Can regulators influence the affordability of medicines?

16 May 2016

The growing problem of high medicine prices and its impact on the sustainability of health care systems is getting more and more attention in many countries around the globe. Regulators are willing to play their part in solving the problem and in facilitating continued access of patients to safe and effective medicines.

Although drug regulators aren’t supposed to be concerned with pricing when making decisions on products’ safety and efficacy, they’re increasingly being drawn into what two representatives of the European Medicines Agency (EMA) and the heads of two national regulators call an “acrimonious debate” over drug costs.

In a New England Journal of Medicine editorial, EMA’s Executive Director Guido Rasi, its Senior Medical Officer Hans-Georg Eichler, the Executive Director of the Dutch Medicines Evaluation Board Hugo Hurts and President of the German Federal Institute for Drugs and Medical Devices Karl Broich cautioned against the growing sentiment that the value of regulators is declining.

“Without evidence that has been vetted by regulators, why would anyone pay more for any drug than they would for, say, a dietary supplement?” they write. “If we eliminated regulation, the current biopharmaceutical business model would collapse — and so would science-based drug development. Without a requirement for regulatory approval, companies would have no incentive to conduct expensive clinical trials of their products. Lowering regulatory standards would be unwise for both patients and organizations that invest in pharmaceutical R&D. Robust regulation improves public health and creates economic value.”

And for the sake of affordability, they also argue that regulators should not yield to pressure to lower standards or be oblivious to the growing budget pains caused by newly authorized products.

The article comes just a day after former US Food and Drug Administration (FDA) Commissioner Margaret Hamburg and former National Institutes of Health Director Elias Zerhouni called for more regulatory harmonization worldwide. The European Commission also released a report in February on drug pricing, regulators and policy options.

Possible Solutions

The EU experts lay out four possible ways for regulators to either directly or indirectly take steps to lower the cost of pharmaceuticals, though they also say that these steps may not be readily implementable in the US due to its legislative framework.

The first idea, long championed by the US Food and Drug Administration (FDA) and others, is that the rapid approval of generics and biosimilars can facilitate competition, which drives down prices.

As FDA announced in March its intention to prioritize certain generic applications that would compete with only one marketed product, the EU authors also call for fast-tracking additional generic approvals when “companies are taking advantage of monopoly conditions.”

And while consumer advocates criticize the number of me-too drugs that provide limited or no added value over available drugs, the authors say that “some me-too products that were originally criticized have benefited patients and provided additional treatment options. More important, sometimes the availability of these products can drive down prices almost as much as the availability of generics.”

The regulators use the example of the entry of hepatitis C medications similar to Gilead’s Sovaldi (sofosbuvir), which reduced prices and expanded access to treatment.

Thirdly, the EU authors point to the idea of including payers at the table when regulatory decisions are made in order for drugmakers to provide more information upfront on measures of quality of life or health care resource utilization.

EMA, and some EU member states, have hosted nearly 70 “parallel scientific advice” sessions so far, during which regulators, health technology assessment experts and drug developers discuss premarket clinical trial designs.

And finally, the authors say that regulators can facilitate the collection of other kinds of data that payers need.

“Increasingly, payers and pharmaceutical companies are considering outcome-focused deals tying a drug’s price to the results achieved,” Rasi, et al. write. “Although pay-for-performance schemes are attractive in theory, practical hurdles have prevented widespread adoption. Most important is the difficulty of collecting and interpreting the relevant patient-level data in a given health care system. Regulators, at least in some countries, can facilitate data collection by considering payers’ needs when asking companies to conduct postapproval studies.”

And the EMA is now exploring with HTAs new ways to collaborate on collecting postmarket data. In conclusion, the authors are wary of placing all of the onus for drug pricing on regulators, particularly because as price gouging continues.

“Regulators alone cannot solve the growing problem of high drug prices. We understand that new drugs should command prices that reward and provide incentives for R&D investment. However, we fail to comprehend prices that, like Sovaldi’s, recoup the entire investment within the first few months after a product’s launch but are so unaffordable that patients in need are denied access. We are committed to doing our part to facilitate continued access to effective and safe treatments.”

Drug Regulation and Pricing — Can Regulators Influence Affordability?

Source: RAPS