ESMO 2018: Affordability of New Anti-Cancer Drugs 'Becoming Mission Critical'

Prof Richard Sullivan, PhD, MD


October 23, 2018

Hello, I'm Prof Richard Sullivan. I'm the director of the Institute for Cancer Policy from King's College London and also a clinician at King's Health Partners Comprehensive Cancer Centre and I'm here this year at ESMO meeting, in Munich, talking about a number of things but one particular issue which is the pricing of new medicines. And this is fortunately and finally a really big issue both for ESMO and for the community.

Over the last 5 years, there's been a lot of discussion about the increasing prices of expensive new anti-cancer medicines and how countries like the UK are going to be able to continue to afford them, but at the same time as delivering affordable cancer care as a whole.

Let me unpack this a little bit. One issue is around the price of medicines. The second is around the total cost of the cancer care. And then two other issues that have really arisen that we're talking a lot about here at ESMO is the value. So this is the value of individual expenditures for the outcome, that's what we actually mean in economic terms. And of course for the system, affordability, how do we afford not just an individual medicine but indeed the whole package of care.

The first thing with pricing, what's been very clear over the last few years is how un-transparent a lot of the prices are that we pay for our cancer medicines. It doesn't matter which country you go to, there are a number of confidential discounts, rebates, and mechanisms, which means it’s very hard to tell what the true price is of a pharmaceutical medicine in the country.

So the issue here around solidarity and individual pricing is really quite difficult. And one thing we do know is countries across Europe have very different bargaining powers for price. They also have very different levels of affordability in terms of their gross domestic product. So what can be afforded in the UK, and the prices that are set in the UK, is not necessarily what can be afforded in places like Romania.

So this comes on to the issue of differential pricing. In the UK of course, we have a mechanism which actually sets the price, or rather sets the price at which we start to negotiate. And that's called NICE [The National Institute for Health and Care Excellence], our health technology assessment programme. Now, this is not really a true value mechanism. It sets a willingness to pay threshold and individual pharmaceutical companies put their products towards NICE knowing what the clinical impact is going to be in terms of outcomes, efficacy, and quality of life. And indeed, they set their price point. Now if they set their price point above the threshold of NICE’s willingness to pay, it's rejected. But if a company does that, it knows it's going to be rejected. This is a very, very clear mechanism for setting a specific price.

However, what this mechanism is not, it's not really truly about determining the true value of a medicine. Let me explain that a little bit more. It's very hard to begin with to know what a true value of a medicine is going to be. You take a drug like rituximab, for example. An initial price for rituximab, in its first indication, we have absolutely no idea it would eventually be used in up to seven indications.

So there's a problem here with the indication based pricing - knowing what the overall impact of a drug is going to be over a number of different indications over the lifetime of that particular product.

We're obviously trying to unpack value a bit more by using things like the ESMO Clinically Meaningful Benefits Scale, which has been a fantastic initiative that was being led by Elisabeth de Vries and Nathan Cherny. Now this has been a fantastic tool for illuminating those medicines that are getting onto the market at the moment that have very low clinically meaningful benefit, and dissecting those out from those drugs that have really very high clinically meaningful benefit, in both the palliative and the curative setting.

And that's been a really good start in trying to illuminate actually that we do have a significant problem. There are many medicines at the moment getting onto the market which have a relatively low clinically meaningful benefit. But of course, the price setting point for those individual drugs is going to be something we're going to have to negotiate over the years, and that hopefully what we'll see is real improvements in the clinical trial designs.

I want to end really by talking about affordability because even if a price is set for the UK which we can essentially consider to be cost-effective, in other words it's authorised by NICE, the reality is it may soon swallow up an enormous amount of budget. And I'm thinking particularly here of immuno- oncology, CAR-T, that's coming forward. And so we're obviously now setting these affordability budgets and each individual country is starting to really struggle with knowing what sort of level they should be setting their budgets at.

Now the trade-off, of course is, medicines are only one technology. We're seeing rapid expansion in surgery, minimally invasive surgery, robotics, were seeing huge expansion in radiotherapy as well. So the overall cost base of our models of care and pathways is dramatically increasing.

The affordability challenge is going to be dramatic. We think a lot about the prices but actually the true issue for many countries is going to be affordability.

So really the three key messages coming from ESMO this year is:

Number one, countries need to have supply and demand side policies. They really need to have those to control budget.

Number two, we need far more socio-economic studies within our research protocols. That's absolutely essential.

And number three, the issue of affordability is everyone's problem. It's medical oncology's issue. It's patient organisations. And unless we can find solutions that satisfy everybody, then the train will come off the tracks at some point. So this is absolutely mission critical now.

Thank you very much indeed for watching and for listening.


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