Our analysis of the 2023 pricing and market access predictions brought to light some significant hurdles in the pharmaceutical industry. Challenges ranged from uncertainties surrounding the impact of the US drug negotiation program to heightened controls on pharmaceutical expenditure in Europe and a notable lack of system readiness for cell and gene therapies. Yet, amid these challenges, we’re also witnessing positive strides, such as the increased standardization of digital pathways (highlighted by the launch of PECAN in France), the VPAG agreement, and the introduction of confidential rebates in Germany.
It’s time to look into our crystal ball and consider what 2024 holds for pricing and market access and identify the five key PMA trends that could shape the industry.
Trend 1: Enhanced patient access to digital therapeutics on a global scale
With a plethora of digital therapeutic products (DTx) vying to enter the market or in development, there is a growing emphasis on securing funding and patient access for these innovations, a task proving to be quite challenging. Despite the successful application of DTx in treating various conditions, their adoption within health systems remains limited. Some countries, including Germany, France, and Belgium, have established value frameworks to assess the worth of digital therapeutics. However, the evaluation approaches vary significantly (learn more about this in our article on the evaluation and reimbursement of digital therapeutics in these countries). In contrast, other countries are still in the process of determining how to evaluate the value of DTx.
The existing assessment frameworks demand substantial local knowledge and investment, often beyond the capacity of digital therapeutics manufacturers, to build the necessary evidence base supporting value assessments. For digital therapeutics to play a role in patient healthcare, every country needs a transparent reimbursement pathway for DTx. We anticipate that some “fast follower countries,” such as the UK, Canada, and the Netherlands, will unveil their assessment frameworks, potentially enhancing commercial opportunities for DTx.
To streamline reimbursement through these frameworks, the expectations for evidence—both in terms of clinical data and healthcare cost-offset—are projected to be high. This necessitates significant upfront investment in evidence development, going beyond securing regulatory approval. While the increasing use of AI in healthcare holds the potential to revolutionize patient healthcare and potentially save healthcare resources, these AI tools will need robust evidence to secure funding and ensure patient access.
For the time being, we believe financing for DTx/AI healthcare tools will continue to be sourced at a regional/local level, resulting in a relatively slow uptake until their patient benefits and healthcare resource savings are demonstrated within a real-world setting.
Trend 2: The road ahead for EU HTA
We are now less than a year away from the anticipated date when the joint EU Health Technology Assessment (HTA) regulation is set to take effect on January 12, 2025. In the past year, EUnetHTA 21 made significant strides in developing essential documents and templates, including a dossier submission template and guidance on direct/indirect comparisons. As we look ahead, the European Commission’s 2024 rolling plan outlines key priorities such as further procedural rule development, training for patients and clinical experts, and raising general awareness. However, uncertainties persist.
Questions loom over how EU member states will integrate joint clinical assessment outcomes into their existing price and reimbursement processes, the potential demand for additional evidence, and the practical implementation of these changes. The level of manufacturer involvement in the process, particularly in addressing consolidated PICO(s) that reflect diverse treatment landscapes across EU member states, remains uncertain.
Notably, EU member states, including Italy and Spain, have provided minimal guidance on integrating the EU HTA report into national processes, and the timeline for this information remains unclear. Some countries, such as Italy and Spain, are revamping their HTA systems independently of the broader EU HTA context. In Germany, industry stakeholders have largely expressed negative sentiments toward the EU HTA prospect. We cautiously predict that by the end of 2024, these countries may not have released definitive guidance due to limited capacity within HTA bodies, indifference towards the EU HTA process, and the hesitation to pioneer in ceding control over the joint assessment. This uncertainty will pose challenges for companies undergoing early joint clinical assessments, requiring rapid adaptation to evolving national HTA processes. Additionally, we anticipate that the European Commission may not take substantial action to address the potential issue of numerous PICOs, leaving it to unfold in practice.
Trend 3: Navigating demand, ethical access and future challenges of obesity
Diabetes and obesity remain at the forefront of public awareness. In 2023, the surge of interest and demand for GLP-1 agonists Ozempic and Wegovy (semaglutide) took centre stage. With approval for weight loss management in overweight/obese patients, Wegovy has effectively addressed the need for a novel treatment option in a complex disease landscape. Novo Nordisk has witnessed remarkable sales and growth in both the US and Europe, to the extent that demand has surpassed supply.
Anticipate a continued surge in demand throughout 2024, driven by Wegovy and the introduction of Eli Lilly’s Zepbound (already approved in the US). The escalating demand for existing weight management treatments will inevitably give rise to immediate and long-term concerns regarding insurance coverage, public spending, and ethical accessibility. These concerns will further intensify as these drugs undergo trials for expanded indications (e.g., Wegovy in obesity and heart disease), and new competitors enter the weight management arena.
Trend 4: Does value drive price?
In 2024, a shift in focus from value to price is anticipated. To comprehend this change and formulate effective responses, it’s valuable to take a step back to the pre-HTA era.
Twenty-five years ago, conversations revolved around “pricing and reimbursement”. The objective was to determine the “best” price and negotiate its reimbursement by national authorities. The emergence of formal health technology assessments (HTA) altered this narrative, shifting the focus from price to value, and introducing the term “market access”. Early HTA recommendations caught the pharmaceutical industry off guard, criticising products that, while deemed effective by regulatory processes, faced scrutiny for evidence design flaws such as the wrong population, comparator, endpoint, or insufficient follow-up. Moreover, proposed prices were often deemed disproportionate to the effectiveness demonstrated.
Over time, pharmaceutical companies adapted, developing systems and processes for evidence-based value propositions. Many recent HTA submissions have been successes, albeit often with discounts and innovative payment schemes).
So, what has prompted the shift?
Traditionally, health has been viewed as a “superior” good by economists, meaning healthcare expenditure typically rises faster than GDP. However, the combined impact of the Covid pandemic and the Ukraine invasion has created an urgent need to curb the growth in healthcare costs. Managing the pandemic spiked healthcare costs, redirected spending from routine care, and hampered economic growth. Rebuilding economies while reorienting healthcare delivery necessitates critical cost-containment, with prescription medicines, particularly older, well-established ones, becoming a target for cost reduction.
In 2023, this trend began, with significant discounts and clawbacks under VPAG in the UK, confidential discounts in Germany, and the Inflation Reduction Act in the US. While the cost to healthcare systems depends on both price and patient population, limiting access for rare diseases or transformational products isn’t a primary focus. Thus, the emphasis is on price, especially for older, widely used medicines. In markets with low adoption of generics and biosimilars, increased pressure for switching patients to these alternatives is expected.
What can pharma do?
First and foremost, do not forsake value development or evidence design. A robust value proposition is not automatically rewarded with favourable pricing and access—it merely forms the starting point for negotiations. Ensure that your value story serves as a sturdy platform for price negotiations and consider investing in negotiation training for local teams.
Trend 5: US and Medicaid price negotiations
Cost-containment measures have been expected and established within European markets for several years. However, with the implementation of the Inflation Reduction Act (IRA), companies will now also confront cost containment challenges within the United States. According to the new guidelines, drugs experiencing prices rising faster than inflation will be required to reimburse the difference to Medicare in the form of a rebate. The Biden administration has already identified 48 drugs eligible for these penalties.
Moreover, while 2023 marked the identification of the first 10 drugs for the IRA price-setting process, 2024 will demonstrate, for the first time, how this process unfolds in practice. The Centers for Medicare and Medicaid Services (CMS) is expected to present its initial “offers” for these products in February, with the price-setting process extending until the end of July. Although manufacturers will have the opportunity to counter the initial CMS offer, refusal to agree to the final “maximum fair price” set will incur significant penalties. However, despite expectations of strict enforcement, uncertainty looms over the actual extent of price reduction and consequent savings achievable. Notably, seven out of 10 drugs undergoing the first round of negotiations fall within the cardiovascular and diabetes landscape—both areas already grappling with intense competition and rebates.
In 2023, Bristol Myers Squibb and other entities filed cases against the IRA price-setting process. It is not inconceivable that additional companies may opt to push back against these measures.
Pharmaceutical manufacturers and the broader healthcare industry must ready themselves for a potentially dynamic 2024. The pricing and market access trends highlighted above emphasize the ever-changing nature of the healthcare landscape, calling for adaptability and strategic foresight to optimise patient access.