Same challenges, new opportunities – the impact for industry of the Commercial Framework for New Medicines

As any experienced market access professional will tell you, securing access to a new medicine is rarely as simple as just submitting a dossier to a national body and waiting for a positive recommendation. Behind the scenes of almost all health technologies appraisals (HTAs) is some form of negotiation on price. Historically, much of the ‘dark arts’ involved in successfully negotiating a deal with NHS England (NHSE) has, arguably, only been accessible by some of the big players in the pharmaceutical world.[i]^,[ii]

The new Commercial Framework for New Medicines (‘ The Framework’) published by NHSE professes to change this. It outlines the principles on which NHS commercial medicine negotiations will be based in the future, and also includes plans to pave the way for more transparent, streamlined and flexible commercial arrangements for industry.

Early engagement, early access

The Framework has a notable focus on horizon scanning and commits proactively to creating more opportunities for industry to engage early with the system, including with the Office for Market Access (OMA) and the scientific advice service at NICE. This is positive news, in principle. However, the emphasis on these fee-based services should be of some concern, particularly for smaller companies. It is worth considering too, that the advice given by these stakeholders at early stage ‘safe harbour’ and OMA meetings carries no weight later in the process at the NICE committee stage.

New commercial opportunities

The most notable headline from the Framework is the formalisation of a new type of commercial arrangement – the Commercial Access Agreement (CAA). CAAs are confidential, unlike complex Patient Access Schemes (PASs), and while they have been around for some time, they may now become more common.

Crucially, NHSE states it will enter into a CAA where the company wants to propose an enhanced value offer, or where there are unusual or unique circumstances that mean launching a product is considered particularly challenging or commercially unviable. Naturally, the terminology ‘enhanced value offer’ thinly veils this option as a move to assert downward pressure on price. NHSE outlines its expectation that an offer through a CAA should result in a cost-effectiveness estimate ‘at or below the lower end of the standard NICE cost effectiveness threshold range’ (i.e. £20,000 per QALY), putting a price on confidentiality.

Reflections

The Framework makes clear that commercial negotiations will only proceed if a treatment meets three criteria; it must be clinically and cost-effective, affordable to the NHS, and transactable (i.e. able to be administered easily). Over the last few years, the widely publicised high-cost medicines that have struggled to secure reimbursement would likely not have met these criteria. Therefore, this begs the question – to what extent will the Framework open access to medicines and improve the attractiveness of the UK market?

As ever, the proof of the pudding will be in the eating. By providing clarity and transparency for the commercial arrangements available, industry may be able to have more confidence to bring products to the UK market. However, this is dependent on NHS England seeking to build pragmatic solutions to commercial challenges with industry as a partner, and being genuinely open to innovative deals. To date, this isn’t something we have always seen. We know the strong preference for simple discounts prevails, which is a suitable option for most, but there is real opportunity to recognise value through confidential complex deals, and we hope that NHSE meets industry half way in making these a reality.

This article provides a snapshot of the commercial framework, if you would like to learn more or understand the work of Newmarket Strategy, please do contact us.

[i] https://www.england.nhs.uk/2018/09/nhs-england-announces-groundbreaking-new-personalised-therapy-for-children-with-cancer/

[ii] https://www.england.nhs.uk/2020/06/nhs-patients-among-first-in-europe-to-benefit-from-landmark-deal-for-cystic-fibrosis-treatment/