Approaches to Regulatory and Market Access in the US and the EU

Approaches to Regulatory and Market Access in the US and the EU

Immuno-oncology harnesses a patient’s immune system so it can recognize and attack cancer cells. It does this through the use of pharmaceutical products or biologics that stimulate antigen-presenting cells, T-cells, or innate cells, reduce immunosuppression in the tumor environment, or enhance adaptive or innate immunity.

There are several main types of Immuno-Oncology therapies: bispecific antibodies, cancer vaccines, cell therapies, checkpoint modulators, cytokines and oncolytic viruses.

On both sides of the Atlantic, Immuno-Oncology has been recognised as a key development.

According to the FDA, 'Immuno-oncology therapeutics are leading to a transformational shift in treatment paradigms for patients with cancer...  more effective therapies tailored to the unique immune biology within each cancer patient (will) stimulate and orchestrate the body’s natural defences as a treatment for their cancer while minimizing toxicities.’ (FDA, 2018)

The EMA is equally positive about this emerging science, ‘Immunotherapy is a fast-growing area of new medicines in oncology...(they) target 'suppressive signals' that prevent the development of an immune response... enhancing the immune system to help fight cancer. These new medicines have significantly changed the therapeutic landscape and have increasingly benefited patients with some cancers.” (EMA, 2016)

Despite this, the US and EU have very distinct medical and therapy environments. Each territory has a markedly different approach to some key regulatory and marketing issues.

The US regulatory framework

There is no pricing control as such in the US. Pharmaceutical companies set their prices directly without intervention  from a paying body.

There is a substantial contribution of private insurance. In the US, government funds  approximately 50% of all healthcare. Other health plans control a substantial proportion of all private healthcare spending.

The FDA makes all the marketing authorization decisions. The guidelines regarding coverage and payment reimbursement are set by the Centers for Medicare and Medicaid Services (CMS) through Medicare.

So companies face not only government and individual commercial payer restrictions, but also different mechanisms depending on the product in question. This means that if a hospital can effectively treat the patient for less money than Medicare pays for the product, the hospital makes money. If not, the hospital loses money on that hospitalization. This may affect the take up of any therapy – but especially the more innovative ones.

The payers do not set pricing for products, but they are heavily reliant on a pharmaceutical company to dictate what that price is, involving third parties, including an incremental cost-effectiveness ratio (ICER) in the review, and also clearly defining the price value relationship.

Payers tend to assess what to pay for an IO medicine based on whether alternatives are available, how much the total cost exposure would be, as well as the growth rate of the condition and the clinical impact.

Payers prefer value-based pricing (VBP) for pricing new IOs, with manufacturers and purchasers negotiating the costs of each drug based on patient health outcomes or financial incentives. This is the point at which health insurers negotiate with pharmaceutical companies for discounts or other incentives. To date, only a handful of products have implemented VBP.


The EU Regulatory Framework

In the EU, the pricing environment for medical care has always been more restrictive than in the US. For a start, there are several different reimbursement  mechanisms in use.

These include reimbursement and price capping, systemic devolution of decision-making, the creation of prescribing guidelines, tender purchasing, and quota systems. EU countries regulate drug  pricing a lot more aggressively than in the US. Typically this is through the setting of price caps and direct negotiation.

Despite a more centralized system for approval, there is fully decentralized reimbursement. All EU countries have independent and very different healthcare delivery and  payment systems.

Marketing is granted through either standard or conditional authorization, or under exceptional circumstances.

Because of tailored interactions with the EMA, regulatory processes can be more rapidly deployed and completed. This ensures there are no gaps in any marketing authorization applications.

There are still some major challenges in securing reimbursement for IO medicines in the EU. Manufacturers with marketing authorizations have struggled to obtain national reimbursement in some EU countries.

In the UK specifically, the reimbursement of oncology drugs is regulated by the National Institute for Health and Care Excellence (NICE). Drugs prescribed in general practice are automatically reimbursed unless they are not integrated in the positive list on the evaluation from NICE. In general, NICE typically considers anything above £30,000 ($39,700) per quality-adjusted life year (QALY) not to be cost-effective.

The effect on outcomes

The result of the US system is often that therapies are restircted until they can show financial advantage. Only some 20% to 30% of patients who may benefit from CAR T therapy for instance, are actually getting access to it. The overall benefit of this is a more substantial drive towards biosimilars, and the assessment of whole acquisition costs rather than individual thrapies.

In the EU there is more direct negotiation, and this may lead to more outcome-based remuneration – where the payment relfects the benefits directly. Although promising in therory, this offers some challenges with defiintion of the outcome, and complexities where more than one therapy is applied.

Post-Covid in the EU, it is expected that the pressure of the regulatory authorities over the price of the drugs and their approval will be higher. This will not necessarily limit the incorporation of new drugs, but may provide a strong downward pressure on pricing.

To conclude

Ultimiately in a global marketplace for therapies, patients benefit from the sustained and robust development of new approaches. Different regulatory and marketing environments across two of the biggest geographical markets offer different pressures and opportunities. These do compliment each other in some ways, but ultimately cost consideration and explicit patient outcomes remain paramount.


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