* PharmaFutures backs adaptive licensing, risk-sharing deals
* Opportunity for new model as countries reform healthcare
* Potential investor pay-off in earlier cash flow, less risk
By Ben Hirschler
LONDON, June 19 Pharmaceutical companies need to
boost the benefits of drug research by working with regulators
and healthcare providers to overhaul the way medicines are
approved and paid for, a thinktank backed by investors says.
After years of disappointing research and development (R&D)
productivity, a new report backed by leading institutional
investors sees "early indications of a recovery", with U.S.
approvals of new drugs last year the highest since 1996.
The PharmaFutures thinktank said on Wednesday that getting
the most out of an improving flow of novel - and costly - drugs
in areas such as oncology will require a more flexible approach
to developing, licensing, using and paying for medicines.
This would allow investors in drug companies to benefit from
earlier cash flows, reduced regulatory risk and less
uncertainties over whether drugs will be paid for.
The thinktank has the backing of investors such as Fidelity
Worldwide Investment, JPMorgan Asset Management, Robeco and
Universities Superannuation Scheme Investment Management, as
well as drugmakers like GlaxoSmithKline and Johnson &
PharmaFutures director Sophia Tickell saw scope for change
as governments seek to overhaul healthcare and get better value,
sometimes prompted by austerity.
"Today's binary decision-making at the point of regulatory
approval and price setting will need to be replaced by
iterative, dynamic decision-making that adapts as evidence is
accrued, and value determined over time," the new report said.
In particular, regulators should have more flexibility to
take into account evidence about a drug's effectiveness as it is
rolled out and used.
At the same time, the industry needs to move away from ideas
of a fixed price point for medicines to a system where prices
are adapted according to changing perceptions of the value of a
medicine, based on how it works in clinical practice.
On both fronts, there are signs that industry and regulators
are starting to change.
The U.S. Food and Drug Administration, for example, recently
launched a programme to accelerate life-saving therapies
designated as a "breakthrough," opening to door to earlier
approval based on quicker studies, where clinical data is
The European Medicines Agency also has a scheme to allow
conditional approval based on good interim clinical trial
results, while Britain currently plans to introduce a system of
value-based pricing for new drugs in 2014, although details of
this measure are still awaited.