How can European Biotechs Successfully Navigate to America?
GAVIN OUTTERIDGE and CHAD PATEL
Land of Opportunity
In terms of patient reach for your much-needed innovations and maximizing public health benefit, more than 131 million people — 66 percent of all adults in the United States — use prescription drugs (compared to just 65 million in Europe’s largest market).1,2
This represents an exciting opportunity for more patients to access – and to ultimately improve their health outcomes with – newer therapies, not only in chronic diseases but also in rare conditions (e.g. idiopathic pulmonary fibrosis, metachromatic leukodystrophy). An estimated 30 million Americans are living with a rare disease, compared to just 4 million in Germany.3 And, just as the 17th century pilgrims searched for freedom, the US provides great opportunity for innovation. The number of approvals from FDA in 2019 was 48 novel drugs, compared to just 30 new active substances approved in Europe by the CHMP.4
An Unfamiliar Landscape
But there isn’t a single national decision for coverage in the US. The US payer system is highly decentralized, consisting of multiple different payer segments (commercial insurance, Medicare, Medicaid) and customer models (managed care organizations (MCOs), pharmacy benefit managers (PBMs), Medicare Advantage, integrated delivery networks (IDNs)), and the list grows on, in contrast to the more centralized HTA reimbursement systems in Europe. You’ll need local experience to navigate your way through this unfamiliar landscape.
Nevertheless, it’s not completely alien territory. One aspect you’ll recognize is that, as drug spending continues to soar, the demand for value-based pricing and assessments has arrived. The Institute for Clinical and Economic Review (ICER) is a US-based organization which assesses the comparative effectiveness and value for money of new therapies, using methods similar to ZiN in the Netherlands and other HTA bodies in Europe. ICER continues to gain attention from all pharmaceutical manufacturers, and their influence is having a real impact on US price, access and reimbursement decisions.
The Next Frontier: Cell and Gene Therapies
You can see the promise of innovative and potentially curative new therapies in cell and gene therapies, but achieving access for such products requires both mindset change and innovation in value evidence.
Manufacturers are actively exploring innovative outcomes evidence programs and pathways to share value and risk with the healthcare system. Examples include:
Amortized payments based on the outcome
Bluebird Bio is developing plans to sell its first gene-replacement therapy on a five-year installment plan. Each annual payment will be contingent on the treatment’s continued effectiveness. 5
Outcome-based rebate payments
Spark Therapeutics negotiated with a US payer on rebates if patient outcomes fail to meet a specified threshold, linking payment for LUXTURNA to both short-term efficacy (30-90 days) and longer-term durability (30 months) 6
Given this paradigm shift focused on outcomes evidence, European biotech companies should start thinking about these needs earlier in the development cycle. As the number of gene and cell therapies continue to grow in the pipeline, all relevant stakeholders (biopharma innovators, payers, providers, policy-makers and patients) in the US market must adapt their mindsets. And biotechs need to adapt their approaches to the US market to achieve sustainable access, the possibility of longer and healthier life – and return on venture investments.
Your guide to the west
If, like a modern-day Walter Raleigh, you’re looking from Europe to America, ask AESARA to help you navigate the unfamiliar. From our deep, direct experience in industry, we can give you expert and creative advice to:
- Design your US access strategy
- Develop technically sound value evidence
- Translating your evidence into powerful communications that shift mindsets.
Please contact our Strategy Consulting team, as we would be delighted to join your expedition!
- Accessed online on February 13, 2020 at: https://hpi.georgetown.edu/rxdrugs/
- Accessed online on February 13, 2020 at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet
- Accessed online on February 28, 2020 at: https://www.euractiv.com/section/health-consumers/news/germans-spend-more-on-medicine-than-most-of-europe/
- Accessed online on February 28, 2020 at: https://www.tribecaknowledge.com/blog/2019-new-drug-approvals-and-updates-the-year-in-review
- “Biotech Proposes Paying for Pricey Drugs by Installment,” The Wall Street Journal, January 8, 2019,