While the immediate impact of coronavirus on the pharmaceutical industry is evident, one area of uncertainty is how the virus will alter the landscape for the pricing and access of medicines in the longer term. Much of this impact will likely be linked to the macroeconomic effects of coronavirus, where we can speculate that changes in the size of economies as well as reprioritization of healthcare spending may alter payers’ ability and willingness to pay for medicines overall, and also for certain diseases and classes of medicine. However, another significant factor could be the impact of the virus on the value and access policy landscape. While there’s still uncertainty around how these policy changes could develop, we can look to some of the immediate global reactions to coronavirus that may serve as leading indicators of potential mid- to longer-term policy change.
Here are some leading indicators of the longer-term impact that could be in store for the value and access landscape:
Digitization of the payer-pharma engagement model
Indicator: The prioritization of efforts in the fight against coronavirus will inevitably cause some delay to health technology assessments (HTAs) and price/access decision-making in certain markets. For example, France’s Transparency Commission (TC) and Comité Economique des Produits de Santé (CEPS) committees both recently announced delays to their agendas, the UK’s National Institute for Health and Care Excellence is reprioritizing its work program, and the U.S. cost-effectiveness assessor ICER has also delayed its timelines. However, EU HTA agencies have also recognized the need to maintain timelines as much as possible and ensure access to innovative new medicines. Germany’s GBA and G-KV have both expressed a commitment to maintaining timelines under AMNOG. To enable this, these agencies (like many around the world) are turning towards the increased use of remote working to enable meetings to continue.
Potential impact: We have been monitoring the increasing desire of payers to engage with digital channels over recent years, from education through to active manufacturer engagement. This latest “nudge” in the digital direction, combined with the potential for novel relationships between pharma and payers in light of the coronavirus response, could possibly result in new channels and even expectations for the payer-pharma engagement model.
Increased access for digital healthcare
Indicator: The acceleration of all things digital in response to COVID-19 seems to be a theme across many parts of healthcare, and the same is true in terms of access to digital services and therapeutics. Telemedicine has been made readily available by governments and payers worldwide, helping to lessen the burden on in-person practices and health resources, and has seen a surge over recent weeks. Access has also been granted or expanded for digital technologies related to the prediction or monitoring of COVID-19. For example, Johns Hopkins has rolled out a digital tool to monitor healthcare providers for potential symptoms, and even more ambitious projects are under way to leverage big data from wearable devices to track the spread of COVID-19. Bayer’s former chief digital officer commented earlier this week that COVID-19 is “a chance for digital health firms to prove their worth.”
Potential impact: If health systems will be combatting coronavirus in some shape or form until a vaccine is developed, it seems reasonably likely that the novel telemedicine and digital healthcare practices established over the coming months could persist even once the virus fades. Especially once you factor in potential heightened public interest in healthcare, the post-viral era could certainly see payers’ increasingly willing to fund innovation in this space on the back of the infrastructure, processes, and value generated by digital healthcare during the coronavirus response.
Centralized procurement and encouragement of competition
Indicator: Multiple countries are looking to take advantage of centralized procurement efforts to streamline the purchase of medicines, testing and equipment for the treatment of coronavirus. For example, Germany has set up such a process for the procurement of four drugs for the potential treatment of COVID-19. While often aimed at ensuring an appropriate supply of treatments, these same procurement efforts can also be combined with measures to encourage price competition: for example, in China where coronavirus medicines and testing are being listed in national guidelines to enable procurement via the country’s highly competitive 4+7 procurement scheme. These coronavirus-specific measures are also taking place on a backdrop of recent trends in a similar vein, such as the joint procurement enabled in Europe through bodies such as BeNeLuxA and the Valetta declaration.
Potential impact: Should countries have a positive experience with the centralized procurement measures rolled out, accelerated or expanded in response to coronavirus, it might not be surprising to see these processes kept in place or expanded beyond their coronavirus purpose.
Compulsory licensing and shifting incentives
Indicator: Chile, Ecuador and Canada are among the countries to have passed legislation supporting compulsory licenses for coronavirus medicines, vaccines and equipment. Compulsory licensing featured in the drug pricing debate during 2019, with some politicians—such as the UK’s Jeremy Corbyn—having waved the idea as a threat in response to perceptions of unaffordable, high-priced drugs.
Going one step further still, the Costa Rican government has asked the WHO to create a voluntary pool of patient rights that could be shared for developing drugs, vaccines and diagnostics. Similarly, Members of the European Parliament have written to the European Commission to highlight the level of EU funding in the COVID-19 research effort and request legal safeguards be put in place to ensure fair pricing and support IP management. One such area where public funding has been highlighted is in the context of the EU’s Innovative Medicine Initiative (IMI) and its latest coronavirus research partnership (IMI2-Call 21), for which funding is split between the European Commission and the pharma industry. This was also a theme in 2019, with commentators highlighting the role that publicly funded R&D plays within the context of the traditional private model for drug development; as before, the debate seems to center around the IP fuzzy border between early stage, “non-competitive” research and later-stage, single-lead “competitive” research.
Potential impact: While the concepts being pursued by the Chilean and Costa Rican governments have a sound theoretical basis and could indeed play an important role in the context of the coronavirus crisis, the industry will be resistant to calls to weaken their IP rights, and it therefore seems unlikely that these ideas would catch on within the context of the pharmaceutical model. But that need not mean that the proof points established now would not be felt, at least as influencing factors, within the drug pricing debate further down the line.
Retrospective analyses leading to system change
Indicator: Once countries get through their respective outbreaks, it will be natural for the public, the media and policymakers to look back on what elements of their countries’ health systems worked well during the crisis—and what elements didn’t. Signals of this can already be seen in those markets that have been the first to experience the crisis. In China, policymakers have already reacted by issuing a new policy waiving the need for “pay before care” in the context of COVID-19 treatment, requiring more frequent drug price adjustment, and encouraging commercial insurance schemes to accelerate the advancement of insurance coverage in China.
Potential impact: Retrospective assessment of health systems is to be expected following the coronavirus outbreak, and may be further heightened in the context of the global nature of the coronavirus pandemic. While the immediate attention is on flaws specific to COVID-19 care, it seems quite plausible that this attention could cast light on broader issues requiring larger steps to be taken. This seems particularly likely in insurance-based markets, where notable disparities in patient care have been shown up by the virus.
It will be some time before the full effects of COVID-19 play out on the broader value and access landscape. However, given the enormous and lasting impact expected on the world economy, and the unique measures already being adopted by payers and policymakers around the world, changes seem inevitable. By engaging now with payers and policymakers to understand their needs and provide support that recognizes pharma’s unique responsibility during this period, pharma companies can be better prepared to adapt to the evolving value and access landscape.
For more ZS insights on the impact of COVID-19, visit zs.com/COVID19.
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