Shire Pharmaceuticals – Written evidence (LSI0084)

Executive summary

• Shire is the biopharmaceutical global leader serving patients with rare diseases with innovative orphan medicines
• Rare diseases are mostly genetic, often severe, life limiting and present throughout peoples’ lives with symptoms usually appearing in childhood
• While Brexit creates uncertainty for industry, it also offers a once in a generation opportunity to create a new pro-innovation eco-system which benefits patients and the economy
• A report by PwC highlights the various criteria which influence investment decisions in the pharmaceutical sector. Access to medicines is one of the key drivers of these decisions and the one criterion where the UK falls significantly behind other countries[1].
• The Government’s own reports show UK use of innovative medicines lagging behind comparator countries[2]. The Life Sciences Industrial Strategy recognised this challenge and sets the ambition for the UK to be in the top quartile of adoption of medicines.
• A separate report from the Office for Health Economics (OHE) further shows the UK falls significantly behind European competitors in the use of the 143 rare disease medicines authorised by the European Medicines Agency (EMA), with only 48% being reimbursed in England compared to 81% in France and 93% in Germany[3]

• The Life Science Industrial Strategy needs to address the issues which prevent rapid access and adoption of innovative medicines or this will seriously impede the competitiveness of the UK life sciences sector. To do this the Strategy needs to be implemented fully to create a new innovation-led eco-system which ensures that: all patients, whatever their condition, can benefit from early access to innovation; the NHS benefits from new collaborations which drive improved healthcare within the available financial envelope; and the economy benefits from future investment into the UK from the life sciences industry

­        It is further welcome that the strategy specifically highlights the need for “the NHS and industry to work harder together to achieve agreements on access” in the area of rare disease (p.54)

• The Strategy outlines a vision for the future environment. Many aspects of the Strategy are welcome. Importantly it recognises the fundamental issues affecting access and use of innovation in the NHS and has recognised the need for change in the way we value assess and take up new medicines. The challenge is now to ensure that government, industry and the NHS can make the changes needed to build an innovation-led system, with early patient access and more focus on the particular needs of rare disease patients
• To achieve this there needs to be a broadening from the Accelerated Access Review, which had a narrow focus on transformational medicines, so that all medicines targeting unmet need and rare diseases are given equal opportunity and thereby patients are given equal access.
• The Life Science sector deal needs to create a new eco-system which recognises that future innovations will be for small populations and rare diseases

Introduction and context – The growing importance of rare diseases

1. Shire is the biopharmaceutical global leader serving patients with rare diseases. A c£10bn revenue company listed on the London Stock Exchange with over 300 employees in the UK. Founded in 1986 in Adover, Hampshire, Shire has 40 marketed products, available in more than 100 countries with nearly 40 programs in the clinical pipeline, 75% of which are focussed on rare diseases. Shire expects to launch ten orphan medicines in the next three years and today is recognised as the world leader in rare disease.

2. Rare diseases are often severe, life-altering and complex conditions. They affect 3.5 million people[4] in the UK and an estimated 30% of rare disease patients will die before they are five years old[5].

3. Biopharmaceutical companies operating in the UK may face higher costs following Brexit as a result of greater complexity in regulation. However, Shire is submitting evidence to this inquiry as we believe that there is a once in a generation opportunity to use Brexit to create a globally leading environment for the life sciences industry, ultimately benefiting UK patients and the wider economy.

4. A key driver for a successful economy is retaining and attracting investment. In the biopharmaceutical industry that investment can take various forms including clinical trials, R&D and manufacturing infrastructure and jobs. These investment decisions are taken on a global basis by international leadership.

5. A report by PWC highlights that three factors are the most important if the UK is to remain globally competitive for inward investment within life sciences and biopharmaceuticals in particular, these are:
1. workforce and skills
2. academic and leading edge science
3. access to medicines.

Other factors, such as fiscal incentives and clinical trials infrastructure are also important and the UK fares well in these. The report concludes that the one area where the UK lags behind other countries significantly is in access to innovative medicines. The report estimates that if the UK could close the medicines access gap it could better support growth in the life sciences ecosystem creating 4,000 new jobs by 2021 and £705m in Gross Value Added (GVA) each yeari. Investment is access is therefore both an investement in UK patients and a post-Brexit UK economy.

6. If the UK continues to lag behind in use of the innovation it may fail to compete with other countries in attracting clinical trials because global standards of care will not be in use. In turn, clinicians will fall behind in their use and experience with the latest innovation and particularly in rare diseases, it could be deemed unethical to conduct clinical trials in a country where reimbursement and use in the NHS post-licensing, is very uncertain.

7. The UK Government’s own competitiveness indicators reportii demonstrates the significant gap in medicines access. In the first year after launch even NICE approved medicines only achieve 18% of the average uptake compared to 14 other comparable countries, rising only to 62% in Year 2. Medicines which have not been reviewed by NICE fare even worse with 12% uptake compared to other countries in Year 1 and only 54% in Year 2.

8. In response to the very high level of unmet need faced by rare disease patients – where just 5% of the 7,000 known rare diseases have a licensed treatment option[6] – the EU introduced legislation in 2000 to incentivise the research, development and marketing of medicines used to treat rare conditions, commonly known as orphan medicines. This has had a significant impact: whereas only one orphan medicine was licensed across Europe each year between 2002 and 2005, 20 orphan medicines were licensed in 2015 alone[7].

9. Currently, the UK access environment is wholly unfit for purpose for more specialist and rare disease medicines for a number of reasons:
1. Fragmented access system – There are multiple access routes for rare diseases medicines, including the NICE Single Technology Appraisal route, the NICE Highly Specialised Technology Route, and the NHS England prioritisation framework. The fragmented – and at times opaque – system can be hard to navigate for rare disease medicines which can be approved through any of the routes outlined
2. Use of traditional HTA measures designed for common conditions – Traditional HTA measures such as the QALY are not sensitive enough to accurately measure very small and highly variable populations. The over-use of these measures therefore makes it hard for rare disease medicines, with small populations, to truly demonstrate their value. The use of these measures could therefore be deemed as being discriminatory to rare diseases.
3. Inability to enter flexible commercial schemes – The NHS has been reluctant to enter complicated commercial schemes, due to issues around data collection. The AAR had sought to overcome this challenge, which would help improve access to medicines

10. This results in the UK having a significantly worse record than other comparator EU countries for enabling orphan medicines to reach patients. 143 authorised rare disease medicines have a marketing authorisation from the European Medicines Authority (EMA). Of these only 68 (48%) are routinely reimbursed in England, compared to 116 (81%) in France and 133 (93%) in Germanyiii.

11. On average, it takes 27.6 months to take a decision on whether to reimburse an orphan medicine or not in England, compared to 19.5 months in France, 18.6 months in Italy and immediate access in Germanyiii. By contrast, the average NICE decision via the Singel Technology Appraisal route is 11 months, demonstrating the extra delay faced by rare disease medicines[8]

12. The Life Science Industrial Strategy needs to create a new eco-system which recognises that future innovations will be for small populations and rare diseases and not for the large population chronic conditions. The new system needs to ensure that: all patients, whatever their condition, can benefit from early access to innovation; the NHS benefits from new collaborations which drive improved healthcare within the available financial envelope; and the economy benefits from future investment into the UK from the life sciences industry.

13. Therefore, improving access to innovative medicines remains a critical issue, which, if it is not tackled by the Life Science Industrial Strategy, may prevent the new eco-system from being established. If the new innovation-led ecosystem can be created then use of the latest medicines will lead to the UK having a world leading data base of medicines use in the real world. The NHS could work with industry to build these data hubs and potentially benefit financially and scientifically. This would attract future clinical trials as the current gold-standard treatment would be in routine use in the UK. All of this would considerably enhance the benefits to UK patients, enhance UK standing in a competitive global world and ensure that we continue to ‘fight above our weight’ in terms of global perceptions, putting the UK in a strong position to secure future investment.

14. Rare diseases face particular challenges and yet, because the patient populations are small, with a small number of focussed specialist centres delivering the care, it should be quicker and potentially easier to build infrastructure to enable the new ecosystem in these areas. For once, there is an opportunity for these patients to be at the forefront driving the new eco-system where a virtuous cycle can be created with benefits for patients, the NHS and the economy.

Q4 - How does the UK compare to other countries in this sector, for example Germany and the United States?

15. In Europe, the UK lags behind other comparable countries in terms of use of innovative medicines. Whilst our science and research are world renown we have a poor reputation for commercialising the fruits of that research. The UK Government’s own competitiveness indicators reportii demonstrates that in the first year after launch even NICE approved medicines only achieve 18% of the average uptake compared to 14 other comparable countries, rising only to 62% in year 2. Medicines which have not been reviewed by NICE fare even worse with 12% uptake compared to other countries in year 1 and only 54% in Year 2.

16. In rare diseases the UK lags particularly behind. 143 authorised orphan medicines have a marketing authorisation from the European Medicines Authority (EMA). Of these, only 68 are routinely reimbursed in England, compared to 116 in France and 133 in Germanyiii

17. On average, it takes 27.6 months to take a decision on whether to reimburse an orphan medicine or not in England, compared to 19.5 months in France, 18.6 months in Italy and immediate access in Germanyiii

18. Anecdotally, invesement from the life sciences industry in Germany and the US is substantially higher and longer, during the life of a rare disease product, than in the UK, even when adjusted for population.

Q5 - What can be learnt from the impact of the 2011 UK Life Sciences Strategy? What evidence is there that a strategy will work for the life sciences sector? How can its success be measured against its stated objectives?

19. The 2011 Strategy for UK life sciences stated[9]:

‘Building for the future

The industry is changing and the UK must adapt so that we can compete in this challenging environment. The UK must capitalise on its strengths: its world-class science and clinical research, talent base of pioneering life science researchers, and the NHS, where discovery can be translated into results for patients. The race is on and we need to move quickly to ensure the UK is where innovation happens.

In the future, the NHS will need to play a more active role in realising innovation. It will be the “pull” behind the industry “push” for new therapeutic interventions.

At the heart of this will be the patient. Patients will be offered new choices to participate in the development of novel treatments, with the support of their clinicians. This will mean they gain earlier access to new treatments and improve their chances of recovery. Through the use of anonymised data patients will be making a contribution to the ongoing health of people with similar conditions.’

20. The same statement could be made today to describe the ecosystem we all aspire to. Six years on from the publication of the previous Life Science strategy this ecosystem has not been created. Whilst initiatives such as ‘Innovation, Health & Wealth’ followed the launch of this strategy and progress was made, particularly in R&D and incentives for investment in start-ups, the biggest issue remains the ability of the NHS to be the ‘pull’. The access environment has worsened since 2011 with the UK continuing to lag behind other countries. The latest addition, in April 2017 of a threshold of £100,000 per QALY for Highly Specialised Technologies (HSTs) exemplifies this. This will effectively stop the flow of new medicines reaching patients in England with very rare diseases. Use of innovation in the NHS is the critical issue which the new Life Science strategy must address, alongside continuous improvements in other areas. Innovation is a catalyst to address inefficiencies in any healthcare environment and should be seen as an ‘invesment’, not a cost.

Q6. Does the strategy contain the right recommendations? What should it contain/what is missing? How will the life sciences strategy interact with the wider industrial strategy, including regional and devolved administration strategies? How will the strategies be coordinated so that they don’t operate in ‘silos’?

21. The Life Sciences Industrial Strategy outlines a way forward which broadly contains many aspects which, if implemented, should improve the environment. However, there is too much focus on the Accelerated Access Review, which was too narrow, focussing on transformational medicines. Implementation needs to be broadened to a wider set of products, in particular those targeted at unmet need and rare diseases.

22. The Sector deal needs to help deliver the Strategy by ensuring all relevant parties are included and bought into the need for change, particularly in the way innovation is adopted in the NHS.

Q10. How can public procurement, in particular by the NHS, be an effective stimulus for innovation in the Life Sciences Sector? Can it help support emerging businesses in the Life Sciences sector?

23. The new Life Sciences ecosystem will be fuelled and be dependent on use of the innovation. For over 50 years the DH, on behalf of the four UK nations, has negotiated a voluntary agreement (Pharmaceutical Price Regulation Scheme – PPRS) with the pharmaceutical industry to regulate the pricing and profits of the biopharmaceutical industry. The current agreement which runs from 2014-2018 was negotiated specifically to help manage the financial challenges in the NHS and to enable greater use of innovative new medicines. In this agreement industry underwrote the growth in the branded medicines bill above agreed levels and pays back when those levels are exceeded. Between 2013-2016 industry paid a rebate of £1.7bn to the Government[10].

24. Since the 2012 Health & Social Care Act, the NHS in England has operated more independently from Government. Previously the devolved administrations were given control over their health and social care budgets. All of which means that access to and use of medicines is now controlled at a level beneath the UK government.

25. Therefore, despite the current PPRS agreement the NHS has maintained that the money from industry has not flowed through to them and they cannot afford all the new innovation which is emanating from industry research.

26. Industry is very willing to be a responsible partner to manage these issues, as demonstrated by the agreement reached between government and industry in December 2016 as an amendment to the current PPRS agreement, where industry has also agreed to pay more than was due in 2017 and 2018, in order to help government with budget pressures. Stability and predictability are crucial for both sides and essential if industry is to consider future investments in the UK. Therefore, there needs to be a joined- up approach to the Life Sciences Industrial Strategy, the Sector Deal which will follow it and within that to agree future arrangements for a stable and effective pricing, access and adoption environment, which will enable patients to benefit from the newer medicines and kick-start the ecosystem fuelled by use of innovation.

27. A new PPRS should recognise that the current environment is very competitive. Some products are centrally tendered, others are in highly competitive markets where the NHS receives discounts. As a point of principle there should only be one means of agreeing the reimbursement cost to the NHS i.e. if a product is under central tender arrangements it should be exempt from any cost reduction mechanism in a future voluntary PPRS.

Q11. How can the recommendations of the Accelerated Access Review be taken forward alongside the strategy? Will the recent changes to the NHS England approval process for drugs have a positive or negative effect on the availability of new and innovative treatments in the NHS? How can quick access to new treatments and the need to provide value for money be reconciled?

28. The Accelerated Access Review is positive but if it only focusses on a few transformative medicines it will not transform the whole access system and ‘kick start’ the new ecosystem. The AAR needs to be broadened to all innovative medicines, especially medicines which are first to market, treating conditions with unmet need and those which have orphan designation.

29. The recent changes in NHSE of a test of Budget Impact and the introduction of a threshold of £100,000 per QALY for HSTs are further negative steps which will slow or halt patients’ access to innovative medicines. The implementation of the Strategy needs to include a complete review of the value assessment methods being used, especially for rare and ultra-rare conditions, as they are currently not fit for purpose. The recently introduced measures should be halted whilst discussions are held to design a system fit for now and the future, as more specialist and rare disease medicines become available.

15 September 2017