Deal paves the way for outcomes-based drug pricing

A newly established partnership between healthcare providers and the pharma industry in Manchester will use patient data to monitor the safety and effectiveness of medicines, helping to extract more value from the region’s £1 billion drug budget.

The deal, which has the support of 14 pharma countries, is also seen as a route to making the region a hub for health research and clinical studies.

“We want to be able to improve people's health, get the very best value for money from our medicines budget and continue to raise Greater Manchester's profile as a global hub for investment in research and development,” said Jon Rouse, Chief Officer of Greater Manchester Health and Social Care Partnership.

The agreement has benefits for companies, which are promised access to patient data and faster uptake of drugs that are shown to be effective in real world use. Signatories to the Memorandum of Understanding have committed to explore, “the potential of multi-year, multi-agency budgets to enable outcome-based models.”

This will open the door to developing “outcome-based pricing methods and test other incentive models,” with successful pilots becoming standard care within two years.

New risk-sharing models of care delivery will be tested as part of the new arrangement. A group including members from the health service and pharma companies is now developing a plan to scale up successful proof-of-concept projects that demonstrate the value of drugs, reduce inequalities and variation in outcomes.

Several ‘quick win’ projects are already in the pipeline for the first year of the partnership. Those that work well will be adopted within three years.

Real-world value

Health chiefs and industry leaders have highlighted the need to rethink healthcare funding models to improve the value for taxpayers and outcome for patients.

“The industry recognises the challenges faced by the NHS and we are committed to supporting improvements in the use of medicines that can enhance the care and wellbeing of people in the area,” said Mike Thomson, CEO of the Association of the British Pharmaceutical Industry.

He cited the Salford Lung Study as an example of how the NHS can embrace innovation to help improve health outcomes.

That project, funded by GlaxoSmithKline (GSK) and conducted in Salford and South Manchester, was the world’s first randomised controlled trial to test a drug in a real world setting, using a single electronic medical record linking primary care, secondary care and pharmacy data. It found that patients taking a new GSK drugs to treat chronic obstructive pulmonary disease (COPD) were less likely to suffer exacerbations than those taking standard therapies.

On the back of its linked electronic health records and the experience of the Salford Lung Study, greater Manchester has the infrastructure to create one of the world’s pre-eminent hubs for life sciences research and investment from global companies, according to Thomson. “We can see from initiatives like the Salford Lung Study how the NHS can embrace innovation to help improve health outcomes,” he said. 

“By working together with the NHS to improve how to use and learn from real time health data in hospitals and communities we have the best chance of creating the most appropriate and cost-effective medicines for patients in Greater Manchester and throughout the UK,” Thomson said.

Rowena Burns, chair of Health Innovation Manchester said the agreement is a first step towards increasing the number of real-world clinical trials in Greater Manchester. “Our goal is to improve the health of greater Manchester citizens by working more effectively with industry,” she said.