).

It also seems there may be an imbalance between showing cost-effectiveness versus other elements that contribute to demonstrating therapy value and so perhaps the pharmaceutical industry as a whole could improve on how it communicates value to payers and other stakeholders. For example, factors such as meeting a high clinical need, improving quality of life and productivity gains (i.e. returning people to the workforce) are important, yet may not always translate to a cost-effectiveness ratio. Nevertheless, there remains the need to effectively communicate to all stakeholders on how the cost of an innovative therapy is justified by the clinical, economic and social benefits it delivers to patients.

CRC’s dedicated Medical Affairs experts are well equipped to implement effective market access strategies and communicate therapy value for clients bringing innovative products to market.

References:

  1. Rowley D. 2017. Local pharma hostage to global pricing says PBAC chief. Pharma in focus. Available at: http://www.pharmainfocus.com.au/news.asp?newsid=12520
  1. Aris R. 2013. Pricing and reimbursement in Australia. Available at: https://pharmaphorum.com/views-and-analysis/pricing-and-reimbursement-in-australia/
  1. Rowley D. 2017. Public doesn’t get the value of medicines. Pharma in focus. Available at: http://www.pharmainfocus.com.au/news.asp?newsid=12448
  1. Tower K. 2017. Big Pharma’s had a gutful of PBS. The Australian. Available at: http://www.theaustralian.com.au/national-affairs/health/big-pharmas-had-a-gutful-of-pbs-report/news-story/e65d776b0d298327a58e850233202043
  1. Challenges and Change: A report on the Australian pharmaceutical industry. Available at:https://www.pwc.com.au/industry/healthcare/assets/challengesa-and-changes-final.pdf
  1. Rowley D. 2017. Patient data key to faster PBS-listing says DoH. Pharma in focus. Available at: http://www.pharmainfocus.com.au/news.asp?newsid=12410
  1. Brodie M. 2017. New PBS fast track essential say pharmas. Pharma in focus. Available at: http://www.pharmainfocus.com.au/news.asp?newsid=12444
  1. Rowley D. 2017. PBAC chair: time to review and renew policy. Pharma in focus. Available at: http://www.pharmainfocus.com.au/news.asp?newsid=12447