AstraZeneca Polishes Up Brilinta As It Woos EU Payers

Still reeling from the FDA's knock-back to its blockbuster cardiovascular hopeful Brilinta, AstraZeneca is doing its utmost to push uptake in Europe. So on Monday the company issued a press release highlighting a health economics sub-study of PLATO – the 18,000-patient Phase III trial that underpinned EU approval in December– showing that even though Brilique (as ticagrelor is known in Europe) costs up to 20 times more than generic Plavix, it is actually, dear payers, more cost-effective…as a result of lower hospitalization costs.

The sub-study took patient data from PLATO and used it to work out event rates and thus ultimately a cost-per-quality adjusted life year (QALY) for the drug for one year, using Swedish health care costs. Since PLATO had shown a reduced rate of MI, stroke or death from vascular causes, without a significant increase in the rate of overall bleeding, relative to Plavix, the theoretical health care bill was lower. The study then used "necessary assumptions and external data sources" to extrapolate longer-term QALY data, according to a description in the International Society for Pharmacoeconomics and Outcomes Research's Value in Health journal.

The result: Brilinta's cost-per-QALY was in the €2,350-€5,700 range, making it look rather cheap against the backdrop of an informal €25,000-€38,000 cost-per-QALY threshold applied by watchdogs like NICE in England.

One of the professors behind the study described this result as "particularly impressive". Whether or not Europe's most important payers agree is still unclear. AZ concurrently announced that Scotland and Denmark had agreed to reimburse Brilique, but these tiny nations alone won't move the needle for the Big Pharma.

Decisions from Europe's biggest markets will. But France's health technology assessor has already requested further data, notably from AZ's response to FDA's complete response letter, delaying its decision (AZ withdrew its submission as a result, but plans to re-submit within months). Cost-effectiveness assessments in the UK and Germany are due to report later this year.

It's unlikely that this particular sub-study will sway NICE's decision. That agency often questions manufacturers' assumptions and models in their cost-effectiveness analyses; like many US payers, it's (probably rightly) skeptical of pharma-sponsored studies. Even the Scottish Medicines Consortium's approval document from April notes that "the manufacturer may have underestimated the potential uptake of this product" in its calculations of the impact of Brilique on the Scots' drug budget.

Meanwhile Germany has one of the highest generic usage rates in Europe and is notoriously harsh in its judgment of what constitutes innovation (and thus warrants a premium price). But it will at least appreciate that AstraZeneca bravely pitted Brilique head-to-head against the relevant competitor in its Phase III trials, rather than trying to get away with a placebo-controlled trial. Indeed, Germany now requires head-to-head trials with existing therapies before it will grant reimbursement at a premium relative to existing treatments.

As such, Gunnar Olssen, head of AZ's CV/GI iMed, reckons the company couldn't have done a lot more to prove Brilique's superiority, and thus its value to patients. "I don't believe in this case we should have done anything differently," he said. "The drug led to a statistically significant reduction in cardiovascular mortality."

At what price, that reduction, though? That's what the payers are asking.

image by engnr_chik from flickr, used under creative commons

NICE Death Reports Exaggerated, Says Dillon

"Reports of the institution's death have been greatly exaggerated," declared NICE chief executive Andrew Dillon at the FT Pharmaceutical and Biotechnology Conference in London today. Of course, it's clear from the cost-watchdog's latest spate of assessments that NICE is still going strong today.

Dillon's invocation of Twain refers to the fate of NICE post-2013, when a new value-based pricing system in the UK will necessarily change the institute's role. Lord Howe, Parliamentary Under Secretary of State in the Department of Health, recently declared that NICE's decisions on whether a new medicine should be reimbursed by the National Health Service will be "somewhat redundant". That's what prompted the death reports.

Ok, so they weren't really death reports, they were "NICE will soon have significantly less sharp teeth" reports.

And we stand by them (ours, anyway). No-one (not even Dillon) knows precisely what NICE's role will be in the UK's new value-based vision of health care provision, since the government's consultation report isn't out yet. (It's due before year-end, though, so watch this space).

Still, "what I do know is that NICE will continue to assess clinical and cost-effectiveness of new pharmaceuticals," Dillon explained. "But it seems we won't be asked to formally recommend, in the terms we have used to date, how a new drug should be used" (in other words, whether it is reimbursed or not).

So NICE's cost-effectiveness assessments of individual drugs, while still likely to happen, won't lead to stark 'yes' or 'no' recommendations. Instead, "we will articulate the outcome of our assessment in a way that makes clear the optimal use of the product," Dillon explained.

NICE will still express the output of its assessment in terms of cost-per-QALY (quality-adjusted life year), or in terms of a cost-per-QALY range, Dillon clarified to your blogger later. "But we will not be asked to say whether this cost-per-QALY is acceptable or not, as we do now."

Bye-bye the controversial £30,000 cost-per-QALY threshold for determining whether a drug will get reimbursement, in other words (although NICE tends to deny that such a cut-off exists anyway). That's the crux of it. That's the trigger for the death reports.

Instead, Dillon continued, "someone else" will decide whether that cost-per-QALY is acceptable or not, "since the drug price will be driven by someone else in the system," he continues, pointing to the UK's forthcoming value-based pricing set-up. Details of who or what that someone else is, and how they decide whether and how a new drug should be used, remain to be agreed. Formal discussions between industry and the department of health are due to begin next year.

ABPI director general Richard Barker is confident that these talks "won't be too protracted", and speaks positively about a "collaborative approach" where industry has a real say.

It seems unlikely, though, that it will be NICE which takes into account in its assessments the broader factors – including societal impact, treatment support & carer costs – which are to be included in the UK government's vision of value-based pricing and a health care system defined by "value-based pathways", as the catch-phrase appears to be.

Instead NICE will probably do broadly what it did before – and will do so in an equally transparently and consultative fashion, emphasized Dillon – but that this will be just one ingredient that's put into a bigger, as-yet-to-be-defined 'value-based' machine that will determine product usage. "I don't know for sure, though," qualified Dillon (although he did add that there are few if any concrete measures used, to date, to quantify the broader societal benefits of a particular drug…).

More important to Dillon right now is ensuring that his empire does remain a key influence on health care provision. "I want NICE to provide a point of reference on how an intervention should be used," he says."This is very important, and I expect will be expressed in the government's consultation document."

Being a 'point of reference' is somewhat different to being a key decider, as NICE is now.

So from industry's perspective, things probably look good, as far as NICE is concerned. Barker says he doesn't really care at what point these broader, less easily quantifiable elements are blended into decisions on drug usage – whether it happens within the NICE process or afterward. "We're not hung up on what institution does it." As long as it's in there, making it less likely that his members' innovative drugs are tripped up at the starting line.

OK then, NICE isn't dying. In fact it's taking on a broader remit; from 2012 NICE will look at social care, too, as well as maintaining and developing role in promoting optimal public health via general treatment guidelines. "This is a real opportunity for NICE to re-invent itself," and to make sure health care provision is value-focused and outcomes-focused, and to ensure it adequately encompasses social care, too, insists Dillon.

A NICE with a broader remit is a NICE that's spread thinner, though, with less weight in specific areas – like single drug reimbursement assessments.

No More NICE by 2013?

Any drug developer who showed up at the Royal Society of Medicine in London this morning could have been forgiven for thinking Christmas has come early. By 2013, NICE probably won't be doing cost-effectiveness analyses of individual drugs anymore, according to Lord Howe, Parliamentary Under Secretary of State in the Department of Health.

Speaking at the joint ABPI/BIA conference entitled "Our Vision for a New Decade" (where a few other worthy initiatives were announced), Howe declared that those highly visible, and controversial, opinions delivered by NICE on whether a particular new medicine should be reimbursed by the UK National Health Service "will probably be somewhat redundant" in a few years' time.

Don't get too excited: it's not that cost-effectiveness assessments are going away. It's just that, according to Howe's plan, by then the UK will have a spanking new value-based pricing system which will see a drug's value assessed and quantified during pricing discussions. That system will replace the current PPRS (Pharmaceutical Price Regulation Scheme, which caps companies' profits rather than drug prices directly) which expires at the end of 2013.

According to Howe, the new set-up will see "the price of a drug reflecting everybody's agreed perspective on the value it provides". We were unable to establish exactly who 'everybody' is, and how they might 'agree' on such a matter. But despite scant details, it appears that companies may in future discuss value with pricing authorities directly rather than have NICE--usually post hoc--impose its judgment on a drug's cost-effectiveness.

So it's not quite Christmas. But it seems the industry associations have done a good job lobbying for greater influence in pricing and value decisions, and for NICE's teeth to be blunted somewhat. (Perhaps the writing was on the wall in 2009 after Sir Ian Kennedy published his report on NICE's methodologies.) Plus a system wherein value is discussed at the same time as pricing is, arguably, simpler, and "anything that's simpler is better," says Roch Doliveux, CEO of UCB and a significant investor in the UK (largely courtesy of the 2004 Celltech acquisition).

No-one will admit outright that NICE is about to take a back-seat in cost-effectiveness decisions. Universities and Science Minister David Willetts was quick to refute that there will be a "lesser" role for NICE, saying instead it would be a "changing role". A more "advisory" role. NICE will move away from single technology assessments (drug assessments) towards setting quality standards more broadly for public health and for care within the NHS, including in social care.

Here's the Department of Health's summary of where NICE will fit in:

"We respect the expert independence of NICE, and believe that it must be allowed to continue to issue guidance free from political interference. However, we believe that there are fundamental failings within the wider system for drug pricing and access. We are determined to address this and are clear that NICE plays a vital advisory role."

Vital its advisory role in establishing a new drug pricing system may be, but a NICE focused on setting quality standards for public health will certainly be less controversial than in its existing form. And less powerful. Today, a NICE decision can--and quite often does--shatter a drug's commercial prospects in the UK. That power looks uncertain post-2013.

Celgene: Not So Lucky This Time

Back in early 2009, Celgene was looking rather pleased with the outcome from UK cost-effectiveness watchdog NICE of its multiple myeloma treatment Revlimid.

The drug had won a green light even though the company's "patient access scheme" (as NICE and companies like to refer to cost-sharing deals) really wasn't going to help the UK National Health Service coffers that much. Instead it was NICE's late-2008 end-of-life guidance--a relaxation of the strict cost-per-QALY (quality-adjusted life year) threshold that the agency usually uses to judge whether a drug should be reimbursed or not--that allowed the drug to be waved through.

Not so lucky this time, Celgene. NICE today announced that it would not be recommending myelodysplastic syndrome drug azacitidine (Vidaza) for reimbursement, despite a proposed patient access scheme (almost becoming obligatory for approval these days, it seems) and despite meeting the criteria to be considered under the less stringent end-of-life guidance rules.

Somewhat tantalizingly, Carole Longson, Health Technology Evaluation Center Director at NICE, acknowledged in a statement that the drug could "potentially prolong the life of people with these conditions by around nine months longer than standard treatment," and claimed it was "disappointed" not to be able to recommend it.

We suspect there are poker tactics involved here. If this isn't a call for the company to try harder on its cost-sharing proposals, then what is? Even with the patient-access and end-of-life rules, "the magnitude of additional weight that would need to be assigned to the original QALY for the cost-effectiveness of the drug to fall within the current threshold range would be too great," concluded Longson.

Celgene's already offering a 7% reduction on the drug's acquisition cost, estimated at about £45,000 per patient. But according to NICE's final appraisal determination document, even with this, the most plausible cost-per-QALY would be a whopping £63,000, over double the agency's unofficial threshold.

Unfortunately for Celgene, NICE determined that the cheapest comparator--best supportive care--was also the most appropriate, since it's what's given to the majority of UK patients. This only increased the relative cost of Vidaza; more so than it would have done, for instance, if compared with chemotherapy. What's more, opines Professor Rodney Taylor, deputy chair of the patient support group MDS UK, "they didn't cost [best supportive care] appropriately," underestimating, in his view, the cost of blood transfusions for example.

Celgene plans to appeal the decision, and will argue that the drug fits not only the end-of-life criteria, but also qualifies for various innovation criteria agreed by NICE with the Department of Health designed to increase access to highly novel medicines serving small patient populations. (Read this for more on the review of NICE that led to these proposals). The company is not at this point considering a more aggressive patient-access scheme.

This is the latest in a series of tough decisions emanating from NICE recently; another was its somewhat restrictive policy on second-line anti-TNF use in rheumatoid arthritis patients. These suggest that we were wrong to propose, in the light of the various loopholes that have appeared over the last year or so, that NICE was going soft. The teeth are still there, and sharp, it seems.

image by flickrer greenchartreuse used under a creative commons license

NICE Snubs Novo With Draft Lira Guidance

You'd think that even NICE would have welcomed with open arms a new, effective treatment option for the UK's nearly 3 million diabetic patients--particularly one that not only lowers blood sugar, but also causes weight loss.

Nah. NICE is playing hardball (again). Its draft recommendation for Novo Nordisk's GLP-1 analog liraglutide (Victoza), although not nearly so damning as last week's preliminary guidance around Sprycel and Tasigna, suggests that the drug be used only in limited circumstances by the National Health Service. 'Limited' means a) as part of triple therapy regimens only (that is, for patients already on metformin and a sulfonylurea, or metformin and a thiazolidinedione, where the above combos aren't quite doing the trick), b) among patients with a body mass index equal to or higher than 35kg/m2 (that's high) and c) only at the lower, 1.2mg daily dose.

Ok, so patients that aren't quite so obese as 35kg/m2 could also qualify for the drug, "if it is considered that the drug's use could help to achieve levels of weight loss that could be beneficial in treating other conditions caused by being obese", the NICE press release concedes.

But a quick read of the full appraisal consultation document reveals that even among those tightly-defined patient groups, drug treatment should only be maintained if the individual loses at least 3% of body weight after six months (that's not far off the threshold for an actual weight-loss drug) and sees a reduction in blood sugar levels of at least 1 percentage point.

It seems, at first glance, to be a case of "damned if you do, damned if you don't" for Novo. After all, weight loss is supposed to be a nice side-effect of the diabetes drug--one that could lead to lower incidence of co-morbitidies--yet it's apparently being used to limit its reimbursement.

Although NICE concedes that liraglutide "may have some advantages over insulin...in particular its effect on weight," it appears to rule out the higher dose point blank, and is asking for further analyses on the cost-effectiveness of liraglutide on patients with a lower BMI, which it says were not presented.

NICE was also unsatisfied with the extent of the data comparing liraglutide in triple therapy with other combinations of oral drugs, including for instance DPP-4 inhibitors, and felt that the LEAD-1 trial comparing liraglutide to rosiglitazone used an insufficiently high dose of the glitazone.

It's impossible to cover all the various permutations and combinations in diabetes therapy, however--and Novo did submit data from six trials in over 4000 patients. All except one of the trials showed that the drug reduced HbA1c levels significantly better than comparators, which included rosiglitazone (Avandia), sitagliptin (Januvia, the DPP-4 inhibitor), insulin glargine (Lantus), placebo, and Lilly/Amylin's exenatide (Byetta, the only other GLP-1 out there). The exception: the LEAD-2 trial, comparing liraglutide with glimepiride (Amaryl), which showed up liraglutide's weight advantage although no significant difference in blood sugar lowering.

Perhaps NICE's conclusion isn't such a surprise, though, considering the fate of Byetta in the UK (which you can read about in NICE's Type 2 diabetes guideline document). In brief, Byetta's "not recommended for routine use in Type II diabetes", with the same six-month benefit hurdles as described above, deemed as "expensive" and "not cost-effective for an unselected population as compared to commencing human insulin therapy."

As such, Novo's VP Europe, Viggo Birch, admitted that "given what they [NICE] have done for exenatide, this is what you'd expect in the first round." Still, "I'm not happy with it," he continued. "We have a much better product [than exenatide] and much better data." Novo's looking for reimbursement as second-line therapy, "at least for important patient subgroups," and a relaxation of the BMI-based restriction, since this, Birch claims, "isn't fair; it was plucked out of the sky."

There's a crack in the door, though. NICE will hold another meeting on March 18, allowing Novo and others time to comment and submit further data supporting wider use of the drug. And in its full diabetes document, NICE does acknowledge, with regard to Byetta, some uncertainty as to whether GLP-1s would be deemed cost-effective if the [health economic] model "fully reflected the negative quality of life issues of insulin, including fear of hypoglycaemia, and the costs of support and patient education for modern intensity of insulin dose titration" and added that the "more obese require much higher insulin doses, such that insulin costs alone can easily exceed those of exenatide."

Still, reading between the lines, we suspect this preliminary appraisal for Victoza is a call not just for more analysis, but also for a cost-sharing scheme of some description to help smooth the drug's passage past the cost-effectiveness watchdog.

That's not likely, according to Birch. "It [a cost-share scheme] is not really on the radar for this product right now." Perhaps with reason: after all, Victoza's hardly the most expensive drug to cross NICE's desk--the low dose costs GBP 954 per year, compared to tens of thousands of pounds for some cancer treatments.

But given the growing prevalence of diabetes, "NICE is probably wary of giving free rein to something that [may become] so huge" comments one analyst.

The question is whether its hard-ball stance on Victoza ideally balances the concern over escalating drug costs, with that of the escalating costs of the disease itself (plus consequences), estimated to eat up about 10% of the health care budget.

image by flikrer Roland used under a creative commons license

"No!" says NICE, to Sprycel, Tasigna

The UK cost-effectiveness watchdog NICE today delivered a resounding "no" to the use on the National Health Service of Bristol's dasatinib (Sprycel) and Novartis' nilotinib (Tasigna) in chronic myeloid leukemia patients intolerant to imatinib (Glivec).

"The evidence available to support [the clinical effectiveness] of dasatinib and nilotinib was very poor," declared Professor Peter Littlejohns, clinical and public health director at NICE. "The drugs' cost is also very high," he added, in a press release announcing the latest draft guidance.

Sprycel costs about £30,477 per year, and nilotinib about £31,711, according to appraisal documents on NICE's website. And the drugs are taken for several years, with no evidence-based 'cut-off' point currently in use.

It doesn't even look as if the drugs came close, in other words. And Bristol and Novartis can't even consider one of the loopholes now available to companies, the end-of-life guidance issued in late-2008, which permits a somewhat higher cost-per-QALY (quality-adjusted life year) than usual for drugs that extend life in niche yet terminal diseases. (This, you will recall, is what allowed Celgene's multiple myeloma drug Revlimid to slip past the agency.)

The available evidence on the drugs' extension of life--typically required to be of at least three months--"is too weak", declares the NICE PR in yet another blow to the products' manufacturers. That the drugs, both second-generation tyrosine kinase inhibitors, offer such an extension, documents declare, "is plausible, but definitely not proven."

But at the end of this rather damning announcement came an olive branch. "It would be heartening to hear that pharmaceutical company manufacturers are prepared to share some of the very high cost of these drugs with the NHS," suggested Littlejohns.

Now if that isn't a call for a cost-share (or should we say 'patient-access') scheme, then I don't know what is. Recall that such schemes have allowed NICE to green-light a good handful of expensive drugs that likely would not have otherwise made the cut--including most recently UCB's RA drug certolizumab (Cimzia). (Interestingly, although Celgene also put forward such a plan for Revlimid, this wasn't what tipped the decision in its favor.)

So we understand NICE's call for companies to make an effort on the cost-share front--indeed, the agency's CEO Andrew Dillon has told us clearly that he'd prefer if manufacturers simply submitted such schemes up front rather than waiting for a rejection in order to fish one out.

But is Littlejohns implying that a cost-share proposal would simply eliminate all the problems that the appraisal committee identified in the submission, around trial data and design? These seemed considerable: no studies submitted assessed either drug against relevant comparator; trials were 'heterogenous in terms of design, population, implementation and analysis'.

We put this question to NICE. Their reply:

Although there is some evidence to suggest that dasatinib and nilotinib could be considered clinically effective in cases of chronic myeloid leukaemia (CML), the quality of that evidence was extremely poor. This, coupled with the very high cost of the drugs, meant that the independent appraisal committee could not recommend them as an appropriate use of NHS resources.

During the public consultation on the draft recommendations manufacturers will have the opportunity to propose a patient access scheme, to make it easier for the NHS to afford expensive new treatments. We would be happy to look at such a scheme.

The answer is still not entirely clear (to me anyway; and I'm pushing for further clarification). But it sure looks as if patient access schemes will trump poor data.

If that's true, we're not sure that will do anyone any good--the NHS (paying, if a reduced price, for drugs that aren't effective), companies (forced to submit access schemes above all else), or patients (potentially receiving an ineffective drug and, as a group, perhaps not getting something else as a result).

We hope, then, that we're wrong.

image by flikrer greenchartreuse used under a creative commons license

"We're Not Like NICE," Barks Germany's IQWiG

It's not as if the UK's cost-effectiveness watchdog NICE isn't used to a bit of bashing. Patient groups, spurned companies, disease foundations, the good 'ole British public have all had a go over the decade or so since this fourth hurdle came into being.

But NICE has stood up relatively well, we feel. Sure, it has U-turned on a few decisions, and has bowed to pressure for increased transparency. No bad thing. But overall its role and influence are growing, not shrinking. And its measure for assessing cost-effectiveness, the controversial QALY (quality-adjusted-life-year), remains central.

So NICE isn't going to flinch at a dig from its German counterpart, IQWiG, which in October declared what it clearly views--perhaps justifiably, we're not judging--as a far superior method for evaluating cost-benefit. (So we're a bit slow to react, but the English translation has only just been made available.) Note that IQWiG has only since 2007 been allowed to take cost into account at all--this is the outcome of a two-year study.

Basically, IQWiG's new method doesn't impose a uniform upper cost threshold across all diseases, akin to NICE's £30,000-per QALY guideline limit. "We compare the relation between cost and benefit for each individual disease," says the PR, using existing treatment prices in that area as benchmarks. Indeed, "such a [NICE-style, uniform upper] threshold "would not be in keeping with the German Social Code Book," the release continues. (But should cancer or heart disease sufferers have a right to more expensive treatment than, say, diabetes patients....?)

Then the socio-cultural philosophy kicks in: "Peter Sawicki [IQWiG's Director, unlikely to be appointed for another term next year] is convinced that the utilitarian mindset which underpins the British approach would not be accepted in Germany," pipes the release. Sawicki is then quoted as saying: "This benefit maximization ethic leads, for example, to cancer patients not receiving the expensive drug Avastin, because the costs are seen as too high in relation to extending life. On the other hand, despite doubts surrounding their additional benefit, diabetes patients are prescribed insulin analogs because the higher costs seem reasonable in the face of the supposed increase in the quality of life. In Germany, this would be seen as unfair."

Talk about mobilizing the anti-NICE troops. (Regarding insulin: in Germany rapid-acting analogs must be priced no higher than human insulins because of these 'doubts' over additional benefit; never mind speed-of-onset or convenience.)

IQWiG, it seems, is cosying up instead to the Australians. Its approach is to outline a maximum reimbursable price for products, taking into account additional benefit relative to other therapies within the same TA, and performing budget impact analyses not just on overall health care spend, but also taking into account other costs, such as social insurance and productivity losses resulting from sick leave. (Another subject that came under recent scrutiny at NICE.) "There are clear parallels with Australia, the country with the longest experience in matters concerning health economic evaluation," the PR goes on.

And another kick at the QALY: "While our British colleagues work more or less exclusively with QALYs.....after 15 years' experience, the Australian Pharmaceutical Benefits Advisory Committee (the Aussie version of NICE) has warned that there is a high price to pay for carrying out general therapeutic comparisons using QALYs. The utility weightings required for this are often based on many ambiguous assumptions."

Most of the drug industry would agree with Sawicki on this one. Shame, then, that IQWiG's bark is so much louder than its bite. Unlike NICE, whose yes/no decision determines whether a drug will be commercially successful in the UK, IQWiG has no such power. It can only make recommendations--if requested to--as to the relative benefit of a drug and, from now on, as to a maximum reimbursable price. Health insurers can either follow those recommendations, or not.

And in contrast to most other countries, where health technology assessment agencies are gaining sharper teeth, IQWiG's likely going the other way: most expect the newly-elected government to appoint a more pharma-friendly chief, effectively putting the agency in industry's pocket. But that's a whole other blog post.

image by flikrer stereonaut used under a creative commons license

What's the Hardest Job in the Biopharma World?

Maybe it's yours. Maybe it's Jeff Kindler's (keep Pfizer small? Yeah right.) Maybe it's Elan CEO Kelly Martin's(all those shenanigans with Biogen over the J&J Alzheimer deal, ouch).

Most likely, though, it's Andrew Dillon's--he, in case you forgot, is the CEO of UK cost-effectiveness watchdog, NICE. That's what David Mott, ex-CEO of MedImmune and now a General Partner with VC firm New Enterprise Associates, thinks (and this blogger agrees). "Andrew has the hardest job of anyone up here," Mott remarked from the stage during a panel at last week's Pharmaceutical Strategic Alliances conference in New York.

Harder, then, than that of drug developers like co-panelist Peter Wirth, EVP Legal & Corp. Dev at Genzyme, which (besides dealing with manufacturing snafus extraordinaire) is having to "quite deliberately gather the information [around our development programs] that people like NICE will use in their decisions"--(not that we think all of NICE's analysis is right, he added later on). Harder than Mott's, faced as he is with the "triple whammy" of reimbursement hurdles, the elimination of the IPO market and "fundamental changes in Big Pharma's pipelines," all of which have "raised the innovation bar significantly," leaving him (and one presumes any other VCs that have money) with fewer promising investment opportunities. Harder than Ian Spatz's--no longer VP, Global Health Policy at Merck, instead running his own policy advisory firm (and due to start a policy advisory service with Elsevier Business Intelligence, too--plug plug).

Yup, Dillon's job takes the biscuit: He is responsible for 'rationing' health care in the UK--a word so hated in the US that we were pleasantly surprised that no audience-launched projectiles made it up onto the stage. To him (and his teams) to decide "what level of reward is given for the benefit being offered, and....how much of a fixed resource to make available [for a particular drug] given the opportunity cost, if that cost was allocated somewhere else, for another patient group perhaps."

We felt Dillon calmly defended NICE's approach, acknowledged its weaknesses, and tried to correct misconceptions. "I know we have a reputation for only caring about cost, but that simply isn't the case," he argued. "We begin our exploration of the product with the evidence of its clinical effectiveness and try to measure the impact [of that] on patients," he said. "By and large our decision-makers are physicians in the NHS," he added, who know their decisions affect patient wellbeing. (Not that this necessarily means they don't think about cost, mind you.)

In response to accusations that NICE stifles innovation, Dillon elaborated on how the agency attempts to unpick sponsors' 'innovation' claims and translate them into concrete clinical benefits. It's not easy, and he knows NICE needs to be more transparent in explaining how and at what point in the assessment process this is done. "We need to be much more explicit about the particular innovative features that [we believe] will bring benefits to patients. We probably didn't [used to] spend enough time talking about that [with sponsors] right at the start" of the assessment process, he told the PSA audience.

While conceding on transparency, though, Dillon put up a robust defense of the QALY, the controversial utility metric used by NICE, and its 'acceptability range' of around £30,000-per-QALY. (Refresher: Quality-Adjusted-Life-Year is the estimated cost of one additional year of life per person when comparing a new drug with the current standard.) "The QALY is the best approach despite its flaws," he said. And as to why the QALY threshold hasn't increased over the years, with inflation, "well there isn't really a fixed threshold. Advisory Committees aren't told not to go beyond £30,000-per-QALY," he said. (Hear that? Indeed there's already ample evidence of slippage....)

Dillon left the stage at PSA composed and unscathed, we'd say. Which is a very good thing (thank you, audience, for not throwing things) since he--and others with similar jobs, and there will be a growing number thereof, including, yes, in the US--will be invited back to similarly important industry events. Reimbursability is the new proof-of-concept, after all.

image by flickrer Brooks Elliott used under a creative commons license

NICE and the Definition of Innovation

What 'innovation' means to NICE--or at least, how it takes innovation into account in its cost-effectiveness assessments--may yet become a little clearer. Tomorrow the National Institute of Clinical Excellence will hold one of its regular public board meetings and item 7 on the agenda is the agency's response to the Ian Kennedy report.

In case you'd forgotten (it was before the summer holidays, after all): Sir Ian Kennedy published a report in July proposing, among other things, how NICE should take into account the 'innovative' nature of medicines. We summarized it here, noting that industry was particularly peeved about Kennedy's support for the controversial QALY measure which NICE uses to judge cost-effectiveness.

Innovation is a tricky one. Kennedy had a shot at defining it, including criteria such as that a drug should 'substantially and significantly improve the way that a current need is met'. NICE argues that it already 'has flexibility in supporting the use of technologies' whose cost-per-QALY exceeds the £30,000 threshold (the cut-off point as to whether a drug will be reimbursed or not), including 'where the intervention is an innovation that adds substantial, distinct and demonstrable benefits that may not have been adequately captured in the measurement of health gain'. The agency also points to recently-introduced guidance which allows it to raise the threshold for treatments which extend life at the end of life (from which several drugs have already benefited) and the even-newer "Innovation Pass" notion foisted upon it by the UK government in its bid to kick-start the sector.

Still, recognizing its role in supporting innovation (and in particular the UK government's fresh call for it to do so), NICE is proposing two measures that, if not exactly radically change the way the agency values and assesses innovation, certainly try to make the process clearer and thus make the agency more accountable.

Firstly, if a company claims its product is 'innovative' and that this confers specific benefits upon it, scoping workshop meetings (prior to assessment) will be used to explore those 'unique characteristics [of the drug or technology] which support this proposition, and the data sources through which the Appraisal Committee will be able to validate it'. In other words, NICE is saying, we'll explicitly lay out, up-front, the company's claim to innovation and how we can validate it.

But clearly, NICE must establish whether a supposedly 'innovative' product in fact has a substantial impact on health-related benefits and improves the way a current need is met (above and beyond best supportive care). Innovation for its own sake isn't much help.

Thus in its second measure, the agency states that where the Appraisal Committee is satisfied that a product represents a 'step change'--noting that it's up to the Committee to decide what 'step change' means--it will have to demonstrate that these innovative characteristics have been taken into account (and, one presumes, how they've been taken into account) in the QALY calculation of health-related quality of life. If they haven't directly been factored into that calculation, the Committee will have to describe how it has evaluated their impact (if at all) on its overall judgment of the drug's cost-effectiveness.

Basically, then, NICE's committees are going to have to better explain themselves and their evaluation processes, and pinpoint how and where they factor in innovative value, rather than just claiming that they do. "We're going to be more systematic in cataloging those [innovative] features and in tracking our assessments of those features through the appraisal process, all the way through to the final guidance," explains NICE's CEO Andrew Dillon.

At the end of the day, though, the exercise isn't going to get any easier. "We have to convert a proposition that a drug or technology is innovative into a measurable assessment of patient benefit," Dillon continues. "We have to unpick the proposition and find out in what way a product's innovativeness can benefit patients. Then we factor that into the value of a drug."

Drug companies, are you paying attention? Don't just go in and say your drug is 'innovative'.

(NICE's proposals, if agreed at the meeting tomorrow, will be open for consultation.)

Regulators and Cost Watchdogs Getting Too Close, says EMEA's Lonngren

The European regulatory agency, EMEA, and Europe's various cost-effectiveness watchdogs are brushing up a little too close for comfort, according to Thomas Lonngren, EMEA's executive director. "The decision points for approval [of a medicine] and its health technology assessment [in individual European countries] are getting very close," he observed during a media workshop in London yesterday.

That in itself isn't the problem--it's simply a reflection of governments' and payers' increasing rigor in testing new drugs' cost-effectiveness before they dish out too much money for them. The problem, Lonngren continued, is that some health technology assessment agencies (HTAs) give scientific advice, "and so do we. And we'll have a big problem in drug development if there's too much different scientific advice going around," particularly as it's increasingly given at about the same time in a drug's development path.

The UK's NICE and Sweden's HTA both provide advice to companies on what kind of clinical data they need to provide in order for a green light. At least for NICE, it's a relatively recent additional activity, providing some welcome on-the-side income. Speaking to The IN VIVO Blog back in December 2007, NICE CEO Andrew Dillon argued: “Regulators charge extra for early consultations with companies,” he says, “so why not us? It’s what everyone wants.”

Now sure, companies want to know what kind of data they need to secure both an approval in the first place, and reimbursement. One's no good without the other. But "we need some agreement [with HTAs] so that industry doesn't find itself doing one development program for EMEA, and another 27 for the various member-state HTAs," Lonngren told The IN VIVO Blog.

He's gunning for harmonization of both sides' requirements, with the goal of an integrated drug development process that meets the needs of both regulators and payors.

This isn't pie-in-the-sky, at least according to EMEA. "We could possibly get consensus on the assessment of relative efficacy [of a drug] in the scientific and clinical setting," argues Hans-Georg Eichler, EMEA's senior medical officer. His point is that the cost element can be added later onto an agreed assessment of a drug's medical value, which may include impact on quality of life, for instance. (No one, Eichler included, sees standardization of HTA methodologies across Europe as likely to happen soon, though the hurdles are more political than scientific, according to EMEA execs.)

Some kind of harmonization between EMEA and HTA agencies' clinical guideline standards seems logical, though, given that HTA bodies are already banging on EMEA's door for more detailed information about its decision-making processes as a result of converging timelines. "They [the HTAs] need information [sooner], and they get that from our decision. But they're saying they need more insights [into our processes] in order to make their judgments about value," says Lonngren.

The HTA agencies (or at least some of them; they're not a coherent unit across Europe, although they have created an informal network) want more color on the various steps in EMEA's decision-making process, such as the first list of questions sent by the CHMP (the actual EMEA committee which assess drug applications) to the sponsor, the sponsor's reply, the assessment of those replies, and the weighting/significance attributed by the regulators to the various elements of a product's benefit/risk profile.

Fortunately, those demands tie in with EMEA's own drive to increase transparency--something that others including the media could benefit from too. And the work's on track, according to Patrick Le Courtois, EMEA's head of pre-authorization evaluations for human medicines. "We'll be liaising with various HTA agencies," he says, and are working to improve our EPAR (the European Public Assessment Report published for every drug that's approved, which sets out the scientific grounds for the approval, plus an SPC and labeling and packaging requirements for the product).

Whether HTA agencies will play ball remains to be seen (we'll be asking NICE's Andrew Dillon at our forthcoming Pharmaceutical Strategic Alliances conference--to which you may register here). Without their cooperation, Lonngren's concern over duplicate or conflicting advice increasing the cost and time for drug development will remain. But where EMEA is a politically neutral, executive beast, HTA agencies are, whether they admit it or not, steeped in national politics. That always puts a break on consensus-reaching.

image by flickrer athousandwordsormore used under a creative commons license

The NICE Report: A Curate's Egg?

We promised we'd come back to it. Several industry representatives have classified Sir Ian Kennedy's report into NICE's value-assessment methodologies as 'a curate's egg', suggesting something that's part good, part bad...but pretty much spoiled as a result.

The bad bit is certainly Sir Ian's strong endorsement of the NICE's controversial cost-effectiveness measure, the QALY, or quality-adjusted life year, which he's "unequivocally convinced" is an approach that's both "right and essential." (Listen to Sir Ian's podcast here.)

Oh dear. "Sir Ian has been unduly influenced by a small group of UK-based health economists" as to the value of the QALY, said one disgruntled industry representative, in an off-record conversation.

As we reported here, pharma feels the QALY is too narrow and overly quantitative. And while welcoming Sir Ian's calls for more wider, health-related benefits to be included in the calculation--and made more explicit, at that--some are frustrated that he doesn't suggest how. "The way that the QALY (currently) calculates improvement in qualify of life (using a questionnaire) remains crude," says Pfizer's UK managing director Richard Blackburn.

He and others are also disappointed that the report more or less rules out the inclusion of wider societal benefits a drug may bring. For instance, a treatment may reduce absenteeism, thereby benefiting the economy as a whole. But cost-benefits beyond the Health Service isn't NICE's remit, stated Sir Ian--and anyway, casting the net that wide would be too complicated, and would lead to an overall bias in favor of those of working age.

But while falling short of proposing that NICE take the kind of holistic view of a drug's benefits that some companies (and payers) are starting to try to do elsewhere (read our upcoming IN VIVO for some German examples), the report does offer some bright spots for pharma. (Read our full analysis in The Pink Sheet DAILY.)

One of them, allowing higher prices for innovative drugs for a short period, we already talked about. Another is that NICE should be far more transparent across the board, and "redouble" its existing efforts to work more closely with pharma. In particular, the report suggests that NICE deliberations on a product's cost-effectiveness, carried out during the second half of its Appraisal Committee meetings, should be made available by video recording after guidance is made public. (As part of a broader project to kick-start the UK life sciences sector and boost innovation, NICE has already agreed to allow manufacturers to attend the first part of Appraisal Committee meetings.)

The caveat to all this (the reason the egg is spoiled, perhaps?): NICE is not obliged to implement any of the report's recommendations. Still, given that it commissioned this research, "it will be hard for NICE to ignore the proposals," opines Genzyme's Steve Bates, Goverment Relations Director. NICE will issue a formal response at its next public Board meeting in September 2009 and begin a three-month consultation.

NICE Should Keep QALY

As anticipated, Sir Ian Kennedy's report into whether NICE values innovation appropriately (read: sufficiently broadly to satisfy the industry) has been published. This matters, remember, because NICE's methodologies, priorities and direction are and will continue to be followed by other markets.

You can read it here, and we'll have more to say on it shortly (and would love to hear your views, too). Briefly, though (there are 25 recommendations): the Quality Adjusted Life Year (QALY) measure that NICE currently uses should remain, says the report, but that doesn't end the debate, far from it. NICE should commission research to determine whether--and how--social and other benefits a drug may bring could form part of its approach. (Isn't that just passing on the problem, somewhat? Ok, so we haven't had time, what with GSK's results 'n all that, to study this fully....)

Likewise, it's up to NICE to formulate a definition of 'innovation' (admittedly tough), but the report suggests incentives to promote innovation, stating (to industry's undoubted delight) that:

"....a higher price could be accepted for some patients or indications, or even across the board, taking the cost-effectiveness of the product beyond the normal threshold. There could be an agreed higher threshold, determined by NICE. The price could then be maintained for a set period of time, eg 3-5 years, after which it must be adjusted to bring the product within the normal threshold. NICE could achieve this by establishing a special protocol for innovation. Or, NICE could undertake the appraisal using one of the new schemes established through the recent revision of the Pharmaceutical Prices Regulation Scheme, the "flexible pricing" scheme, or the "patient access" scheme."

Read this to swot up on the PPRS and flexible pricing schemes, and stay tuned....

Have a NICE Day: Look out for Report on Value-Assessment

Keep your eyes peeled for item number 6 on the agenda for NICE’s AGM, which kicks off today at 2pm BST. It’s “to receive Sir Ian Kennedy’s report: ‘Appraising the value of innovation & other benefits—a short study for NICE.’

A short study for NICE—that makes it sound rather friendly, doesn’t it, as if Sir Ian Kennedy (professor of health law, ethics and policy of University College London) was doing the agency a favor. Maybe he is. After all, it was NICE which commissioned this ‘independent study’ into the red-hot question of how it assesses value, and whether its methodologies take into account a sufficiently broad definition thereof, back in January.

But it did so mostly because it had to—in response to an industry report calling for an enquiry to assess the long-term impact of NICE on drug cost and uptake in the UK. Behind that: plenty of drug firms frustrated at the narrowness of NICE’s current parameter for measuring cost-effectiveness, the QALY (quality-adjusted life year). This represents the estimated additional cost of one year of healthy life, for one person, when comparing a new drug with current standard practice.

Industry argues that the QALY is overly quantitative and fails to take into account wider benefits to society that a product may offer, such as making life easier for caregivers and employers, and further, to the industry's contribution to the UK economy and to innovation. "Too much calculation, and not enough judgment," was how David Fisher, commercial director of UK industry association the ABPI, put it earlier this year. (See this IN VIVO feature for the full NICE treatment.)

We’ll soon find out whether Sir Kennedy agrees—the NICE press office promises that the report will go up onto its website at 2pm.

Meantime, though, NICE isn’t apparently planning to change the current £20-30k cost-effectiveness threshold that it uses to make its go/no-go decisions, according to agenda item 8. The report of an April 2009 workshop to discuss the issue (triggered as a response to concerns expressed by the Health Select Committee) concludes that “on the basis of the current information it would be inappropriate for the Institute to change its current threshold range.”

Ok then. But there are instances where that threshold is ignored or, shall we say, stretched anyway. Like under the end-of-life guidance, issued late last year, which relaxes the cost-effectiveness criteria for drugs licensed for terminal illnesses affecting fewer than 7,000 patients per year. Several drugs, including Celgene’s Revlimid, have apparently already benefited from this loophole (as critics on the NHS/ payor side would call it). And yes, an update report on the application of this guidance is agenda item number 7 at today’s AGM.

Even after just four months of implementation, this supplementary guidance has raised several significant questions. Does the size of the population a drug treats refer to that across all indications, or only that under review? What happens to existing guidance if a drug receives subsequent additional marketing approval? What if two similar drugs are reviewed using this guidance a short time apart—would the first go through and the second be rejected, based on a an ‘alternative treatment’ being available? How should we measure a treatment’s survival gain, using mean or median survival? Should we take into account quality-of-life benefits during that time?

It’ll be a busy day for NICE’s board, after what CEO Andrew Dillon calls in his report “one of the most challenging years the Institute has experienced.”

The action’s likely to continue given NICE’s growing influence on pricing, its role in implementing the new ‘Innovation Pass’ announced earlier this month, the various additional consulting and advisory services it has set up, and ongoing pledges to increase transparency and accountability.

Stuck at NICE? Flash your Innovation Pass

Well, you will be able to soon, anyway. The Innovation Pass was a top action item within the UK government’s new Life Sciences Blueprint, unveiled at Imperial College Business Center in London today.

The Blueprint’s lofty goals include turning the UK into a more attractive location for life sciences companies (not least through tax incentives and measures to facilitate clinical trials), improving the country’s currently dire financing situation for small companies, encouraging industry-academia collaboration and—here it is—improving access to innovative new medicines. (Read the whole thing here.)

Enter the Innovation Pass, administered by the National Institute of Clinical Excellence, which, from next year, will make “selected innovative medicines” available on the National Health Service for three years. The idea is that highly novel drugs treating very small patient populations, where a lack of clinical data would make a regular NICE assessment unfeasible, thereby reach patients, and allow real-life data to be collected to inform the standard NICE process later on. (These days, typically, any novel drug that hasn’t been through NICE is more or less ignored.)

Who chooses which drugs will be selected? NICE will, noted deputy CEO Gillian Leng during the Blueprint launch. “We will decide on the criteria for granting an innovation Pass”, she said, following consultation with stakeholders at the end of this year. With a budget of just £25 million for the 2010/2011 pilot year for the initiative, we’re not talking hundreds of drugs here. More like ten.

Which helps explain why a Genzyme executive thoughtfully thrust his proposal for the “kind of drug that we think might be included in the scheme” under this blogger’s nose during coffee. It’s ataluren (there, I’ve done the favor)—an oral compound, previously known as PTC124, which targets a nonsense genetic mutation believed to cause Duchenne and Becker muscular dystrophy in boys. The compound’s in a 165-patient Phase IIb trial in collaboration with PTC Therapeutics, its originator.

Drugs like this for rare diseases might well benefit from an Innovation Pass, but Lord Drayson, Minister for Science & Innovation, in the Q&A session following the announcement chose as his example of qualifying drugs treatment for late-stage cancers—raising at least in this blogger’s mind the question of how this new process will sit alongside another recent NICE loophole (if we may call it that): the end of life medicines guidance issued late last year. (This, if you’ve forgotten, was a relaxing of the normal NICE cost-effectiveness criteria specifically for treatments used to extend life for terminal patients; several drugs, including Celgene’s Revlimid, have had a green light from NICE as a result.)

The Innovation Pass will sit on top of all this, according to Lord Drayson (a co-founder in 1993 of PowderJect, sold to Chiron—now Novartis—ten years later for £542 million). “It’s time-limited, budget-limited, and highly complementary to the normal NICE process,” he said. Indeed, once sufficient data is collected on a drug with an Innovation Pass, that treatment will go through the regular NICE appraisal system—and may be rejected, Drayson confirmed. (Sparks will fly among patient groups and the public if so, but NICE is used to that.)

Still, it’s reforms to the normal, broader NICE process that larger companies--those like Pfizer less likely to churn out Innovation Pass winners--are more interested in. Those ongoing reforms include increased dialog between industry and NICE’s assessment teams--in particular, the opportunity for companies to attend NICE appraisal committee meetings and respond to questions “on matters of factual accuracy”--and manufacturer debriefing meetings with NICE at the end of a drug appraisal.

On the red-hot question of how NICE assesses value, and whether its methodologies take into account a sufficiently wide range of factors to keep the industry happy, we must wait a little longer for the publication, on July 22, of Sir Ian Kennedy’s report. (Read this for background, and watch this space next week.)

image by flikrer Chris Fleming used under a creative commons license

NICE Deal, Celgene

We imagine that Celgene is pleased with its cost-sharing scheme around multiple myeloma drug lenalidomide (Revlimid), approved, at least provisionally, by the UK cost-effectiveness watchdog NICE.

Having failed to get its GBP4,300-a-month drug past NICE the first time around, Celgene had a re-think, and came back with a plan. The UK's National Health Service, it suggested, should pay for the drug for 26 treatment cycles--that's about two years' worth--in those patients with previously-treated disease. Celgene would fund the drug (used in combination with dexamethasone) in patients benefiting from it thereafter.

Sound fair? The thing is, that the median time to progression figure for patients with this disease, as per trial data presented by Celgene to back up its submission, is 11 months. (TTP is what's typically used to determine whether patients continue to receive a therapy--in other words, whether it's working). So Celgene's onto a good deal, right, since it won't have many patients to fund?

Wrong, argues Celgene. It's just not possible to find the true median TTP or overall survival data from these trials because of limited follow-up and patient withdrawals. So Celgene used a model to extrapolate what is sees as more accurate TTP and survival data. That, is says, reveals that 15-20% of patients may continue to benefit from the drug beyond 26 treatment cycles. Even that estimate, the company argues, might be too conservative, since much existing overall survival data is based on current clinical practice, whereby Revlimid, an immunomodulatory agent, isn't part of the mix at all.

Those arguments were clearly sufficient for NICE (although it's worth mentioning that the agency has been under significant pressure to make a popular decision in recent months). And Celgene had two major tailwinds helping it: a) Recently-issued NICE guidance on end-of-life medicines, which relaxes the cost-effectiveness criteria for products that extend life for those with terminal diseases affecting fewer than 7000 new patients each year, and b) simple administration.

Celgene will administer the 'you-pay-then-we-pay' scheme itself, and easily, piggybacking on the drug's existing risk minimization plan, which is a condition of its license. (Since the drug is related to thalidomide, it must not be used in pregnant women.) That's a big deal, since the main barriers to any risk- or cost-sharing scheme in the UK, as we suggested in a previous post, appear to be practical ones.

Some critics say that NICE is bowing to popular pressure, with this and with recent revised guidance around kidney cancer treatment Sutent. That's a shame, they continue, because if Obama does copy it or any aspect of it in the US, he should copy the old NICE, not what some describe as the more submissive new one.

Now sure, with more risk-sharing proposals on the way, its value-assessment methods under scrutiny, plus the bunch of other responsibilities that come with its increased influence on drug pricing, NICE is going to have to be smart. (We'll have more about this in the next edition of The RPM Report.) But it's hard to argue with the ethics of providing end-of-life medicines, and of increasing patient access. It's also hard to argue with the economic benefits that come to Britain if access improves. Besides, at least companies and the UK Department of Health are engaging on such matters, even if the outcomes may appear, to some, to favor one side or the other.

UK Biotech: Shattered Dreams?

Back in 2003 a government-funded team of experts outlined its vision for UK biotech--one in which the sector occupied a leading place on the global stage, with a strong clinical trial infrastructure, early patient acess to innovative drugs, and all built around a critical mass of companies "in the mould of Amgen".

The dream hasn't come true, to say the least. This much was clear at the launch yesterday in London of a 'renew and refresh' of that original vision--encompassed in a report called Bioscience 2015. Sights are now considerably lower. Instead of building a sector "with a core of large profitable world-class companies", we're now settling, it seems, for "a sector which supports, on a sustainable basis, high value-added employment..." Even the email announcing the event was ominously entitled "Can we save the UK biotech sector?"

It's not difficult to see where this dose of... realism, defeatism, call it what you like... has come from. The UK has lost much of its lead in terms of products in development versus other European countries. Shire moved its headquarters to Ireland for tax reasons, Pfizer and others have shut down UK-based manufacturing, and the UK's stringent application of the European clinical trials directive means the proportion of European products in trials there has fallen from 46% in 2002 to 24% in 2007. Far from Amgen lookalikes, the sector appears to increasingly comprise low market-cap, illiquid companies, many fast running out (or run out) of cash. Biotech now comprises less than 0.2% of the total market capitalization on the London Stock Exchange; investors aren't interested.

Blame the financial crisis? Sure, but the problems pre-date it. And one of the big ones, said Sir David Cooksey, chairman of the Bioscience Innovation and Growth Team which produced the report, is NICE. That 'fourth hurdle' (ever notice how that expression isn't used so much now given how fashionable and inevitable HTA has become?) delays drug usage and creates uncertainty for companies--in particular when decisions are reversed or re-reviewed. And their processes aren't transparent, he argues, calling for an independent enquiry on NICE's impact on medicines uptake in the UK.

NICE would have a lot to say about that; it claims to be among the most transparent of cost-effectiveness bodies in Europe. But, hurdle or not, NICE is here to stay, if anything with ever-growing influence on drug usage (in fact, NICE and Health Technology Assessment in general is probably one area where the UK does have leading global status). And the economic crisis doesn't look as if it will go away soon either. Analyst numbers, already, said some, too low to offer all the UK companies the visibility they need, are dwindling fast.

So what's to be done? Well, many of the ideas in the original and the refreshed report are realistic and achievable. Like rewarding academia-industry collaborations, providing incentives for clinicians to move into research and strengthen the country's R&D base, extending tax credits, and improving NHS IT systems. Others, like the UK taking a lead in bringing together global regulators to adapt their approaches to embrace earlier (eg Phase II) drug access, wider use of biomarkers and simulation technologies (think FDA Critical Path) seem, if noble and sensible, somewhat blue-sky (unfortunately).

Sure, governments can and should help biotech, most usefully via tax breaks, funding for basic research, and appropriate, rather than burdensome, regulation. But they can't replace VCs or investors (remember what the German goverment's BioRegio program didn't do for German biotech). Far more valuable is is what UK entrepreneurs (yes, they exist) can do themselves: seek and find novel funding solutions and new biotech models that can exist and thrive in the tough but now familiar UK climate, just as others are doing elsewhere in Europe. Ideas, anyone?

More Velcade-Style Risk-Sharing in the UK?

It appears that Janssen-Cilag feels a lot better now about its pay-for-performance scheme around multiple myeloma drug bortezemib (Velcade) than it did when the program was introduced in 2007.

The Velcade Response Scheme (VRS) came about out of desperation: cost-effectiveness watchdog NICE had turned down the drug as too expensive, so Janssen-Cilag, to its credit, said to the UK’s state payer, the Department of Health, ok, well if we promise to charge only when the drug is effective (and refund you if not), then will you give this to patients?

The answer was yes. And now, not only have all of the UK’s Primary Care Trusts have signed up to the VRS, according to a Janssen spokesperson, but this scheme “may now be a good example of how a performance-based scheme could be structured.” That’s not a statement from Janssen; it’s from a position document issued last year by the British Oncology Pharmacy Association on risk-sharing schemes.

Indeed, such schemes have, perhaps inevitably, become a rather more regular feature of the UK drug landscape—making Janssen feel more pioneering than desperate (though Janssen isn’t the first to guarantee performance; Pfizer tried with Lipitor too).

Most of the other recent flavors of risk-sharing programs around expensive cancer drugs emerged, like VRS did, as a result of a negative NICE appraisal. Merck-Serono offered the Cetuximab Cost-Share Program around Erbitux in metastatic colorectal cancer, which involved refunding primary care trusts the cost of any vials of the drug used for patients that fell into a pre-agreed ‘non-responder’ category at up to 6 weeks. Roche instigated the ‘Tarceva Access Program’ for its NSCLC drug erlotinib, offering a rebate, in the form of a credit note against any future Roche purchase, for the amount that the drug cost over and above the cost of the incumbent NSCLC treatment docetaxel (Sanofi-Aventis' Taxotere) for an average patient duration (with an upper limit on the total number of packs).

Now granted, Roche’s program was initially introduced as a means to claw market share off docetaxel, which it was struggling to do ahead of NICE guidance. But when NICE found Tarceva to be un-cost effective—with questions around the lack of comparative data with docetaxel in particular--the scheme was formally proposed to NICE as part of a re-review. In November 2008, NICE issued positive guidance—but only on condition that the overall treatment cost remained in line with that of docetaxel. Roche had to drop the price by about 7.5%.

Critics say such programs are simply a way for industry to coerce NICE into a ‘yes’. Maybe. But there’s no denying that such schemes represent a logical way to improve patient access without breaking the bank. Indeed, the new UK drug pricing contract, the PPRS, formalizes a bunch of patient access schemes, including risk-sharing programs. And NICE, as we heard from CEO Andrew Dillon last week, would prefer such schemes to be proposed up front, before a drug is submitted for review, rather than as a last-resort of the drug fails the cost-test.

Small wonder, then, that in the last three or four months since the PPRS was published, the department of health has been in contact with various companies about schemes around several “high profile” drugs, according to David Thomson, Lead Pharmacist at the Yorkshire Cancer Network and author of the BOPA position statement.

The big problem is administration. As it is, it’s complex to administer rebates and track outcomes. The more different schemes are available, the harder that becomes. “Anecdotal evidence suggests that the VRS [and a similar scheme around Sutent] aren’t necessarily bringing the expected levels of financial benefit to the National Health Service,” Thomson told The IN VIVO Blog.

Add to this the problem of patchy uptake or availability of some of the existing handful of programs across the country, and the possibility of multiple risk-programs across a single drug for different indications, and it’s easy to see why BOPA's pushing for some sort of risk-sharing plan template....and why we may not, after all, see a flood of VRS-followers soon.

image by flickr user fboosman used under a creative commons license

NICE’s Growing Influence on UK Drug Pricing

NICE doesn’t set drug prices in the UK, companies do. But the agency’s influence on pricing, if indirect, will nevertheless grow considerably given the UK’s new Pharmaceutical Price Regulation Scheme, published late last year following a surprise renegotiation of the agreement.

“The PPRS has increased price flexibility quite deliberately, and NICE has a role to play in enabling that flexibility to be applied in appropriate circumstances,” said NICE CEO Andrew Dillon in an interview on Thursday.

Aside from the overall 3.9% price decrease slapped on all branded drugs from February (with a further 1.9% due next year) the PPRS formalizes options for a variety of patient access schemes, including outcomes-based programs that allow for a price increase in the light of new evidence around a drug. It also proposes conditional pricing based on the collection of additional evidence, the possibility of rebates in the event that a drug fails to deliver the promised benefits, and risk-sharing set-ups along the lines of that proposed by Janssen-Cilag in 2007 for blood cancer drug Velcade.

All this means more work for NICE, since its role is to assess any additional evidence that might justify a price increase, rebate, or price decrease. Under the new scheme companies can request a re-review from NICE based on “significant” new evidence. “We already keep guidelines up to date,” points out Dillon, but “the difference is that in the past, we decided when to re-consider [a particular drug or drug class]. From now on, companies can come and ask us.”

NICE plans to meet all those additional requests—and let’s face it, there will likely be a few—by establishing a fourth advisory committee (the current three comprise about 30 experts each) and increasing staff in its technology appraisal team. It hasn’t yet committed to responding in any particular time-frame, but “we want to make sure we deal with [all requests] as fast as we can,” Dillion told The IN VIVO Blog. Step one will be for NICE to “ensure that we agree the evidence is sufficiently materially different” to be likely to warrant either a premium price, or a change in a previously negative recommendation. Assuming it is, the product would go through the same standard technology appraisal as any new product does currently.

Companies: Apply Early

But why should NICE prioritize re-reviews that could lead to price rises, over reviewing new medicines or technologies? Well, for one thing, the PPRS allows companies to implement price rises 12 months after they propose them, unless negative NICE guidance has appeared sooner. More significantly, it’s the agency’s job is to re-review important treatments in the light of new evidence anyway. “But clearly, if a company comes earlier than expected to ask for consideration, the effect is simply to advance a review that we would otherwise have done,” notes Dillon.

So get in there early, companies, with your new evidence—so long as it’s meaty.

And get in there early with your proposals for Velcade-style risk-sharing schemes, too. These needn’t only appear as a desperate last measure following a negative appraisal. “If companies have an idea that the scheme might be part of the solution, and it’s in their heads at the time of embarking on a [first] NICE appraisal, we’d much rather hear about it at the beginning,” emphasizes Dillon. “Otherwise it just extends the process” since NICE would then have to start again to review the practicalities of a risk-sharing scheme.

Extended processes are the last thing NICE needs, given its growing workload (fee-for-advice services and masterclasses for smaller companies are also on offer) and its promise to issue guidance within six months of a product’s approval.

Let’s hope the UK government, after bailing out the banks, has enough left at the start of the new financial year in April to grant NICE the extra funds its applying for.

A NICE New Business: Fee-for-Advice

The UK’s National Institute of Clinical Excellence (NICE) is piloting a fee-for-service business that would see companies paying to receive early advice on what kind of cost-effectiveness and pharmaco-economic data they might require to secure drug reimbursement.

Speaking at the Financial Times’ Global Pharmaceutical and Biotechnology Conference in London on Monday, NICE CEO Andrew Dillon talked about the need for earlier engagement with industry, and mentioned a test-run it was carrying out with Novartis. “We’ve just completed the formal part of the process, in an attempt to provide some sort of proof-of-concept for the idea,” he told the audience. He declined to specify which Novartis drug candidate is the guinea pig.

NICE will present an evaluation report to its Board at the end of the first quarter of next year, according to Dillon, outlining how valuable the process has been, and what resources are required. It will presumably also outline in more detail how many meetings take place and at what stage in the drug candidate’s development. "I would envisage companies seeking advice as they prepare their phase 3 studies, although in principle they might approach us at any stage in the development of a product," noted Dillon in an email after the meeting.

As pressure mounts on drug companies to prove not just that a product works and is safe, but that it's also cost-effective, many firms want and need to engage with bodies like NICE well before approval stage. Sure, some are now being more creative in circumventing negative reimbursement recommendations--as we saw in the case of Johnson & Johnson and the risk-sharing rebate scheme it suggested for blood-cancer drug Velcade. But better still to have the appropriate data in the first place, ideally at minimum extra cost.

If the early-advice scheme is adopted, drug firms will have to pay for the privilege, though. “This will be a fee-for-service business,” Dillon told IN VIVO Blog. NICE will have to charge companies given the additional resources required, he explained.

But isn’t there a conflict here—companies paying NICE for advice on whether their drug might be labelled cost-effective? Not really, according to Dillon. “Regulators charge extra for early consultations with companies,” he says, “so why not us? It’s what everyone wants.”

That’s for sure. And given NICE’s influence beyond the UK, the agency may find clients seeking advice on how to best design their trials and provide optimal pharmaco-economic data even if the UK isn’t their target market.

Potentially a nice bit of business on the side for NICE, then.