Remap perspective Oct 2014

PMA Perspectives October 2014


Welcome to the latest quarterly newsletter from Remap Consulting. Topics discussed in this issue include how did NICE & HAS approve the €400,000 ultra-orphan drug Soliris, lower drug prices are expected in the Middle East due to GCC price harmonization and NICE’s current position on Value Based Assessments.

We are pleased to announce that we are expanding internationally: Graham Foxon joined Remap Consulting in August and will be leading our UK office, based in the Biohub at Alderley Park, Manchester. Graham has over 14 year’s pharmaceutical experience within both leading consultancies and pharmaceutical companies. His expertise includes embedding market access drivers into clinical development programme; developing global product launch pricing strategies and producing HTA submissions to address payers’ pricing and reimbursement requirements.

We will be attending ISPOR 17th Annual European Congress in Amsterdam from 8-12 November 2014. Do let us know if you will be attending, as we would be delighted to meet up.

We always welcome your thoughts and opinions on the topics raised here. Do contact us ( or share your thoughts with us on Twitter (@remapconsulting), where you can also find the latest news.

We look forward to seeing you at ISPOR in Amsterdam!

Paul Craddy & Graham Foxon
Managing Directors – Remap Consulting

Cost effective at €400 000? Why NICE & HAS approved ultra-orphan drug Soliris

Alexion is celebrating following positive reimbursement assessments from HAS in France and the UK’s NICE for Soliris (eculizumab), despite prices exceeding €400,000/patient/year and no demonstration of cost effectiveness. How was this achieved?

Soliris is an ultra-orphan drug (prevalence <1 in 50,000) for the treatment of atypical hemolyic uremic syndrome (aHUS), a life-threatening blood disorder that can cause organ failure. NICE initially issued draft guidance rejecting Soliris due to its high budget impact and called on Alexion to justify the Soliris’s price (£340,200/patient/year). However, NICE’s final guidance has approved Soliris despite its high price and budget impact, estimated to be £57 million in the first year.

NICE’s justification for recommending Soliris is as a result of the extraordinary clinical benefits and lack of alternative treatments. NICE commented that the QALY gains achieved are rarely seen for any new drug treatment (25.22 additional QALYs per patient vs. standard care), demonstrating Soliris’s clinical value. NICE highlighted the significant budget impact on the NHS but made no comment as to whether Soliris is considered cost-effective, with no mention of health economic modelling. It can be inferred from this that Soliris was not cost effective on NICE’s traditional metrics. NICE recognise that its traditional approach cannot be applied to ultra-orphan drugs, which are now assessed by the Highly Specialised Technologies Evaluation Committee, who do not take into account cost-effectiveness within their decision making criteria.

In France, the Haute Autorité de Santé (HAS) gave Soliris an ASMR II (substantial benefit) rating due to its significant improvement over current treatment options, although the lack of longer term and mortality data was raised as an issue. This enabled Alexion to successfully negotiate the French reimbursed price at ~€478 500/patient/year. Part of the pricing negotiation required the development of a patient registry to determine the criteria for stopping and potential restarting Soliris treatment and to measure the use of Soliris outside its  indications. The new deal not only “positively impacts” current reimbursement for the drug, with expected sales of €120 million but also includes retrospective payments of €70 million for sales that took place during the pricing negotiations.

Soliris clearly highlights that pricing and reimbursement authorities will approve new drugs whose prices exceed €400,000 and have not demonstrated cost effectiveness, provided that such drugs demonstrate exceptional clinical benefits in areas of high unmet need for small, well defined, patient populations. It also shows that in spite of the recent wave of orphan and ultra-orphan drugs submitted to payers, that they still prioritize clinical benefits over economic impact for drugs that deliver real patient value.

Recommended articles that caught our attention

  1. France to tax Hepatitis C manufacturers’ revenue: The French government will tax Hep C manufacturers’ revenues if they exceed their budget cap:
  2. The price is right: drug reimbursement in Europe: EFPIA’s Richard Bergström argues that the current reimbursement prices are correct and represent fair value:  
  3. EMA to consider patient viewpoints within CHMP: The EMA launches a pilot to incorporate patient viewpoints within drug assessments and drug withdrawals or restrictions
  4. First to market equals success? – Potentially. Being the first to market is no guarantee of success and may have less advantages than previously assumed:

Lower drug prices in the Middle East? GCC harmonizes price in Saudi & 5 other markets

The Gulf Cooperation Council (GCC) has announced plans to align the prices of 2500 drugs across Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates (UAE) from October 2014. The aim of this legislation is to align the import prices between these six countries, with the current lowest price being adopted by these countries, in an effort to lower the cost of pharmaceuticals.

Previously, it was possible to set different prices across countries in the Middle East. However, the recent increase in price referencing and sharing of price data at the governmental level has made differential pricing across the region increasingly challenging. The new legislation will effectively prevent price differentiation across these six countries. However, this new law only applies at the import price level (e.g. CIF) – supply chain margins can still vary, potentially resulting in variations in the publicly available prices across the GCC markets.

The impact of this new legislation will be to drive down the prices not only across the GCC markets, but also the whole of the Middle East, as prices in Saudi Arabia are widely referenced and it was historically regarded as a high price market. This is also one of the first examples of Middle Eastern governments proactively sharing previously confidential pharmaceutical price information in order to achieve the lowest price and help manage their healthcare expenditure.

No change at NICE – Value Based Assessments are delayed until Q4 2015

The NICE board have agreed to postpone the introduction of a value based assessment following the feedback from a six month public consultation. This means that there will be no changes to NICE’s assessment process until the end of 2015 at the earliest.

NICE had proposed new methods to introduce the social perspective and burden of illness into their current assessment methodology, so called “value based assessments”. The feedback from the public consultation revealed a differing of opinion regarding the proposed ‘proportional QALY’ approach to reflect burden of impact with only 33% of respondents agreeing to the approach. In addition, 59% of respondents disagreed with the use of the ‘absolute QALY shortfall’ as a proxy for assessing the wider societal impact of a medical condition.

The lack of enthusiasm or consensus on the proposed approaches has led the NICE board to the opinion that the current NICE assessment process should continue as normal and that a wider consultation should be conducted with regard to the overall NICE assessment process.

Where does this leave value based assessment (pricing)?

NICE will now submit their recommendations to the Department of Health stating that a broader public consultation into NICE’s methodology for evaluating new technologies should be conducted prior to the introduction of Value Based Assessment. Considering that there will be a UK general election in 2015, it is highly unlikely that any public consultation will be initiated prior to the election. As a result it is ‘business as usual’ with regards to NICE assessment, despite its flaws, for the foreseeable future.

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