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Access to Medicines: The Role of Pricing and Technology

In this guest article, Rochelle Sampy from eyeforpharma speaks to Richard Bergström, Director General of the EFPIA about equal access to medicines, pricing disparities across the EU and the role technology can play in bringing affordable healthcare to millions.

The pharmaceutical industry is constantly engaged with national governments and other healthcare stakeholders in order to sustain patient access to all treatments. However, many patients still have insufficient access to medicines even after pharma’s R&D efforts. The biggest challenge in getting access to pharmaceutical treatments for patients stems from healthcare deficiencies in a national health system which leads to various disparities in care within the country itself. Better pricing agreements and a more efficient use of technology could improve access and health outcomes.

Richard Bergström, Director General of the EFPIA

The 2012 Access to Medicines Index demonstrated that pharmaceutical companies were developing more products for diseases that affected the world’s poorer populations as well as collaborating better in the process than they did two years ago. Drug development has become more targeted as many devote around 20% of their R&D pipeline to producing medication that address the needs of the poor. For example, Johnson & Johnson developed a simple, portable, quick screening test for tuberculosis that only requires patients to cough into a breathalyzer and can produce results in minutes. Overall, it was claimed that the industry did have more to contribute especially when it came to pricing schemes.

Recently, an Analysis Group report revealed that the pharmaceutical industry currently has around 8,000 medicines in the pipeline of which 1,800 will target rare diseases. Targeted, personalized medicine developments are on the rise with scientists studying diseases which haven’t had recent approvals like septic shock as well as a new range of first-in-class medicines accepted in a variety of therapeutic areas. So, the Access to Medicines Index and this report indicate that despite pharma’s R&D pipeline being full, an unequal access to medicines still exists.

There is very worrying data about the unequal access to medicines. We are fooling ourselves if we do not admit that this is a problem.

EFPIA Director General Richard Bergström also believes that access to medicines is not a result of a failing R&D pipeline as he says: “There is a real sense of excitement in the area of Alzheimer’s as different ways to approach it now exist and there are at least three promising treatments in a later stage of development. Recent changes in the area of Hepatitis C are also exciting as there was clinical research which demonstrated that you could remove this condition from the body. This product was predicted to be one of the five top products in the world in sales if it came to the market. All these developments mean that the pipelines are full and they are in a better shape than they have been for a long time. In 2012, approvals by the regulators have picked up since 2011 and 2010.”

“It used to be the case that patients got access to all the medicines that were approved in any particular year. However, access to medicines is no longer automatic as a result of [regulatory] approval. There is very worrying data about the unequal access to medicines. We are fooling ourselves if we do not admit that this is a problem.”

Richard’s words are echoed by 2011 figures from the World Bank which estimates that about 883 million people still live on less than USD 1.25 per day. This means the cost of essential medicines can position many patients below the poverty line. In addition, statistics from the 2011 WHO MDG Task Force Report reveals that from 2001 and 2009, essential medicines were accessible in only 42% of public sector and 64% of private sector facilities in developing countries.

Richard adds: “Since Europe is known as the single market, it is believed that everyone should be subject to the same price meaning that this price can become unaffordable for some European countries. But should everyone in Europe pay the same price especially if their GDP is less than others? This is not good for patients in the long run and so the access gap gets wider. So if we had tiered or differential pricing based on income levels, then that would be good for the industry as we [pharma] could sell more new products. In this way, countries can also get much more for their money.”

For instance, a 2012 article from the European Journal of Health Economics demonstrates that Kosovo has narrow treatment choices as compared with other neighboring states as a result of a limited local list of reimbursed essential drugs. This means that the out-of-pocket expenses for public healthcare are around 40% of the total expenses. This situation is very different from the more advanced south eastern European states of Serbia and Croatia.

Alternatively, a system of differential pricing based on income levels would also work in developing countries like India and South Africa. The UN 2013 Human Development report highlights how India and South Africa amongst other developing countries are leading players in the world today and offer important policy lessons as well as profitable partnerships.

Richard says: “We need an agreement that US, parts of Europe as well as India and Brazil would pay for the drugs received as there are affluent members of the population here. In South Africa, the white members of the population have health insurance and are affluent. So shouldn’t they be subject to the higher European prices? There is no equilibrium and so that is why the exiting healthcare pricing model does not work.”

Technology can help and I would like to see an explosion in apps and tools.

Apart from pricing mechanisms, an improved use of technology would also expand access for patients with limited access to medicines. For example, the Eli Lilly and Company Multidrug- Resistant Tuberculosis (MDR-TB) Partnership works with the WHO to provide access to medicines, transfers manufacturing technology to the developing world as well as promoting research and prevention. They have used this technology partnership to manufacture two antibiotics in developing countries like South Africa, India, China and Russia.

Richard agrees with this, “Every healthcare system has to achieve the right mix of medicines which means that there should be access to older treatments as well as the newer, expensive treatments. But this is not happening everywhere. Payers and public health officials tell me that they are frustrated about this issue. Behind the numbers, there is one doctor who loves everything new and he/she only prescribes the new medicines. And then there is another who has many cost constraints and so never prescribes anything new which means that patients here are not getting favorable health outcomes. And the former place has great healthcare but, it is all too expensive for patients.”

He adds, “This is where technology can help and I would like to see an explosion in apps and tools. The best performing health systems, in terms of outcomes, use a lot of technology so that they can encourage patient empowerment and teach self-management of diseases. We should observe the health systems of Denmark and Sweden, for example, who embrace innovation in a very careful way and so have higher health outcomes. But how do you get the treatment mix right and ensure that all patients are prescribed the right medication? This is the real challenge. The issue of adherence only becomes relevant after you have allocated the right medication to the right patient.”

The equal access to medicines is a complicated issue which is affected by a variety of factors like the effectiveness of national healthcare systems and pricing policies. A wide range of disparities between urban or rural areas in a country can make a pricing agreement difficult. But, a system of differential pricing based on income levels offers an ideal solution. The use of income levels rather than a form of value-based pricing means that pricing strategies are based on an objective rather than a subjective figure. Technology is another viable solution that can reduce this access gap. Good practice from countries and pharmaceutical companies should be used to encourage the entire healthcare industry to embrace technological innovation wisely. In time, an increased access will lead to better health outcomes and levels of adherence.

Richard Bergström and BaseCase CEO Gijs Hubben will be speaking at the 2013 Payers’ Forum Europe in Berlin (October 21-22). Hear about changing payer perspectives and how manufacturers can best engage with payers.

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