As our population ages, the incidence of chronic diseases is increasing.
In some cases, diseases that were fatal have become long-term conditions, managed by new generations of treatments. The life expectancy of patients with conditions such as cystic fibrosis and certain cancers has increased because of these treatments.
Yet, in Ireland, there is not a significant budget for new medicines, and even cost-effective treatments face long delays in getting to market due to pricing negotiations. In fact, the high cost of new innovative treatments and the resulting delays is a major challenge and source of controversy.
Traditionally, most medicines are paid for on a pay per use basis, meaning the cost is based on an agreed price which includes rebates for certain drugs on the state’s reimbursement list. The impact is that each year the HSE drugs budget is massively overspent. State expenditure on medicines is approximately €2.5 billion per annum, a significant proportion of last year’s €16 billion HSE budget.
Different payment models
Budget restrictions mean that hi-tech medicines for rare and serious diseases are often unaffordable. With a new HSE multi-year pricing agreement due in 2020, the need for a different way of paying for innovative treatments is becoming acute.
In a recent study, Ireland came 16th out of the 27 EU countries in the time taken to approve payment for new medicines, resulting in an average wait of 486 days for new drugs approved by the European Medicines Agency. Clearly there is disconnect between the time a new medicine is given regulatory approval, to agreeing it should be reimbursed, agreeing a price and getting it on the reimbursement list.
The primary reason for this is cost. That’s why it is so important for all stakeholders – the companies, HSE, hospitals and others – to look at different models for payment, models that could potentially better share the risks.
Focusing on the solution
There are many options that could be considered to speed up drugs coming to market. Savings can be found through the mandated use of generic and biosimilar drugs in the first instance. The National Centre For Pharmacoeconomics (NCPE), who assess the clinical effectiveness of the medication, its impacts on quality of life in health terms and whether the price proposed is justified, have indicated for years that they are under severe pressure. Assigning extra resources to this team could speed up drug approvals.
The process, once the NCPE makes its decision, can be long and time consuming, resting with the HSE and then the Minister for Health if the HSE budget is constrained. This process could be streamlined to speed up decision making. Furthermore, the decision not to fund a new drug is often the start of the process. The decision can be overturned by lobbying the government to intervene. If the process were redesigned so all views are captured and the decision is final, in the long run this could speed up time to market.
What are other countries doing?
There are some examples to look to internationally. In China, the top drug regulator has increased its staff and allows use of data from overseas trials to speed up the approval process. In the USA, the Food and Drug Administration (FDA) have introduced measures such as having different pathways for different types of drugs (Fast Track, Breakthrough Therapy, Accelerated Approval and Priority Review). The FDA also now works more closely with the drug companies to help then get applications through the process.
In a resource constrained model, the question has got to be put to stakeholders – is there a different way of doing this for certain types of treatments? We may need a different reimbursement model where payment is only made when the treatment works. Data-enabled personalisation can then be used to profile the right treatments and patients more accurately.
Potentially, we can improve access to new and innovative treatments by allowing the drug companies to take on some of the commercial risk and cost risk, so that patients are not precluded from having these treatments. We could also invest in helping patients to engage in preventative risk-reduction programmes to reduce the need for expensive treatments.
Bearing in mind the entire portfolio of products that exists in the market, it’s clear that a single model does not reflect the complexity of the science behind new treatments, and the benefit-risk decisions that patients, doctors and payers must make. In many ways, what we are seeing today approaches a crisis, which is in nobody’s interest. This encourages us to learn from what other jurisdictions are doing and to involve all stakeholders in finding the right options for us here.