Reflecting on the Pricing & Market Access trends we thought would shape 2023

Back in January this year, we summarised the key trends our market access experts believed would dominate 2023.

As this year comes to a close, we’ve reviewed our predictions and examined the impact these trends had on the European pricing and market access landscape the year unfolded.

To recap, we suggested the following trends would shape the pricing & market access industry in 2023:

1. Detailed preparation for the joint EU HTA
2. Standardisation of digital PMA pathways and solutions
3. US IRA bill will affect US biopharma industry in more than one way
4. Tightening of pharmaceutical expenditure by Payers and HTA bodies
5. ATMPs break into the mainstream

Here, we review each of our predictions.

Trend 1: Detailed preparation for the joint EU HTA

The implementation of the joint EU HTA in 2025 is drawing closer and as predicted, 2023 saw further characterisation of this process. Of note:

• June saw the publication of the first joint clinical assessment (JCA), which was conducted for Optilume¹.
• The HTA Stakeholder Network, comprising of 44 organisations, was formed².
• Germany announced the continued use of AMNOG after launch of the EU HTA.
• EUnetHTA 21 held its final stakeholder meeting in September and all documents will now pass to the EU to be put into law.

However, whilst progress is continuing, there is still significant uncertainty and apprehension around the EU HTA. These concerns were particularly evident at recent conferences such as ISPOR Europe, where speakers such as Greg Rossi, SVP and Head of Oncology Europe and Canada at AstraZeneca, suggested that the EU HTA new process could result in an additional 2-year delay in access to innovative medicines in Europe compared to the USA.

The discussions at ISPOR also reinforced that despite years of development and (despite now being only a year before launch), there are still remaining questions on how markets with different payer archetypes and historical decision-making processes will adapt to the changes. Panellists at the educational symposia on “EU HTA impact on innovations: expectations and challenges of EU HTA for Germany” for example, noted that there are several areas of the EU HTA regulations which do not align with the AMNOG process. It was further conceded that the implementation of new legislation will be a stepwise approach that is likely to require Germany adapt its procedures. 

Similar discussions were also held at the World Orphan Drug Congress in Barcelona, where panellists such as Diane Kleinermans, raised concerns that whilst one of the main objectives of the EU HTA is to avoid duplication of work and facilitate access, there is a risk that the joint EU HTA will instead become an additional process on top of national assessments, overall increasing resource use.

On the industry side, Remap Consulting’s survey of biotechnology and pharmaceutical company executives highlights that whilst companies see that the JCA provides an opportunity for better alignment across countries, the overwhelming opinion towards the EU HTA process is negative, with several concerns about time and resource burden.

Reviewing EU HTA in 2023 demonstrates that whilst movement has been made, progress has not been enough to allay stakeholder concerns. Janice Haigh, Practice Lead at Remap Consulting, recalls that the founding of the EMA in 1995 was arguably a more challenging endeavour than the joint EU HTA. At the time, stakeholders including companies and national bodies, saw significant challenges with the idea of harmonising national regulatory decisions. However, 28 years later, the EMA has a proven track record, seven scientific committees and more than 30 working parties providing scientific expertise on the regulation of medicines. This leads to the questions: are concerns about the joint EU HTA justified or overblown? Should national bodies be open to greater flexibility and letting go of current processes? Are there any learnings that can be taken from the formation of the EMA?

Trend 2: Standardisation of digital PMA pathways and solutions

At the start of the year, we predicted that 2023 would bring a continuation of digitalisation processes and intensified efforts to address the dichotomy between outdated laws and concerns caused by ever-evolving digital technology. Reviewing this, we can see that whilst several advances in the standardisation of digital PMA pathways have occurred in some countries, development in others is still falling behind.

Notably, both France and the UK have made progress to advance their digital PMA pathways. In the case of the former, as part of its Digital Acceleration Strategy, an Early Support Programme (PECAN) has been launched. This aims to accelerate access for patients to innovative digital medical devices in France.

In the UK, several developments have been made including launch of:

• NICE’s Early Value Assessment approach, which allows rapid assessment of digital products, devices, and diagnostics.³
• Launch of a new artificial intelligence and digital regulation service by NICE and other stakeholders including the MHRA and the Health Research Authority.⁴

In contrast, Spain and Italy, remain without dedicated evaluation frameworks for digital technologies and are dominated by decentralised PMA pathways. We explored this further in a detailed article earlier this year.

In summary, whilst progress has occurred in 2023, manufacturers are still faced with an overall fragmented approach to digital technologies across Europe. Ultimately, this may result in inequalities of access to digital therapeutics across Europe and potentially require increased manufacturer investment to understand navigation of the heterogenous mix of structured and unstructured PMA processes for digital therapeutics.

Trend 3: US IRA bill will affect US biopharma industry in more than one way

In January, we noted that whilst the Inflation Reduction Act (IRA) aims to improve healthcare affordability and accessibility, “not all the trends stemming from this legislation seem equally positive”. A year on, this has been clearly demonstrated, with challenges and uncertainties such as:

• Impact on innovation: Whilst the IRA’s price-setting measures are still being implemented, they have arguably already negatively affected pharmaceutical innovation. Swiss pharmaceutical giant Roche has abandoned certain drug development projects due to the IRA’s planned price cuts, deeming them financially unfeasible.⁵ Other drugmakers, including Merck & Co and Bristol Myers Squibb, have filed lawsuits against the IRA.⁶
• Biologic vs. small molecule investment: The IRA’s preferential treatment of biologics, granting them a 13-year protection period before price controls compared to nine years for small molecules, has further hampered innovation. This disparity has shifted investor sentiment, leading US biotech’s to receive $7.6 billion more venture financing for biologic innovator drugs than small molecule counterparts from 2018 to 2023.⁷
• Impact of initial 10 drugs:  the negotiation program was launched as mechanism to reduce high drug prices in cases where there is the insufficient timely competition. However, analysis of the first 10 drugs selected for the program demonstrates that these are medicines which have high gross spend due to high volume and have high levels of rebates due to competition within their classes.⁸

Despite these uncertainties however, as predicted, the IRA’s biosimilars promotion provisions have shown promise. The US biosimilars market is projected to reach $35.1 Bn by 2030,⁹ driven by factors such as the IRA’s 8% add-on payment rate for biosimilars and the exemption of drugs with biosimilars from price negotiation. In 2023, eight lower-cost biosimilars referencing Humira, the world’s top-selling drug, were launched.¹⁰ Experts estimate that a “competitive biosimilars market” could save patients and the US healthcare system $133 billion by 2025.¹¹

To conclude, whilst the IRA negotiation program has some promise, 2023 has demonstrated significant areas of remaining uncertainty:

• Will the 10 drugs selected for the first phase of program (in areas of high prevalence and high rebates), enable the goals of the program to be met?
• With small molecules playing an important role in cancers and neurological diseases (both of which impact a high proportion of Medicare’s older population), what are the knock-on effects of a potential reduction of innovation in these areas?
• With price setting eligibility occurring 7 or 11 years after the launch of the first indication, will the potential for price cuts hamper investment into post-launch indication expansions?
• Lastly, there remains a significant lack of clarity on how negotiations will play out, resulting in a lack of predictably for manufacturers in the US and globally.

Trend 4: Tightening of pharmaceutical expenditure by payers and HTA bodies

Due to increased and sustained budgetary pressures in recent years, several pharmaceutical expenditure control measures have been introduced in 2023 (as predicted in January):

• In November, the UK government reached an agreement with the pharmaceutical industry after extended negotiations on the new voluntary scheme (Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG)), which is predicted to save the NHS £14 billion.¹²
• In December, the UK government also released details of the new statutory scheme terms, outlining historically high rebates payable on sales of branded medicines to the NHS (raising from 21.9% in 2024 to 24% in 2025 and 26.8% in 2023).¹³  
• In Germany, products on the G-BA’s combination list for the sickness funds are now subject to a 20% rebate. A change that has resulted in both Roche and AbbVie filing complaints
• In Denmark, prices of hospital drugs will be cut by 2.2% from 2024 (12.5% cuts were enforced between 2019-2022) but retail prices will remain frozen (since 2014).
• The Nordic Pharmaceutical Forum has initiated a pilot for joint price negotiations which may increase penetration but is also likely to decrease achievable price points due to the stronger negotiation power of the countries.¹⁴

The above extensive (but not comprehensive) list of pharmaceutical expenditure control mechanisms highlights payer focus on reducing budget. Many of these (including the updated statutory scheme rebates) have been controversial and faced industry backlash. However, 2023 has also seen more favourable policy changes, including:

• Germany’s recent introduction of confidential rebates, which has been welcomed by the pharmaceutical industry.¹⁵
• Increased recognition of the importance of investment in prevention (e.g., by NHS England and German ministers).^16,17  

Trend 5: ATMPs break into the mainstream

Our analysts recognised that there is a need for cost-effectiveness frameworks specifically tailored to ATMPs. A year on and some markets have made progress in the ATMP space. For example, in Sweden, the TLV has initiated a series of development projects to advance their evaluation methods, with a specific focus for rare diseases and ATMPs. In addition, an investigation into the duration of effect of ATMPs has been initiated to reduce future uncertainties

However, 2023 has also been a year of challenges for ATMPs: 

• In February, Germany introduced a new rule for when the G-BA may require additional assurances of the quality of ATMPs.
• In October, we posted an in-depth analysis at the significant barriers faced by cell and gene therapies in 2023, including a look at GSKs decision to pull out of cell therapy due to high cost of development and failure of some product treatments to live up to expectations.
• In December, the US Food and Drug Administration (FDA) raised concerns and initiated an investigation into potential risks associated with CAR-T cell treatments. The investigation comes after the FDA received 20 reports of secondary cancers subsequent to the administration of these treatments.¹⁸

Overall, as further ATMPs have launched, challenges have also significantly increased. With production, access, and pricing challenges, it’s unsurprising that major players such as GSK are walking away from areas that previously looked highly enticing. Unless manufacturers and healthcare systems collaborate to find solutions for access of these products, we may see additional discontinuations in ATMP pipelines, limiting the launch into the mainstream.

Conclusion

In conclusion, our 2023 predictions mostly came to fruition. Our review shows several challenging areas in the pharmaceutical industry, including uncertainty on the impact of the drug negotiation program in the US, increased pharmaceutical expenditure control mechanisms in Europe and a lack of system readiness for cell and gene therapies. However, there has also been several positive developments, including greater standardisation of digital pathways (including the launch of PECAN in France), VPAG agreement and launch of confidential rebates in Germany. In January, we look forward to exploring what trends we can foresee for 2024.

Sources:

1. Eunetha. Publication of first Joint Clinical Assessment. Available at: https://www.eunethta.eu/publication-of-first-joint-clinical-assessment/ Accessed 07/12/23
2. European Commission. Health Technology Assessment Stakeholder Network – list of members. Available at: https://health.ec.europa.eu/latest-updates/health-technology-assessment-stakeholder-network-list-members-2023-05-05_en Accessed 07/12/23
3. NICE. Early Value Assessment (EVA) for medtech. Available at: https://www.nice.org.uk/about/what-we-do/eva-for-medtech Accessed 07/12/23
4. NICE. Artificial intelligence (AI) and digital regulations service. Available at: https://www.nice.org.uk/about/what-we-do/digital-health/multi-agency-advisory-service-for-ai-and-data-driven-technologies Accessed 07/12/23
5.  Manalac T. Roche Drops Hemophilia A Candidate, Prepares for the Impacts of IRA. Available at: https://remapconsulting.com/gene-therapy-atmps/unlocking-the-potential-of-cell-and-gene-therapy-separating-hype-from-reality/. Accessed 07/12/23
6. Becker Z. Bristol Myers follows Merck’s lead with its own lawsuit blasting IRA’s Medicare negotiations. Available at: https://www.fiercepharma.com/pharma/bristol-myers-squibb-follows-mercks-lead-its-own-lawsuit-blasting-ira-price-setting. Accessed 07/12/23
7. Cameron I. Inflation law drives biologic drugs to outpace small molecules in US venture financing. Available at: https://www.biopharma-reporter.com/Article/2023/07/06/inflation-law-drives-biologic-drugs-to-outpace-small-molecules-in-us-venture-financing#:~:text=Biotechs%20located%20in%20the%20US,prescription%20drug%20prices%2C%20reveals%20GlobalData. Accessed 07/12/23
8. Cole A. The Inflation Reduction Act: Price negotiation underway for the first 10 drugs. Available at: https://www.ohe.org/insight/the-inflation-reduction-act-price-negotiation-underway-for-the-first-10-drugs/. Accessed 07/12/23
9. Patel C. US Biosimilars Market Executive Summary. Available at: https://www.insights10.com/report/us-biosimilars-market-analysis/#:~:text=The%20US%20biosimilars%20market%20size,reach%20%2435.1%20Bn%20in%202030.Accessed 07/12/23
10. Joszt L. The Wait Is Over: 8 Adalimumab Biosimilars Launching in the US in July. Available at: https://www.ajmc.com/view/the-wait-is-over-8-adalimumab-biosimilars-launching-in-the-us-in-july. Accessed 07/12/23
11. Pfizer. What Are Biosimilars and How Do They Expand Treatment Options for Patients? Available at: https://www.pfizer.com/news/articles/what_are_biosimilars_and_how_do_they_expand_treatment_options_for_patients. Accessed 07/12/23
12. Gov.uk. Landmark deal to boost nation’s health and save NHS £14 billion. Available at: https://www.gov.uk/government/news/landmark-deal-to-boost-nations-health-and-save-nhs-14-billion. Accessed 07/12/23
13. Gov.uk.  Review of the scheme to control the cost of branded health service medicines: consultation response. Available at: https://www.gov.uk/government/consultations/review-of-the-scheme-to-control-the-cost-of-branded-health-service-medicines/outcome/review-of-the-scheme-to-control-the-cost-of-branded-health-service-medicines-consultation-response#executive-summary Accessed 07/12/23
14. Amgros. Nordic Pharmaceutical Forum Strategy for 2023-2025. Available at: https://amgros.dk/media/3790/nlf-strategy-final.pdf Accessed 07/12/23
15. Inside EU Life Sciences. German government pursues new Pharma Strategy with significant reform ideas. Available at: https://www.insideeulifesciences.com/2023/11/21/german-government-pursues-new-pharma-strategy-with-significant-reform-ideas/ Accessed 07/12/23
16. NHS Confederation. Prioritising prevention policy in integrated care systems. Available at: https://www.nhsconfed.org/articles/prioritising-prevention-policy-integrated-care-systems Accessed 11/12/23
17. Health Policy Watch. German Ministers Call For Investment in Pandemic Prevention, Suggest Cutting Fossil Fuel Subsidies to Pay for Healthcare. Available at: https://healthpolicy-watch.news/german-ministers-call-for-investment-in-pandemic-prevention/  Accessed 11/12/23
18. FDA. FDA Investigating Serious Risk of T-cell Malignancy Following BCMA-Directed or CD19-Directed Autologous Chimeric Antigen Receptor (CAR) T cell Immunotherapies. Available at:  https://www.fda.gov/vaccines-blood-biologics/safety-availability-biologics/fda-investigating-serious-risk-t-cell-malignancy-following-bcma-directed-or-cd19-directed-autologous Accessed 11/12/23