GSK Gains Access to New OTC Drug, CEO Advocates Changes to EU Regulatory and Reimbursement Frameworks

Wider Role for EMA

The European Medicines Agency (EMA) is responsible for the evaluation and approval of marketing authorisation applications for drugs in the European Union (EU). Once marketing approval is granted for a particular drug, manufacturers have to proceed to seek reimbursement for the drug in each of the 27 countries of the EU. As part of the reimbursement process, reimbursement authorities look at the cost effectiveness and clinical effectiveness of the particular drug in relation to rival treatments. According to U.K. pharma major GlaxoSmithKline's (GSK's) chief executive officer Andrew Witty, the EMA could potentially have a role to play in terms of assessing the clinical effectiveness of drugs. The advantage of this approach is that it would lead to a standardised approach to assessing clinical effectiveness, as opposed to the current approach, whereby clinical effectiveness is assessed on a country-by-country basis.

Dialogue Between Pharmaceutical Industry and Government

The current budgetary constraints facing most, if not all, governments in the EU provides an opportunity for the pharmaceutical industry and governments to address key issues regarding innovation, access, and affordability. At the same time, Witty stressed that the pharmaceutical industry must acknowledge these budgetary issues, and work towards developing drugs that address unmet needs and offer real value for money. In return, companies should be adequately rewarded for innovative products, and these rewards should be viewed as an investment required for continued innovation.

GSK Snaps Up Rights to New OTC Drug

In corporate-related developments, GSK has entered an exclusive agreement with Swedish company Medivir for its OTC cream Xerclear (acyclovir and hydrocortisone) in the prevention of cold-sore lesions. According to the terms of the agreement, GSK will be responsible for the commercialisation and distribution of the drug in key global markets such as Europe, Russia, Japan, India, Australia, and New Zealand. In addition to this, the U.K. firm will also be responsible for funding the commercial development of the product in the aforementioned markets. In return, Medivir will receive an up-front payment of three million euro (US$3.7 million), as well as milestone payments and double-digit royalty fees. Xerclear will be marketed as part of the Zovirax franchise.

Outlook and Implications

Mr Whitty's comments are timely in light of the wider austerity measures taking place in many countries, as well as the increased emphasis on demonstrating value for money in order to secure reimbursement for drugs. Given the EMA's role in approving new drugs, there is probably a case for transferring the job of evaluating clinical effectiveness to the regulator. There would need to be a stronger debate on this issue in order to decide whether the scope of the EMA's mandate can be extended, and what type of impact this would have on its core activities, especially the potential effect on drug approval timeframes. If such as system is indeed viewed as beneficial, it would go a long way towards harmonising clinical-effectiveness analysis in EU countries, thereby making it easier for reimbursement decisions to be compared. The key difference in reimbursement decisions will therefore lie in cost-effectiveness analysis, which will remain the responsibility of individual member states. In terms of the need for improved dialogue between the pharmaceutical industry and the government, although there is still room for improvement in this area, there will always exist some form of conflict of interest between the need for greater access to innovative treatments and the need for tighter control on pharmaceutical spending. Demonstrating value and cost effectiveness will remain a key issue, and the pharmaceutical industry will therefore need to come up with improved solutions to ensure that it delivers value-for-money drugs.