Negotiating indication-specific pricing pharmaceuticals U.K.
- R.M. Boylan
- Feb 13
- 3 min read
Updated: Feb 25
NHS England Commercial Framework for New Medicines:
UK update on indication-specific pricing.
It is essential in planning a commercial strategy & tactics for indication-specific pricing to be aware & thoughtful about the payer perspective when reviewing such files. The perception is this is evergreening and commercial manufacturers must not ignore this reality.
All objections must be addressed in negotiation planning. Not doing so is both irresponsible and careless.
What your customer "The Payer" believes you are doing:
"Indication-specific pricing arrangements are an example of price discrimination, whereby different prices are paid for the same medicine, leading to increased company revenues and increased costs to the payer, in this case NHS England."
Commercial teams in the pharmaceutical industry lacking experience in market access and/or maturity may get opposed to addressing these concerns upfront. All negotiations must be planned strategically around your customer's objections, needs and the delivery of concessions. Otherwise your strategy is sure to fail or be delayed.
July 24th, Consultation UK
New NHS framework
The framework acknowledges that a standard price "might render it commercially impractical for companies to introduce new indications in certain situations, especially smaller indications that necessitate a greater discount to be cost-effective." ISP will be evaluated when all of the following conditions are satisfied:
1). The medication for the indication being evaluated addresses an unmet clinical need by offering a therapeutic advantage over current treatment options or by showing a health system productivity benefit that allows for more patients to be treated, such as by needing fewer healthcare interactions or a less time-consuming method of administration.
2). The company can confidently show that implementing uniform pricing would lead to a decrease in total revenue for a medicine across all indications.
3). Existing NHS systems contain enough data to make these arrangements operationally viable. NHS England will evaluate other data sources that demonstrate comparable quality and completeness to the prior approval system data, provided that the data can be supplied promptly.
4). The economical pricing varies significantly across all indications.
In the summer of 2024, NHS England held a public consultation regarding proposed changes to the framework. Sixty-two stakeholders participated, with thirty-two (52%) being pharmaceutical companies. Seventy-five percent of the participants disagreed or strongly disagreed with the proposed ISP criteria. Many felt that the criteria—and the necessity to meet all conditions—were overly restrictive and inflexible. Some argued that the unmet need criterion was unclear and could potentially limit choices for patients and clinicians, affecting companies' launch decisions. There were calls for NHS England to adopt a more pragmatic approach to data requirements to prevent access inequities. Additionally, some respondents expressed concerns about the interpretation of the revenue loss criterion.
NHS England addressed certain feedback. The unmet need criterion encompasses more than just effectiveness and can be satisfied by drugs that are not the first of their kind. Future indications may be included in revenue loss calculations if there is strong confidence in regulatory approval, NICE recommendation, projected volumes, and pricing. The pathways for company engagement have been clarified, connecting the chance for a commercial surgery with the latest guidance on commercial access arrangements.
Respondents also provided feedback outside the consultation's scope, criticizing the necessity for value propositions to meet or fall below the lower limit of the standard NICE cost-effectiveness threshold, along with the effect that the wider value and access policy environment has on the competitiveness of the UK life sciences sector.
Address objections in submissions "Perception of Evergreening":
This strategic approach can be perceived as evergreening by payers. Ensuring your clinical, pharmacoeconomic & burden of illness policy arguments address these concerns is a necessity.
Commercial individuals frequently avoid addressing this issue directly. As a result, reimbursement negotiations can be delayed by 3-5 years. It is crucial for pharmaceutical manufacturers to tackle concerns related to indication-specific pricing and unconscious objections before submitting a file.
"Evergreening":
Evergreening may involve any legal, commercial or technological strategy used in business to extend the lifetime of their patents that are facing expiration in order to retain and or expand revenues.
Understanding the payer's perspective and addressing this objection is crucial for your commercial strategy. This approach enables you to successfully negotiate access agreements with government officials, managed care, and/or third-party payers. Failing to do so is negligent.
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