Reimbursement rather than Brexit more likely to impact how drugmakers order global launches
Photo credit: Hernán Piñera/Creative Commons
The current reimbursement climate in the U.K. is more likely to impact how drugmakers order their global product launches than the U.K.'s vote to exit the European Union.
In recent years, the U.K.'s National Institute for Health and Care Excellence (NICE) has taken a narrower view of what drugs it will cover as it seeks to stem rising prescription drug costs. Drugmakers traditionally launched new therapies first in Germany or the U.K., but NICE's stricter coverage decisions have already pushed the U.K. farther down the list for some launches, experts say.
That doesn't mean global drugmakers have shifted their focus from the U.K. market - or are expected to do so now that the U.K. plans to exit the European Union. The market remains one of the top 10 largest pharmaceutical markets in the world and the second largest in Europe, after Germany.
“No global marketer is going to want to turn their back on their U.K.,” said Kurt Kessler, managing principal at ZS Associates. The country's “reimbursement climate has a much bigger effect on the launch sequence than Brexit.”
The rising prices of drugs, particularly at launch, have prompted the U.K.'s cost-effectiveness watchdog to vote against covering certain drugs. This has created an environment similar to the U.S. market, where commercial payers, like pharmacy benefit managers, have moved to crack down on high prices. Now, the exit from the E.U. may further impact the launch position of the U.K.
“The extra pressure ... will potentially slow U.K. patient access to medicines and there will be a need to create solutions to mitigate this consequence,” Jo Pisani, pharmaceutical and life science consulting leader for PwC, wrote in a blog post in July.
Drugmakers usually place the U.K. market sixth in a global launch sequence. Weight is given to the therapeutic area, which can move the U.K. market higher or lower in a particular sequence, said Claire Gillis, ghg's executive managing director in Europe. However, the U.K. may face increased pressure to lower healthcare costs as a result of the E.U. exit, even with NICE's current emphasis on controlling costs.
“There are difficult cost constraints in U.K.,” Gillis said. “The reimbursement environment in the country may get more punitive as the U.K. exists Europe.”
There are still a number of unknowns regarding the impact of the Brexit vote on the healthcare industry, and how the ensuing changes may affect everything from the regulatory process and clinical-trial funding to recruiting and retaining key executives and researchers in the U.K.
One of the most pressing issues for drugmakers is the question of regulations. The European Medicines Agency, Europe's drug regulator, is currently based in London and expected to move its headquarters. At the same time, the U.K. will have to decide whether to join the European Economic Area, which allows drugs in non-E.U. countries like Norway and Iceland to continue to be covered by the EMA, or establish its own regulatory pathway for how therapies come to market, according to a BMJ briefing published in May.
GlaxoSmithKline CEO Andrew Witty told analysts in July that developing a new regulatory agency may have upsides for the industry, in part because there would be room to develop policies and regulations that focus on innovation and speed.
“That could create a very interesting competitive dynamic, in the way in which innovation is assessed globally, and would create a new voice in that system,” Witty said during an earnings call. “There are clearly lots of downside risks of separating the U.K. out, but there are possible upsides.”