Medicines pricing policy requires boldness and flexibility

Opinion: partnership between pharma industry and Government vital to solution

The announcement of the latest Irish Pharmaceutical Healthcare Association pricing and supply agreement is a success for Irish healthcare and, most importantly, Irish patients. These agreements remain a reliable and effective instrument that have delivered, through partnership, an important shared objective of ensuring Irish patients continue to gain access to new and existing medicines.

However, as time goes on, this current approach may make agreement more and more difficult to achieve. Science and innovation are creating medical possibilities and opportunities that may not fit the mould of Ireland’s reimbursement and agreement frameworks despite the progress that has been made in this latest deal.

To ensure Ireland’s access to new medicines keeps in step with scientific progress, we will all need to reframe and flex our mindset about how, but more importantly why, it reimburses medicines – ie what value are medicines truly contributing to Irish health.

But how do we shift the thinking of medicines from a pure cost to a wider investment in health?


Medicines in development

Scientific advancement today is creating opportunities for treating disease that 20 years ago would never have been thought possible. How these therapies could or should be reimbursed is a question we need to work out together.

There are currently more than 7,000 medicines in development across Europe. This is what pharmaceutical companies do – continue to discover, develop and supply products that address unmet need and improve quality of life. Yet what benefit are any of these treatments if nobody can afford or access them?

Added to this the force of demographics. Ireland’s ageing and growing population will further drive demand and challenge budgets for all medicines, new and old.

Yes, yesterday’s innovative medicines are tomorrow’s generics and biosimilars, but adding tomorrow’s innovations into this same full medicine cabinet and expecting it all to cost the same is unrealistic.

This raises a question about whether the current aspiration to keep Ireland’s medicines budgets flat is realistic. Following from this, can a similar approach to agreement such as the one we have just concluded with the Health Service Executive and Government be effective in the future.

Pharma companies have a role to play: we must acknowledge budgetary constraints in healthcare systems and ensure we have a responsible approach to pricing that is value-based, fair and outcome-driven. This new agreement brings good progress on reimbursement process and time lines, all of which is good news for patients. However, the risk remains that when very new, innovative and often expensive new treatments breakthrough, this same system may falter and so we will have to figure out together the best way to make them available.

Shared commitment

There is already shared commitment towards considering health spending in the context of the outcomes it delivers but there is more that can be done on both sides to ensure pricing recognises when and where medicines slow the progression of illness and prevent costlier medical care.

Over the past decade, innovative medicines are estimated to have accounted for more than 73 per cent of the health gains achieved across 30 OECD countries including Ireland.

As an example, this year, Ireland is introducing a vaccine against rotavirus to the childhood schedule. While GSK has committed to undertaking a study to assess the public health impact of this when introduced in Ireland in December, studies from other countries including the UK have shown an associated reduction in hospitalisations and outpatient visits of 70 per cent due to acute gastroenteritis.

These types of benefit to the patient and the public-health system are often not included in the debate on medicine prices. We need to understand far better where the flows of value are going in the system. If cost-effectiveness was deployed across the entire healthcare system, the true and relative value of medicines could be more holistically debated.

The success of any future agreements will require fairness and balance but will also require a new boldness, flexibility and fortified commitment to protecting innovation.

There are challenging and tough health resourcing decisions ahead for Ireland. To ensure these decisions can keep pace with advances, partnership between the pharma industry and Government will be more important than ever to find a sustainable way forward for access to medicines.

It is my hope this relationship evolves into a broader more collaborative one, which is not solely focused on price and the negotiation of same. If we are to continue keeping Ireland's strong commitment to access to new medicines at the heart of health policy, this will be necessary. Aidan Lynch is vice-president and general manager of GSK Pharmaceuticals