by Helen Collis
LONDON, Oct 13 (APM) - The majority of U.S. biotechs are failing to consider data required for European pricing and reimbursement reviews when designing trials, effectively blocking them from accessing the world’s second largest drugs market, an expert told APM.
“I would say more than 60%, or around 70% of pivotal trials run by U.S. biotechs aren’t optimised for the European health technology assessments,” said Rob Johnson, business development consultant, partner and co-founder at Alacrita LLC, a consulting company specialising in guiding U.S. firms to successful European access with their products.
“Gradually the pin is dropping that NICE and other health technology assessment (HTA) bodies are rejecting drugs…the easy reaction from U.S. companies is to think that Europe is too difficult so let’s forget it. But Europe is still the world’s second largest pharmaceutical market,” he told APM in a telephone interview.
U.S. biotechs have access to capital that allows them to see their products through to late-stage clinical development and often they are under significant pressure from shareholders to start and complete trials as quickly as possible, he said.
“They have the wherewithal to raise the money they need to do the Phase III and commercialisation themselves in the U.S. and they are dead set on that strategy,” Johnson added.
However, designing and conducting pivotal trials only for the U.S. is potentially blocking them from accessing Europe’s more cost-conscious markets, where payers demand cost-effectiveness data from Phase III and sometimes from Phase II trials.
“Companies may run a protocol past European regulators, but often they either don’t know that European payers may need to see different data, or they feel they don’t have time to engage with payers to get their perspective.”
He added: “It really is a great shame as there are several hundred million patients in Europe and their access to new medicines is going to be restricted if European payers don’t have the evidence they need to evaluate new technologies.”
Once a U.S. firm decides to focus on Europe, it has the choice to partner, or attempt to go it alone.
Given the range of different languages, cultures and health systems, partnering is often a more desirable option, but companies too want to see evidence of cost-effectiveness data in the biotech’s trials.
“Companies will start to engage with European partners with the view to licensing the rights to them. But European companies are very focused on these market access challenges. If a U.S. company hasn’t done this work, then the European company will have a stronger negotiating position,” he said.
Johnson added that partnering deals were now reflecting market access barriers, with lower milestone payments for regulatory success, and greater milestone payments for successfully being approved by HTA bodies at a desirable price.
Johnson also pointed out that it is very much in U.S. companies’ interests to understand and learn to crack Europe’s complex markets, not only to gain access there, but also elsewhere globally.
“A lot of countries all over the world look at Europe for the way it prices drugs and they follow Europe’s example. So to cast off Europe will have an impact on the rest of the world.”
By now, many senior executives in the U.S. are becoming tuned to the payer demands of Europe, Johnson said, recognising there is a potential road block ahead, but still unaware of how to go about tackling it, or that they need to think about it before designing pivotal trials.
Many of the business-aware big pharma companies are already designing Phase II trials to collect HTA data, adding even more pressure on biotechs to catch up, he said.
Boston-based Alacrita’s clients “reflect the pipeline of the industry’s drugs,” and work in therapeutic areas ranging from oncology to antibiotics, he said. The consulting firm has produced a white paper on the need for U.S. biotech to understand the European market, available here: tinyurl.com/moenk2h
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