These commentaries by John Macgill represent his opinions only and not those of any Ettrickburn client.

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Tuesday, November 15, 2016: SMC – are drug firms voting with their feet?

Scotland’s gatekeeper for new medicines is having to formally reject an increasing number of medicines because the pharma companies behind them are choosing not to apply to have them used in Scotland.

Unlike its counterpart for England, NICE, the Scottish Medicines Consortium (SMC) rules on all new medicines. As of this week, 25 out of 103 new medicines (24 per cent) this year were not submitted by their manufacturers for consideration. This is compared to 9.5 percent last year and 12.5 percent in 2014.

Meanwhile, the proposal that SMC might do its own assessments in the absence of the necessary paperwork from companies has not been followed through.

The reasons for not submitting to the body tasked with deciding which medicines are clinically and cost effective for NHSScotland vary. In some cases, it is because the new medicine is the latest in a long line in the same class, in others a strategic decision has been taken not to market a medicine in Scotland.

Of those not submitted during 2016, eleven were for cancers, where a crowded marketplace is not an issue.

There is a considerable cost – often £80,000 to £100,000 – to bringing together a clinical and cost effectiveness case for SMC. One inference is that the companies have decided that it will be a wasted of time and money to submit as they will inevitably get the answer ‘no’ because the numbers, even with discounting arrangements, won’t be within SMC’s threshold when assessed using its methodology.

Since its inception in 2001, SMC has based its decisions on a unit of benefit measure of the cost per Quality Adjusted Life Year (QALY) gained, gauging how a treatment might lengthen and improve the quality of a patient’s life. The QALY number is calculated by multiplying the number of additional years of life achieved by a treatment, by a measure of the quality of life. While a threshold has never been set, the rule of thumb is that a medicine that has a cost per QALY of over £30,000 will probably not get through unless the SMCs ‘modifiers’ can come in to play. These kick in for very rare and end of life conditions and move the threshold closer to £50,000.

The QALY measure is also expressed as an incremental cost effectiveness ratio (ICER) of the medicine – the difference in cost of the medicine compared with the most appropriate existing ‘comparator’ medicine (or treatment) divided by the difference in benefit to Scottish patients.

For highly targeted new medicines, many of which are now coming through for cancers and rare diseases, the answer to the sums can be too high for such an approach.

This ‘quality’ of life improvement measurement was devised for chronic conditions and may not translate so well to advanced cancers, where quality of life is not necessarily going to improve dramatically and the period of time that the cancer is held in check, and thus the extension to a patient’s life, may be months rather than years.

In some new medicines that are the first in class, where the comparator is a much older and cheaper generic medicine, then no matter what the improvement in quality of life or longevity, the way the ICER is calculated means the medicine won’t come in under the threshold without modifiers and a big discount. Added to that, the new medicine may not supplant any other medicine, traditionally a good way to show cost effectiveness, but instead be used in addition.

A further complexity is around the speed at which medicines are coming to market, coupled with relatively small patient populations. For humanitarian reasons, national and international licensing organisations are granting breakthrough status and allowing innovations to come to market sooner. However, this replaces the certainties offered by big trials run over longer periods, with uncertainty and data gaps. Oncologists and those treating rare diseases live their working lives surrounded by clinical trials, uncertainty and hope-over-expectation. HTA bodies do not.

For over two years, the SMC has had an additional step for medicines to treat people with very rare and ‘end of life’ conditions. The Patient and Clinician Engagement (PACE) initiative introduces an additional meeting to allow a non-money discussion of the wider importance of a new medicine. A supportive PACE meeting report, and the modifiers that go with a medicine eligible for PACE, can take a new medicine across the line at SMC – but not if the gap is too large.

Some of the uncertainties for highly sophisticated breakthrough medicines may now be reduced where they are brought in through the UK-wide Early Access to Market Scheme system: effectively ‘try before you buy’ programmes were highly promising medicines can be made available to clinicians treating the sickest patients, paid for by the company, many months before the medicine receives its official marketing authorisation. In these cases, all things being equal, when SMC does assess these medicines, the information about use in the real world will be more complete.

So, whatever the reason, if SMC has received no submission (and has no reason to expect one) three months after a medicine has received European Marketing Authorisation, it will issue advice that the medicine is not recommended for use in NHS Scotland due to it not being submitted – giving the same message to the NHS as for medicines that were considered but failed to make the grade.

In the past, the fact that SMC was amongst the swiftest Health Technology Appraisal (HTA) bodies in the world to reach a conclusion was a powerful incentive to submit, even though Scotland often represents less than half a percent of global turnover for a multinational pharmaceutical company. ‘Accepted’ advice was a boost across many more countries than just Scotland long before any of the slower HTA organisations had reached their conclusions. Equally, a ‘not recommended’ verdict reverberated far and wide too.

Now others have caught up. Where once it was months or over a year behind, NICE is now issuing advice (albeit for selected medicines rather than for all of them as SMC does) at much the same time as the SMC.

In 2013, at the conclusion of the last major review of access to new medicines, the Scottish Government stated that “if a submission is not received by the SMC for a medicine that they judge to be potentially of clinical importance to the NHS in Scotland, the Scottish Government is supportive of the SMC commissioning an independent evaluation of publicly available information about the medicine in question to use as a basis for an SMC appraisal”.

Since then, there has been no case of a medicine being considered by SMC where the information has been from any other source than the company behind it, and all the indications are that SMC – both members and its small staff – are already at capacity with the submissions they do receive. [see note at the end]

Dr Brian Montgomery has submitted a report to ministers following a detailed new review of the access to new medicines landscape in Scotland.

In the absence of any obvious alternative, proposals for a root and branch change to the core QALY methodology are not on the cards. However, it seems likely that Dr Montgomery will support increased flexibility and more conversations between the NHS and companies on evidence and mutually beneficial approaches, so long as they bring down costs to the NHS.

The question will then be whether that is enough to reverse the non-submission trend.

[NOTE: SMC did make a decision to turn down a medicine in November 2010 on the basis of independent economic analysis, taking into account three published studies not included by the submitted company.]