Archives for the month of: October, 2012

“Recently enacted policies in Germany and the UK may make these markets less attractive as early launch countries, while the opposite is likely the case in Japan which has begun to reverse decades of delayed launches with pricing reforms”

The Global Use of Medicines: Outlook Through 2016, IMS, August 2012

The UK faces a global challenge if it is to remain a launch country for innovative drugs and profit from the jobs and growth that go alongside such endeavour. One policy mechanism the government has put on the table to help deliver this is an early access to medicines scheme. In its Strategy for UK Life Sciences of last December the government promised that “….early in 2012 the MHRA (Medicines and Healthcare products Regulatory Agency) will bring forward for consultation proposals for an “Early Access Scheme” which aims to increase the speed and efficiency of routes to market approval for innovative, breakthrough therapies.

The BIA recently held a workshop on the initiative and I thought some personal reflection on the debate there might prove useful. The workshop also helped the BIA formulate its response to the MHRA consultation.

My core proposal is that if an Early Access to Medicines scheme is to work and deliver on the government’s ambition it must do what it says on the tin – provide earlier access for patients and work for innovative smaller companies.

To do this the scheme must work on a number of levels. First it is important to realise that the main block on getting earlier access is not a regulatory issue – there are plenty of ways to get novel drugs to patients under the present regulatory framework – not least through clinical trials – as Grant Castle’s presentation at our event showed. Where there is a will there is often a way at present especially where pioneering doctors, patients and their families are prepared to work together.
Second for a scheme to work it will need companies to participate. At present several things put them off the MHRA’s proposal:

  • The proposed £29,000 application fee
  • The fact this is seen as only at the end of phase 3 (and consequently seen as only big companies need apply)
  • It is only for one or two products each year. (Useful advice here from the MHRA at our meeting was that this was an extrapolation not a fixed number).
  • There is no dedicated budget or money to pay for these drugs
  • Any regulatory scheme couldn’t and doesn’t address reimbursement issues.

So to be valuable and successful the scheme must address the actual issues that prevent early access and be attractive enough to companies to make them want to participate. What are the elements needed to make this happen?
The scheme needs to be a comprehensive route for new drugs to get to patients. This means it must encompass not only the regulatory, but also the reimbursement (and if needed HTA) elements.

It’s here that the academic and policy debate about what is called adaptive or progressive licensing intersects with the limited Early Access proposals from the MHRA.

The adaptive licensing approach is being seriously considered at the top of the EMA and has a persuasive champion in Sir John Bell who advises the Prime Minister on Life Sciences. In the UK the heavy lifting of producing a policy proposal is being done by Richard Barker and Dr Sarah Garner as Project Director of Adaptive Licensing at the Oxford Centre for Accelerating Medical Innovation. They are calling for a new system-wide approach to introduce appropriate incentives to support new medicines development and held a useful seminar on this earlier this week.

At their boldest proponents argue for getting rid of phase III trials altogether and changing the law on liability to get more drugs into the clinic. This and has been most eloquently argued by Prof Lachmann of Cambridge University (watch the video).

Although this is an ambitious agenda parts of it may not be as far off as one might think, certainly in Europe. NICE already has a plan to assess off-label medicines, and the MHRA could under their early access plans add a route to a regulatory opinion. All that would need to be added is a dedicated pot of funding that companies could apply for. This is clearly a matter that is beyond the MHRA alone and would need to be taken at a governmental level.

Perhaps this is what we should hope the outcome from the limited MHRA consultation should be – advice from the MHRA to the government to consider a more fundamental and wide-reaching scheme that could make a difference to UK plc.

As to the question of where might such a pot of funding come from? Well in the next few years the UK and in particular the NHS is reaping the bonus of the patent dividend – and saving significant sums as many drugs discovered a decade or more ago go generic, face competition and become cheaper. IMS the leading industry consultants estimate this to be worth £125 million to the UK in the next four years (see footnote). Some of this saving should be given to the next generation of drugs coming through to ensure the cycle of innovation continues.

If 10% of that £125 million saving was ring fenced for the next generation of drugs – that would be create a £12.5 million fund for early access for innovative products. This would go a long way to making the Early Access scheme an attractive proposition for companies and ensure the UK remains an attractive place to launch new medicines and the scheme has at least the attraction of the French ATU scheme.

Footnotes

  1. Patent expiries will reduce brand spending in developed markets by $127 billion over the next five years offset by generic spending, and yielding a “patent dividend” of $106 billion through 2016. The Global Use of Medicines: Outlook Through 2016, IMS Institute, 2012
  2. In the UK $0.2 billion 2012-2016 will be the patent dividend as sales of branded drugs go from $3.3 billion to $3.1 billion: Source IMS Institute for Healthcare Informatics, May 2012
  3. Drugs going off patent 2012 to 2016 in the UK include Viagra®,Xeloda®, Abilify®, Cipralex® Risperdal® Consta®, Spiriva®,Cymbalta®, Alimta®, Glivec®, Vfend®

On 4 October the BIA held its UK Bioscience Forum. The event, which was attended by more than 300 delegates, discussed a range of issues including:

  • Cell Therapy Catapult Centre
  • BBSRC Innovator of the year, Professor George Lomonossoff on producing proteins in plants
  • Understanding the renewed focus on orphan diseases
  • Accessing the innovation in academia
  • The Angels for Life Sciences network
  • Bioscience Got Talent
  • Drugs and diagnostics – delivering value
  • Biting the social media bullet
  • The Future ofPharma – Evolutionary Threats and Opportunities

The report on the event can be viewed on Storify:

[View the story “BIA UK Bioscience Forum report” on Storify]

We have received a number of enquiries from our members about how Biomedical Catalyst funding might affect a company’s R&D tax credits position.

Colin Hailey, of Confluence Tax and a member of the BIA’s Finance and Tax Advisory Committee, says:

It is necessary to consider the interaction between awards under the Biomedical Catalyst and R&D tax credits. Both systems are a form of State Aid or grant from the UK government, but it is not permitted for a company to claim State Aid twice in respect of the same expenditure.

The most valuable of the two is usually the Biomedical Catalyst award. Therefore this funding should be taken where possible, but crucially the award will specify the project in respect of which the award is given.

It is then standard practice to claim R&D tax credits in respect of all of the other R&D projects and activities of the company which are outside the Biomedical Catalyst award project. This approach, together with the amount of expenditure excluded from the R&D tax credit claim, should be clearly disclosed to HMRC when the claim is made.

For further information on Finance and Tax related issues, please see the BIA website.