Balancing budgets and access to innovation: European payer concerns

In our current post-pandemic, inflationary environment, the pressures on healthcare budgets continue to grow. In light of this, we asked European payers/payer advisors to provide us with a few key focus areas in their healthcare systems and then discussed “What keeps them up at night?” at an advisory board.

This April 2023 session was the latest in our continuing series of meetings to discuss key market access issues. Advisory board participants included 6 former and current payers/payer advisors from the EU4 and 2 from the UK. Payer profiles included, ex-CEPS and ex-TC payers in France, KV and SHI payers in Germany, ex-regional payer in Italy, national payer advisor in Spain, and ex-SMC and NICE advisors in the UK*.

Payers are particularly concerned about the launch of therapies for disease states with high prevalence and high unmet need. The size of the population for therapies treating diseases such as Alzheimer's along with the uncertainty about the duration of treatment has potential sizeable budget impact implications for the financial capacity of healthcare budgets. Moreover, requirements for testing and the need for equipment such as PET scanners introduce additional challenges and burden healthcare systems already at a tipping point. Shortages in manpower, capacity, and the need to build and finance healthcare infrastructure to meet growing demand are key concerns.

Of equal concern to payers is the difficulty in assessing and determining appropriate prices for Advanced Therapy Medicinal Products (ATMPs), which are often introduced in areas with high unmet need, while lacking robust long-term clinical evidence at approval. While political pressure to reimburse these potentially transformative, one-time therapies is considerable, their high price tags combined with immature data sets as well as budget constraints present enormous challenges for payers. New pricing and reimbursement frameworks and payment models that help address these challenges are evolving. However, with numerous such therapies now in the pipeline, payers are bracing themselves for the full impact of what this may mean and how these therapies will need to be assessed and financed.

Reforms being introduced are an attempt by health systems to curb pharmaceutical expenditure but are seen as punitive by industry and thus disincentivize investment. Budget limitations and opportunity costs drive payers’ decisions, especially in the face of uncertainty. Balancing the need to provide access to promising therapies, especially in high unmet need areas is critical, but increasingly difficult with constrained resources. Managing the expectations of different stakeholders and developing sustainable long-term solutions that enable patient access is key.

However, as healthcare systems struggle to cope, access to innovation is often impacted by government decisions that are sometimes politically motivated. Manufacturers must consider these different stakeholder perspectives and goals when mapping their clinical development path for new products. A collaborative approach with payers taken early in the development life cycle of a new therapy is likely to mitigate some concerns.

We will continue to explore these and other key areas. If you are interested in any of these please get in touch. We plan to discuss these in future blogs/whitepapers and at conferences.

Contact us to learn more!

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