Big Pharma in Ireland has an image problem. At least that’s how it sees it.
"I think we are not seen as a trusted partner," says Aidan Lynch, president of the Irish Pharmaceutical Healthcare Association (Ipha), the body representing the research pharma industry in Ireland.
Partnership is a recurring theme for Lynch as he starts his two-year term as head of the group that has spent much of its recent past at loggerheads with government and the health authorities over getting its members paid for the new medicines they develop.
“I want to move us along in terms of how the other side, if I can say that, sees us in terms of partnership,” he says. “I think as a representative body we’re not anywhere close to where we should be in terms of how our stakeholders see us in terms of partnership.”
Little surprise then that the term "partnership" figures prominently in the lobby group's recent policy document which carries the somewhat grandiose title of Manifesto for Better Health.
Lynch acknowledges that too often the conversation between the parties has been about price rather than the wider benefit of new therapies.
“The perception from the other side is that we are profit-taking, charging ridiculously high prices and just in it for the money. Which clearly that is not how we see ourselves,” says Lynch.
“I guess we want to use the manifesto as a platform to start that conversation. And price and funding is part of that, absolutely.We don’t want to shy away from anything, but what we’re trying to do is put forward a holistic view of what we see is the value that we as an industry can bring to the environment. And use the manifesto as a platform to start having those conversations.”
Demographics
However, it’s difficult to get away from price.The budget of the health service is finite even if it is growing. The pharma companies would argue that the growth is nowhere near enough, and it is certainly true that, even without any new medicines, the demographics of an aging population and increasing life expectancy mean that the bill for already approved medicines will rise substantially regardless.
Ipha keeps returning to the savings it has committed to delivering under the existing drug price and access agreement – €785 million. It is, as Ipha says, an "incredibly large amount of money" over four years.
However, the cost of new-generation biologic therapies – especially those targeting rare diseases – are such that it would not take much to spend all of those savings.
In May 2017, after a long and pointed campaign of political pressure, the Government sanctioned approval of a breakthrough drug for cystic fibrosis, Orkambi. It was warmly welcomed by the patient community, but in budget terms the Government reckons it will cost it €400 million over the next decade.
While critics keep looking to tie price to actual development cost, the industry notes that it also needs to meet the cost of the many drugs that fail to get to market. Without taking the risk, Big Pharma argues, there would be no success.
“There are an enormous amount of failures for every success, and that’s just a factor of how the industry operates,” says Lynch. “Over time, how research and development is happening is changing. We’re now probably heading into a space where it’s more data-driven than it was in the past. So that should lead to less failures. So in theory the price of developing medicines should start to fall, and I think it has started to fall in a lot of cases.
“It’s important that medicines are affordable, and then it’s about finding the balance where the company will set the price.”
Disservice
He acknowledges some egregious examples of price gouging in recent years have not helped the image of the industry. “It is fair to say that some companies have done the industry a disservice by doing things that we wouldn’t support,” he said, adding quickly that none were members of Ipha.
Yet in a week when Novartis has announced the culling of 20 per cent of its pipeline – 90 expensive drug programmes – there remains a distinct lack of transparency about the research and development process in pharma and even the costs involved.
The Novartis move follows similar trimming of portfolios in recent years by Lynch's own company – GlaxoSmithKline, for which he is Ireland country manager – as well as at Eli Lilly, Biogen and Alexion among others.
Each time the R&D review has followed a change of personnel at the head of the organisation. It obviously raises concerns about the calibre of some of the decisions on suitable research targets and controlling the costs involved.
The health service, in its broadest sense, has questions to answer as well. It seems quite clear that, for one reason or another, not enough is being done to maximise what budget space is available.
One high profile example is the recent patent expiry of Humira, a immunosuppressant used to treat rheumatoid arthritis and other inflammatory conditions. In recent years Humira has been the biggest single item in terms of spend within the HSE medicines budget – accounting for €123 million in 2016 and more again last year.
Even the current access agreement introducing biosimilar competition to the market would force Abbvie to cuts its price by 30 per cent – a saving of €37 million a year. And there are biologic alternatives to Humira – five of them, in fact. But not one has yet been approved for reimbursement by the HSE.
The Humira example, if not necessarily evidence of dysfunction, certainly indicates that the medicines budget needs to be more actively managed.
Policy document
Meanwhile, a promised policy on biosimilars remains just that – a promise. The consultation process is complete, but there is as yet no sign of a policy document from Minister for Health Simon Harris's office.
Companies involved in the biosimilar and generics spaces argue that Ipha and the pricing and access deals agreed by it with the Government have actively discouraged the entry of biosimilars into the market.
The irony, as Lynch himself notes, is that many Ipha members produce both proprietary drugs and biosimilars and generics. “There is a place for all products in the market place, and indeed many of our member companies will have associate companies that are in the space. So we are not against biosimilars.
“But we do not see biosimilars the same as generics. They are slightly different. We strongly believe that there should be no substitution of biologics and biosimilars [as currently happens with generics] unless a healthcare professional is involved. So we would be absolutely against pharmacy-level substitution.”
Lynch argues that €100 million of the €785 million in savings it has committed to delivering under the current drug-pricing agreement relates to the impact of biosimilar competition up to 2020.
The industry also does itself no favours with what is a pretty absolutist approach to patent protection.
The EU moved recently to provide a waiver to those companies making generics in Europe for other markets outside the EU where the particular drugs are not protected by patent protection. The Big Pharma companies objected loudly, and continue to do so, even though there is no suggestion that such production in any way undermines patents they hold in EU or other markets.
Lynch makes no apologies for the position, citing what he says is the relatively short window of patent protection for new drugs.
“It’s counter to everything that’s important to us in terms of the amount of life that we have to recover our investment. It’s a 20-year lifespan. Ten of it is gone before the product ever gets to market and you have 10 [years] of patent protection left, you know. So this is something we care deeply about.”
Patent legislation
While not breaching patent protection within Europe, he likens the measure to a “chink in the armour”.
“I think to keep Europe attractive and to keep Ireland attractive, the stronger our patent legislation is the more added incentive for somebody to come here. The fundamental belief of our industry is that anything that undermines patent, patent life, is something we just can’t support.”
The subject of recovering cost in the patent window is an enormously contentious one. Prices in Ireland are regulated to the extent that they are governed by the average prices of a drug in a “basket” of 14 European countries. That’s not necessarily the case elsewhere, particularly in the US where the only metric is an assessment of what price the market will bear.
Only last week US president Donald Trump unveiled a plan to tie prices of certain drugs paid for by Medicare to an international average.
The reaction from the industry was immediate. Pfizer CEO Ian Read said he didn't believe "reference pricing to price-controlled markets as a way of setting prices in the US is good for innovation, patients or our industrial base".
And also speaking on CNBC, Brent Saunders, chief executive of botox maker whose Allergan has a major presence in Ireland, calling it a "dangerous proposition" and a "slippery slope".
“It’s important that we set the price to allow the economic return for the pharma companies,” Lynch says, “ because they’re driven by shareholders and you know all of that. But at the same time innovation that nobody can afford is not innovation.”
Clinical trials
The discussion on access to drugs also draws in the issue of clinical trials. The high-profile case of cervical cancer campaigner Vicky Phelan has put the spotlight on the potential of trials to offer hope to critically ill patients..
Ms Phelan, who was given a terminal diagnosis, has since been put on a drug called Keytruda, made by MSD, which is currently available to cervical cancer patients in Ireland only if they are taking part in a clinical trial. To date her cancer has responded well to the therapy.
Despite being homes to Icon, one of the world's largest clinical trials groups, as well as Venn Life Sciences and others, Ireland punches well below its weight for participation in clinical trials.
There are many reasons for this, including small patient populations for many of the rare or orphan disease areas now being pursued by many drug companies. But Ipha argues that the Government is not doing enough to make Ireland an attractive location for such trials.
“It’s an integral part of the overall chain so we would like to bring more and more trials to Ireland,” says Lynch. “It’s not as simple as it sounds because there are many, many issues, but I think if we had a more active approach from Government in terms of policy towards making Ireland a more clinical trial-friendly location, then we would start to get somewhere.”
For its part, Ipha sees its manifesto as the starting point of a conversation about access and innovation, including on cost.
Multiannual budgeting, where there is visibility on what sum will be available in coming year, will help, as will “horizon scanning”, where the industry can see what likely therapies are coming down the line and what they are likely to cost and share this with government.
Better data
Ipha says it is open to looking at models where pricing is more closely tied to the success of drugs in reducing health system costs, though he says that would require much better data on the Irish system – especially in relation to drug costs and use in hospitals.
All this comes back to Lynch’s focus on partnership. He notes that when Mr Harris addressed Ipha’s annual conference last year he promised to invite it in for talks. One year on the invitation has never materialised. It’s an issue that is likely to come up when the Minister attends this years’s event next week.
But no matter how much talking takes place, it seems impossible that any government can continue to meet a rising budget for existing therapies and create new space for expensive new treatments. Something has to give.
