Executive Summary

Combination therapies involve the use of two or more separate medicines in combination to treat a disease. It can be compromised of a 'backbone' therapy and one or more 'add-on' therapies. The former will be an already approved and well-established drug, while the latter is a drug which may have been introduced into the market as a monotherapy or been specifically developed to work in combination with the backbone therapy. Combination therapies often result in better health outcomes and is expected to be increasingly used for treatments in the future, particularly in respect of cancer.

On 17 November 2023, the CMA published its Prioritisation Statement on Combination Therapies which sets out its position that it will not prioritise investigations under the Competition Act 1998 into specific forms of engagement between actual or potential competitors carried out in good faith and aimed at making a combination therapy available to NHS patients in the UK, where certain market features are present and particular conditions are met. These types of collaborations are subject to self-assessment to ensure compliance with competition law, and therefore this guidance is very welcome. 

Negotiation framework 

Following discussions with the CMA, National Institute for Health and Care Excellence ("NICE") and NHS England ("NHSE"), the ABPI's proposed Negotiation Framework ("Negotiation Framework") in respect of combination therapies is intended to allow suppliers of component medicines to negotiate a commercial agreement that would result in a combination therapy being supplied to the NHS at a 'cost effective' price, while minimising competition concerns. 

Under the Negotiation Framework, suppliers of the component medicines would negotiate an amount per patient ("Contribution Payment") to be paid from the backbone medicine[1] supplier to the add-on medicine[2] supplier(s) when the backbone medicine is supplied as part of the combination therapy. This Contribution Payment would compensate the add-on medicine supplier(s) for offering their component medicine(s) to the NHS at a price low enough that the combination therapy can meet the relevant 'cost effectiveness' threshold necessary for approval and reimbursement by the NHS. The broad structure of this framework is set out in the diagram below.

Addressing the challenges to making combination therapy cost effective

Despite the positive health outcomes of combination therapies, it remains very challenging for these to reach the required 'cost effectiveness' thresholds to be recommended for use by NHS patients. 

The ABPI noted that the confidential net price of the existing backbone medicine may have already been close to the cost effectiveness threshold when previously approved as a monotherapy treatment, such that there is little, if any, scope to accommodate the additional cost of the add-on treatment. Moreover, the use of the combination therapy often results in patients staying healthier and using the therapy for longer periods of time. The cost effectiveness for the incremental benefits generated by the combination therapy would already be absorbed by a corresponding increase in the cost of the extended use of the backbone treatment, thereby leaving no room for the additional cost of the add-on treatment. 

In recognition of these challenges, the CMA has made clear that it does not wish for perceived competition risks to act as a barrier for companies to negotiate agreements for developing new combination therapies. 

The CMA notes that when taken as a whole, there is limited scope for the exchange of information under the Negotiation Framework to lead to higher prices or poorer patient outcomes. The reimbursement approval process acts in effect to limit the price that can be charged for each treatment, therefore limiting the scope for firms that receive such information to use it to inflate their own prices. The Negotiation Framework also restricts the component suppliers from sharing their confidential net pricing, and more generally, confidential information between suppliers. Accordingly, information exchanged under this framework would not be expected to have a material negative effect on medicine suppliers' independent pricing incentives.

ABPI's view of necessary information that may be exchanged to reach commercial agreements

A key part of the Negotiation Framework is that information exchanged between suppliers must be limited to what is strictly necessary to implementing the mechanism for the Contribution Payment. While this reflects standard competition law good practice, the Association of the British Pharmaceutical Industry ("ABPI") has specified the types of information which are necessary to exchange as including: 

1. The combination therapy and expected indication.
2. The healthcare technology assessment ("HTA") agency evaluation timelines and requirement for a response, for example, confirming the backbone company is willing to engage during the evaluation process.
3. The treatment pathway / line of therapy, including comparators / standard of care.
4. The expected patient population numbers for the indication and assumed duration of treatment (including extrapolation analyses if applicable).
5. The amount of Contribution Payment that the add-on company requires per patient to make their own (confidential) discount sufficient for a positive HTA agency evaluation and commercially viability.
6. How the agreement would be implemented (data to be shared; source and analysis of data; frequency of payments).
7. The proposed scoping meeting date, venue, agenda, terms of engagement if a discussion about the commercial agreement is required.
8. The proposed duration of agreement and any conditions for termination.

Conduct that the CMA will not prioritise / not investigate

The CMA will not prioritise nor investigate conduct in the following circumstances:

1. Exchanges of information in the commercial negotiations; or 
2. Any subsequent agreements related to the payment of Contribution Payments entered into by component medicine manufacturers, where: 
   1. Specific market features are present, namely, pricing agreed limiting the price paid by the NHS and any basis for prescribing decisions;
   2. Negotiations between the component medicine suppliers and associated exchanges of information are carried out according to the Negotiation Framework in good faith to reach an agreement with a view to making a combination therapy available to NHS patients;
   3. The information exchanged between the component medicine manufacturers are limited to public information, the information set out in the ABPI list (see above), and any additional information reasonably necessary for component suppliers to agree the Contribution Payments. This, however, should not include (or allow to be calculated through reverse-engineering) the confidential net price of a component medicine;
   4. The terms of any agreement between the component suppliers are directly related and necessary for the calculation or operation of the Contribution Payments that have been agreed according to the Negotiation Framework, and do not:
      1. Involve an agreement to fix the prices of either of the component medicines (which should remain individually determined by each supplier); or 
      2. Extend to provisions that agree or discuss any collective action outside of the narrow scope of seeking to obtain reimbursement approval for a combination therapy, and 
   5. The manufacturers involved implement measures to ensure that information exchanged between them as part of the commercial negotiations or any subsequent agreement are not disseminated more widely than necessary and are not used for any other purposes.

The CMA noted that there may be other approaches to make combination therapies available to NHS patients. In those circumstances, parties will need to self-assess to determine whether they are compliant with competition law.

[1] i.e. the medicine already approved for use and reimbursement by the NHS for a particular disease

[2] i.e. the medicine to be combined with the backbone medicine to create the combination, not necessarily already approved for use and reimbursement by the NHS for the disease in question.