OLS Blueprint: PICTf 3.0?

The UK pharmaceutical industry is one of the most significant industries to make money for ‘UK plc’ and re-invest it back into UK-based R&D, within their own organisations, in universities and throughout the NHS. As many have said, the UK ‘punches above its weight’ in our sector. Despite this, we often feel unloved, in terms of both media and public opinion and increasing constraints on revenue (eg, prescribing decisions being led by NICE guidance while reimbursement rates have been cut under the successor to the PPRS). However, the counter-balance to this top-line constraint has come in the form of various initiatives to make more of a contribution in terms of investment in education and training, infrastructure and organisational processes. As a globalised industry has far less binding ties to doing its R&D in the UK than it did 30 years ago, this policy makes a great deal of sense. Over the past decade or so, these initiatives have come under the banners of PICTf, UKCRC and, now, the Office of Life Sciences (OLS) Blueprint, which was published over the summer.

The Blueprint set out 12 key action points, which have been agreed across government, industry, the higher education sector and the NHS. This expands to 10 pages of specific policy measures, complete with timelines and budgets. The Blueprint has been widely welcomed by industry and commentators alike, and certainly, every policy measure should have a positive effect.

The measure that has received the most coverage is the Innovation Pass, ring-fenced funding for time-limited use across the NHS without appraisal by NICE (although NICE will define the criteria for medicines that can take this short-cut). This will be piloted in 2010/11 with a budget of £25m. While initially portrayed by the media as bypassing NICE, this could be a valuable experiment in ‘live appraisal’ mirroring the ‘live licensing’ model proposed by PricewaterhouseCoopers in their Pharma 2020 reports.

The policy that will be of most interest to us in the clinical research sector is the “package of measures to improve the UK environment for clinical trials”. This includes ensuring the UK “fully exploits its potential to be a world leader in heath informatics” (ie, making electronic patient records finally happen!), underlining the duty for SHAs to promote R&D, adding metrics on patient in clinical trials to Trusts’ Quality Accounts, and creating a national framework for local management of research (ie, transforming NHS R&D departments). Significantly, the last three points are essentially reworking areas covered by PICTf nearly a decade ago…

The questions that need to be asked about all these measures, though, are “Will they be implemented as planned?”, “Will they result in improvements in the productivity of UK R&D and uptake of resulting products?” and “Are they sufficiently different from previous initiatives to justify the top-line reduction in reimbursement for medicines?” The many intelligent and powerful people close to this project evidently think so. Far be it from me to disagree, but the fact that this is the third major initiative in less than a decade suggests that its predecessors did not maintain momentum in their improvements (or, more cynically, that pharma are getting increasingly itchy feet in the light of increasing competitiveness overseas).

To sound another small note of scepticism, the UK is less than 12 months from a general election, with a change of government far more possible than at any time since 1997. Although many measures in the Blueprint can be implemented almost immediately, many will take time to demonstrate success, and none will be immune from reversal under a new government.

So, I would like to raise two cheers for the OLS Blueprint: it talks a good game and will certainly have some success, but will it be enough to steady ship of UK competitiveness or just the latest in a series of defences against an insuperable drift to merely “punching our weight”? We will see…

Twittering from the ICR conference next week

Next week will see the Institute of Clinical Research 30th Anniversary Conference & Exhibition, taking place on March 17th & 18th at the ICC in Birmingham. Of course, I will be there to:

• Cover the meeting for CRfocus (along with a team of roving reporters!)
• Help with the organisation and operation of the meeting (ICR is the parent organisation of CRfocus)
• Chairing a session on the tension between pricing and patient value, and how you can accurately assess either

I also plan to Twitter live from the conference (I’ll be too busy to live-blog like I normally do from such meetings). You can see my most recent “tweets” on the main CRfocus webpage, or follow me on Twitter itself. I’m also hoping to have time to do some other neat things, such as one or two audio interviews with delegates or speakers, and post some photos live from the meeting…

This is going to be a great conference, and I’m looking forward to it immensely. If you haven’t registered yet, take a look at the conference programme, and come along (we have passes available from a half day up to the entire meeting).

I’d love to see you there…

Bigger = better for late phase clinical trials… but who pays?

The relative calm of August in the clinical research industry was ruffled a couple of weeks ago with a paper in the US health policy journal Health Affairs. In it, the authors (all well-connected clinical research academics at Duke University, led by Shelby Reed and including Robert Califf, Duke Vice Chancellor for Clinical Research and Director of Duke Translational Medicine Institute) used computer modelling of phase 3 studies to demonstrate that requiring a larger dataset of patient safety information would dramatically (and often cost-effectively) increase the power of that dataset to accurately predict adverse drug events (ADEs) in future use.

In the example given of a drug that would be prescribed to 10 million patients after launch (with 75,000 ADEs expected), increasing the size of the pre-launch safety database from 2000 to 4000 per treatment group would increase the power from 76% to 96% and increase the number of ADEs which could be predicted and avoided from 57,000 to 72,000. The value of this increase was modelled to be approximately $27,000 per life year saved, which could be expected to offset the additional cost of including more patients in the safety dataset. With more optimistic starting assumptions about the test compound, and redoublings of the size of the safety database, the incremental value of increased still further.

On a purely scientific level, this work is hardly surprising. But there are a few things that make it more notable. The inclusion of health economics into the modelling enables the benefit to be more easily understood by the policymakers and businessmen who lead the broader healthcare sector, in addition to the regular audience of clinicians and clinical research professionals. Similarly, the placement of the paper in the journal Health Affairs, which bills itself as “The Policy Journal of the Health Sphere” alongside papers on other ‘big picture’ topics in public health and policy put this argument in front of a very particular audience, at a time when the FDA is pushing patient safety and pharmacovigilance as its “big goals” under the PDUFA IV legislation passed this time last year. The authors are well respected in the field, and are also working closely with the FDA on the CTTI initiative, “a new public-private partnership aimed at modernizing the way clinical trials are conducted” which is hosted at Duke and co-chaired by Robert Califf. So, this is precisely the area where the FDA wants strong, new ideas, and these people are among the inner circle of people trying to come up with them.

Looking at the big picture, the scientific and economic arguments are strong. However, when viewed from the perspective of the organisation developing the medicine, it’s more problematic. The value is gained by the prescriber/payer over the lifetime of the drug (possibly including a “tail” in the generics sector after patent expiry) but the additional cost and time are expended up-front, before any revenue stream begins and while its patent protection ticks away.

At a time when pharma is already feeling the crunch of cost-containment in the face of impending expiry of many key blockbuster patents, the prospect of increasing the cost and timelines of late phase development are unlikely to be welcomed. The obvious route to fund this increase would be to raise the prices of the current generation of products… which in the current media climate could be perceived as profiteering and fly in the face of the recent agreements between the NHS and ABPI on the future of the Pharmaceutical Pricing Regulation Scheme (PPRS). The only plausible alternative to this would be to take more drastic cost-cutting measures, accelerating the flow of clinical trial work out of the developed world to cheaper countries to the south or east.

So, the irony of this proposal is that safer drugs tomorrow could only be delivered by more expensive drugs today or a dramatic drop in the contribution of clinical research to national economies. When (or if…) they think through these issues, some politicians will have quite a dilemma!

PPRS: Achievable Compromise or Missed Opportunity?

In 1867, Otto von Bismarck described politics as “the art of the possible”; it’s easy for commentators (myself included) to pontificate without the responsibility to implement those suggestions in the ‘real world’. With this in mind, I’m cautious of being too critical of the recent announcement of a deal¹ between the UK Department of Health and the ABPI on parts of the voluntary scheme to replace the Pharmaceutical Pricing Regulation Scheme (PPRS). This was accompanied by a consultation² from the Department of Health on a statutory alternative.

This is important in an international context, as pricing systems in many countries are benchmarked against the UK. Healthcare payers around the world will be watching with interest, to see how far prices can be squeezed in return for investment in research infrastructure, and how deeply economic models of patient value can be built into reimbursement negotiations.

Last year, I wrote³ about the beginnings of this process, as an Office of Fair Trading report recommended that the current arrangements be overhauled. I was broadly optimistic, because the OFT proposed changing the system from a complex network of controls on profits and post-launch price changes to one based more on the value of individual medicines, based on economic evaluation of their benefit to patients. However, the settlement is based on an across-the-board price cut… While it gives stability and predictability for the next 5 years (the statutory scheme will be reviewed annually), the settlement appears to be a polishing of the same ‘blunt instrument’, sweetened by a commitment to speed the uptake of newly-registered medicines.

This is certainly not the value-based pricing many had hoped for. In the days following its announcement, Jim Furniss of Bridgehead Consulting told me that he thought “the opportunity provided by the OFT report for a much-needed reform to reflect the realities of the modern pharmaceutical industry has been squandered.” Were Jim and I being too hopeful? In the short term, perhaps, but not in the longer timeframe. Implementing a value-based model across the whole range of pharmaceuticals so quickly was probably impractical, but there have been pilot schemes (such as Velcade, where the NHS will be able to recoup the costs of treatment of any patient who shows no or minimal response) and these need to be applauded, nurtured and expanded.

So, is this re-negotiation of the PPRS an equitable balance to the large investment that government has made into NHS R&D over the past few years, a ‘quick fix’ to shore up public finances while ignoring the opportunity to put patient value at its heart, or a practical compromise to help the NHS’ depleted coffers while a more sophisticated, value-based model is being developed? I’d certainly like to think that it’s the last of these, but to be confident I’ll need to see strong signals from government that a more sophisticated pricing model is indeed the intended way forward.

References

1. Association of the British Pharmaceutical Industry (ABPI) press release (18^th June 2008): “Big Progress In Government And Industry Drug Price Deal”, available via www.abpi.org.uk/press/press_releases_08/180608.asp [accessed 25th June 2008]
2. UK Department of Health (18^th June 2008): “Consultation on a statutory scheme to control the prices of branded NHS medicines”, available via www.dh.gov.uk/en/Consultations/Liveconsultations/DH_085523 [accessed 25th June 2008] This consultation closes on July 15^th 2008 (part) and September 25^th 2008.
3. Smith A (2007): “Who Wins From Value-Based Pricing? Everybody!”, CRfocus 18(3) p4