Opinion

Are outcomes-based contracts gambling with pharma's future?

Hassan Chaudhury 20 June 2017

There was big news in May when Amgen and Astra Zeneca agreed outcomes-based refunds contracts with Harvard Pilgrim, a respected American health service company.

These innovative deals mean the provider will follow the progress of their patients using real world data and only be charged for medicines if patients meet specific outcomes, rather than on the volume of medicine purchased.

These weren’t the first contracts of their type, but they boosted the discussion about when, not if, we’ll be seeing similar contracts in the UK and Europe. Who could blame cash-strapped health economies for being interested? Why wouldn't the NHS jump at the chance of only paying full price if a drug led to a favourable outcome? It negates risk on investment, leaving pharma companies to carry the can and only receiving partial reimbursement if it doesn’t work out.

At the moment, these contracts are limited to products like Amgen’s Repatha, where there’s both huge potential in successful treatment and where there's a simple way to uncover if the treatment succeeded. Why? Because it's not that straightforward to access and connect the real world data required to make the case for whether a particular treatment was clinically effective or not. Therefore, it has to be worth the effort.

Of course, this raises some interesting questions. For a start, what happens to drugs that aren’t likely candidates for outcomes-based contracts? How are we going to secure the real world evidence required for drugs that are potentially more difficult to assess than the usual pay-for-performance candidates, such as Astra Zeneca’s Bydureon or Novartis’s Entresto?

Does this mean the evidence required for drug approvals needs to adapt? This last question is key. A Cochrane review on direct-acting antivirals (DAAs) against hepatitis C, published in June, produced a startling conclusion. It found that while DAAs cleared the virus from the blood, it found no evidence that this actually prevented harm from disease or saved lives.

It’s worth noting that the review has been challenged following questions about outcomes which clinical trials simply aren’t designed to answer.

If indeed we are shifting to a world with outcome-based contracts then is it not inevitable that we’ll need real world data about effectiveness and outcomes at the approval stage? Look at how much effort it took for Roche’s Kadcyla to finally get approved. Would outcomes data have prevented some of the rigmarole?

At this point, ask yourself if pharmaceutical executives are going to accept an additional five to 10 years in order to receive results of a pragmatic clinical trial in the real world, before they gain approval. Ask yourself if patents will be extended by five to 10 years to accommodate this. Ask yourself if there’s an appetite to extend patents from pharma companies who aren’t first to market.

Does this all amount to a gamble too far for pharma or is it worth rolling the dice? The old adage states that when America sneezes, Europe gets a cold, so outcomes-based contracts could well be our future. Until that becomes a reality, there is much for industry to ponder before playing its hand.

Hassan Chaudhury is a big data expert and Chief Commercial Officer at Health iQ Limited

Go to healthiq.co.uk

 

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