World Monitor Magazine April 2017 - Page 118

additional content Administration in 2013 and 2014. We found a significant discrepancy in reimbursement decisions for similar drugs among four large E.U. payors: • France’s Haute Autorité de Santé: Reviewed 19 drugs and approved all for reimbursement. Approval criterion was comparative clinical effectiveness. • Sweden’s Tandvårds- och läkemedelsförmånsverket (TLV): Reviewed 16 drugs and approved 13 for reimbursement. Approval criteria focused on cost-effectiveness. • Germany’s Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG): Reviewed 18 drugs and approved 12 for reimbursement. Approval criterion was comparative clinical effectiveness. • U.K.’s National Institute for Health and Care Excellence (NICE): Reviewed nine drugs and approved six for reimbursement. Approval criteria focused on cost-effectiveness. Separately, we found that, as with Sweden’s TLV, the U.S. Centers for Medicare & Medicaid Services reviewed 16 of these drugs and approved 13. Decision making appears to be even less predictable in specific therapeutic areas (see Exhibit 2). For example, the three metabolic drugs under consideration in the two years we analyzed received approval from all payors and regulators except IQWiG, which rejected all of them because the agency was unhappy with the choice of comparator drugs used in the clinical studies. Moreover, even the terminology used in the approval process can be confounding, forcing pharmaceutical companies to work their way around mutable definitions. For oncological and neurological drugs, Strategy&’s review found that half of the time, clinical outcome — that is, mortality rate — was the primary factor. But for the other half, surrogate endpoints, 114 world monitor Exhibit 2: E.U. payor approval rates for drugs, 2013–14 such as changes in a diabetes patient’s glucose level, were favored metrics. With the metabolic drugs, surrogate endpoints were the sole criterion for reimbursement, and with respiratory drugs, this approach was preferred in 75 percent of the cases. Pharmaceutical companies are at a disadvantage — especially in comparison with other healthcare stakeholders (for example, national health programs or payor organizations), which are increasingly working together to accomplish critical goals, such as lower prescription costs. Some of this is a problem of the pharma industry’s own making. Over the years, insularity has begun to infect many pharmaceutical companies. Silos have emerged that separate, for example, R&D from the commercial, production, and supply chain parts of the business. And all of these parts are disconnected from the critical outward-facing aspects of the industry: regulatory affairs, pricing and market access, government affairs, and medical affairs — the very parts of the business that must cope with the greatest degree of disruption in the current environment. The result is myopia: pharmaceutical companies that fail to see clearly how the disjointed approval system is affecting patients, payors, and providers. The dangers of silos may not always have been obvious, but today, with more stringent regulatory requirements, greater oversight of healthcare spending, and more demanding patient and doctor constituencies, there is much less room for inefficiency and waste. A product’s costs and returns will be disappointing if a company makes decisions without considering the impact on all stakeholders. Say, for example, a company launches a new compound without a clear window into how much payors will earmark for the product, or what regulators will accept as the minimum data set for accelerated approval, or even the education and support that will be needed to prepare the medical community to embrace the drug. These examples are not