Delayed HTA timelines, tougher price negotiations, and new drug assessment criteria
The global COVID-19 pandemic has impacted every part of life and has led to the need of overcoming the immediate threat, whilst also mitigating for potential future economic and social challenges. Without a doubt, the impact of COVID-19 will be long-lasting and will influence all sectors, including the future of market access of pharmaceuticals. In this article, we outline some of the short-term and longer-term implications we expect for pharmaceutical access as a result of the pandemic.
1. Slowed/delayed timelines due to re-prioritised work programmes
One of the most obvious impacts of COVID-19 on access to new medicines is a delay in timelines due to the significant challenges Health Technology Assessment (HTA) agencies are facing, including:
- Increased workloads and a need to prioritise assessment of technologies related to COVID-19
- Workforces who may be balancing working from home and managing family commitments
- The reality that many clinical experts who would usually be consulted during assessments may currently be unavailable due to supporting the pandemic response
- As the immediate urgency recedes, a need to work through the backlog of assessments which have been put on hold during the pandemic.
Indeed, the pandemic has resulted in many HTA agencies introducing delays in their processes. For instance, looking at the UK specifically:
- The All Wales Medicines Strategy Group (AWMSG) stopped all appraisals and cancelled three-meetings (March – May)
- The Scottish Medicines Consortium (SMC) is continuing assessment of appraisals already in the system. However, all SMC and new drugs committees (NDC) meetings are suspended until further notice. In addition, the SMC are not accepting new submissions or re-submissions at the current time
- The National Institute of Health and Care Excellence (NICE) paused the majority of non-oncology technology appraisals in March during the initial phases of the pandemic and has only recently began a phased return to “business as usual”.
Similarly, outside the UK, HTA agencies have had to make decisions regarding prioritisation of assessments. For instance, both HAS in France and the TLV in Sweden, have stated therapies related to COVID-19 will be prioritised for assessment. Also, HAS has produced a list of priority therapeutic areas for assessment, including but not limited to new drug registrations in oncology, paediatrics, or any medication in a serious disease with high unmet need.
Overall, delayed appraisals timelines are expected in most markets across the EU and further afield, even if not explicitly stated by the respective authorities. Indeed, a survey conducted by Remap Consulting of pharmaceutical companies, demonstrated that 50% of respondents expected up to 6-months delays in the launch of new products.
2. More challenging price negotiations due to redistributed funding and tighter budgets
The COVID-19 pandemic has led to significant financial disruption across markets. Although it is too early to assess the full impact of COVID-19 and the way in which governments will mitigate for these increases in expenditure, the disruption is likely to have ripple effects across all sectors, including pricing and market access of pharmaceuticals.
If we look at the aftermath of the 2008 recession, we can see that austerity measures were introduced across the EU, resulting in a slower rate in growth of pharmaceutical spending in the immediate years after the recession. This impact is likely to be seen globally again with COVID-19 and will have greater impact on less economically stable countries.
Following the 2008 recession, countries across the EU introduced a number of cost-saving measures to cut down on pharmaceutical expenditure, including: price cuts of branded medicines, cost-sharing agreements, a trend towards centralised procurement and a push towards generic use. In some countries, such as Greece, changes were made to international reference pricing approaches resulting in price cuts.
As with the 2008 recession, we envisage COVID-19 will have significant impact on pharmaceutical spending:
- The pandemic has led to a tremendous increase in unexpected public expenditure. This is likely to lead to introduction of austerity measures and strained budgets. As a means of controlling budget, payers may favour restricting use of new products to specific sub-populations with highest unmet need. Whilst markets with established HTA processes are unlikely to abruptly make substantial changes to their processes, it is possible that payers may eventually make changes to formal or informal thresholds of budget impact and/or cost-effectiveness
- The significance of the COVID-19 pandemic is likely to result in a redistribution of healthcare funding towards infectious diseases (e.g. prioritisation of antivirals and vaccines) and potentially of chronic diseases associated with worsened COVID-19 outcomes. This may result in more difficult pricing negotiations for technologies in other disease areas
- Scrutiny on pharmaceutical spending is likely to increase and payers may further push the use of generics and biosimilars, whilst also seeking net level discounts
- An increased awareness of budget impact may also result in stricter monitoring of usage of medicines ensuring that use is within the regulatory label and/or within the reimbursed population
- It is possible that we will see emergency mandatory price cuts implemented either across the board or for drugs which have been on the market for a specific duration.
Overall, we envisage pharmaceutical companies will be faced with increased price sensitivity and decrease in willingness to pay by authorities. These challenges are likely to be faced globally. Our survey results highlight that pharmaceutical companies are concerned with the longer-term impact of the pandemic on healthcare systems, with one respondent noting that “budget constraints, preparation for future pandemics; economically-ruined health budgets” is likely to be key longer-term challenge.
3. New criteria for drug assessments
The pandemic may also result in changes in criteria for new drug assessments. For instance, the pandemic has resulted in significant pressure on healthcare systems. Due to this increased pressure on resources, it may become increasingly important for payers to see a demonstration of a drugs ability to have wider public health value in reducing burden on health care resources and infrastructure.
In addition, during the pandemic, there have been numerous instances of drug supply challenges, which may ultimately result in payers paying more attention to a manufacturers ability to maintain drug supply. Payers may apply more favourable conditions for companies which have a demonstrated history of and mechanisms in place to guarantee stock availability or may introduce measures to encourage national and regional supply chains and manufacturing.
Overall, COVID-19 could have significant short, medium, and long-term impacts on market access for pharmaceuticals through increasing timelines, reducing budgets and potentially changing criteria for new drugs assessments. So, what can manufacturers do to mitigate for these challenges?
We propose multiple key recommendations for pharmaceutical companies, whether large or small, to prepare for the post COVID-19 future pricing and market access landscape:
- A lower willingness to pay due to COVID is likely to lead to greater evidence requirements. Obtaining additional data, and payer’s insights on that evidence, particularly on indirect benefits on healthcare systems, is highly recommended to demonstrate product value. Clinical trials may be challenging currently, however supportive data can also be obtained from real-world evidence
- Early stage interactions with HTA and regulatory bodies has always been highly beneficial, however will be particularly important going forward to an era of greater uncertainty. Many agencies are still offering scientific advice services (albeit remotely) and we highly recommend companies utilise this opportunity to understand stakeholder needs and refine their evidence package
- Be open to alternative access arrangements. For example: restricting to specific sub-populations as a way of reducing overall budget impact whilst maintaining a desirable list price and minimising unfavourable international reference pricing implications
- Explore opportunities to provide healthcare systems with value-added services which may reduce burden on healthcare resources.