From an uncertain 2023 to a hopeful 2024, what to expect next?
Besides the much-anticipated implementation of the EU Joint Clinical Assessment (JCA) planned for January 2025, local healthcare policies will continue shaping the market for pharmaceuticals in Europe in 2024.
As 2023 draws to a close, Decisive Consulting reviews the events of the past year and highlights what the pharmaceutical industry can expect from 2024 as we see anticipated changes in healthcare policy across some of the largest European markets come into effect.
May 2023 saw the implementation of the experimental 2-year direct access program in France, designed to enable market access for innovative drugs. Medicines with a “major” or “important” clinical value rating (SMR) and ASMR I to IV were set to be eligible for 12-month free pricing and full reimbursement at launch. The French pilot scheme somehow resembled German free pricing policy, with a stricter criterion (requiring a positive HTA outcome), and was very well received by the industry (even if by December 2023 only one drug has benefited from it).
Also in May we saw the Spanish National High Court rule against the Ministry of Health’s Plan to consolidate the Therapeutic Positioning Reports (IPTs)’ that since its implementation in 2020 had established an HTA Network (REvalMED) aiming to reinforce the IPTs with economic evaluations. This ruling has put an end to any opportunity to include health economics considerations within the current Spanish HTA platform, exacerbating an existing weakness in the Spanish decision-making process and bringing uncertainty to the future of the Spanish HTA system.
In Italy the year has ended without the implementation of the new Commissione Scientifica ed Economica del Farmaco (CSE; Scientific and Economic Commission for Pharmaceuticals) approved at the end of 2022 with the merger of the current Commissione Tecnico-Scientifica (CTS, Technical-Scientific Commission) and the Comitato Prezzi e Rimborso (CPR; Pricing and Reimbursement Committee). There is concern and uncertainty within the industry due the delay in this implementation, the ability of a smaller unit to cope with HTA and pricing decisions, and even the suitability of the chosen methodology (a single appraisal or two separate evaluations to preserve independence?).
More recently, in mid-December we saw the full publication of the new 5-year Voluntary Scheme for Pricing, Access and Growth (VPAG) in the UK; this will replace the previous VPAS from January 2024 to December 2028. The VPAG establishes a base rate levy of 10% to ‘older’ medicines and a top-up rate of up to 25% based on the observed price decline within a certain timeframe. For ‘newer’ medicines the rebate levy will be set each year at a rate calculated to keep overall branded medicine sales within the allowed NHS sales cap. The VPAG cap is increased each year by a nominal growth rate of 2% in 2024 to 4% by 2027. This was accompanied by proposals for the new Statutory Scheme which sets payment percentages for 2024 to 2026 based on an allowed growth rate of 2% (vs 1.1% in the current scheme), resulting in revised payment percentages of 21.9%, 24.0% and 26.8% for 2024, 2025 and 2026, respectively. The new statutory scheme has sparked concern within the industry which considers these rebates significantly higher than similar schemes existing in Europe.
Finally, December 2023 has seen confirmation of a proposed new law in Germany that will reduce manufacturer discounts for reimbursable medicines to 7% (vs current 12%) as well as establishing confidential discounts that could be implemented as early as January 2024 (for drugs outside the reference price) should this law be approved. With dual pricing already occurring in Italy and Spain, German steps in this direction might provoke a higher level of price obscurity in Europe and create some challenges to current European market access strategy, pricing corridors and launch sequence.
Looking ahead to 2024
With all this mind, and in fashion with the festive spirit, Decisive has asked payers in our network to tell us what they expect in 2024 and how any changes could translate into opportunities for the pharmaceutical industry.
Our experts anticipate a 2024 that will continue to reflect financial pressure across the major European markets, but believe there is much hope for an increased stability from the expected reforms that were not fully implemented in 2023.
Most specifically, in Germany policy changes will continue to be led by financial containment. The implementation (or not) of the confidential discounts proposal announced in 2023 will certainly impact not only the German but general European launching strategy. This is expected to be accompanied by an increasing number of reassessments leading to price negotiations (and potential price cuts) for Orphan drugs exceeding €30 million sales. However, the experts believe Germany will continue to provide an increasing and solid financial platform for pharmaceuticals, particularly for innovative drugs.
In 2024 Spain is expected to develop a new HTA model. The National Court ruling against REvalMED in May 2023 seems to have finally encouraged the Ministry of Health to look beyond the existing process. When last October the Ministry of Health announced that they would not appeal the ruling of the National High Court, a parallel announcement indicated their willingness to revamp the current HTA methodology and implement a national evaluation system that would consider both clinical and pricing assessments in parallel. Our payer network believes that this would be a significant step in the Spanish HTA methodology and that, while a new system might take time to reach full implementation due to bureaucracy and fund allocation, it will strengthen the Spanish system and will eventually contribute to reducing time to market for pharmaceuticals.
Similarly, with regard to more stable policies, we are hoping to see the new Italian Commissione Tecnico-Scientifica fully implemented in 2024. The new committee is expected to be made up of experts with national and international expertise in clinical and drug pricing evaluation, leveraging the current skills of AIFA’s committees. A new committee set up at the time of the EU JCA would be well positioned to adapt to the development of the PICO definition and focus on pricing negotiations in preparation for the first EU JCA evaluations in 2025.
In the UK there is some optimism for 2024 as the recently approved VPAG highlights the NHS and NICE’s commitment to consult on the possibility of raising the Budget Impact Test (BIT) Threshold from £20m to £40m in the first 6 months of VPAG, as well as exploring two outcomes-based pilot initiatives for Advanced Therapy Medicinal Products (ATMPs). NHS England and NICE are also expected to consult upon updates to the NHS Commercial Framework for new Medicines during the first 6 months of 2024.
Finally, despite the level of discomfort that the French Social Security Financing Bill for 2024 has brought to the pharma industry since it was announced earlier this autumn, there is some optimism, and an increase in funds have been announced to reinforce the early and compassionate access systems successfully revamped in 2021. In balance with rebates and price cuts, and elegantly rephrased à la française, ‘this measure therefore proposes to continue improving early and compassionate access systems while ensuring financial sustainability through national solidarity’.
Overall the sentiment points to a year of continuation in cost-containment measures to control both prescription volume and pharmaceutical prices. However, there is a strong willingness across local authorities to accelerate patients access to innovation and a belief that a balance between budget control and funding innovation can be achieved for the benefit of the patients.
Written by Maria Tamayo
Decisive Dialogue 24th December 2023
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