Do you like drugs? Me too.
where you live may impact how fast you get new drugs
Today, we look at drug availability in the US vs. abroad using 2014-2022 data from an IQVIA Institute for Human Data Science report published in November and the European Federation of Pharmaceutical Industries and Associations (EFPIA) Patients Waiting to Access Innovative Therapies (WAIT) indicator published in June. I hope these insights serve as a call to action for healthcare players who want to bring new drugs to people waiting for them.
We have a global drug access problem
Do you live in the US? If so, you’ve benefited from better new drug availability than people in other countries. Compared to Europe and Japan, the U.S. brings new drugs to market faster than anyone else and has access to the largest share of cutting-edge treatments. Europe and Japan don’t approve as many new drugs as we do, and this gap is growing. Even where you live in Europe impacts how long you have to wait for new drugs, sometimes months or years behind peer countries.
According to IQVIA, the US, EU, and/or Japan approved 545 novel active substances (AKA NSAs, AKA new drugs) between 2014 and 2022. Of those 545, the US approved the most. 1 in 5 US FDA-approved drugs is not approved by the European Medicines Agency (EMA). For Japan, that number balloons to half of new FDA-approved medicines. But regulatory approval isn’t the finish line; it’s more like the halfway mark in a marathon, where half-marathon runners break away while the rest push forward to the full marathon. (I assume? I know how to launch drugs, not run long distances…nor short distances, for that matter.)
After a new medicine is approved, pharma must secure payer coverage to ensure patients who could benefit from it can get it. Globally, “availability” typically means the new drug is included in the public payer’s reimbursement list. In the US, availability looks different because we don’t have a single-payer system! I know you already know this because many of you ask me why we don’t (stay tuned for a future letter on this!). Instead, we have:
Commercial insurance: Covers ~67% of Americans and is mostly tied to employment
Medicare: Covers ~19% of Americans, meant for the elderly and people living with disabilities (e.g., permanent kidney failure)
Medicaid + CHIP: Covers~24% of Americans, targeting adults + children earning below a set income threshold
P.S., There’s overlap across these groups!
At a high level, drug coverage is further divided into:
Pharmacy benefits: For self-administered prescription drugs you buy from your pharmacist
Medicare Benefits: For drugs a healthcare provider gives you in a hospital/clinical setting
American exceptionalism! So, how do we define availability in the US? Broadly, a drug is “available” when it is either:
On a payer’s formulary list, which is like their drug IN/OUT list, and they reject less than a third of claims for the drug
Attached to a unique billing code called a J-code
The US leads in NSA availability, with over 90% of drugs within four months post-FDA approval. While the US lags behind Japan, Germany, and Denmark in post-approval time to availability (two months for Japan and Germany, three for Denmark), it excels in rapid access to protected drug classes (think: cancer, HIV/AIDS, immunosuppressants, etc.), with availability in just one to two months. In contrast, most European countries face slower approval and availability.
I’ve tracked the EFPIA WAIT indicator since joining the pharma industry in 2017. It measures the time from central EMA drug approval to country reimbursement. This metric highlights significant access inequities across Europe. Germany stands out, offering provisional reimbursement after EMA approval while price negotiations are ongoing. Beyond that, the 2024 EFPIA WAIT Indicator Survey paints a concerning picture: the average wait time for patients in European countries to access EMA-approved drugs is 531 days (14 days longer than the previous survey). Geographic disparities persist, with shorter wait times in Northern and Western Europe compared to Southern and Eastern European countries.
Why the delays?
APPROVAL
Differences in the regulatory environment and/or regulatory approval requirements regarding safety, efficacy, local trials, etc. For instance, the FDA can make faster decisions on new drug approval submissions because we have expedited review programs for priority disease areas.
Poor IP protections or unfavorable market conditions can disincentivize the pharma industry from submitting for drug approval in that country
Smaller biotechs struggle to launch drugs outside of their country, even when they have groundbreaking ideas because they’re not resourced for global launches and aren’t equipped to navigate complex international approval systems
AVAILABILITY
While the EMA is a centralized drug approval agency, reimbursement negotiation happens at the country level; payer requirements and reimbursement assessments vary by country
Some pricing negotiations drag out longer than others
Other countries rely on external reference pricing (ERP); meaning they use the set price in other countries as a pricing benchmark. Thus, they can’t hold negotiations until their reference countries have made their pricing decisions. A 2023 study found that while ERP countries may realize slightly lower prices at launch for high-cost drugs, ERP practices delay access to new drugs.
Healthcare systems are strapped, and drug spending budgets are tight, so payers/governments view new drugs as a splurge instead of a health investment
What’s the big deal?
Getting new drugs to patients who need them as soon as possible saves lives. Better access to NASs is tied to improved patient outcomes, particularly in cases where existing treatments aren’t enough. Let’s look at the NSAs approved in the US that aren’t available in the EU or Japan. These are mostly oncology or neuro products, two high unmet need disease areas. Half of the FDA-only approved drugs earned a first-in-class designation, which we use for new and unique mechanisms of action/cutting-edge technology with the potential to improve patient lives vs existing treatments. This is a missed opportunity for people living with cancer or neurological conditions in Europe and Japan.
What’s the policy play?
The European Commission, Japan, and the US government are implementing reforms to improve drug availability, but some of these changes may have unintended consequences. For instance, the US Inflation Reduction Act of 2022 (IRA) aims to lower costs for high-spending branded drugs, drawing on elements of European-style price controls. However, this approach could undermine the US’s traditional advantages in research and development, drug availability, and access to innovative technologies. I’d like to see a review of launch drug list prices pre- and post-IRA. My hypothesis is companies may be launching at higher prices post-IRA in anticipation of future price cuts. It’s a delicate balance!
Patients and policymakers benefit from policies that address affordability concerns while encouraging innovation and access to quality drugs. Accelerated approval pathways like those in the US and German provisional pricing schemes tied to regulatory approval could streamline access and availability. Additionally, harmonized regulatory requirements could ease the administrative burden for established and emerging biopharma and regulatory agencies.
TL;DR? Less red tape! More transparency! Greater patient-centricity!
‘til the drugs are gone,
xxsem
Sources:
To what extent do cost effectiveness considerations play a role in country discrepancies in approvals and price negotiations?
This is very well written. Great job