What are the 5 Pricing & Market Access trends that will shape 2023?

Introduction

2022 introduced a number of major pricing and market access (PMA) changes (e.g. EU HTA, IRA in the US etc). Will 2023 be as eventful and how will 2022’s changes impact the future landscape?  It’s time to look into our crystal ball and consider what 2023 holds for pricing and market access and identify the five key PMA trends that could shape the industry.

Trend 1: Detailed preparation for the joint EU HTA

In 2022 we saw the joint EU HTA process being moulded into something tangible rather than rather than a conceptual pipedream. At the beginning of 2023, we are just two years away from the first products entering the process.  However, many uncertainties remain regarding how the process will be implemented (read our summary of those here).

The draft methodologies for the Joint Clinical Assessment (JCA) and Joint Scientific Consultation (JSC) are being developed. We predict that we will see some of the earlier concerns being resolved which may lead to countries beginning to build frameworks as to how they will implement the EU HTA into their pricing and reimbursement processes and writing the relevant legislation ready for the application of the Regulation in 2025.

• We expect further guidance to be issued specifically on the JSC for which there are still several documents left unpublished including the template briefing book , the template report and the procedural guidance.
• Member states must familiarise themselves with the Regulation and create new legislation. Each state needs to begin the process of ensuring that they have the correct legislation in place for 2025 so they can incorporate the joint EU HTA process into their local pricing and reimbursement processes.
• Fine tuning of the JCA and JSC processes will continue. Some of the concerns that have been raised so far need to be addressed. Namely, specifics must be given about how the EU HTA process can successfully integrate the country variances in treatment of patients e.g. patient populations, comparators, relevance of clinical end-points etc. to be able to provide sufficient evidence evaluation to support local pricing and reimbursement decision making.

Trend 2: Standardisation of digital PMA pathways and solutions

The recent COVID-19 pandemic created a need for virtual solutions contributing to the recent boom of Digital Health solutions for healthcare[i]. Regulators and payers accustomed to the cumbersome processes of drug development are struggling to keep up with the challenges of rapidly evolving technologies. In 2023, we can expect a continuation of digitalisation processes and intensified efforts to address the dichotomy between outdated laws and concerns caused by ever-evolving digital technology.

• The digital healthcare solutions such as telemedicine, telemonitoring and triaging chatbots gained popularity during the COVID-19 pandemic and will continue becoming an integral part of healthcare systems. Besides the flexibility these solutions provide to patients, payers’ motivations can also be linked to the growing trend to limit inpatient expenses.
• We will see further efforts to standardise access to Digital therapeutics (DTx) as a treatment option on a national level. “Around the pill” strategies that pair up a pharmacological product with a digital health service will be gaining popularity. A recent example, Roche’s Accu-Chek Guide glucose meter with mySugr’s diabetes management app[ii] , as well as standalone apps exemplified by NICE’s recommendation in 2022 for Sleepio, an app to treat insomnia[iii],. We expect more countries to follow the steps of Germany’s DiGA[iv] and Belgium’s mHealth Pyramid[v] and introduce national frameworks for Digital Health Technologies  (DHTs) assessment. With the standardisation of reimbursement pathways for DTx, clinical evidence and security requirements will become more stringent. This will clearly distinguish the strictly regulated DTx treated as medical devices from wellness apps and programmes which are regulated to a lesser extent.
• The use of health data will come under stricter regulation in the US and Europe. Starting in 2023, European Union in partnership with World Health Organization (WHO) aims to develop a cross-border digital platform through which people can control their own electronic health data by 2027[vi]. The UK has a similar action plan that would centralise data storage and protection, while allowing clinicians and researchers to access it remotely. Protecting health data might be more challenging in the US, a country without a centralised, public healthcare system. Further, the system of competing private companies could impede the planned extension of the data protection laws under the proposed American Data Privacy and Protection Act.

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

The Inflation Reduction Act (IRA) was signed into US law in August 2022. Aiming to curb inflation, the bill contains the most significant healthcare provision changes since the Affordable Care Act.  (Read our summary of IRA healthcare provisions here). The new policies aim to improve access to healthcare and make it more affordable. However, not all the trends we see stemming from this legislation seem equally positive…

• The R&D investments may decrease. Biopharmaceutical manufacturers loudly voice their concerns[vii] about the expected reductions in revenues and in response announce portfolio strategies revisions and R&D fund cuts[viii]^,[ix],[x]. According to Congressional Budget Office (CBO) the act would lead to ~1% decline in newly approved drugs over the next three decades[xi], however, other analyses find those predictions to be significantly underestimated[xii]. Regardless of the actual level of the negative impact from the new IRA measure, we expect that manufacturers will not hesitate to put the blame for those abanded products in early development on the new legislation. With traditionally low rates of pharma products reaching the launch stage, and with other potential causes for tightening around expenditures expected (see Trend 4), other factors may have bigger impacts.
• The ongoing issue with growing launch prices will be magnified by the newly introduced limits on the annual drug price hikes. The launch prices in the US have been reported to be growing for years[PC6] ,[xiii] (new drug price exceeded $200,000 median in 2022![xiv]). IRA provision limits the maximum annual drug price rise to the level of inflation, which could encourage manufacturers to push higher prices when launching a new product to compensate for reduced profit. Overly aggressive pricing strategies will, however, be limited in order to avoid angering public opinion.
• We note a raise in biosimilar uptake. The newly established 8% markup (a change from the previous 6%) that healthcare providers will receive from Medicare Part B for qualifying biosimilars should encourage more competition and promote access to biosimilars.  This will also witness an unprecedented number of biosimilars entering the market for the first time (including up to 10 biosimilars referencing for Humira), making 2023 a year where the US finally starts catching up with Europe in the biosimilar field[xv]^,[xvi].

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

National healthcare systems are facing sustained budgetary pressures from the consequences of inflation and COVID recovery. An obvious target for cost-cutting is the tightening of expenditure on pharmaceuticals, through new negotiating powers (i.e. Trend 3) or extensions of existing mechanisms.

• In Germany, the passing of the GKV Financial Stabilisation Act will reduce the period of ‘free’ pricing from 9 months to 6 months, increase the mandatory manufacturer discount from 7% to 12%, as well as lower of the orphan drug threshold from 50 million euros to 30 million euros (amongst other reforms).¹⁶
• In the UK, there is a proposal to increase the re-payment percentage for the statutory scheme for branded medicine pricing for 2023 from 24.4% to 27.5%, while the VPAS payment is set at 26.5%¹⁷. Criticism from the ABPI and manufacturer representatives has been extremely strong, with the ABPI calculating that a VPAS clawback will return almost £3.3bn in sales revenue to the UK government, an increase from around £0.6bn in 2021 and £1.8bn in 2022. The ABPI summarises the industry perspective on this clawback measure succinctly: “the industry now regards the current approach, due to end in 2023, as broken¹⁸
• In France,  the drug expenditure for 2023 has been allocated as €24.6 billion, which is 7% lower than the estimated expenditure of €26.4 billion in 2022. This measure, alongside safeguard clauses targeting high-growth/turnover drugs and imposition of discounts, were described as a ‘complete U-turn on France’s ambitions on health innovation and manufacturing sovereignty’ further, ‘which turns back the clock on a five-year period of reforms’ by Les Entreprises du Médicament (LEEM).¹⁹

Manufacturers should expect to see other countries across the world to follow suit. With our recent ISPOR poster considering how many companies have refused to submit to NICE due to evidence concerns²⁰, could this trend be expected to grow as markets are considered less profitable? Will manufacturers delay or avoid launch in markets that implement such measures for revenue reasons? We may see a trend in manufacturers developing US specific products only, due to the simpler regulatory and payer evidence requirements.

Trend 5: ATMPs break into the mainstream

ATMPs have the potential to dramatically improve patient outcomes for the most serious and life-threatening conditions. However, a number of access challenges already exist for ATMPs, intertwined around uncertainty in level of clinical benefit and cost. These challenges will only intensify as ATMPs become more mainstream within healthcare systems over the next two or three years.

The majorities of ATMPs are single administration therapies that require significant upfront payments. In November 2022, the FDA approved Hemgenix, a one-time intravenous treatment for haemophilia B, now deemed the world’s most expensive drug at $3.5m²¹. While this treatment was assessed to demonstrate long-term cost-effectiveness at that price point by ICER²², this is not proof of affordability. It also does not mean that other ATMPs will be considered cost-effective through similar assessments, despite offering substantial clinical benefit. Complicating this, calculating the budget impact can be highly challenging due to the uncertainty in patient volumes in targeting ultra-rare indications. What trends may we see to overcome these challenges?

• New cost-effectiveness frameworks specifically tailored to ATMPs (e.g. cost-effectiveness threshold modifiers accounting for severity and rarity of indication)
• Further development of innovative payment models and mechanisms that allow payers to distribute costs over time, likely linked to outcomes, to overcome affordability issues.

ATMPs also launch with limited clinical evidence and lack of comparative effectiveness data, which creates uncertainty in the long-term additional benefits at the time of launch. When payers deem clinical evidence packages to be incomplete, this results in problems determining clinical value and a reasonable price. In turn, this increases the chance of negative decisions or suboptimal pricing. Over 2023, we see trends emerging across three crucial timepoints in the development pathway of ATMPs:

• An increased used of early scientific advice to appropriately address potential pain points.
• In parallel with the EU HTA processes described in Trend 1, we believe to see harmonisation of evidence requirements across HTA agencies (especially for those already in HTA collaboration groups like BeNeLuxA)
• A greater push towards the collection of RWE after launch, as directed by HTA agencies (already seen in Germany for Inrebic and Zolgensma)²³

Overall, manufacturers, HTA agencies/payers and healthcare providers will all have to be innovative to implement ATMPs on a larger scale. Overcoming access challenges tied to pricing and evidence will require a fresh approach to assessment, addressing uncertainty and payment mechanisms.

Conclusion

Without a doubt, pharmaceutical manufacturers and the wider healthcare industry should be preparing for a potentially eventful 2023. We are still recovering from the effects of the COVID-19 pandemic and at the same time battling with the challenges of inflation. This, but also the legislative changes in the US and Europe, the rapid expansion of digital technologies into healthcare systems and the advancements in ATMPs proves that we are awaiting a year full of unseen challenges, but also new opportunities.

Sources:

[i] Digital Health Trends 2021. IQVIA. https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/digital-health-trends-2021/iqvia-institute-digital-health-trends-2021.pdf Accessed 06/01/2023

[ii] mySugr and Accu-Chek® blood glucose meter. MySugr. https://www.mysugr.com/en/accuchek/ Accessed 06/01/2023

[iii] Guidance: Sleepio to treat insomnia and insomnia symptoms. NICE. https://www.nice.org.uk/guidance/mtg70 Accessed 06/01/2023

[iv] Digital Health Applications (DiGA) directory. BfArM. https://diga.bfarm.de/de Accessed 06/01/2023

[v] mHealth Belgium. https://mhealthbelgium.be/ Accessed 06/01/2023

[vi] Towards a digitally capable health workforce in Europe: approaches to developing digital skills and competencies. World Health Organization. https://www.who.int/europe/news-room/events/item/2022/11/17/default-calendar/towards-a-digitally-capable-health-workforce-in-europe–approaches-to-developing-digital-skills-and-competencies Accessed 06/01/2023

[vii] Impact of the Inflation Reduction Act. No Patients Left Behind. https://nopatientleftbehind.docsend.com/view/e4cg7sgj6js5qenr Accessed 06/01/2023

[viii] Bristol Myers Squibb warns US price reforms will dent drug development. Financial Times. https://www.ft.com/content/a763ba0d-e48e-47e4-aba0-a71ee7e18d1f Accessed 06/01/2023

[ix] As Amvuttra makes inroads in ATTR, Alnylam scraps heart disease trial interim analysis, rethinks another rare disorder plan. Fierce Pharma.  https://www.fiercepharma.com/pharma/amvuttra-makes-inroads-attr-alnylam-scraps-heart-disease-trial-interim-analysis-rethinks Accessed 06/01/2023

[x] IRA impact: AstraZeneca and Merck CEOs warn of oncology drug development shifts. Endpoints https://endpts.com/ira-impact-astrazeneca-and-merck-ceos-warn-of-oncology-drug-development-shifts/ Accessed 06/01/2023

[xi] Estimated Budgetary Effects of Reconciliation Recommendations for Prescription Drug Legislation. Congressional Budget Office. https://www.cbo.gov/system/files/2022-07/senSubtitle1_Finance.pdf Accessed 06/01/2023

[xii] New analysis finds deeper impact of drug pricing bill on biopharmaceutical researchers. Pharmaceutical Research and Manufacturers of America. https://catalyst.phrma.org/new-analysis-finds-deeper-impact-of-drug-pricing-bill-on-biopharmaceutical-researchers Accessed 06/01/2023

[xiii] Rome BN, Egilman AC, Kesselheim AS. Trends in Prescription Drug Launch Prices, 2008-2021. JAMA. 2022;327(21):2145–2147. doi:10.1001/jama.2022.5542

[xiv] U.S. new drug price exceeds $200,000 median in 2022. Financial Post. https://financialpost.com/pmn/business-pmn/u-s-new-drug-price-exceeds-200000-median-in-2022 Accessed 06/01/2023

[xv] New Year, New Hurdles: What’s in Store for Biosimilars in 2023. The Centre For Biosimilars. https://www.centerforbiosimilars.com/view/new-year-new-hurdles-what-s-in-store-for-biosimilars-in-2023  Accessed 12/01/2023

16 Germany: Experts criticise the GKV’s financial stabilisation Act. Remap Consulting. https://remapconsulting.com/biosimilars/germany-experts-criticise-the-gkvs-financial-stabilisation-act/[Accessed 12/01/2023

17 Proposed update to the 2023 statutory scheme to control the costs of branded health service medicines. Department of Health & Social Care. https://www.gov.uk/government/consultations/proposed-update-to-the-2023-statutory-scheme-to-control-the-costs-of-branded-health-service-medicines/proposed-update-to-the-2023-statutory-scheme-to-control-the-costs-of-branded-health-service-medicines Accessed 12/01/2023

18 UK medicines revenue clawback rockets to 26.5% putting Life Sciences Vision at risk, says ABPI. ABPI. https://www.abpi.org.uk/media/news/2022/december/uk-medicines-revenue-clawback-rockets-to-26-5-putting-life-sciences-vision-at-risk-says-abpi/ Accessed 12/01/2023

19 France: Implications for Pharma of the proposed Social Security Finance Bill 2023. Remap Consulting. https://remapconsulting.com/pricing/france-implications-for-pharma-of-the-proposed-social-security-finance-bill-2023/ Accessed 12/01/2023

20 ISPOR 2022: Do manufacturers still see value in submitting evidence for a NICE appraisal in England? Remap Consulting. https://remapconsulting.com/nice/ispor-2022-do-manufacturers-still-see-value-in-submitting-evidence-for-a-nice-appraisal-in-england-comparing-and-contrasting-terminated-appraisals-between-oncology-and-non-oncology-and-monotherapies/ Accessed 12/01/2023

21 HEMGENIX Product Information. FDA. https://www.fda.gov/vaccines-blood-biologics/vaccines/hemgenix Accessed 12/01/2023

22 Report at a glance: hemophilia A and B. ICER. https://icer.org/wp-content/uploads/2022/12/Hemophilia-RAAG_December-2022.pdf Accessed 12/01/2023

23 Reflecting on the Pricing & Market Access trends that shaped 2022 Remap Consulting. https://remapconsulting.com/hta/reflecting-on-the-pricing-market-access-trends-that-shaped-2022/ Accessed 12/01/2023