HDA Media And Political Bulletin – 22 November 2016

UK could seek ‘transitional deal’ to cushion Brexit

21 November 2016, Pharmaphorum, Andrew McConaghie


The Prime Minister, Theresa May, has alluded that the UK may seek a transitional deal for Brexit. Business leaders have previously raised concerns that the 2 year period evoked by triggering article 50 will not be enough time to establish favourable trading relations.  Speaking at the Annual Conference of the Confederation of British Industry (CBI), Theresa May said that the Government are working to avoid what Paul Dreschler, President of the CBI, described as a cliff edge effect upon leaving the EU.


Pharma’s new ‘sensible pricing’ behind cancer drug approvals, says NICE

Pharmaphorum, Andrew McConaghie


The National Institute for Health and Care Excellence (NICE) has said that the recent uplift in drugs being approved by the Cancer Drugs Fund (CDF) is mostly due to companies offering price cuts. NICE’s Chief Executive Sir Andrew Dillon said that as the reappraised drugs move to routine commissioning it frees up funding in the CDF to be used for newer, innovative cancer treatments.

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UK could seek ‘transitional deal’ to cushion Brexit

21 November 2016, Pharmaphorum, Andrew McConaghie


Prime Minister Theresa May has hinted that the UK could seek a transition deal to allow the country to avoid a ‘cliff edge’ effect of leaving the European Union.


The prime minister is today addressing the annual conference of the Confederation of British Industry (CBI), and has unveiled several policy developments aimed at soothing Brexit fears.


Business leaders are concerned that there won’t be enough time to establish favourable trading relations in the two year period allowed once Article 50 is triggered.


The government is expected to trigger Article 50 in spring next year, which would mean the UK would automatically leave the EU two years later in 2019 – regardless of whether a mutually satisfactory deal has been struck.


Speaking this morning, Theresa May appeared willing to respond to pleas made by Paul Dreschler, the CBI president.


“I understand the point that Paul has made, others have made this point, that people don’t want a cliff edge, they want to know with some certainty how things are going to go forward. That will be part of the work that we do in terms of the negotiation that we are undertaking with the European Union.”


This is assumed to mean that the UK would seek a transitional deal, allowing it to stay in the single market, or preserve many aspects of single market membership for a period after leaving the EU.


However, while this is appealing to many in business, those negotiating Brexit from the EU side are unlikely to be in the mood to compromise with the UK. Many European leaders are urging the EU to enforce a ‘Hard Brexit’, to help ensure the negotiations don’t drag on for years, and to discourage other countries from considering an exit or renegotiations.


Such a plan is also likely to face opposition from within May’s own cabinet, where senior Brexiteers will fear such an approach will inevitably lead to a ‘Soft Brexit’. They believe this means the UK will retain what they see as the worst aspects of EU membership, and never break free of its dominance.


The UK pharmaceutical industry has been careful not to publicly back either of these different factions – but it will nevertheless want to minimise the risk to the sector.


However, behind the scenes, many business sectors are fearful of a hard and indeed rapid Brexit. Brexit-sceptic and Conservative ex-minister Anna Soubry MP says one pharmaceutical company has privately informed her that if the UK leaves the single market (as would be the case in a Hard Brexit) it would relocate to Europe, taking with it 1,000 jobs.


Support for innovation


Meanwhile May has also suggested the government could cut corporation tax even further than planned by the former Chancellor George Osborne. Corporation tax is due to fall to 17% by 2020, but she says this could dip further – even below the 15% promised recently by President-Elect Donald Trump for the US.


At the same time, May appears to be backtracking on an earlier-announced policy to put workers on the boards of all companies.


An extra £2bn a year has also been promised to fund scientific research and development by 2020, a move which May says would make the country “profoundly pro-innovation.”


This is very encouraging news for the UK pharma industry, however it also wants to see increased investment in the NHS – to all and intents and purposes its only customer in the country, and one being squeezed by unprecedented financial pressure.


New Chancellor Philip Hammond makes his crucial Autumn Statement this Wednesday, which is likely to include announcements of investment in multi-billion road and rail infrastructure projects. Measures to ease financial pressure on the so-called ‘Just About Managing’ (JAM) segment of UK society, working age households on low-to-middle incomes are also expected.


However despite pleas from the NHS for more funding, Hammond is expected to pass over the health service. This will leave the health service facing increasing pressure on services and few options to avert more debt in the system, increasing the risk of patient care being undermined and reducing budgets for medicines.


Pharma’s new ‘sensible pricing’ behind cancer drug approvals, says NICE

Pharmaphorum, Andrew McConaghie


A string of ‘yes’ decisions from NICE on cancer drugs – but what has changed?


After years of a deadlock between NICE and the pharmaceutical industry on cancer drugs, recent months have seen a wave of positive approvals from the cost-effectiveness watchdog.


But is this a significant shift in pharma pricing policy? Many companies are probably being persuaded to cut prices for older drugs, with the hope of creating ‘headroom’ for a rush of newer medicines.


Following a decision to reform the CDF earlier this year, England’s cost effectiveness watchdog began to reappraise, or appraise for the first time, most drugs currently in the CDF in April 2016.


NICE has been re-appraising 31 existing cancer drugs over the last few months, and today announced 9 out of 11 reviewed so far have been recommended.


The list of 31 drugs must now either gain NICE approved or be removed from the CDF and have all funding taken away.


NICE says price cuts offered by companies on these cancer medicines are the prime reason why it has been able to say yes to so many.


Welcoming the shift, NICE’s chief executive Sir Andrew Dillon also acknowledged better data in some cases, but the emphasis on pricing was clear.


“Sensible pricing and in some cases better data, is helping to secure access to important cancer medicines as they move out of the old Cancer Drugs Fund, following reappraisal by NICE,” said Dillon


“As reappraised drugs now move to routine commissioning, funding in the CDF can be freed up and used for newer, innovative cancer treatments. This is good news all round for patients.”


NICE and the pharmaceutical industry have been at loggerheads for years over cost-effectiveness of cancer drugs, but now pharma companies look to be offering deeper discounts in order to gain market access.


One of the latest examples is Bristol-Myers Squibb’s chronic myeloid leukaemia drug Sprycel (dasatinib).  As part of its reappraisals of Sprycel in two CML indications, BMS submitted a revised discount, which meant that NICE could recommend the drug for use in the NHS for both patient populations. Around 700 patients will be eligible for treatment with the drug per year.


This decision brings the total of approved reappraised CDF treatments to seven: Bosulif (CLL) Afinitor (breast cancer) Xalkori (NSCLC) Sprycel (two CML indications) Alimta (NSCLC) Xofigo (prostate cancer).


Erbitux in head and neck cancer and Nexavar in hepatocellular carcinoma are the two currently slated for rejection in the process – though further discount from their manufacturers could sway NICE on these as well.


Pharma still wants NICE reform


However this new ‘sensible approach’ to pricing doesn’t mean pharma is happy with the NICE process. Indeed reform of NICE’s core appraisal methodology remains a key industry demand.


But pharma companies operating in oncology know that a wave of new drugs are being launched, and both sides want to move on to tackling this new generation – which are high cost drugs.


These include flagship immunotherapy treatments, Merck’s Keytruda and BMS’ Opdivo. Both of these drugs may soon end up in the new ‘managed access’ Cancer Drugs Fund for use in non-small cell lung cancer (NSCLC).


The CDF budget has been fixed at £340 million, and once this limit has been reached, no new drugs will be admitted. Faced with a new generation of drugs being blocked from England’s market, pharma companies are settling for access for established drug at lower prices.


This battle reflects similar negotiations going on in developed markets around the world over cancer drugs. In Japan, the government has just announced that a 50% price cut will be imposed from February 2017 on BMS’s Opdivo – a response to its growing use in melanoma and NSCLC.


GSK’s chief executive Sir Andrew Witty this week urged the industry to follow his company’s strategy of focusing on volume rather than price. He made this recommendation particularly in light of growing pressure on US prices, where heavy discounting is also now becoming a fact of life for pharma.

HDA Media And Political Bulletin – 22 November 2016

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