The New EU5? European Access and Reimbursement in a Brexit-Inflected Future

AESARA’s European General Manager observes multi-national trends for collaboration in health technology assessment and drug procurement, and examines pessimistic and optimistic scenarios for the European market access landscape after Brexit.

Considerations of Brexit’s impact on Europe’s healthcare sector have mostly focused on risks to physical supply chains and regulatory harmonization.

What has received less attention is the effect of Brexit on market access, reimbursement and health technology assessment (HTA). Perhaps because these are de jure “national competencies” by EU definition and because access decisions are often made, de facto, even more locally at provincial or institutional levels, these have been thoughtfully rather than carelessly overlooked by other commentators.

Nevertheless, in an increasingly interconnected world, where data availability, information sharing and global influencing are increasingly feasible, biotech and pharma executives and investors ought to consider now what the European access, reimbursement and HTA landscape could look like when today’s early stage pipelines are ready to launch.

So, whether Brexit is finally delivered, or whether we merely reap the effects of a three-year whirlwind precipitated by the 2016 plebiscite (the EMA, for example, has already left London anyway – suspiciously quickly for some people), what is likely to happen when the ripples from the Brexit stone hit the shores of European market access?

Some uncertainty must be admitted, so a couple of scenarios must be considered. Taking the perspective of European biopharma executives and investors, consider an Optimistic Case and a Pessimistic Case:

The Pessimistic Case: Britain as Backwater

In a No Deal or Bad Deal scenario, our worst fears of regulatory fragmentation are realized. The UK becomes a Third Country for regulatory approval, and a third wave country – at best – for global biopharma product launches. Either because of weak negotiations or a worst-of-both-worlds deal with the EU, the UK economy and tax-take tanks, forcing contraction on the NHS. NICE thresholds for cost-effectiveness accordingly grow ever tighter.

As what was the world’s fifth largest economy falls away, not just UK GMs but European Regional industry executives have to trim their top- and bottom-lines. Some biopharma innovators entirely give up on launching in the UK. Worse than the economics, patient outcomes in treatable and even curable conditions slip to the lower reaches of global benchmarks.

The Optimistic Case: A Bright British Future

Life outside the EU allows the UK to strike trade deals around the world. Canny US negotiators (enabled by the evergreen US pharma lobby) get UK agreement for FDA approval of US-headquartered biotech innovations to be effective in the UK with just an MHRA rubber-stamp. The Japanese achieve a similar outcome. Additionally, just as the major anglophone economies share security intelligence under the ‘Five Eyes’ arrangements, a pre-existing closeness on cost-effectiveness based HTA is a springboard for the UK, Canada, Australia and New Zealand to move even closer together; mutual recognition between these countries, both in regulatory approval and for pricing and reimbursement decisions, facilitates access to these markets for global biotech and pharma innovators.

The UK economy remains of G7 standard and, as current UK Health Secretary Matt Hancock has said, “a strong economy drives a strong NHS”, with the UK becoming an early adopter and paragon rewarder of healthcare innovation. The two-way flow of manufactured medicines is a landmark – and perhaps outlier – success in the new UK:EU relationship, easing the concerns of European Commercial executives. Even more importantly, UK patient outcomes across multiple disease areas continue to climb. Pleased with the efforts of their lobbyists and Policy functions in helping bring about this state of affairs, biotech and pharma executives regard the UK market with special fondness.

In either case: The New EU5

Brexit is not just about the UK, of course. In either the pessimistic or optimistic scenario, the so-called “EU5” of the largest pharmaceutical markets in the EU certainly loses a member – at least one member. Perhaps Italy also departs the EU, and Catalonian independence drops Spain down the drug purchasing league table. Or perhaps those economies shrink for any number of reasons (e.g. the populist anti-vaxxers which seem distressingly prevalent). Either way, existing trends suggest we will not be left with just Germany and France as a pair of sticky coconuts to shy at.

Multi-national collaboration in HTA, and initiatives to institute joint procurement for increased negotiating power, are already well underway across Europe. As the EU adjusts to the absence or reduction of UK financial contributions, European countries will be forced to manage their tax takes differently, spurring further evolution in this field.

BeNeLuxA is currently leading the pack, with a Nordic consortium such as FINOSE not far behind. A pick‘n’mix of central and Eastern European collaborations exists across a range of sectors, from the Visegrad 4 to the Three Seas Initiative. Any one of these could emerge as the leader in that ecological niche and provide a third multi-country system for negotiating price, access and reimbursement. Responding to changes in the landscape, industry trades operational efficiency and volumes for headline prices. Access to innovation is eased for all health systems involved, with a consequent uptick in patient outcomes.

With the right win-win attitudes and effective partnering and policy-influencing, there is no need for biotech and pharma executives to fear such coalitions. As one regulatory process already delivers marketing authorisation in 27 markets, which European Regional Commercial or Market Access executive wouldn’t sign up to moving from 27 (or more!)access processes to just 5? And why wouldn’t European tax-payers and patients agree?

A Brexit-inflected future for market access in Europe is out there. Industry executives today need to believe that it doesn’t have to be the downside case. But there’s work to do…

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