Launching a new drug can be a risky business, with regulatory approval no guarantee that private, commercial, and government-funded insurers will reimburse it. In Europe, the pricing and reimbursement (P&R) of pharmaceuticals is governed by individual member states. Due to the many differences between European health systems, pharmaceuticals are subject to very different rules from country to country.
One general trend throughout Europe is the use of cost-containment measures to control public spending. Many EU member states have implemented internal and/or external reference pricing systems to curb escalating costs, and a range of pricing tools based on cost-effectiveness are used by different states. An example is NICE’s Quality Adjusted Life Year score, used to price drugs in the UK.
Another tool used as a supportive measure for balancing the incentivisation of pharmaceutical innovation with the containment of drug prices is the health technology assessment (HTA), where the value (in terms of efficacy and costs) of using a pharmaceutical versus alternatives on the market is evaluated. Some nations such as France base their decisions on the drug’s medical benefit and clinical added value versus existing therapies. Meanwhile, in Germany, the AMNOG process is conducted twelve months after the drug is launched, thus giving freedom to the company to set the drug’s price during this period.
In addition, reimbursement schemes in European countries differ considerably between the outpatient and inpatient sectors. Almost all countries have full coverage for inpatient medicines, however, drugs in the ambulatory setting often require co-payment.
While there are some similarities and patterns, the overriding fragmentation of the European market means that a successful access strategy must be country-tailored. It is important to devise a plan as early as possible, starting with an assessment of the overall landscape and the opportunities and challenges presented.
Don’t leave it too late
Focusing on P&R earlier in development helps manufacturers avoid a rushed or ill-informed decision that could come back to bite them. “If you don’t spend time finetuning a strategy that tackles some market access challenges that you might face in the future, you could end up in a situation where you withdraw your drug from a key market because of a negative reimbursement decision or because of failed pricing negotiations,” says Cristina Freire Sanz, market access manager at Abacus Medicine Pharma Services.
She advises that, at the earliest possible stage in product development, manufacturers should decide where and when they plan to launch the drug and at what price. To do so, they must first assess the attractiveness and potential of each market. This is done by: 1) identifying the standard of care and potential comparators in the P&R assessments, and by estimating the eligible patient population that benefits from the drug, 2) understanding the funding pathway mechanisms, and the relevant stakeholders involved in the P&R decision-making process, 3) understanding the competitive landscape, and 4) assessing the burden of the disease and identifying the level of unmet medical need. By providing valuation and reimbursement landscape assessments, Abacus Medicine Pharma Services helps companies understand the relevant funding pathway mechanisms and long-term competitive environments in their chosen market.
When target markets have been selected, manufacturers must engage with the main stakeholders involved at the national, regional and/or local level. Some drugs will undergo different routes to be reimbursed depending on the country. For example, in some countries the drug will be appraised at a national level and in other countries the drug will be procured at a regional or local level.
Once all applicable procedures and policies have been studied, a pricing and launch strategy can be plotted. As certain markets will be quicker to access than others, the launching sequence must be carefully determined. A prudent launch strategy must take into account the price referencing mechanisms used by certain member states, ensuring that a low price negotiated for a country earlier in the sequence does not negatively affect a price set in another.
The payer perspective
While a well-researched and carefully planned strategy for accessing a complex region is a great reason to start market access early, another advantage is the opportunity for R&D teams to take important actions during the product’s development that improve the chance of accessing target markets later on. Much of this refers to the individual evidence requirements of European HTAs and payers.
As most of the evidence presented during P&R negotiations is generated from the Phase III clinical trial, it becomes critical that payers’ inputs and perspectives have been included in the trial design. Failing to do so could mean you lack the evidence to convince stakeholders of the value of the drug. National HTA bodies will challenge the design and comparator used in the trial, the appropriateness of the patient population included in the trial, and the inclusion of relevant primary and secondary endpoints, among others. If sponsors weren’t aware of these requirements in advance, they likely won’t be able to conduct another Phase III trial, as the costs of doing so would probably outweigh the sales from that market.
Before commencing any pivotal clinical trials, manufacturers should engage in conversations with payers and other relevant stakeholders. This allows them to secure feedback on the proposed evidence-generation plan and make necessary changes before it’s too late. Depending on the country, scientific advice can be obtained through official consultations or less formal advisory boards, and the inputs of not only payers but also patients and clinicians can be heard.
“It’s very important to engage with payers and different stakeholders such as clinicians and patient organisations, so they can give you their insights for your evidence-generation plan,” notes Sanz. “They can advise you on the in-target population that is eligible for the medicine, the outcomes relevant to the study, and the type of endpoints to measure those outcomes. They can also give their feedback on the design of the clinical trial, if the comparator reflects the standard of care, and if real-world evidence is part of the evidence requirement package.”
Overall, it is never too soon to begin market access activities, but it can easily be too late. Starting research early and using the findings to inform R&D decisions gives pharmaceutical companies the best chance of success when they come to scale the many market access obstacles presented by Europe. By tackling these challenges with the help of a well-chosen service provider, the risk of an unsuccessful drug launch is further mitigated.
Abacus Medicine Pharma Services possesses deep expertise in European reimbursement systems and payer needs and, in addition to landscape assessments, can advise companies on aspects of clinical trial design, including relevant comparators, patient selection criteria, and preferred payer endpoints. Engaging with this service early on helps partners form the basis of a better value story for their pharmaceutical, putting them on track to achieve market access success.