David Cotterell

Apex Healthcare Consulting Limited

Author of: What is pricing and reimbursement?

DSC_7091David Cotterell BSc MBA PhD is the MD and founder of Apex Healthcare Consulting. After completing his PhD at Southampton and carrying out post-doctoral research at Northwestern University, Chicago, he joined the industry, first in clinical research and later in project management at Glaxo Laboratories. After completing an MBA in 1993, David joined the International Business Analysis team in Glaxo Holdings, where he spent five years carrying out a variety of strategic projects. In this role, he was responsible for commercial analysis and evaluation for a number of international therapy teams, most notably working on Zantac® for over five years. After leaving Glaxo Wellcome in 1996, David established Praxis Research and Consulting with two colleagues, as one of the founding directors. The company focused mainly on market research and in 1998 spun off the consultancy arm, so forming an independent group – Apex Healthcare Consulting. In the 18 years since Apex began, the partnership has grown to ten employees and upwards of ten associates. The company has carried out a large number of consultancy projects for both established companies and venture capital-based start-ups.

Summary: What is pricing and reimbursement?

  • Pricing and reimbursement can mean a variety of things in many different spheres of industry. For a pharmaceutical manufacturer launching a new product, pricing and reimbursement broadly refers to establishing a price and obtaining a positive reimbursement decision, or formulary listing status, for their product.
  • For most manufacturers, key countries in which to gain a favourable price for their products are the USA and the five largest European countries: France, Germany, Italy, Spain and the UK (EU5), with many other countries referencing the prices achieved in the EU5 and USA when negotiating with manufacturers.
  • The three biggest and most influential countries among the EU5 are the UK, France and Germany, and it is these countries that also have the most well-developed and transparent national drug and device assessment processes.
  • The processes through which the USA and individual countries in the EU facilitate a new product – gaining a favourable price and securing reimbursement – differ greatly, with each country having clear national, regional and local decision-making processes.
  • When you approach setting a price and ensuring your product is reimbursed, a number of processes need to be considered; each one can impact eventual uptake and, therefore, the reimbursement of your product. These include:
    – Understanding the patient pathway
    – Understanding price setting and negotiations linked to health technology assessment (HTA)
    – Engaging with payers and purchasers
    – Considering whether involvement of any unique funding bodies (for example, the Cancer Drugs Fund in the UK) is required.
  • Pharmaceutical companies often develop separate ‘US’ and ‘ex-US’ launch strategies for their products; however, each of the major EU countries has different clinical evidence and comparator requirements, which suggests that a simple ex-US pricing and reimbursement strategy cannot work.
  • Conducting the appropriate background work in order to engage with payers early, understand the spectrum of comparators and be able to clearly justify your choices is, therefore, a key step to take.
  • National-level health technology assessment can set a list price and grant access to national formularies; however, much of the actual reimbursement subsequently requires engagement and evidence-based discussions with clinicians, commissioners, regional and local-level payers and a clear understanding of patient-focused outcomes and holistic cost-saving benefits.

 

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