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Barriers to market access for innovative medicines increase in the COVID era

The coronavirus disease 2019 (COVID-19) pandemic and governments responses are still impacting the pharmaceutical market globally, according to our latest market access risk scores (MARS).

There was a temporary stabilization of market access risk in Q3/2020 following the initial impact of the pandemic on the MARS ratings in the April 2020 update, due to public policy and with promising indications of vaccine development. However, the unfavorable market environment and disruptions associated with the pandemic have resulted in an increase in the global risk ratings for the fourth consecutive quarter since then.

mars risk score

The elevated risk trend is observed for the majority of the 75 markets covered in MARS. However, there are variances in the magnitude of the pandemic impacts on market access depending on the overall stability of the country and governments response. This is illustrated by the market with the currently highest MARS ratings, Lebanon, and its deteriorating situation. The wider economic, business, and political crisis in Lebanon has been the main driver of the increased market access risk over the last few quarters - with the subsequent impact on the healthcare sector leading to severe medicine shortages and supply chain disruptions. Similarly, recent economic and political turmoil are the significant factors for the difficult market conditions faced by the pharmaceutical industry in Venezuela and Iran.

On the positive side, we are observing the government response to the pandemic exemplified by the German government's decision to provide EUR7 billion additional subsidy for health funds in 2022, on top of the fixed amount of EUR14.5 billion to tackle the additional spending necessitated by the COVID-19 pandemic. The United States has the lowest market access risk ratings in MARS owing to the size of the pharmaceutical market, early position in launch sequencing, and high drug prices due to a free pricing system, although we are closely monitoring state-specific initiatives for containing drug prices including drug importation programs, as well as the enactment of new laws that facilitate greater price transparency or oversight by state regulators.

Key market access risk changes made in the latest July 2021 quarterly update include:

  • The global MARS ratings increased to 2.874 in Q3/2021 compared to 2.834 in Q2/2021 as the majority of countries experienced elevated risk activities.
  • The MARS ratings for the United States increased to 2.09 in Q3/2021 from 2.04 in Q2/2021 due to increasing pricing pressure on the pharmaceutical industry with specific US states advancing policies to lower drug prices, including Virginia's new price transparency law, as well as the administration's tightening enforcement of the 340B discount program statute.
  • The MARS ratings for Austria were lowered to 2.30 in Q3/2021 from 2.49 in Q2/2021 mainly driven by improvements in "Quantitative Measures" with favorable pricing indicators including Austria's ranking in launch sequencing.
  • The MARS ratings for Denmark, Sweden, and Norway were lowered (-0.24, -0.19, -.025 respectively) from previous ratings in Q2/2021 mainly due to the inclusion of pricing indicators (such as launch sequencing and number of reimbursed drugs) for which these markets have among the lowest risks.
  • The MARS ratings for the Netherlands increased to 2.78 in Q3/2021 from 2.56 in Q2/2021 due to the potential increased risk associated with BeNeLuxA cross-border HTA and procurement alliance expansion to include co-operation with the Nordic Pharmaceuticals Forum.

MARS is a quantitative platform assessing the barriers to market access for innovative medicines by incorporating over 40 different quantitative, qualitative, and event-driven variables within the framework. MARS was further strengthened in the latest quarterly update cycle with the integration of unique, aggregated pricing indicators (time to pricing, price trends, launch sequencing, reimbursed drug count, and priced drug count) from our proprietary POLI pricing database.

Posted 18 August 2021 by Niklas Wallin Bernhardsson, Consultant, Life Sciences, IHS Markit

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