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ABPI president: NICE needs political reform

Published on 01/08/14 at 03:27pm

Jonathan Emms, the new president of the ABPI, is a man not shy about defending the rights of the UK pharma industry.

Before becoming the new head of the UK pharma group in April – after taking over from MSD UK’s Deepak Khanna – he was a vocal critic of the new PPRS drug pricing deal and NICE: England’s medicine pricing watchdog.

On the PPRS, he was one of nine signatories in a critical open letter to British national newspapers deriding the new plans, which were finally pushed through late last year.

This new deal has given the government more control over the drugs budget and has also curbed its growth for the next five years, meaning it must remain flat for the next two years and grow by less than 2% for the three years after that.

This was knocked by many in the industry and the open letter said: “The government’s deal for the pharmaceutical industry could have been transformational for Britain. Instead we believe a critical opportunity has been missed to improve the health of the British public and wealth of the British economy.”

The signatories add that it has “failed to break down the barriers” which they believe are currently preventing patients from being treated with new medicines.

Despite signing this letter in November last year just after the plans were finalised, Emms’s stance on the PPRS has softened somewhat given his new position.

He tells Pharmafile: “We know where we are with this [the PPRS] – the deal is done, and I think there is an opportunity now, given that the industry has underwritten the branded medicines budget, to make sure that we direct this in a way to make sure the right patients get the right drugs at the right time.

“We will work with government, the Department of Health and NHS England to really ensure that that happens. We are where we are, and I think we’ve got to see the opportunity moving forward.” He adds however, that there is a lot more work to be done.

Some of this work will likely revolve around those companies deemed to be making ‘too much’ money given that the NHS patented drugs budget cannot grow at all for the next two years.

In fact in the first quarter of this year, UK pharma firms had to collectively pay £74 million back to the Department of Health as it had gone beyond its growth limit.

Emms says that those unhappy with the new voluntary PPRS system have been entered into the statutory scheme, so those unhappy with paying these costs do have a way out.

The statutory deal is very onerous upon those within it, as it effectively enforces a 15% price cut on their products. Whichever way you cut it, the new deal is all about keeping drug costs down.

Despite the problems Emms says the agreement was the best the ABPI could get. “We did the deal with our eyes open,” he explains. “I think it was the best option in the circumstances, we signed up to it, and we’ve got to live with the consequences of what we’ve done.”

We need to talk about NICE

As part of the new PPRS deal the government has promised that NICE will undergo internal reform in an effort to appease the industry. Essentially the government is saying that whilst it is curbing growth on one hand, it will potentially allow NICE to recommend more medicines on the other.

The industry and NICE have a long history, and the watchdog has been something of a bugbear for UK pharma firms ever since its creation in 1999. In academic circles it is highly respected, with its processes being used by many HTAs across the world, and now being exported via the work of NICE International.

The watchdog is currently undergoing a consultation which could change its remit to allow it to make ‘value-based assessments’ in line with the new PPRS policy, but Emms says this will not go far enough and wants it to be more pro-innovation.

“We think the intervention should be political, rather than technical,” he says. “NICE’s methods are dominated by a small number of health economists with a certain view of the world and dictated by their methods and their methodologies.”

The main bone of contention for Emms is its use of QALY – the calculation used to assess the cost-effectiveness of new drugs. This is a highly complex formula and one that many see as being ‘cold’ – given that it can deny access to medicines that work, but are not deemed to fit within its narrow pricing range.

Pharma has long since argued that QALY should be softened to allow greater pragmatism in its decision-making process, as well as allowing NICE the ability to assess medicines on more than just pure cost-effectiveness. 

“I don’t think we have to use QALY, that’s the first thing”, Emms says. “QALY isn’t applied to all medical interventions, only to medicines, and the threshold hasn’t changed since 1999.

“The problem is that by using QALY, you’re always subjecting new medicines to a rather formulaic, algorithmic assessment that no other healthcare system gets. It is important that our medicines are scrutinised in an appropriate way and at the moment, we just feel that the methods and the approach just hasn’t moved with the times sufficiently.

“But on top of that, it’s really important to say that the industry doesn’t want a blank cheque: that’s not our deal with society. The deal with society is producing medicines at the right cost – I just don’t think QALY is always the best method to arrive at the best cost.”

He points out that he believes the NHS is ‘the envy of the world’. “We have brilliant doctors and nurses, who devote their lives to their jobs, but they are working with a medicines cabinet from the last century – they’ve simply not got the tools to do the job.” Part of the reason for this, he says, is because new innovations just aren’t being picked up quickly enough.

Despite his misgivings however, QALY does not look like it is about to be changed anytime soon as the formula is not part of the ongoing consultation on NICE’s future shape.

This is a source of frustration for Emms who also says that the new drug pricing deal in the UK, which has a new Value-Based Assessment (VBA) system built within it, will not help offset the problems with NICE.

“We [the ABPI] don’t think that VBA will necessarily provide the answers. Therefore, the ABPI has been very clear on this, that we would like a new mandate for NICE, in the same way that the Scottish Medicines Council [Scotland’s NICE equivalent] has had one from its government.”

The sort of things NICE should be asking, Emms argues, is whether a new medicine allows patients to go out to work to contribute to society, or have less pain, or require fewer doses, and so on.

“[NICE] should also in its assessment take into account that innovation is a step-wise thing; you can’t just sit on the side-lines and wait for a cure for cancer and sort of say ‘oh, we’ll take that now’.

“You have to follow the pathway of innovation along the way as well, and therefore, if you just take a very narrow QALY-based approach, you’re missing all of the things that I’ve described.”

When asked if he thought NICE should be able to set prices, or at least negotiate with pharma on cost, he was very clear: “I don’t think that the role of NICE should be to negotiate, or publically set, or get involved in pricing discussion; that’s not an area we’re building toward, nor is it an appropriate area for NICE to engage in.”

Tight budgets

But the reason for NICE’s existence is to ensure that the NHS has a drugs budget that doesn’t spiral out of control, whilst also ensuring that taxpayers get the best value for money.

In the times of economic austerity, management of the healthcare budget has become increasingly important, and so has the work of NICE in keeping drug costs down.

But money is still constricted, and even though the industry would like to see more drugs on the NHS at a local level this simply means greater cost.

All NHS bodies have a finite budget they must juggle, and NHS trusts especially must stay within their appointed budget. If they fall into deficit they will get hit by tough penalties – and could even lose their trust status.

This means that for some local NHS bodies innovation is less important in terms of new medicines than price. So NHS managers are choosing to fund older chemotherapy agents ahead of biologics and cheaper generic drugs, all in an attempt to keep costs down.

This is not just restricted to medicines as it also occurs with non-emergency surgeries such as mole removals or bariatric surgery, the likes of which will be delayed or even cancelled in an effort to save money. 

But drugs are more routinely targeted in this type of cost-saving measure as they represent a quick, short-term fix when it comes to keeping a trust in the black.

That’s something the ABPI is continually fighting against: the restrictions inherent in an NHS budget.

This has always been an issue Emms says and that because of this, the ‘postcode lottery’ of access still exists, as does the ‘red’ and ‘black listing’ of new drugs which essentially bars or restricts them from patients due to cost – even if they have been recommended by NICE.

“The original remit of fixing the postcode lottery is still relevant so that’s definitely an issue,” Emms explains.

“Trying to convince an NHS manager to spend money on new drugs can be a big challenge; they’re measured on a financial plan and it’s sometimes difficult to make savings in one place in order to generate cash to spend in other, which is essentially how they have to manage their budgets.

“I think we have to be understanding of those issues. As an example, say a new medicine allows a patient to be treated at home instead of at hospital; we can’t ask hospital managers to close the ward or completely re-purpose everything the day a drug is launched onto the market.

“An intelligent way is helping to manage that change by ensuring the patient pathway and the way those patients get treated is laid out and logical.

“I think that’s one of the reasons why I want our industry to work in more partnerships with the NHS: we know our medicines right from the beginning, so we can help doctors and nurses really figure out how to integrate them into the treatment pathway ahead of time. By doing this, they can start to plan ahead so it isn’t such a ‘step-wise’ approach in their eyes.

“Fundamentally there has to be a good understanding of both sides – but it is challenging to run a budget if you’re in a hospital as there is lots of pressures and you can’t always materialise the costs straight away.”

Emms says that he has spoken to many stakeholders at NHS England as well as ministers about this very issue, and notes that they are all keen to fix it. “There is a good desire to try and find a way that enables these things to happen for patients, because sometimes the way costs are allocated and how budgets work get in the way of doing that.”


One of the big pharma issues Emms says he wants to deal with during his presidency is pharma’s reputation, and says this can be something that gets in the way of all the things the industry wants to do in the NHS.

But he is bullish about the industry’s ‘good news story’ and notes that it’s time for the ABPI to tell the story of its success. “One of the things I want to do with my presidency is to enhance our reputation as an industry. I think the story has been told for us – rather than us telling our own story.

“Quite honestly the rare, negative things seem to predominate. I think it’s just a good news industry: we’re here to discover, develop and bring disease-preventing, life-saving, life-enhancing medicines to the world, and I want us to focus on that narrative.”

But when asked about previous bad behaviour, such as the extravagant trips abroad between pharma sales reps and doctors, and the fact that any policies to stop these practices were only introduced very recently, Emms is more humble.

“Some of the practices of the past were regrettable,” he admits. “But actions speak louder than words, and I think if you look at what the ABPI have put in place [such as releasing data on payments to doctors from 2012], it goes beyond the minimum requirement.

“And I think that’s got to be the way that we deal with this because quite honestly, we can’t just do things at the last possible moment, and we should actually be ahead of the curve.

“I can’t defend what happened in the past, but I can influence what happens in the future and to really change that. You know, when I first started in the industry and saw the way the whole industry worked – well it felt uncomfortable to be honest, as a new person coming in. But the way we are now is worlds apart.”

He adds that the ABPI must “be proactive in the areas we need to improve”. He goes on: “I can’t for one second pretend that the industry has always got it right – of course not – and I think we need to take action in the area of transparency of clinical trials.”

The issue of data disclosure has been a big one for the industry, and with the creation of the AllTrials pro-transparency lobby group last year this debate has become very public.

The ABPI were initially keen to dismiss this agenda – and notably AllTrials – after its chief executive Stephen Whitehead said at a debate on the issue in 2012 that it was nothing but a ‘PR stunt’.

But AllTrials has gathered pace with groups such as NICE and even GlaxoSmithKline signing up. Whilst Emms acknowledges the need for transparency, he was still clear that the ABPI would not be signing AllTrials, arguing instead that nearly 90% of clinical trial data are disclosed, and that it is already working to increase this.

“The best way to deal with things such as AllTrials is frankly through action – it has to be less about words, and just cracking on with being transparent as that is the way the world is moving, and we will move with it.”

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