LSHC Horizons Brochure 2024 - Flipbook - Page 84
Hogan Lovells | 2024 Life Sciences and Health Care Horizons | Europe
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UK CMA guidance on collaborations facilitating provision
of combination therapies
On 17 November 2023, the UK Competition
and Markets Authority (CMA) published a
statement confirming that, provided certain
conditions are met, it will not prioritize the
investigation of commercial negotiations and
agreements between medicine manufacturers
which aim to make life-saving combination
therapies available to the National Health
Service (NHS).
The issue
There are typically two prices for a patented
medicine available on the NHS: a public list
price determined by the manufacturer, and a
confidential discounted price agreed between
the manufacturer and the NHS which meets
a ‘cost-effectiveness’ threshold. Combination
therapies (involving two or more separate
therapeutic agents used together) must meet
this ‘cost-effectiveness’ threshold in the same
way as monotherapy treatments.
Complications arise with this pricing structure
where the confidential price of the existing
‘backbone’ treatment is already at or near the
‘cost-effectiveness’ limit, leaving little room to
accommodate the cost of the ‘add on’ treatment
of the combination therapy. The manufacturer
of the ‘add on’ treatment may therefore
be required to lower the price of its own
medicine in some cases to the point of
commercial nonviability.
Jane Summerfield
Partner
London
A commercial agreement on pricing between
the respective medicine suppliers is therefore
often the only means by which the parties
can reach a satisfactory solution. However,
the perceived risks of competition law
infringement have to date acted as barriers
to these commercial discussions.
The CMA’s guidance
The Association of the British Pharmaceutical
Industry (ABPI) has developed a negotiation
framework for the purpose of these
arrangements. So long as this is followed, the
CMA will not prioritize investigation of any
required exchanges of information during
negotiations or subsequent agreements
whereby the manufacturer of the alreadysupplied medicine agrees to pay to the
manufacturer of the ‘add-on’ medicine an
amount per patient to compensate for the
necessarily low price at which it must supply
the NHS.
While competition law is only one challenge
faced by manufacturers attempting to bring
combination therapies to market, the CMA’s
statement provides much-needed guidance
and clarity on this key issue for the industry.
It is the first of its kind worldwide and opens
the door for more NHS treatments for cancer
and other serious health conditions. It will be
interesting to see whether other competition
authorities follow suit, and whether the CMA
decides to extend a similar self-assessment
framework for the private sector.
Alice Wallace-Wright
Partner
Dublin, London
Juliette Parkinson
Associate
Dublin, London
