UK life sciences investment at stake as NHS reimbursement grumbles grow

Gareth Morgan of Pinsent Masons was commenting after a series of recent disagreements between pharmaceutical companies and the National Institute for Health and Care Excellence (NICE) over the level of reimbursement the companies should receive were their products to be approved for use in the UK NHS.

Earlier this week, the chief executive of Convatec, Karim Bitar, told the Times that the “willingness of companies to invest” in UK life sciences will be limited if those companies’ products are not approved for use by the NHS.

In England, NICE is responsible for negotiating agreements with life sciences companies in respect of reimbursement for NHS use. Bitar said Convatec has yet to secure an agreement with NICE over the level of reimbursement for a new wound care product it has developed – to treat foot ulcers of diabetic patients.

Bitar said: “You’ve got some British technology that’s being developed by a British company. We have R&D sites here, we have manufacturing sites here, and I think that if the authorities want to go ahead and reward us for our innovation it’d be great if we could launch it first in the UK and have a level of reimbursement commensurate with the impact.”

Morgan said the Convatec case is the latest example of NHS reimbursement becoming “more and more of a frontline issue with the industry”.

Morgan said: “The UK is in a global competition to attract companies that can develop and manufacture innovative new treatments. It is currently a world leader in this regard, but it cannot rest on its laurels – with policymakers in other jurisdictions taking steps to speed up access to medicines, the UK too must ensure that the legal, regulatory, tax, and wider commercial environment evolves to remain attractive to would-be investors.”

“Developing new treatments to the point they can be commercialised takes years and requires significant investment. Life sciences companies will typically engage in lab testing and multiple rounds of clinical trials as part of the robust process for obtaining marketing authorisation from regulators. To make doing this worthwhile, the companies need to have a level of assurance that they will have access to markets and able to obtain a fair return on investment,” he said.

“In the UK, securing NHS access for products is a vital step in this regard, but we have been seeing a worrying trend emerge in our work in relation to the degree to which NICE is seeking to negotiate discounted prices in return for recommending access to those products through the NHS. In one sense this is an understandable position – given the widely documented budget constraints of the NHS, NICE has an important role to play in ensuring that products given access to the NHS are reimbursed at a cost-effective level. However, NICE must be careful not to drive too hard a bargain as it risks companies withdrawing from the UK market altogether – and in some cases may end up pushing up the longer-term costs of providing healthcare on the NHS or turning the UK into a low priority launch country for companies thereby delaying UK patients’ access to innovative treatments,” he added.

“The current view in the industry is that NICE sees any uncertainty in efficacy data as an opportunity to ‘chip’ pricing and demand higher discounts. This can be devastating for companies seeking to commercialise ‘orphan’ products – treatments for rare diseases – where low patient numbers often result in clinical trial efficacy data in these conditions being more variable, and so less certain, when compared to disease states where larger trials are possible, Morgan said.

In respect of Convatec’s new product for treating foot ulcers of diabetic patients, Bitar said: “If you can heal a diabetic foot ulcer in half the time and kill the bugs, the patients are really happy, the doctor’s going to look like a hero and because you’re avoiding hospitalisations and avoiding amputations we’re going to save the NHS a lot of money.”

Last month, NICE expressed its disappointment after it failed to negotiate an agreement with Daiichi Sankyo and AstraZeneca over reimbursement for Enhertu, a breast cancer treatment. The lack of agreement means the product has not been recommended as cost-effective for use for NHS patients with advanced breast cancer.

At the time, Helen Knight, director of medicines evaluation at NICE, said: “The fastest and only guaranteed way to get medicines like Enhertu to the patients who need them is for companies to offer a fair price. NICE and NHS England offered as much flexibility as possible, but the companies did not put forward a new price, so we have no choice but to publish our final decision which is not to recommend the medicine in this group of patients.”

According to the Times, AstraZeneca chief executive Pascal Soriot last month said that “developing medicines in a country doesn’t really make a lot of sense or is not very attractive if you know patients will not benefit”.