Forging ahead with US and EU healthcare policy changes: balancing sustainability, innovation and patient access in the era of IRA and EU HTA

Health care is at an inflection point in the US and Europe, marked by the introduction of new policies aimed at maintaining the sustainability of healthcare systems whilst balancing innovation and ensuring patient access to essential medications. In the US, the Inflation Reduction Act (IRA) is set to introduce significant reforms aimed at controlling drug prices and reducing out-of-pocket expenses for patients. Meanwhile, in Europe, the EU Health Technology Assessment (HTA) Regulation is about to be increasingly adopted to streamline and enhance efficiency within decision-making for the clinical value of new health technologies. But what are the implications of these policies for stakeholders, including biopharma companies, healthcare providers, payers, and patients? How can these stakeholders forge ahead and navigate this evolving landscape?

“Today, we stand at the intersection of healthcare policy evolution, where understanding the implications of these changes in paramount. In this rapidly evolving landscape, it’s not just about adapting; it’s about anticipating, strategizing, and ultimately staying ahead of the curve. The decisions we make today will shape the healthcare access and delivery for years to come.” Corey Ford, Cencora, ISPOR 2024

These powerful words from Corey Ford (Cencora, USA) set the scene for the 60-minute session, ‘Staying Ahead of the Curve: Navigating Policy Changes and Ensuring Patient Access in the Era of IRA and EU HTA’ at ISPOR 2024, where experts offered an insightful discussion on the complexities of these two pivotal areas. Moderated by Ford, the session included Michael Drummond (University of York, UK), Casper Paardekooper (Vintura, part of Cencora, The Netherlands) and Kimberly Westrich (National Pharmaceutical Council, USA) who discussed the intricacies, objectives, timelines, and challenges associated with these reforms.

Considerations for stakeholders in the wake of IRA implementation

Speaking first, Kimberly Westrich explained three components included with the IRA related to drug pricing provisions that aim, in part, to improve some of the financial barriers that patients are facing:

1. Reforms to the Medicare Part D program – including a cap on out-of-pocket (OOP) costs, cost-sharing for Part D vaccines, and a $35 OOP cost for insulin
2. New penalties for drug price increases that outpace inflation – companies must pay a mandatory rebate if drug prices increase faster than inflation for certain Part B and Part D drugs
3. Medicare Drug Price Negotiation Program – Medicare to negotiate the prices for certain single-source brand-name Medicare Part B and Part D drugs directly with companies

Westrich shared several concerns related to the implementation of these provisions, which are already underway. The Centers for Medicare & Medicaid Services (CMS) is moving ‘full steam ahead’ despite a real lack of clarity in the guidance for stakeholders, who are entering ‘unchartered territory.’ As many have proclaimed, this could lead to several unintended consequences, which Westrich outlined.

Firstly, CMS can select eligible small-molecule prescription drugs for Medicare drug price negotiation as early as 7 years after the FDA approves them. This timing may discourage post-approval outcomes research (particularly real-world evidence [RWE]) and potentially limit future innovation, raising concerns about reduced indications for small-molecule drugs. Another concern relates to patient access to medications, potentially resulting in delays for vulnerable populations in obtaining necessary treatments. Additionally, there may be an increase in utilization management by payers, reflecting the adverse incentives created by the shifting financial responsibilities. Lastly, there's a concern regarding patient experience and how patient preferences are incorporated in healthcare decision-making. Initially, during the beginning of Medicare drug price negotiation, there was a lack of substantial patient engagement despite the ‘listening sessions.’ There’s a significant opportunity to enhance the process moving forward and prioritize patient involvement, but how CMS will incorporate patient experience data and patient preferences in evaluations is still unclear.

Understanding the EU HTA and the Joint Clinical Assessment

Michael Drummond, a widely recognized thought-leader in the field, provided the audience with a background to joint clinical assessment (JCA) in the EU. Enacted by the European Parliament and the Council of the EU in January 2022, the EU HTA Regulation encompasses two key measures aimed at reforming HTA processes in the EU, incorporating joint scientific consultations alongside JCA. JCA, conducted in parallel with EMA marketing authorization, addresses differing evidence needs in HTA versus marketing approval, aiming to harmonize processes across the EU, avoid duplicate efforts, and expedite patient access, especially in less active HTA member states. Drummond emphasized JCA's focus on comparative effectiveness, while pricing and value assessment remain the responsibility of individual member states.

Currently, JCA is in the preparation phase, with the Member State Coordination Group on HTA (HTACG), comprising one member from each EU country, tasked with formal and methodological guidance, as well as the formation of a stakeholder network. January 12, 2025, marks the mandatory implementation of JCA for new oncology drugs and ATMPs, moving to orphan drugs in 2028, and all drugs and some high-risk medical devices from 2030.

Drummond was generally supportive of the JCA component of the EU regulation, but, like Westrich, highlighted several challenges for biopharma companies in implementing the changes. The JCA includes several challenging timelines, including the need to publish draft JCA reports within 30 days after European Commission (EC) marketing authorization. Companies will only have up to 100 days between confirmation of the population, intervention, comparator(s), and outcomes (PICO) framework used to define the scope of the JCA and dossier submission. The anticipated multiplicity of PICOs coming from the 27 Members States in the EU is also expected to prompt early preparation of required statistical analyses. Drummond also noted there was a sense of minimal engagement in the process, attributed to the limited involvement of manufacturers in the scoping process, which only consisted of an ‘explanation’ meeting. Additionally, there has been no sharing of individual member state PICO requirements, and it remains unclear how patient and clinical organizations will participate. There is also a challenge for companies for high transparency in the process, particularly regarding the sharing of manufacturer materials. This demand is increased by the tight timeframe of just 7 days allocated for fact-checking the report and redacting any commercially sensitive information prior to publication in the public report. Furthermore, the process for challenging the publishing of confidential material remains unclear.

Aligning the key objectives of healthcare policies across Europe

Building on these insights, Casper Paardekooper discussed the key objectives of EU HTA alongside other strategic health policy developments in Europe, including the revision of EU general pharmaceutical legislation (GPL). The European Parliament adopted GPL reform proposals in April 2024, marking the first major overhaul of the EU's medicines regulatory environment in over two decades. Paardekooper highlighted the links between EU HTA and GPL reform, noting their shared goals of improving patient access to innovative medicines, fostering regional solidarity, and accelerating the availability of new drugs in Europe.

“A patient in Bulgaria should not be different from a patient in Germany. They should all have equal and timely access to innovative medicines.” Casper Paardekooper, Vintura, part of Cencora, ISPOR 2024

Both policies are also linked by their demanding timelines. Michael Drummond explained that the JCA must be published within 30 days after EC marketing authorization. Similarly, the GPL reform proposes reducing the EMA approval timeline from 210 to 180 days, necessitating quicker actions from both assessors and companies.

Paardekooper echoed Drummond's support for JCA, particularly benefiting countries with less-established HTA processes. He highlighted that this initiative has prompted several countries, including Spain, to review their local HTA procedures. Additionally, he noted a growing trend of cross-country collaborations, such as economic assessments by Nordic countries, indicating a potential move towards more centralized economic assessments and negotiations in Europe.

Strategies to alleviate the unintended consequences of IRA implementation

Kimberly Westrich offered three approaches to CMS to mitigate any unintended consequences:

1. Improve transparency to provide more details on how information will be used by CMS
2. Leverage lessons learned from other agencies, HTA bodies and research collaboratives who have previously grappled with these issues
3. Formalize the patient engagement process to ensure that patient priorities are effectively integrated into the implementation process, making a meaningful impact on decision-making

Corey Ford provided the biopharma perspective, suggesting how companies can overcome these challenges from a short- and long-term standpoint. For those companies with drugs selected for Medicare drug price negotiation, they only have 1 month to submit data to CMS, including detailed information on drug dosage, pricing, R&D costs, and comparisons with therapeutic alternatives. Existing medical communications, such as AMCP dossiers, should be leveraged rather than ‘reinventing the wheel.’ Ford expressed hope that once CMS publishes the negotiated prices for the 10 drugs selected for Medicare drug price negotiation in September 2024, valuable insights will be gained for future negotiations.

Ford emphasized the importance of companies analyzing their preclinical and early development products to understand the IRA's impact on innovation and pipelines. He suggested addressing key questions about which indications and patient populations to pursue and which geographies to focus on, considering the significant government pricing pressures now prevalent in the US, like those in the EU. Conducting these analyses and net present value assessments is crucial for making informed long-term decisions about pipeline focus.

Ford underlined that, in addition to Medicare drug price negotiations, reforms to the Medicare Part D program also warrant attention due to their potential implications. He noted that these reforms could increase financial liabilities for Part D plans, intensifying market competition. Consequently, products, especially those outside protected classes, must clearly demonstrate their value to stand out. Engaging payers effectively, both in person and through robust platforms showcasing value messages, has become increasingly important since the pandemic. Furthermore, he stressed the importance of considering the potential need for a Patient Support Program within the Part D redesign, as many patient assistance programs are a significant part of it. Reassessing support criteria is crucial to ensure patients receive adequate assistance.

Kimberly Westrich highlighted some of the research from the National Pharmaceutical Council, which found that Part D redesign could result in plans increasingly implementing utilization management requirements, which runs counter to the intention of providing greater patient access to treatments. Westrich noted that in the updated draft guidance published by CMS in early May 2024, CMS revised their language to indicate that they are monitoring some of these potential implications.

Considerations for stakeholders in anticipating EU HTA and their parallels to the IRA

Like the IRA, Michael Drummond explained that EU HTA is a complicated process for stakeholders to grapple with, particularly with there being 27 Member States in the EU deciding on market access for a product. The first issue is how Member States will respond to JCA. Some may accept it as the best interpretation of clinical evidence and proceed to market access negotiations with companies; however, others might disagree with the evidence in the assessment and prefer to focus, for example, on head-to-head clinical comparisons only, or exploring effects in different patient populations, possibly leading to additional efforts being needed by companies.

Another concern is what factors are speeding up or hindering market access. A more streamlined and harmonized clinical assessment might accelerate access, especially in countries lacking HTA capacity; however, the primary barrier in many countries is financial constraints. It is unrealistic to expect a low GDP per capita country to match the access levels of a wealthier nation like Germany. The EU is considering these issues. While the JCA might not harm patient access, its effectiveness in significantly speeding it up remains uncertain.

Casper Paardekooper highlighted two additional factors that stakeholders need to consider, drawing parallels with challenges posed by the IRA. He pointed out that while the intervention and populations in PICOs are well-defined, the comparators and outcomes often are not. RWE can be utilized to clarify these aspects without the need for additional research, thereby reducing the data burden on companies who must provide evidence of treatment pathways in various countries for the JCA dossier. Paardekooper suggested that both local countries and the HTACG should begin accepting more RWE to facilitate this process. He echoed Drummond’s concern about potential duplication of efforts, emphasizing the importance of companies engaging early with local affiliates and HTA bodies to ensure acceptance of the JCA in market access decisions. Additionally, he stressed the importance of early engagement with patient and clinical organizations, as companies cannot interact directly with European assessors. Companies need to work through local entities and HTA bodies to understand the landscape better.

Indirect influences of EU HTA on market attractiveness in Europe over the next 10 years

Casper Paardekooper expressed hope for continued cross-country collaborations over the next 10 years, including joint economic assessments and negotiations. He pointed to existing initiatives like FINOSE, a HTA collaboration network between Fimea (Finland), NoMA (Norway), and TLV (Sweden), as signs of this potential. However, Paardekooper acknowledged that a single price negotiation across Europe is unlikely due to differing GDP levels among countries. He suggested that EFPIA's proposal for an Equity-Based Tiered Pricing framework, which aims to ensure that countries with lower economic means pay less for medicines, could be a solution.

Q&A – How important are patient advocacy groups in the IRA?

Corey Ford stressed the crucial role of companies in collaborating with patient advocacy groups to ensure that patients are heard throughout the process, especially given the lack of awareness about the Part D redesign. A Kaiser poll found that only 23% of Americans knew about the out-of-pocket cap. Patient advocacy groups will be key in educating patients, and biopharma companies should support this effort through their patient support programs. Partnering with these groups is essential, as they best understand patient needs and can effectively communicate with them.

Q&A – Could there be a spillover effect of the IRA on European pricing, and EU HTA on the US?

Michael Drummond noted that with the IRA, money would be taken out of the system, raising the question of how it would be recouped. He suggested that one possibility was a change in pricing policy in Europe. He foresaw several European jurisdictions facing challenges due to different demands from international companies. This could result in higher prices or a restricted range of drugs for specific patient populations. Drummond believed that unresolved cost issues in the US would have negative repercussions for Europe.

This was echoed by Casper Paardekooper, who stated that pressure on prices in Europe is already substantial, making it challenging to increase prices further. He also expressed scepticism about the possibility of raising prices globally, considering the current landscape.

Both Kimberly Westrich and Corey Ford acknowledged the potential for a 'spillover effect' within the commercial insurance sector in the US, which is difficult to predict with certainty.

“We have this disparate system here in the US and there are so many people who are focusing on what's happening in the government and what that is going to mean for the commercial sector. I don't have a crystal ball. I would love to know what's going to happen in Europe. It’s going to be interesting to see where we are this time next year.” Kimberly Westrich, National Pharmaceutical Council, ISPOR 2024

Michael Drummond suggested that generating evidence to justify value is akin to HTA. He asked:

“I just wonder whether CMS are stumbling down the road here without understanding what final consequences are? I think that's the link in the sense that Europe is, rightly or wrongly, developing a fairly rigorous HTA culture but whether that will transfer back to the US is unknown.” Michael Drummond, University of York, ISPOR 2024

Q&A – What is the effect of the IRA on RWE generation?

Kimberly Westrich highlighted both the rise and fall in the potential for RWE. The negotiation timeline, typically set at 7 years, might disrupt RWE generation as much of it historically occurs after this timeframe. This could truncate research opportunities and result in fewer follow-on indications. Despite potential incentives for RWE research, crucial for demonstrating value, other factors could prematurely halt or curtail it.

Q&A – Are we expected to consider the PICO criteria for all 27 countries in the submission process, or will there be a standardized PICO criteria established first? In other words, will the approach be standardized first and then region based, or will it be region based from the outset of the submission?

Michael Drummond reiterated the ultimate goals of JCA: to assist those countries with limited HTA capabilities and to enhance patient access. While there may be a conflation between access and HTA capability, the EU aims to ensure that all Member States have access to reliable evidence on product effectiveness. The aspiration is to cover all regions in the PICOs, but this may not result in 27 PICOs. Different quantitative evidence synthesis methods may be necessary, such as indirect treatment comparisons. Despite initial challenges, there is a collective willingness to make the process work effectively within the EU.

Casper Paardekooper emphasized the ambiguity in prioritizing the PICOs. He clarified that during the initial process, EUnetHTA planned to address only three to five PICOs due to time constraints; however, addressing all individual PICOs within the given timeframes is not feasible. Paardekooper expressed hope for prompt clarification on this matter.

Q&A – What are the potential implications of the IRA on R&D?

Both Kimberly Westrich and Corey Ford stated that it was premature to make a definitive assessment, although insights from earnings reports suggest a decline. Casper Paardekooper highlighted that unless efficiency in R&D improves to offset declining income, R&D budgets will suffer negative impacts.

“We’ve discussed the importance of alignment and collaboration, the power of data-driven insights and the necessity of preparation for the evolving healthcare landscape. As we navigate these changes, it’s clear that staying ahead of the curve is not just the goal, it’s a necessity for ensuring patient access and driving innovation.” Corey Ford, Cencora, ISPOR 2024