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UK CMA issues 'prioritisation statement' to allay competition law fears that prevent combination therapies reaching NHS

The UK Competition and Markets Authority (CMA) has taken the unusual step of issuing a prioritisation statement on cooperation between competitors to make combination therapies available to the NHS.

The CMA worked closely with the Association of the British Pharmaceutical Industry (ABPI) to understand challenges faced by medicine suppliers who want to offer a combination therapy. Its statement confirms that:

  • Competition law concerns currently prevent tens of thousands of NHS patients from receiving combination therapies. Companies feel unable to negotiate commercial agreements to adjust the prices at which their component medicines can be offered to the NHS, which could effectively lower an upper limit on the price at which those component medicines can be sold to the NHS in other contexts. They fear that negotiations or agreements on these prices could give rise to allegations of illegal information exchange or price fixing. This makes it commercially very challenging to propose a price for the combination therapy that is ‘cost-effective’ and can be approved for NHS reimbursement. 
  • The CMA has set out five conditions for suppliers to negotiate / agree that one of the component medicine suppliers who contribute to a combination therapy can be compensated for lowering its prices to make a combination therapy cost-effective. These are framed around a negotiation framework that the ABPI developed. They include a number of restrictions on information exchange, including that the component medicine suppliers should not exchange their confidential prices for a component medicine to be offered to the NHS. 
  • The CMA’s statement does not resolve all competition law barriers to combination therapies and the CMA is open to producing further guidance if needed. The CMA commits not to prioritise investigations into agreements that meet the five conditions but does not exclude that it may investigate combination therapy agreements. There will also be many instances in which the compensation mechanism for add-on suppliers will not address all barriers to cost-effectiveness, meaning that suppliers go beyond the parameters of the CMA’s conditions. Where they need to do this, suppliers need to rely on a self-assessment of competition law or otherwise push for the CMA to deliver further guidance, which in principle it is open to consider. 


Fear of competition law prevents innovative treatments reaching tens of thousands of patients

Combination therapies typically comprise one or more ‘backbone’ treatments already approved for use and reimbursement by the NHS and one or more ‘add-on’ treatments to be added to the backbone treatment(s) to create a new therapy. They are increasingly used to treat cancer and other diseases – the ABPI told the CMA that combination therapies may constitute up to half of the oncology medicine pipelines of its members.

The CMA received evidence from the ABPI and some of its member companies that combination therapies are not reaching NHS patients because the price of the medicines, in combination, cannot be deemed cost-effective by the authorities that would need to approve them for NHS reimbursement. This is in part because lowering the price of component medicines when offering them in a combination therapy can lower the price that the NHS pays for the same medicines in other contexts. In the last five years, half of combination therapy appraisals for cancer treatment were terminated or not found to be cost-effective. The CMA concluded that as a result, tens of thousands of NHS patients have been unable to access treatments developed to treat “a range of devastating cancers”. 

The ABPI and a number of its members told the CMA that it is “extremely challenging” to offer cost-effective combination therapies without a commercial agreement between the suppliers who manufacture the component medicines for the therapy. Many suppliers are reluctant to engage in negotiations for these agreements because of concerns that the CMA might investigate the negotiations and ensuing agreement as possible breaches of competition law. The CMA’s prioritisation statement is, therefore, intended to ensure that perceived risks of CMA enforcement do not present a barrier to companies seeking, in good faith, to negotiate agreements that would make new combination therapies available on the NHS. 

Companies now have a negotiation framework to compensate ‘add-on’ medicine suppliers for lowering their prices to achieve a cost-effective combined therapy proposal

The CMA’s prioritisation statement clarifies that the CMA will not prioritise competition law enforcement against commercial agreements and any subsequent agreements carried out in accordance with the negotiation framework where five conditions are met:

  1. Negotiations follow a specific framework to compensate ‘add-on’ suppliers for price decreases. This framework has been designed by the ABPI to allow suppliers to negotiate during the NICE evaluation of a combination therapy. Negotiations under this framework would have the objective of allowing backbone medicine suppliers to make a contribution payment to add-on medicine suppliers. This would compensate them for offering their component medicines to the NHS at a price low enough that the combination therapy can meet the cost-effectiveness threshold to be approved for NHS reimbursement. 
  2. Specific market features are present. These include a confidential price agreed with the NHS for component medicines that acts as an upper limit on the price the NHS will pay for the medicines in any use or indication (meaning that if the agreed price reduces for any use, the upper limit price for all uses will reduce). They also include that any clinician’s decision about whether to prescribe a combination therapy would be based not on price but on guidance from an authorising agency that the treatment is clinically and cost-effective, the clinician’s own evidence-based knowledge / experience and the treatment preferences of the patient. 
  3. Information exchanged between component medicine manufacturers is limited. This should be limited to public information and information set out in a list that the ABPI has designed, and any further information that is reasonably necessary for the suppliers to agree contribution payments. The CMA clearly states that this information should not include, or allow the reverse-calculation of, the confidential net price for a component medicine to be supplied to the NHS. 
  4. Agreement terms are directly related and necessary to calculate and make contribution payments that have been agreed under the negotiation framework. To fall within the scope of the prioritisation statement, any resulting agreement should not fix prices of component medicines or include agreement or discussion of collective action outside of the narrow scope of obtaining reimbursement approval for a combination therapy.
  5. Measures are implemented to contain the information that manufacturers exchange. In particular manufacturers should ensure that the information they exchange is not shared more widely than necessary nor used for another purpose. 

The CMA admits that this is not the ‘last word’ on competition law obstacles to combination therapies – watch this space

The criteria for the prioritisation statement to apply are specific, limited and there may be many circumstances in which the contribution payment they envisage will not resolve key barriers to a cost-effective combination therapy. 

In addition, the statement does not provide total comfort for the businesses involved. The CMA does not entirely exclude the possibility that it will enforce against agreements that are covered by the statement (in stark contrast to the comfort that might have been achieved if, for example, the CMA had successfully recommended that the government issues a ‘block exemption’ from competition law). 

Unsurprisingly, the CMA therefore acknowledges that the challenges of bringing combination therapies to market are long-standing and that approaches and solutions continue to emerge. For those negotiations or agreements that fall outside of the prioritisation statement, it notes that parties will for now need to self-assess whether they are compliant with competition law. In the future, it reserves the right to revisit and/or update the statement “as circumstances evolve”. We will keep you updated of any further developments.