by Guillaume Bietry
PARIS, Nov 4 (APM) - The vice-chairman of France's economic committee for health products (CEPS) has said he thinks there needs to be a complete review of drugs pricing policy and financing innovation, in light of new drugs that will shortly come onto the market.
Jean-Yves Fagon said on Monday at a symposium held at the Ministry of Health, that there are many new therapeutic approaches coming into play, that all represent new challenges for CEPS. He suggested, therefore, a review of pricing and financing policies in line with these new challenges.
The symposium was organised by several patient associations involved in management of hepatitis C, in response to concerns over the high price charged by Gilead for its new drug Sovaldi (sofosbuvir) (APMMA 40317). Patient associations are concerned over pricing affecting patients’ access to care and are calling for an overhaul of the price setting system.
Fagon noted however, that he believes the French system has “done its work” since “all innovative drugs are on the market” and the measures set up by CEPS to allow making savings of 1 billion euros per year - 40% of the savings made in the yearly national target for health insurance expenditure (ONDAM).
Mentioning Sovaldi and other innovative medicines that will come onto the market over the coming decade, he outlined several changes that all represent new challenges for CEPS.
In particular, he said new personalised therapies cannot be directly compared with other products and complicate the Transparency Commission’s (CT) evaluation. There is also a poor apprehension of the target populations, that vary depending on whether it is the pharmaceutical company or the French national authority for health (HAS) that does the evaluating.
He emphasised that the price of a drug is not “set forever” and that it can be reviewed when a new molecule comes onto the market, depending on real-life observations and product development aspects.
On this last point, he said that discussions on price cuts are made complex by the numerous indications approved and the various clinical benefit (ASMR) rankings for any one drug. With two indications and two different rankings, for instance, “it is necessary to apply the rule of three where it will be necessary to set a coherent and acceptable price for these two indications”.
In his speech, the CEPS vice-chairman said innovation is currently financed by savings from other products by means of price cuts and the development of generics, and said it could also be financed through actions concerning volumes. There is also a need to intervene on the structure of prescriptions, French doctors having a reputation for prescribing mostly recent drugs that are more expensive.
In Fagon’s view, other savings could come from an overhaul of the system, taking into account the fact that drugs are “just one of the components in therapeutic management”.
This could lead to reflection on “measures - difficult to decide to implement, to my mind more difficult than asking CEPS to ensure 1 billion euros’ worth of savings - reorganising management inside or outside hospitals that would allow a certain number of savings”.
Fagon said he is in favour of reviewing the “method of financing therapies rather than the actual setting of the drug’s price”.
“I remain doubtful as to whether one actually sets the price of ‘boxes’ of drugs. We are going to have to place the subject of what we pay for, on the table. What is it we pay for? A care pathway? A therapeutic strategy? A drug?” he declared.
“Between 80 and 100 molecules are going to arrive in the coming years. Among them, it is likely that more than 20 will have high-level clinical benefit (ASMR) rankings and consequently their initial price proposals will be high, and they will require lengthy and difficult negotiations,” he said.
“If everything comes at once and becomes more complex ... how shall we manage it all? Currently, the economic committee fulfils its tasks as they were attributed to it, I do not think it will be able to continue with the same way of doing things over the coming 10 years,” he warned.
Fagon said the debate needed to take place “within the framework of health democracy”. “The worst thing would be to modify this model on the quiet. I think that, for some aspects, this is what we are actually doing - we issue a little order, a small modification, a minor amendment,” he said.
Also at the symposium, Eric Baseilhac, director of economic and international affairs at France’s pharmaceutical industry body LEEM, regretted that the current price-setting policy was only based on “value” and does not take into account R&D or production costs.
Baseilhac called upon public authorities to reform the system to move towards “fair prices” that would be based on added-value and on the “economic imperatives” of pharma executives and payers.
On the subject of pharma executives, Baseilhac said their main concern is to perpetuate their economic model and amortise R&D costs to re-invest in innovation. For the payers, the main issue is “sustainability,” essentially that of financing for new products and of calculating their impact on the budget, an aspect that is not sufficiently evaluated.
According to Baseilhac, this would involve ending the “short-termism” of the Social Security budget bills (PLFSS) by opting for three- to five-year orientations, and “opening budget lines” for savings (drugs, medical devices and hospital(s), for instance) within the budget.
“It is necessary to build a holistic system for capturing gains in a single budget,” he recommended, also pleading in favour of an investment or amortisation fund that “would feature in the social security budget bills” and finance therapeutic innovation.
Pierre Chirac, of the French independent prescribing guide Prescrire, said, on the basis of a study published in Forbes and in the Journal of the American Medical Association (JAMA), price-setting problems ensue from pharma executives’ positioning their drugs on niche markets that are devoid of comparator products.
“In this situation, agencies set the bar too low,” and therefore attribute prices that are too high, he said, emphasising that several tens of niche drugs are in development. He questioned whether society actually needs these drugs.
He called on people not to target the wrong bodies on pricing issues. Concerning Sovaldi, for instance, “the too-high prices come from Gilead”.
He also said this comes, on the one hand, from investors who place their bets on an innovative start-up by making its stock rise at a moment when risk is low and, on the other, from shareholders, that in case such a start-up is bought up, pay a very high premium with a substantial return on investment.
gb/aki/hlc
TRY APM Market Access AND GET ACCESS TO THE FULL CONTENT
Interviews with KOLs/senior executives amongst the Regulators, Payers, Health, Medical & Pharmaceutical organisations
Events coverage with a unique focus on Market Access & sustainability of healthcare systems
6 European bureaus : Berlin, Brussels, London, Madrid, Milan & Paris
Ask for a Free trial and get access to the latest stories
Our coverage includes:
- Health Care
- Market Access
- HTA – policies & practices
- European medicine regulations
- Drug safety issues
- Pricing & Reimbursement
- International medicines agencies
If you are a Payer, Pharmaceutical or Consulting professional our premium data will keep you informed on the regulatory, pricing, market access and cost-effectiveness issues that impact all stakeholders.
REQUEST
an initial 10 day temporary access of APM Market Access.
