[Ip-health] Make Drugmakers Pay: England’s Strategy for Cancer Medicines

Claire Cassedy claire.cassedy at keionline.org
Fri Jul 29 08:58:08 PDT 2016


http://www.bloomberg.com/news/articles/2016-07-28/cancer-drugs-fund-revamp-means-drugmakers-shoulder-overspending

Make Drugmakers Pay: England’s Strategy for Cancer Medicines

By John Ainger
July 28, 2016 — 7:01 PM EDT -- Updated on July 29, 2016 — 9:23 AM EDT

England is reopening its Cancer Drugs Fund with a crafty solution to rein
in the overspending that blighted its predecessor: make drugmakers pay.

Under new rules, if the fund exceeds its 340 million-pound ($450 million)
budget -- as it’s done in the past, overshooting by 37 percent in the final
year before the revamp -- pharmaceutical companies will pick up the tab.
And there’s no cap on that bill.

The reformed fund opened for new applications Friday after a four-month
shutdown. Like its forerunner, it’s meant to pay for therapies that aren’t
deemed cost-effective enough for routine use across England, where cancer
survival rates lag those of other developed countries. But with new rules
devised to protect the National Health Service’s strained finances, it’s
treading a fine line between holding pharma companies accountable and
alienating them.

The new system “feels to me extremely high risk and not particularly
effective,” David Montgomery, cancer medical director for Pfizer Inc.’s
U.K. unit, said in an interview. That’s because it could amount to an
“uncontrolled price cut on top of what will already be good value for
money.”
Not For Free

Pfizer, cancer market leader Roche Holding AG and others already offer
rebates and discounts on their cancer medicines via England’s
Pharmaceutical Price Regulation Scheme and patient access programs in order
to win coverage for their products.

“We’re not in the market of giving medicines away for free,” Montgomery
said, calling it “too simplistic” to keep pushing down prices. “That would
be my point of no return.”

The NHS, which helps manage the fund, is struggling to make ends meet. It
faces a 10 billion-pound annual deficit by 2020 and may fail to meet its 22
billion-pound savings goal, according to a report released in May by the
Chartered Institute of Public Finance and Accountancy. The changes to the
drugs fund are part of a broader effort to tighten the state-run health
service’s purse-strings.
No Wiggle Room

“We do need a system that manages the budget effectively,” said Emlyn
Samuel, a senior policy manager at Cancer Research UK, a charity that
raises funds to pursue new therapies. “I think we all realize the financial
constraints that the NHS is under and we do have to work within the
confines of that.”

So far, the five-year-old fund has helped more than 95,000 patients who
otherwise wouldn’t have received the newest medicines.

In its latest reincarnation, authorities say it will deliver the fastest
cancer treatment approval in Europe. Four new drugs are being made
available immediately to patients on an interim basis, NHS England
announced on Friday, ending more than nine months of hiatus on introducing
therapies. These included Bristol-Myers Squibb Co.’s Opdivo and Yervoy as a
combination, and Novartis AG’s Tafinlar-Mekinist, to treat melanoma.

All the drugmakers whose products are backed by the fund will share
proportional responsibility for the cost overruns under the new rules. The
joint liability combined with the lack of spending caps is a concern,
according to Basel, Switzerland-based Roche.

“Say another company introduces a huge blockbuster medicine that retails at
a very high price and we end up having hundreds of millions of pounds of
overspend -- that’s a really unpredictable thing,” Deborah Lancaster, a
director at Roche U.K., said in a telephone interview. “There aren’t many
industries where you don’t know what your fellow industry members are doing
and yet you could be liable for any overspend caused by the other person.”
Not So NICE

That’s not the only controversy. The National Institute for Health and Care
Excellence, the country’s health-cost adviser, will appraise new cancer
therapies expected to receive marketing approval, extending the reach of an
assessment system that’s irked pharmaceutical companies and charities in
the past.

Medicines targeted at small-patient populations, such as those for rare
cancers, “get routinely held back under the current ‘one size fits all’
system,” said Paul Catchpole, who works on market access at the Association
of the British Pharmaceutical Industry lobbying group. “We will continue to
be at risk of seeing more medicines routinely turned down for use unless
there is greater flexibility in NICE’s core appraisal process.”
Rigid Criteria

The fund initially was created precisely to circumvent NICE’s rejections
and give patients access to innovative medicines that didn’t meet the
agency’s rigid assessment criteria, according to a letter 15 cancer
charities wrote to then-Prime Minister David Cameron in May.

“The Cancer Drugs Fund was introduced as a way of making medicines
available to patients at a time when there was a recognition that NICE
methodology didn’t work terribly well,” Pfizer’s Montgomery said. There is
a “great degree of concern that the new CDF isn’t actually going to make
things better,” he said. Instead, it may “make things worse.”

This month, NICE backed the use of Pfizer’s Bosulif for people with chronic
myeloid leukemia, three years after first rejecting it. In the interim,
patients had access to the drug through the Cancer Drugs Fund.

“We must, as a matter of urgency, address the challenge they have in
assessing the real clinical value of cancer treatments,” Richard Erwin,
Roche’s U.K. general manager, said in an e-mailed statement. Otherwise,
“this could mean that thousands more cancer patients are denied medicines
their doctors believe could be effective in their treatment.”



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