If Pharma is to remain at the forefront of medical research and continue helping patients to live longer, healthier lives, it must become much more innovative, as well as reducing the time and money it spends developing new therapies. We believe that incremental improvements are no longer enough; the industry will need to make a seismic shift to facilitate further progress in the treatment of disease.
At present, a regulator reviews the evidence on a candidate molecule at the end of development, when the sponsoring company submits the supporting dossier. If it is satisfied with the data, it issues a marketing license permitting the company to market the medicine throughout the area over which it has jurisdiction. Thereafter, the new medicine is increasingly likely to be subjected to a health technology assessment – which is usually undertaken by a completely different agency – to determine whether or not it should be eligible for reimbursement. A growing number of healthcare payers now conduct pharmacoeconomic evaluations of new treatments and refuse to reimburse products for which they do not believe there is sufficient evidence of economic as well as clinical value.
Any pharmaceutical company which is launching a new treatment must thus overcome two external hurdles to ensure that it does not have a commercial failure on its hands. Moreover, securing the marketing license and getting a product approved for reimbursement may take several years – years in which the clock on the patent is ticking away.
By 2020, we believe that decisions about reimbursement will fall within the remit of the regulatory body which conducts the quality, safety and efficacy review and that this cumbersome, all-or-nothing approach will be replaced by a cumulative process, based on the gradual accumulation of data. The sponsoring company will collaborate with the regulator to establish the evidence it is required to provide, and when it is required to do so. It will submit the data electronically at predetermined milestones, in line with this timetable.
Once there is sufficient evidence to show that a medicine genuinely works and is cost-effective in the initial trial population, the regulator will issue a “live license” allowing the sponsoring company to market the treatment on a restricted basis. With each incremental increase in evidence of safety, efficacy and value, the regulator will extend the license to cover more patients, different indications or different formulations.
An analogy today is where organizations can obtain conditional approvals in smaller patient populations utilizing the Orphan Drug Regulations. This approach is similar to the general live license approach envisioned in 2020, but is not as seamless or connected with the other stakeholders in the healthcare environment. A move toward the live-license approach will require the use of novel clinical trial designs and changes in regulatory strategies while also leveraging electronic health records and pervasive monitoring in a way that has never been done before.
Moreover, the regulator will decide whether or not to license a medicine using specific risk/benefit analyses rather than data on average outcomes. It will ask sponsoring companies to disclose the gaps in their knowledge about the risks associated with any medicines they submit for approval, and it will make reimbursement of new therapies contingent on performance.
The burden of proof will thus become more precise, but the benefits of this precision will outweigh the disadvantages. This process will enable a company to reduce its time to market and earn revenue sooner thereby recouping its costs more quickly. Peak sales will most likely be lower, but through stepwise revenue growth as each new part of the license is approved the revenue stream will be boosted.
Lastly, and equally importantly, greater collaboration between the industry and its regulators, and greater transparency, will help to restore public confidence in Pharma’s integrity.
>Adapted from Pharma 2020: Virtual R&D, published by PricewaterhouseCoopers and available at pwc.com. Mr Farino is Partner, U.S. Pharmaceutical and Life Sciences Advisory Services Leader, Anthony.l.farino@us.pwc.com.
