“Brexit means Brexit”—but what will it mean for pharmaceutical market access?

On 23 June 2016, the UK electorate stunned politicians, pundits and business communities right around the world by voting to leave the European Union (EU). While the impact will naturally be greatest for the UK, the repercussions of the vote will be felt across Europe and beyond. In the weeks since the referendum, there have been countless assessments of the potential consequences of the UK’s decision to leave the EU. This three-part analysis focuses specifically on what Brexit will mean for pharmaceutical market access. Part 1 considers the current uncertainty surrounding the UK’s departure from the EU, the importance of the life sciences industry to the UK, and the importance of the UK to the international life sciences industry. Part 2 looks ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU. Part 3 reflects on how the challenges associated with Brexit could be turned into opportunities.

The vote to leave the EU has created a business climate of unprecedented uncertainty

In the wake of the UK’s vote to leave the EU, Theresa May, the new British Prime Minister, has repeatedly declared that “Brexit means Brexit.” However, this supercially straightforward statement of intent belies an extraordinarily challenging series of decisions that must be made in the coming years. When will Article 50 of the Lisbon Treaty—the trigger for exit negotiations—be invoked? How long will it take to settle the terms of the exit? What kind of relationship will the UK have with the EU after Brexit—an associated country status, membership of the European Economic Area, a customs union, bilateral agreements, trade under the terms of the World Trade Organization, or some completely novel arrangement? Above all, to what extent (if any) will the UK retain access to the Single Market, and what obligations will it have to meet in return?

Given that the manufacture of prescription drugs is arguably the most heavily regulated industry of all, life sciences companies are perhaps more uneasy than most about the possibility of exchanging the familiar EU system for a potentially very uncertain environment within the UK. The Leave campaign’s promise of a much lighter regulatory burden for businesses outside the EU would be challenging to deliver within the pharmaceutical sector. Indeed, drug manufacturers worry that they might have to satisfy onerous regulatory requirements from both the EU and the UK. However, the life sciences industry is already highly globalized—companies are very accustomed to the challenges of meeting the needs of different markets around the world. In addition, pharmaceutical companies that are doing business in the UK can take comfort from the knowledge that demand for their products is unlikely to be affected by consumer uncertainty about the economy, given that all prescriptions in Scotland, Wales and Northern Ireland are free, and that 90% of prescriptions in England are dispensed free of charge.1

How important is the Life Sciences industry to the UK

In a speech delivered just hours before she was confirmed as the new Prime Minister, May spoke of the need to develop a strong industrial strategy to “defend a sector that is as important as pharmaceuticals is to Britain.”2 

These words went some way towards reassuring an industry that had been unsettled by the vote to leave the EU. Just a week later, however, May moved George Freeman, Minister for Life Sciences, to chair the Prime Minister’s Policy Board. The UK was unique in having a dedicated Minister for Life Sciences, an office that was considered to be a formal recognition of the crucial importance of the industry to the national economy. Many life sciences executives were concerned that Freeman would not be replaced, a decision that might weaken the industry’s position. On 4 August, the government announced a new division of ministerial responsibilities for the life sciences:

  • Within the Department of Health, two ministers will share responsibility for life sciences. Lord Prior of Brampton, Parliamentary Under Secretary of State for Health, will lead on the department’s life sciences industrial strategy, the Accelerated Access Review, “making a success of leaving the European Union,” and the biopharmaceutical and medical technology industries. Nicola Blackwood, Parliamentary Under Secretary of State for Public Health and Innovation, will lead on genomics, data and digital health, and emerging health technologies.
  •  Within the newly created Department for Business, Energy, and Industrial Strategy, Jo Johnson, the Minister of State for Universities and Science, will have responsibility for the department’s life sciences industrial strategy. He will also work with Greg Clark, the Secretary of State for Business, Energy, and Industrial Strategy, to “oversee the UK’s drive to lead the world in the new age of global science.”3

These appointments reaffirm the government’s commitment to promoting the life sciences sector as a key element of the UK’s industrial strategy.

UK-EU Life Sciences Transition Steering Group

The government has also expressed continued support for the recently formed UK-EU Life Sciences Transition Steering Group. Freeman had launched this initiative on 6 July and was due to co-chair it with Sir Andrew Witty, CEO of GlaxoSmithKline, and Pascal Soriot, CEO of AstraZeneca. A statement issued by the Association of the British Pharmaceutical Industry commented:

“At a time of great uncertainty for the pharmaceutical industry we are eager to see who will take up the responsibility of progressing the good work that Freeman has started. This should include the continuation of the UK-EU Life Sciences Transition Steering Group to address regulatory and funding issues facing the pharmaceutical and biotech sectors following Britain’s decision to leave the European Union, as well as initiatives including the much- anticipated Accelerated Access Review, which was set up to make the UK the best place in the world to discover, develop and deliver innovative medicines to patients.”4 

The government has yet to clarify who will assume Freeman’s role as a co-chair of the steering group.

The timetable for the steering group’s work is ambitious: it is due to present its final recommendations to the Ministerial Industry Strategy Group by early September. Teams will cover six distinct workstreams:

Source: Adapted from the UK-EU Life Sciences Transition Program Briefing (July 2016).5

How important is the UK to the Life Sciences industry?

Punching above its weight

IMS Health reports that prescription drug sales in the UK totaled $27.7 billion in 2015, making the UK the third-largest pharmaceutical market in Europe and the sixth-largest in the world. The UK accounts for 0.2–4.5% of total global sales among the world’s top 20 life sciences companies. However, the UK is a significant market for the launch of new chemical entities (NCEs): from 2010 through 2014, only the US and Germany had more NCE launches.6 

The UK is also an important location for the global headquarters of the top 40 life sciences companies, tied with Germany in third place, behind the US and Japan. Furthermore, the UK ranks in the top five countries globally in terms of both pharmaceutical R&D investment and headcount. In addition, the UK is arguably the world leader in health technology assessment and real-world data collection.

For all of these reasons, the UK matters to the life sciences industry, and companies are anxious to minimize any adverse consequences that may result from Brexit.

In Part 2 of this article we will look ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU.


1 Prescriptions Dispensed in the Community, Statistics for England (2005–2015) 

2 Theresa May—2016 speech to launch leadership campaign

3 New ministers for life sciences

4 George Freeman promoted, leaving life science minister role in doubt 

UK-EU Life Sciences Transition Program Briefing (July 2016) 6 Brexit—what now for pharma?

Brexit—what now for pharma?

a-connect addresses Pharma Stakeholders at the World Pharma Pricing & Market Access Congress 2016


a-connect attended the World Pharma Pricing and Market Access Congress 2016, held in London on 24–25th February. Representing a-connect were Claire Hempshall (P&MA Lead), Zornitsa Petrova (P&MA Director), Aunia Grogan (Global Head of Life Sciences) and Romjan Ali (Independent Professional). The conference was well attended by global industry stakeholders, including payers, pharmaceutical companies and pharmaceutical consultancies, many of whom visited the a-connect booth. On the first day of the conference, Aunia Grogan presented a paper entitled ‘Establishing and Maintaining Access in an Evolving Environment’.

Summary of Aunia Grogan’s paper

In order to achieve continued growth in a changing environment, the pharmaceutical industry must tackle a number of core questions and challenges.

What are the key challenges the pharma industry is facing?

Over the last decade, we have seen a number of important evolutions in the industry:

  • Market dynamics: increasing importance of emerging markets, increased use of stacked or combination therapies, increased use of generics and biosimilars, shift to personalised medicine.
  • Industry structure: greater regulatory hurdles, increased role of the payer, emergence of risk sharing/patient access schemes.
  • Product mix and provision of care: move from primary to secondary care, focus on orphan indications, focus on new technologies (e.g. gene therapies), standardisation of treatment pathways.
  • New science and technologies: increased capture of patient data, availability of the cloud, proliferation of social media, growth of mobile applications for smartphones.

How is the industry responding?

The end of the blockbuster era has created tremendous pressure on the industry to maximise value from its assets, and this requires a launch model which delivers both speed and quality of execution. The industry is exploring numerous avenues to achieving this: i) enhancing launch planning, ii) implementing launch academies, iii) introducing a project management office (PMO), iv) developing personalised healthcare capabilities, and v) expanding evidence generation (health economics and real-world evidence).

What does this mean for P&MA?

The evolving operating model has had a huge impact on the P&MA team. More is expected of the P&MA team—greater knowledge, increased technical expertise and enhanced business skills—despite there being fewer resources overall and a need to ‘do more for less’.

What do you mean by ‘knowledge’?

The P&MA team are now expected to know about a greater number of emerging markets, all lifecycle stages and funding routes that would not have been explored in the past.

What do you mean by ‘technical expertise’?

The P&MA team must understand complicated science and complex evidence, develop sophisticated argumentation and tools, and create and execute intricate agreements.

What do you mean by ‘business skills’?

The P&MA team needs strong problem-solving and time-management skills and the ability to work within multi-disciplinary teams in order to effectively support the business.

Are we ready to meet these challenges?

The following questions will help you determine whether your team is ready:

  • How well integrated is your P&MA team with other teams across the business?
  • Are you involved early enough in commercial decision making?
  • How effective is the team in influencing internal and external stakeholders? Are you able to ‘manage up’ and effect necessary changes in the organisation?
  • Do you have skills gaps around specific markets, technologies or services?
  • How well equipped are you to deal with spikes in demand?

Key learnings from the conference

There is no end in sight to the pressure on the pharmaceutical industry to justify prices in an environment of constrained public healthcare budgets and a patient- and media-driven backlash against perceived unjustifiably high prices. The industry must communicate value in terms that are understandable and relevant to all stakeholders, regardless of their role and drivers. The challenge is that there continues to be no common approach to assessing and determining the value of drugs. This is unlikely to change in the near future, despite ongoing efforts to develop a consistent approach by the European Network for Health Technology Assessment (EUnetHTA), among others.

Disruptive healthcare technologies (such as ‘cures’) create huge challenges for payers who are constrained by short-term budget pressures. Adaptive pathways and early access schemes mean there is limited evidence on which to assess value. Affordability is a big challenge because there is often a change in payment terms (i.e. costs previously spread over many years are now condensed into weeks or months). In addition, current P&MA systems limit the opportunity to move away from a ‘price per pill’ mind-set—a move that could help improve affordability for payers.


About a-connect, the human resourcefulness enterprise

At a-connect, we help leading global businesses confront the future by increasing the pace and impact of their critical projects. With our unrivalled global network of experienced independent professionals, we create winning teams with the perfect combination of skills, experiences and qualities, to supplement your internal team and to provide you with a consulting service that is more thoughtful, individual, imaginative and enterprising. This is what we call human resourcefulness.

For more information on how our team of Life Sciences and P&MA experts can help you prepare to confront key industry challenges, please email us at info@a-connect.com or visit www.a-connect.com.

Pricing and Market Access – People Skills

Amongst tremendous pressure on the healthcare system – from squeezed budgets and shifting market trends to new therapy areas – establishing and maintaining access to drugs in this evolving environment is critical. Seismic change is underway across the board.

The pharmaceutical industry has faced a prolonged period of disruption. Market dynamics have radically altered, with emerging markets accounting for a growing share of revenues – generic players are now an important part of the competitive mix. There has also been a shift from small molecules to biologics and then to biosimilars; and last, but not least, changes in the role of the patient as costs rise, and a focus on convenience and personalised care develops.

The industry structure is also rapidly evolving – in part as a response to the market dynamics, and in part as a driver of them. Heightened regulatory standards have been accompanied by changes in the stakeholders who influence prescription decision-making, not least the very different role that payers are now playing. One consequence of this increased influence has been more innovation in payment mechanisms, with the emergence of shared saving and risk models.

This has also affected the product mix and provision of care landscape. As understanding of diseases and optimal treatment has evolved, there has been a transition from single drugs to various combinations and to more integrated treatments across a wider range of points of care. New sciences and technologies are constantly expanding the knowledge of disease progression. Disease management and treatment options are, in many therapy areas, in an unparalleled state of change.

Future Outlook

As these disruptive influences continue to play out, healthcare systems look significantly different today to how they appeared in 2000. How might they look in 2030?

Healthcare systems built around infectious diseases are re-engineering to deal with the chronic care tsunami
The economic basis for many systems continues to move from activity to value, and from input to output. This is being accompanied by a significant system reform
The role of the patient is fundamentally changing from passive recipient to active participant
There is a real and meaningful opportunity for ‘connected health’ across the system and, at a patient level, an opportunity that may well transition to a requirement
New commercial models are emerging, from traditional players to new entrants – both in anticipation of and in response to the change

Maximising Current Asset Value

Notwithstanding all these changes and the fundamental impact they have on the traditional pharma model, shareholder expectations need to be managed and continued growth secured during this challenging time. In light of this, pharma companies must strive to optimise performance both during and post-launch, as part of efforts across the board to maximise the value of every asset.

The established launch business model still holds good – shape the product; shape the market; shape the organisation. There is, however, enormous pressure to improve the speed and quality of execution. At the same time, evolutions in science and technology mean a drug is increasingly not ‘just a pill’, but a ‘healthcare solution’ that must be launched and marketed. As a consequence of heightened competition, shortened timelines and a greater demand for evidence in all its various forms, we have seen increasingly complex launches, with multiple moving parts to coordinate within and across assets. New competencies and functional capabilities are required to meet the internal and external demands of these launches – but all this occurs in the context of fewer resources overall, as margin pressures and a greater number of launches result in teams being told to ‘do more with less’.

Improving Launches

The industry has responded to this by pursuing a number of refinements to the established launch model, with the aim of improving performance before and after a launch. Four of these approaches have taken hold:

Enhanced Launch Planning 
Focusing on systematically identifying and capturing learnings from previous launches, and building the people and processes needed to enhance capabilities for future ones, this refinement places emphasis on the manoeuvrability of the organisation and makes heavy use of war gaming and scenario planning.

Centres of Excellence 
Similarly, companies are investing in ‘centres of excellence’ or ‘launch academies’ to instil launch capabilities within the organisation and codify learnings. This is a pragmatic response to an all too common situation: the launch team will try to recruit people with experience in the therapeutic area and launch activity, but in practice, then end up having to work with people who have an understanding of the therapeutic area but have not yet conducted a launch, or vice versa. Introducing ‘centres of excellence’ facilitates knowledge-sharing and ensures you have a better prepared, higher impact team.

Creating a Project Management Office 
Recognising the increasing complexity of a launch, clients are either building or buying in professional project management expertise to run an office. This is not intended to be a box-ticking exercise, but rather a way of navigating the complexity by improving execution, and addressing any miscommunications or breakdowns that commonly occur at critical interfaces.

Building New Capabilities
In response to payer demand for robust demonstrations of value, pharma companies have expanded teams beyond the traditional pricing and market access (P&MA) skillsets to build the broader capabilities required to demonstrate value in a more holistic way. The industry has seen a huge growth in real world evidence capabilities, either internally or outside the business in the form of an external work bench. Personalised healthcare is also driving significant change, from R&D through to commercial teams. In response, clients are taking steps to prepare by starting to build capabilities to create value stories beyond pill offerings.

Implications For P&MA Teams

The evolving operating model has had a huge impact on the P&MA team. More is expected of them – greater knowledge, increased technical expertise and enhanced business skills – despite there being tremendous resource constraints.

The breadth of knowledge P&MA teams are now expected to provide to support launches is much wider than before, as these involve a greater number of emerging markets, lifecycle stages and funding routes that would not have been explored in the past. Unsurprisingly, there is often less in-house knowledge and the information is not easily accessible. Furthermore, greater variation in market scope, stage and funding routes across assets result in a lack of standard approaches, greater uncertainty and fewer cross-product learnings and synergies. Despite this, such knowledge unlocks the potential for closer payer collaboration, more creative P&MA strategies and the opportunity to secure revenues that would previously have been ‘left on the shelf’.

Technical Expertise 
P&MA team members are called upon to understand increasingly complex science and evidence, develop sophisticated argumentation and tools, and create and execute arguably more intricate agreements. This can place pressure on the team as few individuals traditionally would have had the opportunity to build the technical knowledge to meet these demands. Heightened communication skills are often needed to effectively explain complex concepts within and outside the organisation. Those individuals that are able to meet these needs are in huge demand, and so the P&MA team faces the additional challenge of brain drain into other functions, companies and industries. For the individual, however, it allows them to expand beyond traditional skill sets and provides wider opportunities for career progression.

Business Skills 
As the role of P&MA in launch teams has steadily become more important, team members that reinforce their business skills to complement this technically demanding work have more impact and value. Specifically, there is a greater emphasis on problem-solving abilities, and as international, multi-disciplinary teams (sometimes with external organisations) become the norm, first-class collaboration and interpersonal skills are increasingly in demand. Team members must also be able to work within a context of progressively greater time pressures and workloads. The individual that meets these demands can develop transferable skills that are highly valued by the business, and can thus quickly progress through the organisation.

Addressing Demands

Building and integrating the right P&MA team is critical for the pharma industry to address many of the demands it faces. Individuals must have the necessary knowledge, technical expertise and business skills to cope with changes in customers, competitors, science and technology. P&MA leaders are looking outside of the traditional talent pool to find the right people. Additionally, they must be prepared for these individuals to develop their skill sets before moving into new roles in order to continue their professional development and career progression.

The team must also integrate with other functions in the business, and provide the necessary input to ensure P&MA needs are met at key decision points throughout the development process, during and after launch. P&MA should be involved in these teams early on in product development to ensure clinical development programmes address the requirements of the payer, and commercial decisions reflect the critical role that P&MA potential will play in determining the ultimate value of the asset. These multi-functional teams should be prepared to halt and/or divest assets, which are not considered commercially attractive on the basis of P&MA input.

Finally, the team must be equipped to deal with spikes in demand, as the industry increasingly looks externally to augment their pipeline. New products must be assessed urgently for commercial attractiveness and then, if acquired, must be subject to the same rigorous development, launch and post-launch processes as inhouse assets. It may be necessary to seek support outside of the business to do this.

On the Road to Success 

The need for talent acquisition, development and retention is not a new item on the pharma leadership agenda. For P&MA leads, a higher bar for impact – and the changes in the profile of people required as a result – has pushed this higher up their list of priorities. Building a highly qualified, flexible and agile group is now a cornerstone for success.

This article is taken from European Pharmaceutical Contractor May 2016, pages 17-19. © Samedan Ltd

“Brexit means Brexit”—but what will it mean for pharmaceutical market access?

On 23 June 2016, the UK electorate stunned politicians, pundits and business communities right around the world by voting to leave the European Union (EU). While the impact will naturally be greatest for the UK, the repercussions of the vote will be felt across Europe and beyond. In the weeks since the referendum, there have been countless assessments of the potential consequences of the UK’s decision to leave the EU. This three-part analysis focuses specifically on what Brexit will mean for pharmaceutical market access. Part 1 considers the current uncertainty surrounding the UK’s departure from the EU, the importance of the life sciences industry to the UK, and the importance of the UK to the international life sciences industry. Part 2 looks ahead to the potential consequences of Brexit both before and after the UK actually leaves the EU. Part 3 reflects on how the challenges associated with Brexit could be turned into opportunities.


An uncertain outlook, even without Brexit

Even if the outcome of the referendum had been to remain in the EU, the UK pharmaceutical market would have faced exceptionally challenging times in the coming years. This is because:

  • The NHS is struggling to meet growing demand for its services: the House of Commons Select Committee on Health recently described the scale of the funding challenge as “colossal.”1
  • The Accelerated Access Review, which is scheduled to publish its final report in September, is expected to recommend new, flexible methods of pricing and reimbursement, including price–volume agreements, multi-year outcomes-related agreements, patient cost caps and free or discounted treatment initiation, as well as measures to encourage local drug and therapeutics committees to pursue medicine optimization and cost reduction.2
  • NHS England is implementing a prioritization framework for specialized services to review the status of approximately 80 drugs over the next year.3
  • The reformed Cancer Drugs Fund will require all new oncology drugs to undergo a pre-launch assessment by the National Institute for Health and Care Excellence (NICE); manufacturers of drugs covered by the £340 million fund will have two years to gather real-world evidence of effectiveness and cost-effectiveness as a condition of general NHS reimbursement in England.4
  • To minimize the amount of HTA activity at a local level, drugs that are not appraised by NICE will in future be evaluated by one of four new regional medicines optimization committees on behalf of the NHS in England.5
  • Fifty vanguard sites have been established to explore the potential of new models of care, including integrated primary and acute care, multi-specialty community providers and acute care collaborations.6

These reforms, alongside the changes that may accompany Brexit, could deter companies from doing business in the UK. Alternatively, the life sciences industry could see the forthcoming period of unprecedented change as an opportunity to engage with the government to help shape the future evolution of the NHS in general, and the UK pharmaceutical market in particular.

Urgent need for the life sciences industry to set out its stall

One of the highest priorities will surely be to make a strong case to the government for the regulatory environment life sciences companies will need in the UK, not just for the benefit of their own businesses and the national economy, but also to ensure that patients are not denied timely access to innovative medicines. The UK-EU Life Sciences Transition Steering Group will play a crucial role in communicating the industry’s needs and aspirations.

The negotiations with the EU will be central to defining how medicines are regulated in the UK in the coming decades, but national policy will also be a major factor in shaping the regulatory environment. Sir Andrew Witty, CEO of GlaxoSmithKline, has posed the following question: “To what extent are we prepared to give up being a rule shaper in a space that we’ve dominated historically as a country? … If we remain engaged, it really needs to be on the terms of us having a strong voice at the table on the rule set.”7

Faced with an uncertain future, this may be an opportune time to undertake a publicity campaign to highlight the life sciences industry’s importance to the economy and to the healthcare system.

Capitalize on the Accelerated Access Review

The expected publication of the final report of the Accelerated Access Review this autumn will require the industry to respond promptly, in order to ensure that recommendations intended to improve access to medicines are widely disseminated and, most importantly, effectively implemented. Drug manufacturers might also have to embrace new pricing and reimbursement arrangements for some new medicines.

Manage the impact of the Pharmaceutical Price Regulation Scheme (PPRS)

It is likely that the vast majority of branded drugs on the UK market will continue to be priced under the terms of the PPRS, until at least the end of 2018, when the current contract expires. Given that the government will be preoccupied with Brexit negotiations for at least the next couple of years, a radical overhaul of the UK pricing system for branded medicines in 2019 seems unlikely. Nevertheless, the industry needs to begin planning now—taking full account of the implications of Brexit—for negotiations with the government regarding the arrangements that will replace the existing PPRS.

In the meantime, the PPRS will require manufacturers to pay rebates if NHS spending on branded medicines exceeds specified growth limits each quarter: as of March 2016, the cumulative total for these payments amounted to £1.296 billion.8 The industry might consider lobbying for the government to allocate the money from rebates to a fund to cover the reimbursement of innovative drugs.

Seek opportunities for closer collaboration with the NHS 

Forthcoming changes to the organization of the NHS present opportunities for life sciences companies to forge new partnerships within the healthcare system. The move towards accountable care, the integration of healthcare and social care, and the increased focus on outcomes all call for drug manufacturers to reinvent themselves—focusing on delivering healthcare solutions, rather than simply selling pills. Pharmaceutical companies can play a valuable role in providing a range of support services to the NHS. Experience gained in the UK could be exported to other countries.

Promote the value of innovative medicines and a successful life sciences sector

In the long term, the life sciences industry in the UK will need to address what ‘value’ really means within a changing healthcare environment. A key element of this challenge will be to promote a wider societal perspective on the evaluation of medicines. Pharmaceutical companies must also work with the NHS to recognize long-term value—looking beyond the horizon of the current financial year. Above all, the industry must broaden the debate around value, moving from a narrow focus on cost to take full account of the benefits innovative medicines—as well as a flourishing research-based life sciences sector—will bring the UK in the coming decades.


Spending review does not meet funding commitment for NHS’s vision

Accelerated Access Review: Interim report

Investing in specialized services

NHS England approves Cancer Drugs Fund plans

5 Regional medicines optimization committees—workshop outputs from 20 April 2016

New care models—vanguard sites

GSK says Britain is still an attractive place to invest

UK pharma contributes £1.3bn to NHS meds bill