Delivering the promise of healthcare innovation without compromising sustainability

9th June 2015

Innovation has become synonymous with higher cost, but it need not be like that. For a start, innovation has many guises: it can come in the shape of a breakthrough therapy that revolutionises treatment, an innovative way of administering a generic that improves adherence, a biosimilar that promotes innovative pricing models, or through insights from big data that drive improvements in patient care without adding to cost

Innovation – in the shape of novel, targeted medicines, faster, more precise diagnostics, digital imaging and monitoring tools, and new patient-centred delivery models – has evident power to improve healthcare.

But rather than welcoming it with open arms, many EU health authorities are nervous and concerned that these advances will add to costs, undermining the sustainability of health systems.

As a result, Europe has innovation, but it is not equally distributed. Rather than contributing to an increase in equity, innovation widens the divide.

The key to squaring this circle and balancing the demands of patients against the sustainability of systems and the incentives given to companies, lies in making sure innovations that truly add value are rewarded appropriately. Rather than efficacy, payers should require proof of effectiveness, demonstrations that a drug or technology will scale and perform in the real world.

There is a clear role for regulatory authorities and health technology assessment bodies to work hand in hand in all of this, helping to deliver the innovation Europe needs through adaptive pathways that accelerate review, leading onto conditional approvals that allow new therapies to demonstrate their value when up against the variations in patient populations and the vagaries of different healthcare systems.

Value can be demonstrated by looking to the pockets of innovation across member states, and using these as test beds, both to understand where the value lies, and how to scale innovation.

Demonstrating effectiveness

While the appeal of personalised medicine is acknowledged, it is also seen as adding to cost and complexity, and destroying economies of scale. But personalisation is not only a route to improving productivity in research and development, it also provides the means to satisfy payers that efficacy data will translate into effectiveness.

Personalisation is now moving beyond oncology to chronic diseases, the management of which place such a huge burden on patients and on Europe’s healthcare systems. Here, personalised medicine is increasing understanding of the underlying biology, and making it possible to segment diseases that have many different underlying genetic and environmental causes. In enabling responders to be identified in advance of treatment, personalised medicines will reduce the burden of severe side effects – both in terms of their impact on patients and of the cost for healthcare systems.

What payers hate most – what makes them nervous of adopting any innovation – is uncertainty. Regulatory pathways need to be reshaped, patient views of what matters to them taken into account and tools for real world monitoring put in place, but personalised medicine holds the potential to improve outcomes and to enable healthcare systems to apply innovation and face up to seemingly intractable demand.

Innovation has many guises

The tendency to associate branded drugs with innovation leads onto the assumption that innovation inevitably adds to costs. But this overlooks swathes of innovation that have been demonstrated to reduce costs, improve access and add to sustainability.

One of the most striking examples of such innovation – and an area where Europe has been the pioneer, is in the development of biosimilars.

While at one level, biosimilars may be dismissed as copies of innovative biopharmaceuticals, there is a huge amount of innovation inherent in these products. For a start, Europe took the lead in developing the science of biosimilars, setting out the evidence base required to show bioequivalence and having the first regulatory pathway.

Building on this framework, companies have made large investments in developing manufacturing systems and running clinical trials to show bioequivalence. This is far from being a trivial, copycat process: biosimilars are large complicated molecules and it requires significant research and ingenuity to achieve this.

As a result of this effort, Europe led the way in launching the first products and developing a biosimilars market. Healthcare systems that could not afford the costs of originator products are bringing innovation to patients as a result.

This is leading to improvements in care that potentially reduce costs overall. For example, expanding access to erythropoietin biosimilars in the treatment of neutropenia can limit the incidence of opportunistic infections in cancer patients undergoing chemotherapy.

Biosimilars have introduced competition where previously there were only patented products, leading to lower prices. This frees up resources that can fund breakthrough treatments and inspires companies developing novel therapies to come up with highly differentiated products.

The biosimilars market was slow to develop following the first launch in 2005, but is now taking shape, and healthcare systems are reaping cost savings. This contribution to better care and sustainability is poised to increase as biologic drugs with annual sales of more than $70 billion reach the end of their patent lives over the next two years.