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Managing innovation in the pharmaceutical sector

Clare McGrath
Senior Director HTA Policy
Managing Innovation in the
Pharmaceutical Sector
Defining Innovation
„ Static innovation: e.g. EMEA, England, Kennedy review, „ Dynamic innovation: a process that maintains a steady flow of new medicines that address unmet medical need Several kinds of treatment innovation
benefit patients
ƒ Incremental innovation in a therapy
area e.g. medicines with fewer side
effects, or a new route of

ƒ New mechanisms leading to
breakthrough / radical medicines e.g.
new treatments for Cancer and AIDS

ƒ Use of an existing medicine to treat a
different disease e.g. Viagra for the
treatment of Pulmonary Hypertension

Inventing new medicines and bringing them to the market
Phase III
Failure Costs Account for 75% of Drug R&D Costs ($881M) Most attrition occurs in
Discovery & Pre-Clinical
Failure costs
($655 M)

Share of
costs at

each phase
What do Payers Value and Pay for?
A systematic search was conducted to obtain information on reimbursement decisions for
published English language assessments (n=194);

There were sufficient observations (>10) to include Australia, Canada, England and Scotland in
the pooled analysis (n=189).

Recommen Recommend
d Decision
R* Decision
*R = Recommended decision with restriction to clinical classification or patient group.
Use of cancer drugs in Denmark, E13, Finland, France,
Norway, Sweden and the UK (GB)1998-2008.
OECD Survey (2005)*
System barriers to implementation
Not important
Very important
No flexibility in moving resources
between budgets
Resources cannot be freed to adopt new
Payment mechanisms discourage uptake
Too few mechanisms to inform providers
about policy
No direct benefit to my department
*OECD; The OECD Health Project – Health Technology and Decision Making,; OECD Publishing, 2005 Pharmaceutical innovation and Health Care
„ For a technology to be an innovation it needs to be used. Newer technologies should replace old ones or fill a gap.
„ There are barriers to use in the system for medicines with proven „ These also limit price volume relationship e.g.
Š Difficulty in donating drugs that get used in systems with no Š Number of oncologists has a major influence on oncology drug Thankyou
Medium High
Unmet Medical need

Source: http://www.inno-hta.eu/docs-public/MCGRATH_HTAi2009_Managing-innovation-pharmaceuticals.pdf

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