Niche markets and evidence assessment in transition: a critical review of proposed drug reforms.

Medical Law Review, Vol. 22, No. 2, pp. 200–220 doi: 10.1093/medlaw/fwu005

SHANNON G. GIBSON and TRUDO LEMMENS* Faculty of Law, University of Toronto, Toronto, Ontario, Canada *[email protected]

A B S T R AC T In response to rising demands and treatment costs, and the need to achieve better value for money in the face of tight fiscal constraints, both the National Health Service and the public drug reimbursement system are undergoing important reforms. Concurrently, the pharmaceutical sector itself is also alleged to be experiencing significant changes, perhaps most notably, a decline of the blockbuster model of drug development and a growing focus on niche market products. As pharmaceutical development strategies evolve and the resulting drug products become more complex, regulatory and policy responses must be able to evolve along with them. We explore how in numerous jurisdictions, including the UK, proposals for ‘adaptive licensing’ on the regulatory side and ‘performance-based risk sharing agreements’ on the funding side are shifting the focus of drug regulation and reimbursement towards more incremental access to new therapies and more post-market evidence generation. However, serious questions remain about how such reforms can be successfully implemented and whether they can balance demands for earlier access to promising new therapies with the need for robust evidence on safety, efficacy, and cost-effectiveness.

I . I N T RO D U C T I O N In the context of the reforms of the National Health Service (NHS) under the Health and Social Care Act (HSCA), the UK government has highlighted the need to respond to rising demands and treatment costs, improve patient health outcomes, and achieve better value for money in the face of tight fiscal constraints.1 At the same 1

Department of Health, ‘The case for change—The Health and Social Care Act 2012’ (Factsheet A2, last updated April 2012) accessed 10 March 2013.

© The Author 2014. Published by Oxford University Press; all rights reserved. For Permissions, please email: journals. [email protected]

• 200

Downloaded from http://medlaw.oxfordjournals.org/ at University of California, San Francisco on December 12, 2014

NICHE MARKETS AND EVIDENCE ASSESSMENT IN TRANSITION: A CRITICAL REVIEW OF PROPOSED DRUG REFORMS

Niche Markets and Evidence Assessment in Transition • 201

2 3 4

5 6

Parliamentary Office of Science and Technology, ‘Drug Pricing’ (POSTnote 364) (2010) accessed 10 March 2014. Office of Fair Trading, ‘OFT Report Recommends Reform to UK Drug Pricing Scheme’ (2007) accessed 10 March 2014. National Institute for Health and Care Excellence, ‘Nice “Central” to Value Based Pricing of Medicines’ (2013) accessed 10 March 2014. Parliamentary Office of Science and Technology, above, n 2, 1. R Collier, ‘Bye, Bye Blockbusters, Hello Niche Busters’ (2011) 183 Can Med Assoc J 697, 697.


time, the public drug reimbursement system is also undergoing important reforms in response to criticisms that it is not delivering good value for money and is wasting NHS resources.2 In a 2007 study, the Office of Fair Trading reported that the current Pharmaceutical Price Regulation Scheme (PPRS) should be reformed so that drug prices reflect their clinical benefit, rather than the drug companies’ research, development, and marketing costs.3 With the new PPRS coming into force in January 2014, efforts are underway to implement a new ‘value-based pricing’ model.4 However, determining the true ‘value’ of a drug is no simple task. Concurrently, the pharmaceutical sector itself is also reportedly experiencing significant changes. One shift has been the reported decline of the blockbuster model of drug development and a growing focus on niche market products. The Parliamentary Office of Science and Technology, for example, has noted that ‘[i]n recent years, pharmaceutical R&D has slowed and has tended to concentrate on smaller markets such as conditions affecting fewer people or drugs tailored to meet an individual’s needs’.5 An important contributing factor to this shift has been advancements in pharmacogenetics, the study of the influence that genetic factors have on drug response. Drug companies are showing growing interest in developing new pharmaceutical products that can be paired with companion diagnostic tests to stratify patient populations according to genetic predisposition to respond to drug therapies.6 As pharmaceutical development strategies evolve and the resulting drug products become more complex, regulatory, and policy responses must evolve along with them. This requires consideration of the limitations of existing drug regulatory and reimbursement systems, the unique evidentiary challenges introduced by the niche market context, and what existing and emerging reform options are best suited to tackle these new challenges. We explore how proposals for ‘adaptive licensing’ on the regulatory side and ‘performance-based risk sharing agreements’ on the funding side are shifting the focus of drug regulation and reimbursement towards more incremental access to new therapies and more post-market evidence generation. While each of these reform movements offers important advantages, serious questions remain about how such reforms can be successfully implemented, and whether they can balance demands for earlier access to promising new therapies with the need for robust evidence on safety, efficacy, and cost-effectiveness. Drawing on examples from the UK and other jurisdictions, we discuss both the opportunities and risks involved in the shifting focus of drug regulation and reimbursement.

202

• MEDICAL LAW REVIEW

I I . S H I FT S I N P H A R M ACE UT ICA L D EV E LOP M E NT

7

8 9 10 11 12 13 14 15

16 17 18 19

See, for example, J-P Garnier, ‘Rebuilding the R&D Engine in Big Pharma’ (2008) 86 Harv Bus Rev 69, 70; and DW Light and JR Lexchin, ‘Pharmaceutical Research and Development: What Do We Get for All That Money?’ (2012) 345 Brit Med J e4348, 4348. JA DiMasi and HG Grabowski, ‘The Cost of Biopharmaceutical R&D: Is Biotech Different?’ (2007) 28 Man Dec Econ 469. WN Hait, ‘Forty Years of Translational Cancer Research’ (2011) 1 Cancer Discov 383. Collier, above, n 6, 697. Light and Lexchin, above, n 7, 1. B Munos, ‘Lessons from 60 Years of Pharmaceutical Innovation’ (2009) 8 Nat Rev Drug Discov 959. Light and Lexchin, above, n 7, 1. Ibid, 2. See, for example, the discussion by A Hollis, ‘Me-too Drugs: Is There a Problem?’ (2004) (brief note) accessed 10 March 2014. SG Morgan, CM Cunningham, and MR Law, ‘Drug Development: Innovation or Imitation Deficit?’ (2012) 345 Brit Med J e5580. Collier, above, n 6. W Boon and E Moors, ‘Exploring Emerging Technologies Using Metaphors: A Study of Orphan Drugs and Pharmacogenomics’ (2008) 66 Soc Sci Med 1915. Morgan and others, above, n 16.


A. The ‘Innovation Crisis’ and the Decline of the Blockbuster Model Over the past decade, there has been increasing discussion in the literature and news media about an apparent innovation crisis in the pharmaceutical sector.7 A wide range of studies and reports have pointed to escalating drug development costs8 and declining new drug approvals.9 Other reports sound the alarm about the decline of the blockbuster model of drug development,10 even if some commentators remain skeptical.11 Munos, for example, has reported that the pharmaceutical industry has ‘delivered innovation at a constant rate for almost 60 years’.12 Light and Lexchin, for their part, argue that the rhetoric of the innovation crisis ‘serves as a ploy, a strategy to attract a range of government protections from free market, generic competition’.13 For them, the real innovation crisis has been that ‘pharmaceutical research and development turns out mostly minor variations on existing drugs, and most new drugs are not superior on clinical measures’.14 Such development strategies have led to a proliferation of me-too drugs—pharmaceutical products which largely duplicate the action of drugs already on the market—in recent decades.15 Morgan and colleagues qualify Light and Lexchin’s observations by noting that while ‘the blockbuster markets of the 1990s were ideal for [me-too drugs]. . . by the early 2000s, the clinical and economic opportunities for such competition had declined considerably’.16 In some ways, me-too drugs became a victim of their own success: they resulted in saturated markets, with little place for additional blockbuster products.17 This may explain in part why companies are increasingly looking towards untapped niche markets: small markets both lower the likelihood of ‘me-too’ competitors and reduce the economic viability for generic drugs.18 Indeed, Morgan and colleagues suggest that the decline in follow-on drug development likely resulted from the shift away from small molecule drug development for large primary care drug classes towards more specialised drug development.19 Whatever the reason, it is clear


that the industry is in a significant state of flux and that drug developers are turning more attention towards new areas of drug discovery, including towards niche markets.

20 21 22

23

24 25

26 27 28

J Woodcock, ‘The Prospects for “Personalized Medicine” in Drug Development and Drug Therapy’ (2007) 81 Clin Pharmacol & Ther 164, 167. E Dolgin, ‘Big Pharma Moves from “Blockbusters” to “Niche Busters”’ (2010) 16 Nat Med 837, 837. T Freeman, ‘Orphan Drugs Big Potential in Small Disease States’ (17 September 2012) Applied Clinical Trials Online accessed 10 March 2014. JD Rockoff, ‘Drug Makers See Profit Potential in Rare Diseases’ Wall Street Journal (New York, 30 January 2013) accessed 10 March 2014. JP Cohen, ‘Overcoming Regulatory and Economic Challenges Facing Pharmacogenomics’ (2012) 29 New Biotech 751, 751. Personalized Medicine Coalition, ‘Personalized Medicine by the Numbers’ (2011) accessed 10 March 2014. Ibid. H Brody and DW Light, ‘The Inverse Benefit Law: How Drug Marketing Undermines Patient Safety and Public Health’ (2011) 101 Am J Public Health 399. Ibid.


B. New Opportunities in Niche Markets Although narrowing market share by targeting specific patient populations has conventionally been regarded as highly unfavourable from a business perspective,20 the success of some new niche market therapies has turned this conventional wisdom on its head. The rare disease sector has traditionally been dominated by small biotech start-ups, but many major pharmaceutical companies are now aggressively pursuing this market,21 setting up new research units dedicated to research for rare diseases.22 The Food and Drug Administration (FDA) now reports that almost 200 orphan drugs—a term used to describe drugs that treat historically neglected rare diseases or ‘orphan diseases’—enter development each year and further, that about one-third of new drug approvals are for the treatment of rare diseases.23 Pharmacogenetics contributes to the establishment of niche markets because genetic diagnostic testing allows a more common disease to be stratified into rarer disease genotypes. Cohen reports that the number of pharmacogenetic products on the US market has increased gradually over the past decade, from only a handful in 2001 to several dozen in 2011.24 The Personalized Medicines Coalition describes more rapid growth, reporting an increase from thirteen prominent examples of personalised medicine in 2006 to seventy-two prominent examples in 2011.25 The Coalition also notes the growing number of products in clinical development that rely on a clinical biomarker— a trend that signals the rising importance of biomarkers in drug development.26 The targeted approach to drug development could arguably be a welcome change from blockbuster drug promotion strategies that have led to widespread—and often inappropriate—prescribing of new branded drug products. As Brody and Light describe with their ‘pharmaceutical inverse benefit law’ of blockbuster promotion, ‘the benefit-to-harm ratio of drugs tends to vary inversely with how aggressively the drugs are marketed’.27 Drug marketing strategies typically aim to lower drug-recommendation thresholds to increase the number of prescriptions—and hence company revenues.28

204


However, as pharmacogenetics research has progressed, the ‘one-size-fits-all’ model of drug development has given way to more tailored approaches to using and developing drugs.29 Pharmacogenetics can, in principle, direct the right drugs to the right patients, thereby increasing efficacy and reducing harms.

29 30 31 32 33 34 35 36 37

National Human Genome Research Institute, ‘Frequently Asked Questions about Pharmacogenomics’ (2011) accessed 10 March 2014. Woodcock, above, n 20, 167. Ibid, 167. Cohen, above, n 24. MR Trusheim, ER Berndt, and FL Douglas, ‘Stratified Medicine: Strategic and Economic Implications of Combining Drugs and Clinical Biomarkers’ (2007) 6 Nat Rev Drug Discov 287. Ibid and Cohen, above, n 24. Trusheim and others, above, n 33. M Avery, ‘Personalized Medicine and Rescuing “Unsafe” Drugs with Pharmacogenomics: A Regulatory Perspective’ (2010) 65 Food Drug L J 37. Ibid.


1. A More Efficient Approach to Drug Development Pharmaceutical firms have conventionally tried to avoid intermediate processes such as genetic testing that determine who should—and should not—receive a drug.30 Under the right conditions, however, pharmacogenetics is viewed by some as offering the potential to lower or control costs by improving the clinical development success rate.31 Targeted drug development may decrease drug costs by first, eliminating failures, and second, by accelerating trials and regulatory reviews. In particular, a reliable clinical biomarker can help enrich clinical studies for populations with better responses, which may reduce the size and timeframe, and consequently the cost, of clinical trials.32 Faster regulatory approval may even have the added benefit of leading to longer effective patent life as a result.33 Where a diagnostic test can effectively identify those patients most likely to respond to treatment, a drug will likely demonstrate better clinical performance within the targeted population, which may lead to more rapid adoption.34 In some cases, non-targeted therapies that have proven to be only marginally effective may even demonstrate substantial benefit to patients identified through an appropriate companion diagnostic.35 As such, pharmacogenetics may even be able to ‘rescue’ drugs that have failed conventional all-comer clinical trials and thus improve overall success rates. Nonetheless, other commentators remain sceptical about the efficiencies to be gained from pharmacogenetic drug development. Avery, for example, contests the claims that targeted drug development may lead to more efficient clinical trial design, instead arguing that generating pharmacogenetic data actually ends up being more expensive. In particular, there are additional costs involved for gathering and analysing pharmacogenetic data, developing companion tests, and redesigning trials or adding more studies.36 Questions also remain about how current intellectual property and regulatory regimes apply to the pharmacogenetic context.37 Overall, many of the purported benefits of pharmacogenetics remain theoretical, raising questions about whether the concept of more targeted drugs and tailored prescribing has been oversold in part to justify the extremely high prices demanded for many new pharmacogenetic therapies.


C. The Role of Orphan Drug Policies Much of the growing interest in rare disease markets can be attributed to legislative initiatives which have incentivised drug development related to orphan diseases. The earliest such initiative was the Orphan Drug Act (ODA) passed in the USA in 198347 which offers a special designation to drugs that treat a rare disease—affecting less than 1 in 200,000 people in the USA—and provides a number of incentives including tax benefits on clinical trials, fast-track approval, grants, and seven years of market exclusivity. In 2000, the European Commission also introduced various incentives for the development of orphan drugs targeting a population with a ‘life threatening,

38 39 40 41 42

43 44 45 46 47

Trusheim and others, above, n 33. Boon and Moors, above, n 18. P Keeling, ‘Personalized Medicine: The Absence of “Model-Changing” Financial Incentives’ (2007) 4(1) Pers Med 73. FiercePharma, ‘Herceptin’ (2012) accessed 10 March 2014. A Pollack, ‘Doctors Denounce Cancer Drug Prices of $100,000 a Year’ New York Times (Los Angeles, 2013) accessed 10 March 2014. Collier, above, n 6. Cohen, above, n 24. Experts in Chronic Myeloid Leukemia, ‘Price of Drugs for Chronic Myeloid Leukemia (CML), Reflections of the Unsustainable Cancer Drug Prices: Perspective of CML Experts’ (2013) 121 Blood 4439. Ibid. TR Coté, K Xu, and AR Pariser, ‘Accelerating Orphan Drug Development’ (2010) 9 Nat Rev Drug Discov 901.


2. Charging a Price Premium For drug companies, the most significant incentive for pursuing niche markets is likely the ability to charge a significant price premium.38 Disease stratification can create monopolistic markets without any competition to drive down prices.39 A small but growing number of therapies have already achieved ‘blockbuster’ sales—the most prominent examples being Herceptin (trastuzumab) and Glivec (imatinib)40 with an estimated US$6.08 billion41 and US$4.7 billion42 in sales in 2012, respectively—leading to the coining of the term ‘niche-buster’ model.43 While the number of ‘niche-busters’ remains limited, other targeted therapies are poised to generate massive sales. The US sales of Xalkori (crizotinib), for example, are expected to reach US$500 million by 2014.44 Drug companies typically justify the very high cost of niche market products by arguing that they must recoup their development costs across a smaller patient population. Yet the prices demanded for these drugs are beginning to draw increasing criticism—and rightly so. In a recent article, more than 100 influential cancer specialists from around the world criticised the often exorbitant and unsustainable prices demanded by industry for new cancer therapies and advocated for lower prices.45 In particular, of the twelve new drugs approved by the FDA for the treatment of cancer in 2012, eleven were priced at over US$100,000 per year. Perhaps more alarmingly, some cancer drugs have even increased in price since entering the market: Glivec, for example, which entered the US market in 2001 at a price of US$30,000 per year has now more than tripled in price.46

206


48

49 50 51 52 53 54 55

The Committee for Orphan Medicinal Products and the European Medicines Agency Scientific Secretariat, ‘European Regulation on Orphan Medicinal Products: 10 Years of Experience and Future Perspectives’ (2011) 10 Nat Rev Drug Discov 341. VG Koch, ‘Incentivizing Utilization of Pharmacogenomics in Drug Development’ (2012) 15 J Healthcare Law Policy 263. Ibid. Nuffield Council on Bioethics, ‘Regulation and Public Policy’ in Pharmacogenetics (Nuffield Council on Bioethics, London 2003). D Loughnot, ‘Potential Interactions of the Orphan Drug Act and Pharmacogenomics: A Flood of Orphan Drugs and Abuses?’ (2005) 31 Am J Law Med 365. Ibid, 366. Nuffield Council on Bioethics, above, n 51. Based on a search of: Food and Drug Administration, ‘Orphan Drug Designations and Approvals’ accessed 10 March 2014; and a search of: European Commission, ‘Register of not active Orphan Medicinal Products (alphabetical)’ accessed 10 March 2014.


seriously debilitating or serious and chronic condition’ that afflicts less than 5 in 10,000 people in Europe.48 Incentives provided after designation by the European Medicines Agency (EMA) include fast-track approval, funding for pre-clinical and clinical studies, and up to 10 years of market exclusivity. Advances in pharmacogenetic treatment and the expansion of the orphan drug market are actually part of a converging trend since pharmacogenetic drugs have already qualified for orphan drug status under both the US and European regimes.49 There is some support for the use of orphan drug legislation to stimulate the development of drugs for orphan genotypes.50 The Nuffield Council on Bioethics, for example, has cautioned that the categorisation of patients into subgroups based on genetic features could result in some groups being so small that developing specific medicines targeting these groups could be prohibitively expensive. The Council therefore notes that incentives may be necessary to encourage pharmaceutical companies to develop medicines for these narrow populations and suggest that one solution may be to apply existing orphan drug legislation.51 There is, however, reason for concern. A single drug can receive multiple orphan designations if it targets multiple distinct niche markets. Loughnot suggests that the orphan drug system is thus ripe for abuse with ‘high-tech salami slicing’ of diseases into multiple ‘orphan genotypes’—not for any true scientific reason, but merely to qualify for benefits under the orphan drug policy.52 In particular, ‘[d]rug developers could genetically subdivide diseases that affect a large portion of the population into groups small enough to qualify for orphan drug status’.53 The Nuffield Council has also cautioned about this possibility of the ‘reclassification of diseases’54 to artificially increase niche markets. In both the USA and Europe, the seven separate orphan designations obtained by Novartis for the pharmacogenetic drug Glivec demonstrates the extent to which a single drug can be targeted to multiple orphan subsets.55 Interestingly, Europe has granted fewer orphan designations for pharmacogenetic products. While a detailed comparison of the orphan drug policies in the USA and Europe is beyond the scope of this article, the FDA appears to be more liberal in granting orphan designations to pharmacogenetic drugs than their European counterparts. For example, the FDA has granted orphan drug designations for specific indications for


II I. S H IFT S I N DRU G FUN D IN G A N D R EI M BU RS EM E NT In most advanced economies, the drug approval system can be classified as a marketentry system that focuses primarily on a review of safety and efficacy data gathered in various clinical trials at the pre-market phase.59 These trials are largely organised and controlled by the pharmaceutical industry, which has a vested and significant financial interest in demonstrating that the products tested in these trials work.60 Subsequently, in the post-market phase, drugs are often uncritically presumed to be reasonably safe and effective. Relatively few additional clinical trials are undertaken and other important methods of information gathering, such as adverse event reporting, suffer from serious methodological problems.61 The regulatory fixation on pre-market activities leads to a host of problems that have serious implications for patient health and healthcare costs. Pre-market clinical trials often only detect common and frequently occurring adverse drug reactions; negative reactions that may take much longer to develop or occur rarely are often not revealed until years later when the drug is already widely prescribed.62 Pre-market clinical trials are carried out under controlled conditions that generally do not reflect how a drug will be used in actual clinical practice.63 Moreover, in most jurisdictions, including the UK, it is perfectly legal to prescribe drugs for uses outside the terms of their license (often referred to as ‘off-label’ prescribing) to patients and disease groups that were never

56 57 58 59

60 61 62 63

Based on a search of the FDA database, above, n 55. Based on a search of the European Commission register, above, n 56. M Herder, ‘When Everyone is an Orphan: Against Adopting a US-style Orphan Drug Policy in Canada’ (2013) 20 (4) Account Res 227. Pharmaceuticals are subject to various quality requirements from both the EMA and the UK Medicines and Healthcare Products Regulatory Agency. See European Medicines Agency, ‘Quality guidelines’ accessed 10 March 2014; and Medicines and Healthcare Products Regulatory Agency, ‘Inspection and standards’ accessed 10 March 2014>. T Lemmens, ‘Pharmaceutical Knowledge Governance: A Human Rights Perspective’ (2013) 41(1) J Law Med Ethics 163. Ibid. V Suvarna, ‘Phase IV of Drug Development’ (2010) 1(2) Perspect Clin Res 57. SR Ahmad, ‘Adverse Drug Event Monitoring at the Food and Drug Administration’ (2003) 18 J Gen Intern Med 57.


some of the most profitable pharmacogenetic drugs including cetuximab (Erbitux), crizotinib (Xalkori), and trastuzumab (Herceptin),56 while the EMA has not. Both the FDA and the EMA have, however, granted orphan drug designations for the targeted drugs imatinib (Glivec), nilotinib (Tasigna), and dasatinib (Sprycel).57 Ultimately, while legislative initiatives may benefit pharmacogenetic drug development in certain circumstances, as stated by Herder, ‘new insights from genomics and epigenomics are rendering the boundary between common and rare disease increasingly mutable, potentially exploding the scope of legislated definition of orphan disease’.58 As the science advances and conceptions of disease shift, orphan drug policies should be revisited by regulatory authorities to ensure that the incentives under orphan disease schemes are not misappropriated.

208


64

65 66

67

68

69

M Wiktorowicz and others, ‘Pharmacovigliance in Europe and North America: Divergent Approaches’ (2012) 75 Soc Sci Med 165. A 2012 study revealed that around 11% of prescription drugs in Canada are prescribed for off-label use, while a similar study conducted in the USA in 2006 found that 21% of prescriptions were for off-label uses. See T Eguale and others, ‘Drug, Patient, and Physician Characteristics Associated with Off-label Prescribing in Primary Care’ (2012) 172(10) Arch Intern Med 781; and DC Radley and others, ‘Off-label Prescribing among Office-based Physicians’ (2006) 166(9) Arch Intern Med 1021. A study conducted by McIntyre and colleagues in 2000 in the UK found that 10.5% of drugs prescribed to children by general practitioners were for off-label uses. See J McIntyre and others, ‘Unlicensed and Off Label Prescribing of Drugs in General Practice’ (2000) 83 Arch Dis Child 498. A smaller study of psychiatrists in the UK found that 65% of 116 psychiatrists surveyed had prescribed drugs off-label. See F Lowe-Ponsford and D Baldwin, ‘Off-label Prescribing by Psychiatrists’ (2000) 24 Psychiatrist 415. CM Flood and P Dyke, ‘The Data Divide Managing and Misalignment in Canada’s Evidentiary Requirements for Drug Regulation and Funding’ (2012) 45 UBC L Rev 283. See Institute of Medicine, ‘The Future of Drug Safety: Promoting and Protecting the Health of the Public’ (2006) accessed 10 March 2014. See Health Canada, ‘Blueprint for Renewal: Transforming Canada’s Approach to Regulating Health Products and Food’ (2006) accessed 10 March 2014. European Medicines Agency, ‘Road Map to 2015: The European Medicines Agency’s Contribution to Science, Medicines and Health’ (16 December 2010) accessed 10 March 2014 at 21. H-G Eichler and others, ‘Adaptive Licensing: Taking the Next Step in the Evolution of Drug Approval’ (2012) 91 Clin Pharmacol Ther 426, 428.


studied in clinical trials.64 Yet another limitation is that clinical trials conducted for regulatory approval rarely assess whether a drug is actually more effective than existing therapies already available on the market.65 Structural problems with oversight and integrity of data production add to the lack of reliability of the results. As the shortcomings of the current focus on pre-market activities are becoming increasingly apparent, drug regulatory systems in various jurisdictions including Europe, the USA,66 and Canada67 have been considering reform proposals to adopt more ‘adaptive’ approaches to drug approval where decisions are based not simply on pre-market evidence, but on the entire body of evidence that is collected throughout the life cycle of the drug. In 2010, the EMA issued a ‘road map’ report setting out a strategic vision for the agency over the five-year period from 2011 to 2015, which included a ‘staggered’ approach to drug approval characterised by ‘a better-defined or more restricted population of good responders, followed by a broadening of the population post-authorisation when more “real-life” data are available’.68 Such licensing models—referred to collectively as ‘adaptive licensing’—are often lauded for getting rid of the ‘artificial dichotomy’ of the pre- versus post-marketing stages and acknowledging that drug evaluation is not binary but a continuum.69 An important aspect of this proposed regulatory shift is the ongoing collection, evaluation, and communication of evidence at all stages of drug development. Concurrently, a similar shift towards more dynamic assessment approaches is also taking place on the drug reimbursement front. Drug funders in most jurisdictions have traditionally taken a binary approach to coverage decisions: unconditional coverage or no coverage. In recent years, both healthcare payers and the health technology industry have shown a significant and growing interest in agreements that involve a


A. A Potential Response to the Shift Towards Niche Markets In recent years, there has been rising pressure on drug regulatory systems to evolve in response to growing patient demands for early access to promising new therapies and for greater patient autonomy in drug treatment decisions.73 In many jurisdictions, this has resulted in the creation of more flexible access regimes such as the conditional marketing authorisation74 and the accelerated assessment75 procedures offered by the EMA. It is no coincidence that these demands are growing with the advent of many new niche market therapies. Advances in fields such as pharmacogenetics and legislative initiatives such as orphan drug policies have increased the viability of developing drugs for previously neglected rare disease markets. Patients are being presented with, at least outwardly, promising new treatment options and as a corollary, regulators and funders are facing rising demands to provide access to these therapies. Unfortunately, 70

71 72 73 74

75

See International Society for Pharmacoeconomics and Outcomes Research (ISPOR), ‘Performance-Based Risk-Sharing Arrangements—Good Practices for Design, Implementation and Evaluation: An ISPOR Task Force Report’ (Final Draft for Review) accessed 10 March 2014. Ibid, 3. Parliamentary Office of Science and Technology, above, n 2. See Health Canada, above, n 67, 30. European Medicines Agency, ‘Annual Renewal of Conditional Marketing Authorisations: Questions and Answers’ accessed 10 March 2014. European Medicines Agency, ‘EMEA Concludes First Accelerated Assessment for a Medicine for Human Use’ (2007) accessed 10 March 2014.


‘pay-for-performance’ or ‘risk-sharing’ element. These types of agreements—collectively referred to as ‘performance-based risk-sharing arrangements’70 (PBRSAs)—‘involve a plan by which the performance of the product is tracked in a defined patient population over a specified period of time and the level or continuation of reimbursement is based on the health and economic outcomes achieved’.71 PBRSA models offer a halfway point between fully funding drugs that may not be cost-effective and denying coverage of drugs to patients who may have few or no other treatment options. In the UK, PBRSAs are generally referred to as Patient Access Schemes (PAS)—innovative pricing agreements that allow for the reimbursement of a drug that might otherwise not be covered due to insufficient evidence of its cost-effectiveness. Changes to the PPRS in 2009 placed more emphasis on the use of PASs.72 In many ways, adaptive licensing and PBRSAs appear complementary. First, both are based on the concept that decisions related to providing access to drugs should not be strictly binary, but rather should be managed incrementally and continuously reassessed. Both recognise the uncertainty around the safety and efficacy of data produced during pre-market development and contribute towards ongoing evidence generation in the post-market phase in an effort to deal with this uncertainty. Ultimately, adaptive licensing and PBRSA are both defended as an attempt to balance competing concerns raised by limited data: the risk of exposing patients to ineffective or harmful treatments versus the risk of depriving patients of access to potentially beneficial treatments.

210


76 77

78

79

80 81

82

Boon and Moors, above, n 18. A Owen and others, ‘A New Model to Evaluate the Long-term Cost Effectiveness of Orphan and Highly Specialised Drugs Following Listing on the Australian Pharmaceutical Benefits Scheme: The Bosentan Patient Registry’ (2008) 11 J Med Econ 235. See ‘Marketing Authorization under Exceptional Circumstances’: European Medicines Agency, ‘Questions and Answers on Presubmission Guidance’ accessed 10 March 2014. TJ Moore and CD Furberg, ‘Development Times, Clinical Testing, Postmarket Follow-up, and Safety Risks for the New Drugs Approved by the US Food and Drug Administration The Class of 2008’ (2013) JAMA Intern Med accessed 10 March 2014. Ibid. US Food and Drug Administration, ‘Enrichment Strategies for Clinical Trials to Support Approval of Human Drugs and Biological Products (Draft Guidance for Industry)’ (2012) accessed 10 March 2014. Ibid, 32.


niche market therapies present a number of evidentiary challenges that make approval and coverage decisions particularly difficult. First, clinical trials for niche markets often prove difficult to organise due to the inherently limited number of patients with the disease.76 Owen and colleagues note that ‘[o]rphan drugs, and innovative specialised drugs used in relatively small populations, encounter a disadvantage compared with more widely used drugs, as large-scale clinical trial data are usually unavailable’.77 Existing conditional approval mechanisms in Europe already acknowledge the challenges inherent in building the evidence profiles for drugs that serve a limited population base.78 As a result, drugs for niche markets may be approved on the basis of smaller clinical trials that may not produce safety and efficacy data as robust as that produced in larger-scale clinical trials. Moore and Furberg note that increasingly, innovative drugs are being approved more rapidly on the basis of small clinical trials in narrower patient populations but with expanded requirement for post-market testing.79 They note that this shift has made it more challenging to balance the risks and benefits of new drugs. To the extent that it is appropriate to have these drugs approved on the basis of this limited level of evidence, there clearly is a need to assess the benefits and risks of these drugs through the ongoing collection and analysis of data after market entry. Indeed, the study by Moore and Furberg found that of the twenty drugs studied that received expedited review, the FDA required post-market studies for nineteen of them.80 Whether drugs should be approved on such an evidentiary basis is, however, a thorny question, requiring a careful assessment of the potential benefits and risks of the drug, the unique needs of the specific patient population, and the nature of the disease. Second, while the use of enrichment strategies is neither new nor limited to pharmacogenetic studies, genetic biomarkers represent a powerful new tool that researchers can use to refine the study population so that drug efficacy may be higher and toxicities lower.81 While enrichment increases the power of a study to detect a clinical effect in some populations, questions remain about the generalisability of the results in other populations and the level of data needed to establish selection criteria. The FDA notes that when enrichment strategies are employed, ‘post-market commitments or requirements may be requested to better define the full extent of a drug’s effect’.82


B. An Incremental Approach to Market Access In making approval decisions, regulators and funders in all jurisdictions face the fundamental dilemma of balancing the need for robust evidence on safety and efficacy with the need to provide timely access to promising new therapies. These decisions 83 84 85 86

87

Cohen, above, n 24, 752. O Wellman-Labadie and Y Zhou, ‘The US Orphan Drug Act: Rare Disease Research Stimulator or Commercial Opportunity’ (2010) 95 Health Policy 216, 225. RA Bouchard and M Sawicka, ‘The Mud and the Blood and the Beer: Canada’s Progressive Licensing Framework for Drug Approval’ (2009) 3 McGill J Law Health 49. J Lexchin, ‘New Drugs and Safety: What Happened to New Active Substances Approved Between 1985 and 2010?’ (2012) 172 (21) Arch Intern Med 1680. A similar study in 2009 by Berlin found that where oncology drugs are approved under the accelerated approval or priority review channels offered by the FDA, drug labelling is revised significantly more frequently than the labelling for traditional drug products. See RJ Berlin, ‘Examination of the Relationship Between Oncology Drug Labeling Revision Frequency and FDA Product Categorization’ (2009) 99(9) Am J Public Health 1693. Lexchin, Ibid.


Again, the use of enrichment strategies increases the imperative to continue to monitor the use of these drugs during the post-market phase. Third, since many niche market therapies treat serious or life-threatening diseases with few or no alternative treatment options, pressure on regulators and funders to provide early access to these therapies can be particularly intense. To date, the therapeutic area that has yielded both the most orphan drug designations and the most pharmacogenetic therapies is oncology. In fact, nearly half of successful pharmacogenetic therapies83 and one-third of drugs granted orphan designations by the FDA84 are used in the treatment of this often life-threatening cluster of diseases. While this trend is likely due in part to the high prevalence of the disease and the fact that cancer appears easily stratifiable based on the type of mutation, another factor is the political and public support for cancer research. Drugs for the treatment of cancer already heavily utilise exceptional access procedures.85 While there may be good reasons to speed access to some promising new therapies for serious or life-threatening diseases, studies have shown that where drugs are fast-tracked through the approval process, they are more likely to encounter problems during the post-market phase.86 Lexchin suggests that the difference likely results from faster review missing serious safety issues.87 This raises questions about the level of benefit offered by many of these new drugs. Indeed, if accelerated approval is accompanied by significantly increased risks of yet unknown side effects, such approval appears only justified when there is an expectation of significant benefit to the patient. But all too often, new drugs offer the prospect of at most a minimal survival benefit. If, in exceptional cases, accelerated approval appears appropriate, there is a greater imperative to more closely monitor the use of the drug in the post-market phase. At first glance, both adaptive licensing and PBRSA may appear as an effective response to managing the evidentiary challenges associated with niche markets. As we explore in more detail below, adaptive licensing and PBRSA models may provide regulators and funders with mechanisms for controlling the risks and cost-implications of approving or reimbursing niche market products that may have been approved on the basis of a reduced evidence profile.

212


88 89 90 91 92

MA Hamburg and JM Sharfstein, ‘The FDA as a Public Health Agency’ (2009) 360 N Engl J Med 2493, 2494. WA Ray and M Stein, ‘Reform of Drug Regulation—Beyond an Independent Drug-Safety Board’ (2006) 354 N Engl J Med 194. EMA Road Map, above, n 68. Eichler and others, above, n 69. F Pignatti and others, ‘The European Medicines Agency: An Overview of its Mission, Responsibilities, and Recent Initiatives in Cancer Drug Regulation’ (2011) 17 Clin Caner Res 5220.


are made in a context where huge industry interests in getting products ‘running under a patent clock’ to market as fast as possible are easily hidden behind the rhetoric of the need to provide access to life-saving medicines. Decision-makers face an apparent catch-22, with critics on one side—increasingly an alliance of industry and patient advocacy groups—contending that patients facing life-threatening conditions need earlier access to treatments and that regulatory overload stifles innovation, while critics on the other side argue that drugs are often approved too soon on the basis of small clinical trials that do not accurately reflect the use of the drug in the real world.88 Both adaptive licensing and PBRSAs, in theory, may help to address this tension by incrementally managing the diffusion of a new drug product into the market by limiting or attaching conditions to approval or coverage to prevent the drug from being widely prescribed before sufficient data on safety and efficacy has been gathered, or before the full cost implications of a coverage decision are known. Such a phased approach to the release of certain new medications can help limit the number of patients who are exposed to these drugs before adequate data has been collected on their safety and efficacy.89 Subsequently, as more evidence is generated on appropriate use, access to the drug can be expanded or restricted based on evolving evidence. Pharmacogenetic drug products are in many ways a natural fit for such an incremental approach to access because genetic diagnostic testing could be used to identify those patients who are most likely to respond, and consequently, are the best candidates to receive initial access to the drug. Patients, practitioners, and regulators may be willing to accept greater levels of uncertainty around the benefits and risks of drugs at the time of market entry to grant earlier access to promising new therapies for some patients. Although regulatory authorities such as the EMA have committed that the move to adaptive licensing will not reduce the evidentiary requirements for first-time marketing authorisations,90 some commentators, including EMA scientists, suggest that as in the case of existing exceptional access programs, the quantity of data required for the initial authorisation of drugs that treat serious or life-threatening conditions would likely be considerably less than that required for drugs that treat conditions for which there are already multiple treatment options available.91 Again, the movement towards pharmacogenetics is likely to increase this trend. Pignatti and colleagues note that ‘matching targeted drugs with better patient selection in the exploratory phases of development will lead to a wider use of early approval mechanisms, with drugs increasingly being approved initially for small subgroups of patients with great unmet needs’.92 Eichler and colleagues note that to increase the chances that only approved patients receive the drug under an adaptive licensing framework, ‘[a]ppropriate


C. A Stronger Focus on Post-Market Evidence Generation A key element of any proposed adaptive licensing model is an expansion of postmarket commitments on the part of the manufacturer, including more requirements for post-market studies.98 Recent reforms to European pharmacovigilance legislation introduced some promising new developments in this area, including requirements for manufacturers to adhere to a mandatory ‘risk-management plan’ which may 93 94 95

96 97

98

Eichler and others, above, n 69, 429. Ibid, 429. TM Mulvey, ‘Preserving Evidence-Based Oncology: We Can’t Jeopardize Clinical Trials’ (2006) 2 J Oncol Pract 204. Off-label use may be essential for learning about the use of a drug in combination therapy. According to Mulvey, anywhere from 50% to 80% of cancer chemotherapy involves at least one off-label use of approved drugs. ISPOR Report, above, n 70. Department of Health, ‘A new value-based approach to the pricing of branded medicines A consultation’ (16 December 2012) accessed 10 March 2014 at 13. Eichler and others, above, n 69.


targeting to the label population will need to be a high priority’ and that ‘at least after the initial approval, systemic restrictions and monitoring of prescribing may be required to prevent off-label use’.93 This may involve placing restrictions on the distribution of drugs, including requiring advanced certification for prescribers and pharmacists, permitting dispensing only at authorised pharmacies, or mandating enrolment in patient registries.94 However, the effectiveness of such restrictions will ultimately depend on regulators having both the authority and political will to police and enforce such restrictions—certainly no simple task given the current prevalence of off-label prescribing, particularly in fields such as oncology.95 Even after a drug is granted market approval, obtaining reimbursement from drug funders is an increasingly important step towards market uptake, particularly for highcost niche market therapies since very few patients will have the resources to pay for such therapies out of pocket. As such, restrictions attached to funding coverage may play an equally, if not more important, role in controlling access to new drugs with uncertain evidence profiles. PBRSAs may manage utilisation by linking reimbursement to various performance measures: reimbursement may depend on the clinical decision-making process (e.g. only patients who test positive for a particular biomarker will be covered); other schemes may focus on intermediate or clinical endpoints to determine reimbursement or involve outcomes guarantees where the manufacturer receives lower payment for patients that do not respond to the therapy.96 Linking reimbursement to outcomes appears aligned with the goals of value-based pricing now being pursued in the UK. In particular, under the new system, ‘the Government would apply weightings to the benefits provided by new branded medicines, which would imply a range of price thresholds reflecting the maximum [they] are prepared to pay for medicines’.97 Price thresholds could be higher for drugs that treat severe diseases or diseases with greater unmet medical need, or that demonstrate greater therapeutic innovation or wider societal benefits.

214


99

100 101

102 103 104

European Medicines Agency, ‘Risk-management plans’ (August 2013) accessed 10 March 2014. Owen and others, above, n 77, 236. Organisation for Professionals in Regulatory Affairs (TOPRA), ‘Can adaptive licensing bridge the gap between regulatory and HTA evidentiary standards?’ (3 December 2012) accessed 10 March 2014. J Lexchin, ‘Those Who Have the Gold Make the Evidence: How the Pharmaceutical Industry Biases the Outcomes of Clinical Trials of Medications’ (2010) 18 Sci Eng Ethics 247. See Lemmens, above, n 60. See discussions in T Lemmens and C Telfer, ‘Access to Information and the Right to Health: The Human Rights Case for Clinical Trials Transparency’ (2011) 38 Am J Law Med 63. See also Lemmens, above, n 60.


involve post-authorisation studies on the safety and efficacy of products.99 PBRSAs similarly mandate more prospective data collection in an attempt to gather more evidence and reduce decision uncertainty around funding coverage. However, developing the infrastructure necessary for comprehensive, accurate, and timely data collection about the use of drugs in real-world settings is a major challenge.100 There is still significant debate around what level of evidence should be required before allowing a drug to enter the market. Particularly for drugs that are granted market approval on the basis of a reduced evidence profile, the expansion of postmarket surveillance is an important element to counterbalancing the increased uncertainty around the safety and efficacy of the drug at market entry. There is serious concern, however, that the emphasis on post-market evidence gathering under adaptive licensing will be accompanied by a lowering of the standard of regulatory approval. At an EMA debate in late 2012, Thomas Müller of Germany’s Federal Joint Committee warned that unmet medical need should not be a basis for lowering the required level of evidentiary certainty since ‘[t]he danger is that you substitute evidence with hope’.101 Simply mandating more post-market studies and monitoring will only go so far if insufficient attention is paid to how such evidence generation is conducted. Some of the core problems with existing drug regulatory systems arise from the fact that the sponsoring pharmaceutical companies are responsible for conducting the majority of clinical trials, for the analysis of the results, and for the presentation and publication of the findings. Carefully crafted research design, choices made in the context of statistical analyses, exclusion of negative findings, over-inclusion of positive findings, and often even outright misrepresentation are well-known problems of the drug regulatory scene102—issues which can only be fully addressed through more significant changes to pharmaceutical knowledge governance.103 In this context, enhanced transparency measures have received significant attention in recent years.104 Full transparency can be seen as a necessary, but not necessarily sufficient, step to enhancing the reliability of pharmaceutical knowledge production. The increased use of enrichment strategies and the potential artificial creation of niche orphan markets associated with it may make it more important to consider recommendations for moving transparency beyond the clinical trials context. London, Kimmelman and Emborg, for example, have argued that there is a need to promote


105 AJ London, J Kimmelman, and ME Emborg, ‘Beyond Access vs Protection in Trials of Innovative Therapies’ (2010) 328 Science 829. 106 Ibid. See also J Kimmelman and AJ London, ‘Predicting Harms and Benefits in Translational Trials: Ethics, Evidence and Uncertainty’ (2011) 8 PLoS Med e10001010; and J Kimmelman and JA Anderson, ‘Should Pre-clinical Research be Registered’ (2012) 30 Nat Biotech 488. 107 D Healy, Pharmageddon (University of California Press, Los Angeles 2012). 108 European Medicines Agency, ‘2010 pharmacovigilance legislation’ accessed 10 March 2014. 109 European Medicines Agency, ‘European Medicines Agency policy on access to documents (related to medicinal products for human and veterinary use) (Policy/0043)’ (30 November 2010) accessed 10 March 2014.


access to pre-clinical data to ensure greater reliability of clinical research.105 They suggest that insufficient attention is paid to the level and quality of the available evidence in decisions to move from pre-clinical research to clinical trials.106 This is, in our view, particularly relevant in the context of the expanding pharmacogenetic development paradigm where pre-clinical research often forms the basis of biomarker selection for enriched clinical trials. Greater transparency is equally, if not more, important for post-market studies. Industry may significantly benefit from a lack of post-market research since such studies might uncover the inferiority of a drug to other therapies, or the inappropriateness of a drug for widely prescribed off-label uses. The pharmaceutical industry can obviously also be motivated to manipulate or obfuscate unfavourable study results in the post-market phase. Unfortunately, most adaptive licensing frameworks still rely primarily on drug manufacturers to conduct post-marketing studies of their own products. Given the problems with pharmaceutical industry control over clinical trials in the pre-market phase, any expanded transparency and access to data requirements must also be extended to all clinical trials throughout the life cycle of the drug product. Detailed adverse event reporting and data gathering outside the context of controlled trials is also crucial.107 In this context, the new EMA pharmacovigilance legislation that took effect in July 2012 appears to be a step in the right direction. In particular, the new legislation introduced, inter alia, direct consumer reporting of suspected side effects, new requirements for companies to submit periodic safety update reports, direct reporting by market authorisation holders of adverse events to the EMA EudraVigilance database, and the establishment of pharmacovigilance audits.108 Regulatory authorities in Europe have explicitly endorsed the need for greater transparency measures, with the focus on how—not whether—data such as adverse event reports and clinical trials data could be made publicly accessible. In 2010, the EMA introduced a new access-to-documents policy under which the agency began to release all clinical trial reports on request.109 As the next step, the EMA is currently working towards proactively publishing clinical trial data once an application for marketing authorisation is complete. These reform efforts recently hit a roadblock when two drug companies, AbbVie and InterMune, took the EMA to court to challenge their decision to grant access to information submitted by drug companies to the EMA for the purpose of regulatory approval. In two interim rulings issued on 25 April

216


D. Challenges in Governance One major concern associated with adaptive licensing is that once a new drug is on the market, particularly if it treats a serious condition, it becomes politically very 110 Case T-44/13 Order of the President of the General Court of 29 April 2013—AbbVie v EMA OJ 2013/C 189/51; and Case T-73/13 R Order of the President of the General Court of 25 April 2013—InterMune UK and Others v EMA OJ 2013/C 189/52. 111 Lemmens, above, n 60. 112 Case C-389/13 P(R) Order of the Vice-President of the Court of 28 November 2013—AbbVie v EMA OJ 2013/C 189/51; and Case C-390/13 P(R) Order of the Vice-President of the Court of 28 November 2013—InterMune UK and Others v EMA OJ 2013/C 189/52. 113 Z Fiminska, ‘Abbvie Move Against Data Transparency’ eye for pharma (12 March 2013) accessed 10 March 2014. 114 European Medicines Agency, ‘Publication and access to clinical-trial data (Policy/0070 – draft for public consultation) (24 June 2013) accessed 10 March 2014. 115 Ibid, 2.


2013, the President of the General Court of the European Union suspended the EMA decisions to release documents linked to two of these companies’ products.110 The most troubling component of these rulings is that the President of the court accepted prima facie the companies’ claim that their rights over clinical trials data constitute commercially confidential information (CCI) that fall under the human right to the protection of private and family life, recognised by both the European Convention on Human Rights and the European Charter. The rulings also completely ignore the important human rights claims that can be developed in favour of data access and the state’s role in ensuring that people have access to highly relevant health information.111 Fortunately, on 28 November 2013, the Vice President of the European Court of Justice annulled the interim orders and sent the matter back to the General Court for further consideration. In his appeal decisions, the Vice President rejects the idea that the interests of companies in clinical trials data are of such a nature that the violation of these interests cannot be compensated financially, and he also hints at the unique nature of clinical trials data.112 Until a final decision is issued by the court, however, the EMA will not release the documents related to the AbbVie and InterMune products. It is worth noting that the case against the EMA is openly supported by both the European Federation of Pharmaceutical Industries and the Pharmaceutical Research and Manufacturers of America, which raises questions about the industry’s real commitment to the integrity of drug development data that it has publicly embraced.113 Shortly after the interim rulings in June 2013, the EMA released a draft policy on publication and access to clinical trial data for public consultation.114 The policy claims to strike a balance between public access to clinical data and the protection of CCI by proposing a regime where the degree of availability of data varies depending on the type of data in question. While the EMA states in the draft policy that clinical trial data cannot, in general, be considered as CCI,115 the General Court may determine otherwise and thereby seriously undermine this important public health-focused initiative.


116 There is growing concern about the potential for industry to hijack advocacy groups as a vehicle in their own lobbying efforts. See, for example, D Hughes and B Williams-Jones, ‘Coalition Priorité Cancer and the Pharmaceutical Industry in Quebec: Conflicts of Interest in the Reimbursement of Expensive cancer Drugs?’ (2013) 9 (1) Healthcare Policy 52. 117 D Bishop and J Lexchin, ‘Politics and its Intersection with Coverage with Evidence Development: a Qualitative Analysis from Expert Interviews’ (2013) 13(88) BMC Health Serv Res, doi: 10.1186/1472-6963-1388. 118 Ibid. 119 Owen and others, above, n 77, 236. 120 J Raftery, ‘Multiple Sclerosis Risk Sharing Scheme: A Costly Failure’ (2010) 340 Brit Med J 1282. 121 Bishop and Lexchin, above, n 117, 7. 122 Health Action International Europe and Corporate Europe Observatory, ‘Divide & Conquer: A look behind the scenes of the EU pharmaceutical industry lobby’ (March 2012) accessed 10 March 2014. 123 Ibid. 124 L Garrison, ‘Performance-based Risk-sharing Arrangements: Good Practices for Design, Implementation and Evaluation’ (Report Presented at 7th Annual ISPOR Meeting Washington D.C. 2012) (2012) accessed 10 March 2014.


difficult to withdraw the drug based on subsequent information, even if the approval was conditional. Regulators may be coerced to keep a drug on the market through a variety of lobbying and pressure tactics, including the use of industry-supported patient advocacy groups.116 Adaptive licensing could easily be used by industry to get a foot in the door, with the knowledge that this door is very difficult to close once ajar. Similarly, there is ongoing concern about the role of politics and lobbying in swaying healthcare decision-makers to enter into PBRSAs.117 The decision to enter into such arrangements is often the result of direct and indirect pressure from the pharmaceutical industry, patient advocacy groups, physicians, and patients and their families.118 Owen and colleagues note that the increasing number of drugs with uncertain evidence profiles is placing pressure on funding authorities to enter into innovative risk-sharing approaches with drug sponsors.119 Entering into PBRSA may also be a convenient way for politicians to postpone a difficult confrontation with the patient advocacy groups over funding decisions.120 And as with adaptive licensing, there are often very real concerns that once the government begins to reimburse a particular drug, even under provisional circumstances, it can be ‘very hard to reverse its decision regardless of the evidence around effectiveness’.121 A particular concern in this context is the impact of significant lobbying of governmental regulators, policy makers, and legislative bodies. The pharmaceutical industry spends, in comparison with other interested parties, a disproportionate amount of money on lobbying efforts. According to a recent analysis by Health Action International Europe and the Corporate Europe Observatory of the European Union’s lobby Transparency Register, the industry spends at least €40 million per year on influencing European decision makers—nearly half of which is on in-house lobbyists.122 Since registration to the Transparency Register is voluntary, the study estimates that the true figure could be as high as €91 million annually.123 More than a 100 PBRSA schemes have been undertaken in various jurisdictions124 and are already providing some important—and often difficult—lessons on the

218


125 Raftery, above, n 120. 126 See Multiple-Sclerosis Trust, ‘The Risk-Sharing Scheme for Disease Modifying Therapies in MS’ (2007) accessed 10 March 2014. 127 Raftery, above, n 120. 128 M Boggild and others, ‘Multiple Sclerosis Risk Sharing Scheme: Two Year Results of Clinical Cohort Study with Historical Comparator’ (2009) 339 Brit Med J 1355. 129 Raftery, above, n 120. 130 C McCabe and others, ‘Continuing the Multiple Sclerosis Risk Sharing Scheme Is Unjustified’ (2010) 340 Brit Med J 1786. 131 Ibid. 132 Multiple Sclerosis Trust, ‘A to Z of MS: Risk-sharing Scheme’ accessed 10 March 2014. 133 McCabe and others, above, n 130.


challenges of implementation. One of the most ambitious PBRSA initiatives to date, the multiple sclerosis (MS) drugs risk-sharing scheme initiated in 2002 in the UK, provides a cautionary example of the challenges surrounding PBRSAs.125 The scheme used an observational study to compare the use of four different MS drugs developed by four different manufacturers126–drugs that the National Institute for Health and Care Excellence (NICE) had recommended against covering on cost-effectiveness grounds. This risk-sharing scheme, which has been viewed by many as a failure, was both slow and expensive, costing nearly £50 million annually and taking three years (instead of the estimated eighteen months) to recruit 5000 patients.127 The first report published on the scheme in 2009 revealed that disease progression was not only worse than had been predicted by initial models, but patients treated with the four MS drugs actually experienced worse outcomes than the untreated control group. Most worryingly, these negative findings did not lead to any reduction in price paid by the NHS for the drugs under study. Instead, the report stated that ‘[t]he scientific advisory group considered that it was premature at this stage to reach any decision about re-pricing the drugs without further follow-up and analyses’.128 The decision of the scheme’s ‘independent scientific advisory group’ not to recommend price changes has raised serious questions about the governance of the scheme and the independence of this committee, particularly around the influence that the four drug companies had over the advisory group decision.129 McCabe and colleagues note that while manufacturers, patient groups, clinicians, and the Department of Health—‘all of which have a vested interest in maintaining the status quo’—are represented on the scientific advisory group, budget holders are not represented and thus could not provide any countervailing influence.130 They further express concern over the fact that the Multiple Sclerosis Trust, which advocated for coverage of the MS drugs under study and appealed against the NICE recommendation, is responsible for the day-to-day management of the scheme, noting that ‘[g]ood governance requires that those charged with delivering these schemes are demonstrably free of [conflicts of interest]’.131 Despite the negative findings from early study results, the risk sharing scheme is set to continue until 2015132—although some have argued that continuing the study is unjustified.133 Despite the delays and failings of the UK MS risk-sharing scheme, the study is nonetheless producing further evidence to inform coverage decisions, evidence which thus far appears to justify NICE’s original decision not to recommend


funding the four MS drugs evaluated in the study.134 If other jurisdictions can also use the results of the UK study to inform their own funding decisions, then perhaps the study will be seen to have more value. This highlights the importance of ensuring appropriate and timely data sharing not only within a particular jurisdiction, but also between jurisdictions. A particular challenge will be preventing the duplication of research and establishing frameworks for coordinating research efforts and communicating results across multiple jurisdictions.

134 Raftery, above, n 120, 1284. 135 S Fernando and A Moss, ‘UK value-based pricing will struggle to materialise as year-end deadline approaches’ Financial Times (13 March 2013) accessed 10 March 2014.


I V. CO N CL US I O N When it comes to health reforms, the devil is often in the details of implementation. While the purported goals of the HSCA reforms—namely achieving better value for money and improving patient outcomes—are not controversial, the means set out in the Act to pursue these goals certainly are. The same tension underlies the proposed reforms to the PPRS: while the idea of having prices more accurately reflect the ‘value’ of therapies is widely accepted, there is growing uncertainty around how a value-based pricing under the renewed PPRS will be implemented, with some even stating that the very term has become a mere buzz word.135 Reform efforts must be carefully considered, transparent, and themselves subject to assessment to determine whether or not they are meeting their intended goals. While both adaptive licensing and PBRSAs offer, at least in theory, important reforms to existing drug approval and reimbursement systems, these new developments must be approached with a healthy degree of scepticism. In an ideal world, these two reforms would function together to reward innovative products with more rapid regulatory approval and market uptake and weed out inferior products through more responsive and continuous monitoring of drug use in the real world. However, whether this will be the reality is far from certain. A primary concern with both adaptive licensing and PBRSA proposals is that they may contribute to, respectively, a lowering of regulatory standards at the approval stage and premature market entry and subsequently, mounting pressure to fund costly new pharmaceutical products with uncertain evidence profiles. Any arguments in favour of accelerating the approval of drugs—namely in the context of serious or lifethreatening diseases—needs to be carefully weighed against the potential dangers that may arise from earlier approval. In particular, there are significant political difficulties in withdrawing drugs from the market or in discontinuing funding for drugs, even in the face of new evidence of increased risks or questionable efficacy. Further, while increased post-market evidence generation is an important step in combating evidentiary uncertainty at market entry, the existence of such measures should be a complement to, not a substitute for, rigorous premarket assessment. Given the widely recognised problems associated with the reliability of the evidence in existing regulatory and funding processes, transparency and data access should be a priority of reform efforts, even if such measures do not offer a complete solution.

220


AC K N OW L ED G EM E NT S The authors are grateful to Joel Lexchin and Donald Light, participants of the June 2013 University of Sheffield Workshop “Old Markets, New Markets: Health Law after the 2012 Act”, in particular Julian Cockbain, and two anonymous reviewers, for insightful comments on an earlier version of the paper. FUNDING Research for this paper was supported by a Genome Canada grant on Ethical and Legal Issues of Cancer Initiating Stem Cell Research.


Measures to improve transparency must be incorporated into any reform efforts towards adaptive licensing and PBRSA, including consideration of how to implement such measure in the post-market phase. The ongoing resistance of industry to fullfledged transparency reveals the interests at stake in this debate. Ultimately, although the focus of pharmaceutical research and development may be shifting towards niche markets, the desire of the industry to exert their influence on regulatory and reimbursement processes to their advantage—and sometimes through questionable means—will certainly remain a reality. The game may be changing, but the players—and the vested interests and associated pressures on the system—are the same.

FDA announces reforms of drug review process.

Proposed Reforms in the French Metropolitan Asylums.

Proposed reforms delay Quebec's Bill 20.

Burning mouth syndrome. Critical review and proposed clinical management.

Measuring critical transitions in financial markets.

Bisphosphonates and connexin 43: a critical review of evidence.

A critical review of food-associated factors proposed in the etiology of feline hyperthyroidism.

Are suicide terrorists suicidal? A critical assessment of the evidence.

The niche construction perspective: a critical appraisal.

Liraglutide for weight management: a critical review of the evidence.

β-Blockade use for Traumatic Injuries and Immunomodulation: A Review of Proposed Mechanisms and Clinical Evidence.

Echocardiographic assessment of pulmonary hypertension in infants with bronchopulmonary dysplasia: systematic review of literature and a proposed algorithm for assessment.

Epithelial-mesenchymal transition and drug resistance in breast cancer (Review).

Wells syndrome (eosinophilic cellulitis): Proposed diagnostic criteria and a literature review of the drug-induced variant.

Measuring performance in off-patent drug markets: a methodological framework and empirical evidence from twelve EU Member States.

A proposed framework for the systematic review and integrated assessment (SYRINA) of endocrine disrupting chemicals.

An integrative review of drug errors in critical care.

Response to "Critical Assessment of the Evidence for Striped Nanoparticles".

Indole synthesis: a review and proposed classification.

Newer proposed classification of periimplant defects: A critical update.

Drug treatment of allergic conjunctivitis. A review of the evidence.

The transition between the niche and neutral regimes in ecology.

Treatment of Adolescent Substance Use Disorders and Co-Occurring Internalizing Disorders: A Critical Review and Proposed Model.

Multiple Openings and Competitiveness of Forward Markets: Experimental Evidence.