A Problem Shared

Posted on 03. Apr, 2009 by chiantichiara in Communications, Health, Industry

Here’s your starter for 10: what do Pfizer, Celgene, Novartis, Bayer and Johnson & Johnson all have in common? Nope, they are not all merging together to form one giant global pharma company. In the current climate that would be a very good guess, but it’s not right. Clue? Two words – negotiation and consultation. No? OK I’ll tell you – all these companies have entered into cost sharing agreements with the NHS so that their products can be prescribed to those most in need.

In the case of Celgene’s lenalidomide for multiple myeloma and Pfizer’s sunitinib for advanced kidney cancer, the National Institute for Health and Clinical Excellence (NICE) deemed both drugs clinically effective, but not cost effective i.e. they were too expensive to prescribe for the small patient populations who would benefit. Cue rightful uproar, discontent and condemnation from patients, doctors and charities alike. The pharmaceutical companies rightly defended the high costs of their drugs by arguing that they need to recoup the costs required for research and development, and you have to pay for innovation. But NICE usually sets a theoretical threshold of £30,000 per year per patient (cost per quality adjusted life year or QALY) and anything above that is deemed not ‘cost effective’ and therefore not good use of NHS resources. But there’s no commercial or ethical point in making drugs if no-one will benefit. So what to do?

Well in early January 2009, NICE agreed to extend the threshold at which drugs for terminally ill patients are deemed cost effective. However there are three criteria which need to be met by the drug that is being appraised:

The treatment must be for patients with a short life expectancy, normally less than 24 months
There must be sufficient evidence that it does extend life compared with current NHS treatment, usually at least an additional three months
And it must have a cost-effectiveness ratio higher than £30,000

With NICE adapting to the environment and focusing on extending the lives of seriously ill patients, it was then the turn of pharma companies to propose patient access schemes which would enable these NHS patients to benefit from their drugs. Enter Celgene, who approached the Department of Health (DoH) and NICE and brokered a risk-sharing agreement where the NHS in England and Wales will cover the cost of lenalidomide for the first two years – a total of 26 treatment cycles, each lasting 28 days. If a patient doesn’t benefit from the drug within the first two years, Celgene will pick up the tab for the remainder of the duration of their treatment. My first thought was – you have to be pretty confident in the efficacy of your drug to negotiate a deal like that! It subsequently transpires that 83 per cent of patients on lenalidomide do indeed benefit within the two year window so Celgene will only be expected to pick up the bill for around 17 per cent of patients. Everyone’s a winner.

Last week NICE issued its final guidance on Pfizer’s sunitinib, recommending the drug as a first-line treatment. The drug was initially reviewed and rejected for NHS use, along with three similar treatments. However, with NICE’s new appraisal policy for drugs for the terminally ill coupled with Pfizer’s financially-based patient access proposal, sunitinib is back in the game. Pfizer negotiated a 5 per cent price cut and offered one free course of treatment, worth £3,139, to every eligible UK patient – that’s about 1,700 people every year. But what about the three other drugs that were appraised and rejected? They are also indicated for the treatment of terminally ill kidney cancer patients and all have a QALY of greater than £30,000. Were they not given the go ahead on data grounds (safety or efficacy)? According to a press release by NICE, it is by no means over for these three drugs and further guidance will be published later this year. It is interesting to note that Bayer, the manufacturer of one of these three drugs (sorafenib), has agreed a patient access scheme with the DoH in which the first pack of sorafenib is free to the NHS.

There are several more examples of pharma companies engaging in financial and outcome-based schemes with the DoH and the NHS. Novartis has made its sight saving drug ranibizumab available under a scheme that caps the cost to the NHS. Similar to Celgene, Johnson & Johnson has agreed to offer its blood cancer medicine bortezomib to the NHS under a response-rebate scheme where the NHS pays if the treatment works and Johnson & Johnson will refund the cost if it does not. The press, charities and medical communities alike have all unanimously supported the ‘flexible’ approach of all parties and I can only presume this will be the way of the future for drug market access in the UK. The NHS is running at huge deficit and trusts are being encouraged to cut spending by 3 per cent this year so it looks like cash-back, price-cut deals are here to stay. What I’d like to know is – which company will be the first to offer a BOGOF deal on their drug?

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