A new value-based approach to the pricing of branded medicines. Submission from the MS Society March 2011

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1 A new value-based approach to the pricing of branded medicines About multiple sclerosis Submission from the MS Society March 2011 Multiple sclerosis (MS) is one of the most common disabling neurological conditions affecting young adults. Around 100,000 people in the UK have MS. For most people, MS is characterised by relapses followed by periods of remission while for others it follows a progressive pattern. The causes of MS are unknown, there is no cure and the treatments that are available are effective in only certain cases and for some of the time. MS symptoms include loss of mobility, pain, fatigue, visual impairment, numbness, loss of balance, depression and cognitive problems. MS can lead to severe and permanent disability. About the MS Society The MS Society is the UK s largest charity for people living with MS, with approximately 40,000 members and 350 local branches. We provide grants to individuals, for home adaptations for example, and to public sector organisations, to co-fund specialist nursing and other posts. The MS Society s information and support services are highly regarded by the MS community, and continue to be recognised by prestigious national awards. The MS Society is the UK s largest charitable funder of research into MS. Introduction The MS Society believes that people with MS should have access to proven treatments for their condition no matter where they live in the UK. We support the principles of a valuebased approach to the pricing of branded medicines but it is our view that there are a number of major omissions in the consultation document relating to access to medicines and patient involvement. There are a limited number of MS drugs available to patients and UK prescribing levels for MS drugs were recently shown to be among the lowest in the world. Professor Mike Richards July 2010 report, Extent and causes of international variations in drug usage, showed that the UK ranked 13 out of 14 developed countries for use of MS drugs, with prescribing levels of more than 50 per cent below the average for all other countries included in the report. In order for people with MS to gain access to the right drugs for the right person at the right time, we believe this situation needs to change. It is possible that introducing a system of value-based pricing may provide an opportunity to address low prescribing rates but more work needs to be done to determine how access to drugs might be improved in a value-based pricing system. The consultation document fails to address this issue. The consultation also fails to address how patients and patient groups will be involved in the development and implementation of a value-based pricing system. It is our view that, if the wider value of medicines is to be considered, patients must play a central role in helping to determine what is most valuable to them. 1

2 It is also unclear in the consultation document how the devolved governments in Scotland, Wales and Northern Ireland will be involved in value-based pricing and how a unified system would work in practice when health is a devolved issue. Responses to consultation questions 1. Are the objectives for the pricing of medicines set out in section 3 of this document better patient outcomes, greater innovation, a broader and more transparent assessment and better value for money for the NHS the right ones? We support the principles set out in the consultation document but the objectives listed above are dependent on the necessary policy levers to ensure that there is both improved access to medicines and equality in access. Although MS drugs are slowly improving, access to specialist neurology services across the country is patchy and the National Institute for Health and Clinical Excellence (NICE) clinical guideline for MS is severely out of date. The guideline was published in 2003 but has not been updated since then, meaning that the latest MS drugs, such as Sativex and Tysabri are not included in the guideline. In order for patients to know what drugs they are entitled to and for clinicians to understand how best to use those drugs in the context of a comprehensive pathway, there needs to be accurate and up-to-date guidance on their use. For patient outcomes to improve and for the true value of medicines to thereby be realised, the necessary policy levers supporting access to medicines must be firmly in place. As there are a limited number of therapies available for people with MS, and research into finding a cure for MS continues, we strongly support the objective of encouraging greater innovation. Transparency is essential, especially if the government is committed to its aim of making the NHS truly patient-centred. In order for patients to genuinely understand their entitlements in relation to NHS care, there must be a transparent system in place so the decision making process is clear and understandable. 2. Should value-based pricing apply to any medicines that are already on the UK market before 1 January 2014? If yes, should this be determined on an individual basis, or are there particular groups of drugs which might be considered? There may be a case for this when applied to medicines that have received a negative technology appraisal (TA) from NICE prior to It is not clear at this stage, however, exactly what role NICE will play in the value-based pricing decision making process. In adopting a new approach to assessing value that takes into account the wider determinants of value, such as social benefits and carer burden, it may be that there should be an opportunity for those drugs that received a negative TA decision to be reassessed in this new context. More broadly, NICE methodology should allow for medicines to be assessed in the context of a holistic care pathway. The current NICE clinical guideline methodology allows for this, but delays in reviewing and updating guidelines, such as the MS clinical guideline, mean that there is a lack of up to date information as to the appropriate use of drugs in the context of a care pathway. Technology appraisals can only go so far to address this problem and do not provide an overview of all the treatment options available to patients over the course of care pathway. 4. Do you agree that we should be willing to pay more for medicines in therapeutic areas with the highest unmet needs, and so pay less for medicines which treat diseases that are less severe and / or where other treatments are already available? 2

3 It makes sense that new medicines in therapeutic areas with high unmet needs, such as for MS, would be considered to have a high value. It is possible, however, that the value-based price would need to be adjusted at a later stage if a number of new medicines were developed that addressed similar needs. 5. How should we approach the issue of a single drug which delivers significantly different benefits in different indications? and 6. What steps could be taken to address the practical issues associated with operating more than one price for a drug, if we took such an approach? Ideally, a system should be adopted that rewards innovation in the repurposing of drugs for new indications. However, as the UK accounts for only three per cent of the global pharmaceutical market, it is questionable whether value-based pricing would have a significant impact on encouraging innovation. 7. Do you agree that compared to the current situation we should be willing to pay an extra premium to incentivise the development of innovative medicines that deliver step changes in benefits to patients but pay less for less innovative drugs? and 8. In what ways can we distinguish between levels of innovation? We agree in principle that there should be financial incentives in place to encourage the development of innovative medicines and the views of patients should be taken into account in determining the value of new innovative medicines. However, as stated above, it is questionable whether by paying an extra premium we will actually incentivise the development of innovative medicines. Given that the UK accounts for a relatively small percentage of the global pharmaceutical market, the validity of this supposition needs testing. The 2009 Cooksey report, The Review and Refresh of Bioscience 2015, highlighted that the costs of developing medicines have escalated over recent years largely due to increasing regulatory requirements and burdens. In establishing a system of value-based pricing, it would be appropriate to revisit the recommendations contained in the Cooksey report in order to assess what more needs to be done to deliver its vision of a healthcare, regulatory and business environment that is supportive of innovation and delivers benefits to patients. 9. How can we best derive the weights that will be attached to each element of the assessment? Are there particular elements we should put greater weight on? Patients need to be involved in deriving the weights that will be attached to each element of the assessment. Developing a workable weighting system will not be any easy task, however. There are often a number of trade-offs that have to considered when weighing up the value of something. When faced with making a decision about treatment options, a patient often has to consider a number of complex trade-offs, for example between the risk of certain sideeffects and the benefit that the treatment could bring them. This trade-off might be further complicated by factors such as the patient s age, their job or their family circumstances. The MS Society recently conducted a survey on the views and experiences of people with MS in relation to disease modifying drugs (DMDs) and relapses. Over 1000 people responded to the survey, 95 per cent of whom stated that they would prefer to have their MS drug administered via a pill rather than injections. In the absence of an oral therapy, some people with MS stated they would prefer to go untreated because of the lack of alternatives. Whilst most people described this as a drastic measure, and one they would rather avoid, some would seriously consider going untreated. This example demonstrates that oral delivery in the context of MS DMDs represents a significant innovation that is particularly valued by people with MS. Understanding what really matters to patients is of the utmost importance in determining what types of innovation are really valued. 3

4 A weighting system would need to be sufficiently flexible to address these complexities. Further consultation on the weighting system would be desirable. 10. What measure should we use to define the weightings? Options might include using the existing Quality Adjusted Life Years (QALY) measure, patient experience and expert opinions or some combination of these. We agree that patient experience and the expert opinions of health professionals and researchers must be used to define the weightings. Although the Quality Adjusted Life Years (QALY) measure is the principal measure of health outcome used in NICE TAs, it has been widely criticised on ethical, conceptual and operational grounds 1. We have concerns, in particular, about the use of the EQ-5D tool, which is used to create utility measures for the QALY, in measuring quality of life for people with MS. The EQ-5D has in some instances been shown to be a blunt measure of quality of life in MS. One study, for example, found that fatigue, a common symptom of MS, can profoundly disrupt the occupational and social functioning of MS patients but is not directly captured by the EQ-5D 2. The study concluded that the EQ-5D may not adequately reflect patient perceptions of the range and impact of their symptoms. By focusing on only five areas, the QALY is more concerned with disease specific measures of quality of life than aspects of a good quality of life that really matter to patients 3. It is our view that introducing a new value-based approach to the pricing of branded medicines could provide an opportunity to address the inherent problems with the use of the QALY. Some of these problems were raised by Sir Ian Kennedy in his report on valuing innovation published in In the report, Kennedy proposed that treatments cannot be considered truly innovative unless the wider societal benefits and costs are taken into account. We are disappointed that, to date, this issue has not been addressed by making changes to NICE methodology. 11. How can we best derive the different categories for burden of illness and therapeutic innovation and improvement? Patient groups must be involved in this process. The system will need to be flexible enough to account for the fact that within disease groups there will be different levels of burden of illness. The levels are likely to be dependent on a range of factors such as the personal circumstances of the person with the condition, the level of progression of the condition, and the person s ability to access the care and support they need for outcomes to be improved. 12. What approach should be taken under value-based pricing where insufficient evidence is available to allow a full assessment of the value of a new medicine? Making a full assessment of the true value of a new medicine is dependent on the quality and availability of evidence. It may be that further evidence is needed, for example about the longterm effects of an MS drug, but that this is unavailable at launch. To avoid lengthy delays for medicines, it is possible that a system will need to be adopted whereby evidence can continue to be gathered after an initial value-based price has been determined. It is essential that the mistakes made with the risk-sharing scheme for MS drugs 4 are not repeated and that the methodology adopted in research into the longer-term effects of medicines is fully robust. 1 Prieto, L. and Sacristan, J. (2003) Commentary: problems and solutions in calculating quality adjusted life years (QALYs), Health and Quality Life Outcomes, 80 (1) pp Nord, E. (1999) Cost value analysis in healthcare: making sense out of QALYs, Cambridge University Press. Phillips, C. (2009) What is a QALY? What is? series, second edition. April 2009 [Online - accessed ] 2 Hemmett L, Holmes J, Barnes M, and Russell N, 2004, What drives quality of life in multiple sclerosis?, QJM: An International Journal of Medicine, Vol 97, Issue 10 3 Phillips, C. (2009) What is a QALY? What is? series, second edition. April 2009 [Online - accessed ] 4 For further details - 4

5 The government s information revolution should encourage better gathering of data relating to patient outcomes and how patients are responding to treatments. This would help to gather more accurate and long-term data for those drugs for which there is limited evidence available at launch. 13. Does the system set out above describe the best combination of rapid access to prices and affordability? There is insufficient detail in the consultation document about how value-based prices will be agreed. There should be a robust decision making process with an explicit methodology that takes into account patient views. On the issue of affordability, we are very concerned that local decision-making in relation to prescribing will be unduly influenced by financial constraints resulting in some patients being unable to access high value, and therefore expensive, treatments. Local decision-makers will need adequate funds to ensure that all eligible patients have access to the treatments they need. To avoid a postcode lottery in access to treatments, a system could be set up whereby a central drugs fund is used to fund the additional price of treatments that have been given a value-based price. Local health authorities, for example GP consortia, could pay a nationally agreed price for all drugs while the extra, value-based, cost could be covered by the central fund. By automatically supplementing the basic price for a drug via central funding, the government would be able to ensure that all eligible patients are granted access to the treatments they need as local health authorities would not be under pressure to restrict funding treatments due to their high, value-based, cost. 14. In what circumstances should a value-based pricing assessment be subject to review? There should be an opportunity for a value-based pricing assessment to be reviewed when a significant amount of new evidence emerges regarding the clinical outcomes and/or side effects that are experienced by patients taking the treatment. 16. Will the approach outlined in this document achieve the proposed objectives of better patient outcomes, greater innovation, a broader and more transparent assessment and better value for money for the NHS? As we have suggested already, patient outcomes will only improve if there are policy levers in place to ensure that eligible patients are able to access the treatments they need. The consultation document does not make clear that this will be the case. The MS Society supports the principle of establishing a broader and more transparent assessment of the value of medicines, and better value for money for the NHS. It is too early to say whether the proposed scheme will be capable of achieving these objectives. 17. Are there other factors not mentioned in this document which the new system should take into account? The consultation document does not adequately deal with the issue of patient involvement and how this will be managed. Patients, or their representatives, should be included at all stages of the process of establishing a system of value-based pricing. The document refers to expert advice and expert panels but there is no detail as to who these experts would be. It is our view that, if the wider value of medicines is to be considered, patients must play a central role in helping to determine what is most valuable to them. 5

6 It is also unclear in the consultation document how the devolved governments in Scotland, Wales and Northern Ireland will be involved in value-based pricing and how a unified system would work in practice when health is a devolved issue. With different policies and different funding priorities in each of the nations in relation to healthcare, this omission is a major concern. It is unrealistic to expect that different prices would apply for the same medicines in different nations but, unless the value-based assessment process is unified, this could well be the case. 18. Are there any risks which might arise as a result of adopting the value-based pricing model as outlined above? If so, how might we try to reduce them? As already discussed, we are concerned that value-based pricing could reduce access to the most valuable therapies due to local funding constraints. With clinicians playing a more enhanced role in commissioning health services in the future, they may potentially be faced with a conflict of interest when deciding on which drugs to prescribe whilst being under pressure to reduce local health spending. The motivation for patients and patient groups to help demonstrate the high value of certain medicines will also be affected if this is the case. Contact If you would like any further information about the points raised in this response, please contact Laura Weir, Head of Policy and Campaigns, lweir@mssociety.org.uk,