The increasing convergence will lead to a more consistent evaluation across jurisdictions, which has potential to make life fairer for the population and for the industry.
"I would like to see convergence including all the aspects of all countries’ clinical- and cost-effectiveness evaluations, particularly the inclusion of a social and humanitarian component. For example, in Sweden, there is an attitude that approving some drugs is simply ‘the right thing to do’, whereas in Canada and the UK, the rules are much more rigid, much more black and white," says MacLeod of Market Access Solutions. However, while some HTAs have reputation of being rigid, there are examples of changes in decisions based on additional data – in October 2010, NICE proposed changes in its guidance on drugs for mild Alzheimer’s disease based on costs savings in caring for these patients.
Copayments are another area of increasing convergence, and are designed to reduce the cost burden on the health provider, whether that is a private insurance company or almost universal in some form or other according to Furniss. These can be based on a fixed amount or a percentage of the drug cost, and most European countries tend towards the flat rate. This may vary between regions – for example in the UK, co-payment is in the form of a prescription charge in England, but this has been phased out in Wales and Northern Ireland, and has been reduced in Scotland with a view to phasing it out in 2011. The ban on top ups (additional payments to receive treatments not normally available on the NHS) has been lifted in the UK.
"Because all the copayment systems have different structures and different thresholds, this convergence may be apparent rather than actual," says Furniss. "In order to work, copayments need to be a percentage rather than a flat rate. The issue with the copayment schemes in Europe is the predominance of the flat rate structure, and the trend that the patients that use the most medications, such as those who are chronically ill, are the ones that are likely to be exempt from the payments. This makes the European copayment systems economically insignificant."
Copayment systems can also include a tiered formulary, where the level of copayment will depend on the status of the drug, such as lower payments for generics or drugs where the insurer has negotiated a discount.
"There is a trend towards an increase in the levels of copayments – both public and private payers are shifting the cost towards patients. This puts the lower-income patients under financial duress, which is a huge weakness in this type of system – there is no safety net. In the USA, President Obama is trying to remedy this with his healthcare reform," says MacLeod.
Because prices are so influenced by exchange rates, a single price for a branded drug worldwide is unlikely other than within single currency areas such as the Eurozone.
"The UK always had a reputation for being the highest price market in the EU. However, since there has been a fundamental change in the balance between sterling and the Euro, it is now a major parallel importer," says Furniss. This has led to pharmacies seeing reductions in stocks.
"In Australia, there is a trend towards comparing the price of new branded drugs to that of the generics already on the market," says MacLeod, "which means that many new drugs are not a compelling value proposition compared with the generics. We have also seen this in Canada, and there is a fear that this could spread, leading to price convergence with generics, but increasing cost pressures on biopharma companies." The knock-on effect of this could be a reduction in innovation because of reduced income and therefore reduced investment.
The impact on marketing
As part of the evolution of the biopharma industry and through the impacts of healthcare reform, the buying power has moved from the physicians to the payers, and market access has become the key driver. This has potential to change the emphasis in drug marketing from targeting the physicians to targeting the payers.
"The increasing move towards HTAs is putting more power in the hands of the payers," says Carsten, "as prescribers become more constrained and cost control becomes more of an option.
Because market access is no longer just dependent on market approval, but requires approval from the HTA agencies as well, pharmaceutical companies may be forced to direct their marketing towards the subsets of indications that are approved by the national or regional HTA agency, rather than simply the broader approved indication. Where the agencies have a policy of comparing drug costs with existing generics, companies will have to price drugs carefully, potentially having to offer discounts or suggest copayment in order to gain access to the market.
However, despite all this, convergence won’t ever be universal, when it encompasses countries from within and outside the Eurozone, and potentially from both the developed and the developing world.
"There isn’t likely to be a single system for all drugs in all countries," says Furniss. There are so many variables – economic development, relative wealth, healthcare structure, social values – and all of these will affect the degree of convergence."