Is the Innovative Medicines Fund a risk too great for small pharmaceutical companies?

By Fisentzos Stylianou, PhD

Contact: [email protected]

NICE’s launches a real-world evidence framework

Closing knowledge gaps and advancing patient access to innovations are major aims of the National Institute for Health and Care Excellence’s (NICE) Strategy 2021-2026, and NICE wants to leverage real-world evidence (RWE) to achieve these goals [1].

RWE has the potential to improve understanding of health and social care delivery, patient health and experiences, and the effects of interventions on patient and system outcomes in regular settings, according to NICE. On the 23rd June, NICE announced the launch of its real-world evidence framework [2]. The RWE framework aims to support their Strategy 2021 to 2026 by detailing:

  • When real-world data can be used to reduce uncertainties and improve guidance
  • Best-practices for planning, conducting, and reporting RWE studies to improve the quality and transparency of evidence

According to NICE, the RWE framework should be viewed as best practise rather than minimum requirements for evaluating RWE studies. During the launch event, key principles of evidence generation that should be followed were also discussed, such as transparent reporting, data suitability, and methods to minimise the risk of bias. NICE recognises that randomized clinical trials (RCT) for rare disease indications can be challenging, and this is one area we may see the benefits of using RWE to augment RCT data.

The RWE framework complements NICE’s Innovative Medicines Fund

NICE’s introduction of a RWE framework supports their recently launched Innovative Medicines Fund (IMF), which has a £340 million annual budget, mirroring the well-established Cancer Drugs Fund (CDF). Unlike the CDF, however, the IMF offers early access to non-oncology treatments for rare diseases with significant clinical uncertainty, necessitating the collection of real-world data to allow NICE to subsequently establish their clinical and cost-effectiveness [3]. Drugs must meet numerous requirements in order to be eligible for the IMF, including:

  • Address a high unmet need
  • Provide significant clinical benefits
  • Represent a step-change in treatment for patients and clinicians
  • New evidence generated is considered meaningful and could sufficiently reduce uncertainty
  • Demonstrates plausible potential to be cost-effective
  • Priced responsibly during the period of managed access

Drugs approved onto the IMF must be re-evaluated by NICE, which occurs after data collection or 5 years post-IMF entry, with updated proposals for pricing required. Subsequently, NICE will either recommend the drug for routine use, recommend it under specific circumstances, or not recommend it for use by the NHS. Although the eligibility criteria are stringent, the combination of the IMF and complementary RWE framework should provide manufacturers of rare disease drugs with a new and potentially faster avenue to bring their assets to the English market. Furthermore, the CDF and IMF provide equal opportunities for cancer and non-oncology rare disease patients to benefit from cutting-edge innovative medicines, respectively.

Is the IMF primarily for relatively large pharmaceutical companies?

Joining the IMF may expose manufacturers to a number of financial risks. Firstly, the IMF, like the CDF, has a rebate mechanism in place to recuperate expenditures if the total annual IMF budget is exceeded. In the event the IMF budget is exceeded, manufacturers of IMF-funded medicines will be required to pay a proportional rebate to NHS England; the proportions will be based on a pro-rata calculation of the spending of each companies’ medicines as claimed by NHS trusts. This poses a financial risk to manufacturers, whose profits may be limited in the event the IMF budget is exceeded.

Secondly, the IMF principles document introduces several new and important principles (Principles 1-4, outlined below) that explicitly impose a greater onus on companies, stating that they are responsible for:

  1. “Paying the costs of data collection, validation and analysis”
  2. “Commissioning the development of a data/statistical analysis plan”
  3. “Covering the continuing treatment costs for any patients benefitting from the medicine who were prescribed the medicine when it was in Innovative Medicines Fund if NICE finds that the case has not been made to recommend routine use in the NHS at the point of NICE guidance update.”
  4. “The company must fully engage with a NICE guidance update and provide a further evidence submission, including an updated proposed price, to support a NICE guidance update following a period of managed access. The company must fully engage with a NICE guidance update as detailed in the NICE manual. If a company fails to do this, NICE will withdraw the guidance.”

These principles may increase resourcing requirements, costs, and risks for manufacturers of rare disease drugs. Manufacturers must examine not only the expenses of developing infrastructure for data-related activities, but also the financial risk of joining the IMF in the event of a negative outcome following NICE’s re-evaluation. If NICE does not recommend a drug for routine use in the NHS, manufacturers may be liable for significant drug expenses depending on the cost and utilisation of their IMF-funded asset. Moreover, if a manufacturer fails to submit evidence following the data collection period, NICE will withdraw the guidance, and the company will be required to cover the treatment costs for any patients who have been prescribed the medicine, as previously stated. NICE may react similarly if, during an interim review, they do not discover evidence that data collection is on track and delivering the analytical outputs required for a guidance update [4].

We question whether the principles of the IMF, notably Principle 3, would pose a financial risk too great for small, rare disease drug manufacturers, such as biotech companies. In particular, manufacturers of a single asset may be at greater risk if they are reliant on the financial performance of their IMF-funded drug, especially if the drug treats a chronic disease, due to the potential long-term expenses for patients who benefit from the medicine. This raises the question of whether the IMF is primarily for relatively large pharmaceutical companies with several major assets, and who can afford the financial risks of the IMF.

Despite these risks, the IMF fundamentally allows manufacturers of rare disease drugs to achieve faster market access, and the RWE framework complements this by establishing recommended practises for RWE utilisation. Manufacturers of rare disease drugs will need to thoroughly evaluate the strengths and weaknesses of their asset, as well as the benefits and risks of joining the IMF. Contact us at P4A to learn more about our services to support with market access and the design of RWD studies, and follow us on LinkedIn to remain up to date on how to seize opportunities in this space.



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