January 24, 2012 2:42 pm
This article is provided to FT.com readers by BioPharm Insight—a news service focused on providing insight into the most price sensitive issues in the global pharmaceutical market. www.biopharminsight.com
Pharma companies looking to introduce new products in Germany are grappling with how to design to drug trials that highlight patient benefit outcomes, EU drug consultants told BioPharm Insight. These trials will need to show that a drug is not just effective but improves on standard of care in order to secure higher reimbursement in the country.
Germany has long been considered a “free price” market but that officially came to an end 1 January 2011, when a law known as AMNOG required that companies introducing new drugs submit a cost-benefit dossier to G-BA, which is the ultimate decision-maker in German healthcare. G-BA in turn can consult with the Institute for Quality and Efficacy in Health Care (IQWiG) to assess “patient-related benefit.” IQWiG focuses on evidence-based medicine and patient outcomes in terms of morbidity, mortality and quality of life.
The new reimbursement structure has led Boehringer Ingelheim and Eli Lilly (NYSE: LLY) to delay the launch of their “me-too” once-daily diabetes treatment Trajenta in Germany, despite winning EU approval. Moreover if G-BA determines a price that is too low, the companies may not introduce Trajenta at all, they have said.
The pharma industry is now truly coming to understand G-BA’s and IQWiG’s impact on reimbursement and ultimately clinical trial designs, consultants agreed. IQWiG’s decisions, summarized in English, indicate that Germany is less impressed by surrogate markers as evidence of a drug’s effectiveness and may push for different comparators and patient-relevant outcomes in different clinical trial populations in order to secure desired reimbursement, said Jim Furniss, director, Global Market Access Strategy, Bridgehead International, UK.
Furniss pointed to AstraZeneca’s (LON: AZN) heart drug Brilique, the first medicine to be evaluated under the new pricing process, as how to Germany will require drug makers to put extra effort into trial designs. AstraZeneca compared Brilique to four different comparators in four patient populations, yet IQWiG still only issued a moderately positive preliminary assessment in December. Brilique is expected to be subject to price negotiations this month, according to media reports.
“What the payers in Germany are saying is that (the Phase III trial design) may be fine for regulatory purposes, but it doesn’t help us with reimbursement,” Furniss said. Companies need to think about adding patient outcome measures as trial endpoints - no matter the cost - because Germany is the largest market in Europe, with more than 80m potential patients, he said.
In addition, the price set in Germany is referenced by other countries in price negotiations, from France to Poland to Japan, said Adam Barak, founder, PharmaPrice International, UK.
Under the new system, if G-BA identifies an additional drug benefit, reimbursement negotiations with the pharma company commence, but even then, the company must negotiate the price at a discount on the original selling price. For drugs that do not offer an additional benefit, reimbursement amounts are set at prices to that of the comparator, said Antje Behring, a pharma officer at G-BA.
Drug makers will have to spend extra time - from months to years, depending on the indication - designing clinical trials so as to appease both German regulatory and reimbursement authorities, agreed Andrew Bell, senior director of AVOS Consulting, a division of INC Research, UK.
Furniss noted that the inclusion of direct patient outcomes will be a particular challenge in chronic, long-term diseases such as heart disease and diabetes, and as such trial timelines could be extended from months to years.
Furniss also cited G-BA/IQWiG’s preliminary assessment of Merck’s (NYSE: MRK) HCV drug Victrelis (boceprevir), also in December, as evidence that Germany’s pricing regime is skeptical of surrogate markers. Merck had used sustained biological response as a clinical trial endpoint - a well-accepted surrogate marker for approval, Furniss noted, yet the agencies ruled they do not know how that relates to ultimate patient benefit, such as avoidance or reduction of liver disease. A final Victrelis benefit assessment is expected in March, after which Merck will negotiate Victrelis’ price.
Developing patient outcomes is also challenging for orphan drug developers, such as Raptor Pharmaceutical (NASDAQ: RPTP) and Actelion, Barak said. Many times, it is unethical to do a direct comparison, he said, and small patient populations complicate obtaining good, long-term patient outcome data. Thus they don’t have as strong an argument when it comes to pricing, he noted.
Companies face “Catch-22”
The German law puts companies in a “catch-22” of choosing between less patient outcome data and faster market entry with low price point, or pouring millions into long-term studies with hopes of garnering a better price point, but possibly losing market share, said Bell. He noted this debate could be especially applicable to makers of oncology products, considering that it can take three-to-four years before a patient becomes metastatic and thus can show the direct patient benefit.
While companies may vouch for an early launch and then a post-approval study to get real-life patient outcome data in hope of eventually getting better reimbursement, it is difficult to modulate the initial price offered, Bell said. The price at which a drug enters the market “is usually the best price you’re going to get,” he added.
Having exemplary patient outcome data at the time of launch is exceedingly difficult, but if pharma wants a good price point they may put in the effort, said Adam Plich, pricing & market access associate director, CreativCeutical, UK.
Plich pointed to Roche’s (VTX: ROG) plans to initiate a second three-to-four year, 20,000-patient cardiovascular outcomes study for its cardiovascular drug dalcetrapib in 1H12 as an example of how companies might delay market entry in order to capture good patient outcomes data to secure good upfront reimbursement.
Likewise, Merck can potentially secure a higher price point for its cholesterol agent anacetrapib with its Phase III REVEAL outcomes study with a target goal of 30,000 patients, Plich said.
Bell and Barak noted that pharma is expected to increasingly pursue partnerships with companies that can offer patient data to power outcome endpoints. AstraZeneca recently announced it had inked a deal with IMS Health to gain more information on real-life drug use in Europe to prove product benefits, Bell noted. The drugmaker has a similar relationship with WellPoint’s (NYSE:WLP) health outcomes research subsidiary.
Barak noted that pharma can also turn to Medco Health Solutions (NYSE:MHS)/United BioSource and RTI Health Solutions, which are among the larger providers of health economic/outcomes data, as well as about 30 smaller companies providing such data.
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