Access to medicines is always an emotive issue. If you’re a patient with a life-limiting condition, you’ll never understand why you cannot access a drug that will cure you or rapidly improve your quality of life while another patient, in France, can.
At the other end of the scale, the Health Service Executive is charged with managing budgets for the health system. That's tricky enough as it is, with regular annual overruns leading to tension with the Department of Public Expenditure and Reform. It simply cannot nod through every drug that comes to market without assessing the impact on a budget funded by taxpayers.
But that’s where it gets messy. Patients – and indeed the pharmaceutical companies that make the products – struggle to understand how drugs that are available in many other countries in the European Union are blocked in Ireland.
The issue returned to the headlines this week with the decision by the HSE not to pay for Spinraza, a Biogen drug that is the only available treatment for a muscle-wasting condition called spinal muscular atrophy (SMA).
It affects fewer than 100 people in Ireland, among them 26 children. And for this cohort, the condition can and does prove fatal.
The problem, the HSE says, is that the price Biogen wants to charge for the drug is just too high. The two sides now have 28 days to compromise on price; otherwise, the decision will be finalised.
But Spinraza is just the latest in a long line of high profile, and sometimes controversial, drug approvals.
Cervical check crisis
Following the cervical check crisis, campaigner Vicky Phelan – and later all the 221 women affected who could benefit from it – were offered access to a drug called Pembro. No other cervical cancer patient can get it.
The reason is that, while it is approved in the US, it has not yet been approved by the European Medicines Agency – normally the precursor to any decision about making the drug available in the EU.
Then there was Orkambi, a breakthrough drug for cystic fibrosis that will cost about €400 million over a decade. It was sanctioned by Government after a lengthy patient-led campaign as the HSE said it could find no budget for it.
* These aren’t exceptions. Every year, there are a number of novel medicines that cause a public and political storm. So how does the drug approval system work and why are so many medicines getting stuck in the system?
Once a drug gets approval from the European Medicines Agency – and a licence from the Irish regulator, the Health Products Regulatory Authority, on the back of that approval – it is up to the pharma companies to approach individual national health payers to see if they will purchase it. In Ireland, that is the HSE.
But before it makes any decision, the HSE will pass the application on to the National Centre For Pharmacoeconomics (NCPE) to carry out a cost/benefit analysis.
‘Impartial advice’
The NCPE, under Prof Michael Barry, assesses the clinical effectiveness of the medication, it impact on quality of life in health terms and whether the price proposed is justified in its view. As it states in its assessments: "Our aim is to provide impartial advice to help decision-makers provide the most effective, safe and value for money treatments for patients."
Among its key assessments if what is known as QALY – quality-adjusted life years. In outline, this measures the number of additional years a patient can expect to live with the therapy, multiplied by the degree to which their quality of life is impaired. Perfect health is measured as 1 and death as zero; patient groups will have a number in between.
So if, someone would likely live an extra four years with the intervention of the proposed drug, according to clinical trial data, but with less than perfect qualify of life – say 0.8 – they would be deemed to have QALY of 3.2.
You then take the cost of the drug and divide it by this QALY figure to give you what is called an ICER – an incremental cost-effectiveness ratio. If your drug is going to cost €2 million a year, the ICER is 625,000.
This is then measured against a threshold – the figure above that the NCPE determines the medicine is not value for money. Some countries have different thresholds for different classes of drug – cancer drugs, rare disease therapies etc. In Ireland, we don’t. There is one threshold and that is €45,000 per QALY.
Brutal system
Our drug in the example above – at €625,000 per QALY – is well above it and the NCPE will deem the “reimbursement is not recommended at the submitted price”.
It can look like a brutal system and the NCPE will rightly argue that it does considerably more than simply reach a bottom line. But, ultimately, there is a bottom line and if you are the wrong side of it – as the SMA patients are in the case of Spinraza – it can be deeply distressing.
The NCPE, when it concludes its work, reports back to the HSE. It makes the final decision on price but, importantly, it is not determined purely by cost-effectiveness. The Health (Pricing and Supply of Medical Goods) Act 2013 sets down a list of criteria the HSE must consider. Alongside cost-effectiveness, these include the health needs of the public, the clinical need for the drug being considered, its efficacy in clinical trials and, crucially, the budgetary resources available to the HSE.
If it decides not to pay for a medicine simply because it doesn’t have the cash, the HSE can ask the Minister for Health to consider approving additional money in the budget to pay for the medicine.
Horse trading
Before that, the horse trading begins, with the HSE and the drug company negotiating on price. The pharma companies say they accept that the upfront price is always going to come down. That price is set only for regulatory approval and before any discussion has taken place with the companies or national health systems that are going to pay for the medication.
The price used in the original NCPE assessment is, confirmed one well-placed industry source, “not a real price”.
“Everyone knows it is a higher price than the one that will be agreed. These drugs haven’t landed yet,” they said.
Prof Barry spoke this week of discounts of up to 40 and 50 per cent being offered by companies as they look to get their medicines to market. But if you are looking to get approval for a drug with an ICER that is a multiple of the threshold, it’s always going to be an uphill battle.
"There are drugs that we would like to approve sooner but for which there is no budget," says Dr Paul Connors, the HSE's national director of communications.
“Then there are drugs, such as Spinraza where we would have questions on the data we are getting and whether they are as efficacious as the company would claim.”
The process is also complicated, he said, by the significant increase in the number of drug applications coming through the system and the difficulty of keeping up with the processing of those applications. NCPE director Prof Barry has previously spoken of the pressure he and his team are under.
Frustrated
The Irish Pharmaceutical Healthcare Association (IPHA), which represents the big pharma companies that are developing and trying to sell the drugs in question, accepts that not every drug will be approved. But it is frustrated at how drugs that are approved in other EU states get stuck in the system here.
There is a pricing agreement between the HSE, the Department of Health and IPHA, which says that drugs offered for sale in Ireland cannot be priced above the average of the cost at which it is available in a basket of 14 other European states.
For the companies, the equation is simple. On one side are the patients and the HSE, who want access to the medicine; on the other are the drug developers who want, as IPHA chief executive Oliver O’Connor says, “speed of reimbursement at a level that makes sense over the product lifetime”.
IPHA president Aidan Lynch, who is country head for GlaxoSmithKline in Ireland, notes that innovation that is not affordable is not much use to anyone. Drug companies argue they are commercial entities. They need a certain price to match the costs of research, not just in one particular drug but also to cover the cost of other failed research that must be financed. And they need a profit margin on top of that to reward shareholders.
The big issue is how much of a margin. And, for all the professed transparency of the drug-pricing agreement, the system remains opaque. We might know what the list price of a drug is in each of the 14 states but not the discounts negotiated in each individual market.
‘Out of date’
Biogen, in its reaction to the HSE rejection of Spinraza, said the price quoted by the health service to justify the rejection was “six months out of date”. However, it would not say what price it was offering at this stage.
The drug companies cite the need for commercial confidentiality and point to other industries – such as airplane manufactures – where the list price rarely bears much resemblance to the actual price an airline will pay for new aircraft.
In the pricing agreement, IPHA also offered price cuts on older drugs, savings that it said would amount to €785 million over four years to 2020 – and which it always hoped would be used to boost the budget for new drugs.
It’s not clear if that has happened. In fact, one of the bugbears for everyone in the equation is that there is no actual bottom line total medicines budget in the HSE at all.
The new drug budget this year is somewhere between €10 million and €14 million, depending on whom you speak to. Either way, Prof Barry says it is practically spent already by the end of February. That’s a position from which the HSE does not demur.
Ultimately, most sides seem to accept the current system is broken. The €45,000 NCPE threshold, for example, effectively rules out all modern biologic therapies as well as drugs targeting rare diseases. And that is before we get to the next generation of gene therapies.
Bottom line
The bottom line is that drugs are getting stuck in the system. Some are simply not worth the asking price but the suspicion is that most linger until sufficient money can be found to move them on.
If there is one lesson from the high profile drug campaigns of recent years that we mentioned at the outset, it is that, in Ireland, public pressure is key to approval. And that is one key factor that sets the Republic apart from other countries.
It is traceable to the peculiar (by international standards) nature of our politics. "Our political system is, by design, highly responsive to well co-ordinated, emotionally resonant messages," says health economist Prof Stephen Kinsella, a columnist with the Sunday Business Post. And it's not just in the case of medicines, he notes, pointing to other areas such as nurses' pay where similar campaigns have delivered results.
“Lobbying Government to increase spending for their issue is far more effective in deeply representative systems [like Ireland’s],” he says.
Reimbursed
As one drug industry source said: “In the UK, if [the National Institute for Health and Care Excellence] says no, that’s it, no. Go away, we don’t want to see you again on this issue. In Ireland, no is generally just the start of the conversation. Most of what they deem non-cost effective is generally reimbursed in the end.”
The court of public opinion is generally the final arbiter of budget priorities. For the patients, like those suffering from SMA and their families, the message seems to be to battle on.
*This article was edited on March 1st
