The Pharmafocus Interview: Richard Barker

pharmafile | June 9, 2011 | Feature | Research and Development, Sales and Marketing |  ABPI, Dr Richard Barker, vita 

Dr Richard Barker has been at the helm of the UK pharma industry for over six years, but is now stepping down as Director General of the ABPI.

Barker has become the face of UK pharma, working tirelessly to promote the industry’s interests – and trying, wherever possible, to align those with the government, the NHS and academic researchers in the country.

But his tenure has coincided with a tumultuous period for the industry. The challenge is now coming from a formidable double whammy: the biggest ever cost reduction target in the the history of the NHS, and also the biggest ever proposed reforms of the health service in England.

The challenge for the NHS is stark: it must come up with £20 billion of savings by 2015, meaning the health service is under considerable financial pressure. This pressure is now being exerted on pharma as local health trusts look to squeeze the drugs bill to make short-term savings.

There is also a new challenge coming for the industry: Value Based Pricing (VBP). The new system is set to replace the current PPRS scheme in 2014, a system that has been in place – and appreciated by the industry – for over 50 years. This challenge will be for the ABPI’s new leader – Stephen Whitehead – to steer the UK industry through. Barker is to be the last Director General of the ABPI, Whitehead instead taking the less stuffy sounding chief executive title, reflecting a modernisation of the industry association which Barker launched.

When you arrived six and a half years ago, what were your challenges then, what have you contended with, what are the challenges as you leave?

Barker: ‘‘Well the big challenge when I arrived was the Health Select Committee; their investigation into the influence of the industry on the NHS and elsewhere. That was a very big immediate challenge which led to me appearing in front of health select committee hearings.

‘‘But I think the more general challenges we’ve had over that period relate to getting the system –  and NICE and the SMC in particular – to allow greater access to medicines. I think that’s a battle we are close to winning – I don’t want to put it too strongly, but I think the current government realises the way it looks at value today is ‘legitimately incomplete.’  There’s nothing wrong with NICE’S use of QALY but is doesn’t capture everything – so there has been a ‘Value challenge’.”

Barker alludes to the ABPI’s core values of VITA – Value, innovation, Trust and Access – which it first unveiled in 2009 as part of its new more focused and proactive mandate. He says the Innovation challenge is to try and make the UK a very positive place for companies to conduct R&D, particularly as pharma’s model for R&D is changing, away from the fully integrated pharma company into this more ‘ecosystem’ kind of model.

‘‘We have set up partnerships and joint working with government and research councils, to try and make the country a receptive place for this new model,” says Barker.  ‘‘The best example of this is the Super Cluster initiative, in which we’ve collaborated with universities  on  translational medicine and the MRC on inflammation and immunology and stratified medicines.

‘‘This is now regularly occurring in oncology as well as other therapeutic areas so we’ve done a lot on the innovation landscape which we’re quite proud of,” he says.

Trust is the third ‘value’ and Barker says the industry continues to deal with the problem of not being trusted in some quarters.

Why is trust still an issue?

‘‘Principally it’s because key decision makers in the NHS – not necessarily at a senior level we have established good working relationships with senior level management at the DH and in the NHS – but the people who actually run large parts of the NHS -some of them have spent time with us and understand we are a constructive force, others are still feeding off this idea that having a private sector player in the NHS is some how uncomfortable for them.

‘‘So we have done a lot of work in the area of the ABPI Code to change the way the industry has been seen. I think it is beginning to be effective – we’ve invested a lot in making sure the Code is interpreted in a positive way, as far as joint working is concerned. We want the NHS to understand what the new industry looks like – we’re not sponsors, we’re partners, and that is a very important mindset shift for them, and of course for us as well.”

NICE has been problematic for the industry for many years – can VBP help resolve some of these issues?

‘‘If it can be made to work properly, VBP can bridge that gap. I think you’re right, but for that to happen, the NHS would have to trust us – and that’s one of the big things at the moment if we were to move into the direction of VBP,” says Barker.

‘‘If the current government wants to pursue that, they’ve got to make sure the NHS dismantles the local second guessing that goes on – whether it simply on the grounds of price or them doing their own Health Technology Assessment – you can’t have both: you can’t have a national VBP process and lots of local second guessing.

‘‘But I think this relates to, and I don’t always like using this term – relationship building in the NHS. This is a contact sport, so we the industry need to be out there to understand the point of view of those managers – we want to understand them and them to understand us. To do this we sponsored a shadowing programme where some of their chief executives shadowed ours and vice versa.

‘‘I was in a meeting recently with senior NHS people who said you have to understand this: you give me the opportunity to invest in new medicines as if I either I do it or I don’t –but I have lots of [other] good things I can do with my money and I have very limited money. Then a light bulb went on which, probably, we all wish didn’t need to go on, which is the people we deal with have limited resources and do in fact face choices between different things.”

Barker says the VBP system needs to be constructed  very carefully. ‘‘What’s going to drive the NHS in the future is outcomes over cost – so we either have to offer better outcomes or offer lower cost, or both. And we’ve got to realise that if we simply detail to doctors on clinical benefits and leave the rest of the system, we’re going to have a very tough time of it for the foreseeable future.

Is cost something the industry is willing to negotiate on outside of NICE and of VBP in light of cost pressures on the NHS?

Across Europe – and this is a positive example for the UK – you have lots of these arbitrary price cuts being enforced – here in the UK we have got a more constructive relationship with the government and the NHS which is holding to the PPRS.

That being said companies are, not just in the [NICE’s] Patient Access Schemes, trying to find savings – now it’s going to be more comfortable for companies to improve the value of their drugs by adding resources and offering some kind of ‘pay for performance’ deal than reduce prices, because as everybody knows, decisions in the UK feed into more than 20 price baskets around the world. So the UK government understands that companies are going to be restricted in how much they can concede on UK prices, when that is clearly part of these other price baskets.

Are you worried the government will use VBP to squeeze the drugs budget?

‘‘Well if that is the goal it’s not been described properly – the way Andrew Lansley has described it is as a way of improving access – he knows we have some of the lower prices in Europe, and so if the goal is access – as it should be – price is not the problem – otherwise we wouldn’t have lower uptake of medicines compared to places like France, Spain and Germany who have their own funding challenges. So if VBP is simply a way of trying to force down prices somehow, there has been a miscommunication.”

What do you feel has been the biggest obstacle in your six and a half years that still hasn’t been resolved?

‘‘It really is the question of access and uptake, though it’s not that we haven’t made progress. When I came into this job I saw lot of curves that showed no improvement in uptake when NICE said yes. I now see some curves that show a NICE yes increasing uptake. So uptake is not uniform, and it remains the biggest challenge for the industry – my successor is going to have to work with that. But some of the tools in the toolkit might be beginning to come together – the Department of Health’s ‘Programme Budgeting’ for example. The problem is that people budget by line items and looks at the drugs and say to themselves ‘Oh, I’ll cut that’, not just at a local level but at a national level.

‘‘You need to look ‘vertically’ at the total cost of diabetes of COPD and asthma and consider how you can reduce the cost of the overall burden of these diseases; very often spending more on drugs is a positive thing in terms of managing the disease, so Programme Budgeting will help.

‘‘National guidelines would also be really helpful within what David Nicholson is calling a ‘national commissioning machine’, under the new NHS structure.”

Barker adds that dismantling what he calls the ‘‘arbitrary limits and mechanisms’’ used by local NHS bodies would be a major step forward, and says companies are increasingly coming forward with an outcomes-based proposition.

‘‘So I think we’ve got the ingredients if the will is there in the NHS. I’ve just come from a meeting with ministers – I think this government really gets this, I think they really want to see uptake of innovation significantly increased.”

NHS chief executive David Nicholson has now been given the task of producing a report on the diffusion of innovation in the NHS, to be presented to ministers  by November 2011.

Barker comments: ‘‘You can imagine we’re going to be pretty active  in our input into that.

‘‘If this backs up the the recent Academy of Medical Science report on UK clinical trials, this will give really clear signals to politicians who can’t avoid what this report says. We will make sure Nicholson’s report will be as clear and practical as it can be, because we need mechanisms that work in an NHS that will be under financial pressure.”

One of the big problems I see is the Red Lists – medicines – PCTs trying to restrict GP prescribing – that must be frustrating for you?

‘‘When we saw the Pulse article on ‘Red Lists’, we immediately asked the government what was going on. One of things that emerged was the fact that the article included medicines that GPs cannot prescribe, that actually only hospital doctors can prescribe. So that article may have overstated the problem. Very clearly however, it’s a problem that is going to exist in a NHS that is trying to close a £20 billion gap, so we will have to work hard to tackle that problem.”

How will you do that?

Well we have these mechanisms like the Life Sciences Innovation Delivery Board, the Medicines Access Group – these are both joint activities with government and the NHS, but actually there is no substitute to getting out there and talking to NHS managers.

Is it easy to do that, without them thinking the industry is trying to push its own agenda – how can you talk to them?

Barker: ‘‘Well, it isn’t just doctors – clinical leaders are not wary of talking to us. I was invited recently to the annual meeting of the heads of medical schools and the heads of the trusts that work with them – so they are perfectly happy to listen and have a dialogue with us. It is really at the local level – at the PCT level and the pharmacy advisors who are particularly driven by financial targets rather than clinical targets –  so it remains to be seen what these new commissioning bodies will look like.

‘‘My advice to the industry is to engage with them and make your points directly, but think in terms of improving outcomes or improving  costs rather than simply telling them they ought to use more of our medicines.”

Where next for Richard Barker?

‘‘There isn’t one single job, I’ve got a few bits of what I call ‘unfinished business’ – I suppose there are three things that really interest me that started under my ABPI tenure. The first is how can we restructure drug development and R&D processes to get adequate benefit/risk information but at a lower cost and shorter times – I now chair the Athenian group which brings together senior doctors and senior patient representatives to consider how we can tackle these problems – the time, cost and high attrition rate.

‘‘Something else the [NHS and pharma] chief executives have mentioned to me is the need to explain the NHS to industry and industry to the NHS. The pharma industry is changing rapidly, and I don’t think the people who run the NHS fully appreciate that. Many systems in the NHS are also changing rapidly and I don’t think pharma fully understands that, so even if we had a productive relationship today, that relationship is inevitably going to change.

‘‘As value changes and product portfolios change, and economic pressure mounts on the NHS – perhaps I can be something of an interpreter of change to each of these two parties.”

Healthcare and the digital age

Barker says a third area of interest is technology, which links back to his time as head of IBM’s healthcare business before he joined the  ABPI.

‘‘I think ‘mobile health’ and the convergence of IT healthcare is going to throw up lots of interesting entrepreneurial challenges to the pharma industry,” he says.

‘‘Standing on the train or in Starbucks everyone is on their phone or iPad or their iSomething! This is a new world we are entering and everyone is managing their lives on these devices – why not manage our health on them as well? At the moment we have around 2,000 disconnected apps –  perhaps can we create an integrated patient management process through which mobile health gives us.

‘‘People are telling me not to rush into anything, just listen and talk, so I am now in a lot of conversations about what to do, but I am certainly not retiring as you can tell from this conversation!”

What will your successor Stephen Whitehead’s biggest challenge be?

‘‘We have pretty thoroughly modernised the ABPI. The movement to the new location [with the BIA to Victoria in London] is one of the steps in that process.

‘‘We have a largely new management team and a new website, we are in the process of finalising new branding, and we are also buying out the pension benefit plan. So a lot of the internal aspects of the ABPI will have been quite thoroughly modernised so that will be a platform for Stephen.

‘‘So hopefully he won’t have to worry about what happens internally, but rather how you use that capability externally.

‘‘I think uptake and access issues will remain high on his agenda, clearly the negotiation of the next pricing scheme as well; how much Value Based Pricing there is in it, we will have to see. But clearly by the end of 2013 we’ll need a pricing system that we will argue should be a system that encompasses all products with VBP reserved just for the new ones.

So, that will do for him to go on with, but you know he’s obviously a very talented guy – he has pharma industry experience, but also experience from the financial services sector, so it wouldn’t surprise me if he sees new things and develop priorities of his own –  that’s certainly what I found myself doing and I’m sure he will do the same.

How do you view off label drug use  – and governments funding their own trials off label. I am thinking in particular of Avastin being used for wet AMD. How big a problem will this be?

‘‘You’ve used an example which is a pretty stark example and I won’t comment on that directly, but we will be commenting on the GMC’s consultation on the use of off label drugs.

‘‘We think it is completely wrong to change the prescription from one kind of drug to another simply to save money if that puts the patient at risk or offers them inferior care. Of course doctors should manage resources well, but I don’t think the patient wants doctors to be  driven by saving money when prescribing. That’s why we pursued the government to the European Court on financial payment for switching drugs – it’s something we lost at the last hurdle but a lot of people agreed with us at the time. We think it is very important to be clear minded about when and for what reasons drugs are switched, and to switch to a drug that is not even licenced for an indication is definitely a step too far.”

Conclusion

Barker concludes by saying: ‘‘Overall it’s been a fascinating six and a half years years, this a tremendously challenging job but very rewarding at the same time. I wish my successor really well in it, but more importantly still I think the industry can and should hold its head high, because it makes such a tremendous contribution in what it does. 

He adds: ‘‘I believe it has a successful and sustainable future on the UK and we need always to remind ourselves of that and be proud of what we’ve achieved.”

ABPI – THE BARKER YEARS

August 2004: Dr Richard Barker named as the next ABPI Director General, succeeding Dr Trevor Jones in January 2005.

April 2005: The Commons’ Health Select Committee publishes its report on the influence of the pharmaceutical industry, criticising pharma’s relationships with doctors and patient groups for lacking transparency. Also highlights concerns about drug safety reporting.

Jan 2006: A new stricter, and more strictly enforced ABPI Code of Practice is launched. ‘‘This has been a fundamental review of the code and follows a far-reaching public consultation exercise. We have listened to all these comments and taken action accordingly,” said Vincent Lawton, then President of the ABPI.

Feb 2007: OFT report on the PPRS pricing system recommends replacing it with a Value Based Pricing system. The government rejects the proposals, but breaks the current PPRS agreement early to renegotiate a new deal.

May 2007: The ABPI launches a legal challenge against the use of prescribing incentives to control GP prescribing habits. The European Court of Justice eventually concluded in April 2010 that the practice was legal.

June 2008: Specialist pharma company Norgine quits the ABPI, claiming the PPRS negotiations were not conducted in the interests of smaller companies.

July 2008: Roche is suspended from ABPI membership for six months in relation to serious misdemeanors relating to payments to private diet clinics.  One year later, after being invited back, Roche says it will remain outside the ABPI, but abide by the Code.

October 2008: Government and ABPI agree new ‘flexible’ PPRS agreement. The agreement includes incentives to doctors to prescribe novel medicines alongside a new flexibility in pricing, which the industry says will allow it to deliver value for money to the NHS but also protect innovation.

May 2009: ABPI launches new proactive VITA agenda – standing for Value, Innovation, Trust and Access.

July 2010: New Health Secretary Andrew Lansley sets out timetable for introducing Value Based Pricing system in 2014.

May 2011: ABPI and Biotechnology Association move into new shared premises, and coincides with a refreshed corporate image for the ABPI

Richard Barker is now stepping down from his role as the ABPI’s Director General after six and a half years.  

He has more than 25 years’ experience in the healthcare industry, holding a range of senior leadership roles in the UK and internationally. His career has spanned the pharmaceutical, biotech and medical infomatics sectors in the US and Europe.
 
Before joining the ABPI, Richard was founder and president of New Medicine Partners, an advisory firm assisting pharmaceutical and biotech companies to address issues of strategy, product development and commercialisation.
His past roles include Chief Executive of Chiron Diagnostics, General Manager of IBM’s Healthcare Solutions division and Partner at McKinsey & Company.

Richard recently published a book 2030: The Future of Medicine, which looks ahead to the funding dilemmas for healthcare caused by demographic change and technological progress.