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Cost effectiveness is the new hurdle for pharma

hurdles.jpgProducing a globally successful drug can now depend as much on proving its value for money as proving its clinical effectiveness, says the head of Britain’s pioneering pharmaceutical assessment agency.

Andrew Dillon, chief executive of the National Institute for Health and Clinical Excellence (NICE), told journalists at a briefing in London this morning that “all around the world the process of introducing a more objective, systematic and transparent set of arrangements for evaluating the benefits of new treatments are popping up. Everywhere from China to Brazil.”

NICE evaluatives new medicines for cost effectiveness on behalf of the UK’s National Health Service (NHS). The British government is in the process of switching to a new system of ‘value based pricing’ which will see the price paid for a drug by the NHS negotiated based on NICE assessments. Some in the drug discovery business have expressed worries over the impact of such a scheme on the perception of the UK’s friendliness to big pharma (see: ‘UK drug-price overhaul set to shake up pharmaceutical industry’ and the editorial ‘Treated fairly?’).

In the UK, the system is likely to value especially highly drugs that meet current unmet needs, and those that are particularly innovative, as well as looking for value for money in new medicines. This presents an additional burden for drug companies who can now expect to have to provide cost effectiveness data along with the traditional clinical trials showing efficacy.

“There’s quite a lot of pressure on companies globally,” said Dillon. “They know that whereas in the past the big thing that they had to get past, beyond which lay the opportunity to make sometimes very significant profits, was registration. They now know … that they’ve got a twin challenge. They’ve got to convince the regulator to give them the license and they’ve got to have a value proposition in the markets where they want to sell the drug.”

Image: photo by Philo Nordlund via Flickr under creative commons.


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