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Freshfields Risk & Compliance

| 5 minutes read

UK CMA issues welcome guidance on combination therapy collaborations for life sciences companies

The UK Competition and Markets Authority (CMA) – following extensive consultation with the Association of the British Pharmaceutical Industry (ABPI) and industry participants – has issued much-welcomed practical guidance confirming that collaborations between competitors on combination treatments for the benefit of NHS patients are not an enforcement priority as long as certain conditions are met.

The CMA’s guidance provides much needed clarity for life sciences companies looking to collaborate on combination therapies and is an important step towards increasing the availability of innovative treatments for the benefit of NHS patients suffering from some of the most serious medical conditions, including multiple myeloma, lung, and breast cancers.

Background to combination therapy collaborations

Combination therapies combine two or more medicines into a single therapy and can provide better health outcomes than an individual medicine, as they can target the disease more efficiently. An increasing number and range of treatments – in particular in oncology – rely on combination therapies. This trend is expected to continue into the future. 

However, many combination therapies ultimately fail to get approval in the UK as they are not sufficiently ‘cost effective’ for the NHS under the current UK access and reimbursement systems. As a result, tens of thousands of NHS patients have been unable to access combination therapies developed to treat a range of the most serious cancers, including advanced renal cell carcinoma, multiple myeloma, lymphocytic leukaemia, lung cancer, metastatic gastric cancer and breast cancer.  

In many cases, it would be possible for suppliers of component medicines to reach a commercial agreement allowing the combination therapy to be supplied in a ‘cost effective’ way to the NHS and therefore be made available to patients. However, such agreements could raise competition law concerns, particularly as negotiations may involve the exchange of competitively sensitive information and relate to the coordination of prices that the NHS will pay for the combination therapy. This has meant that many drug manufacturers, in circumstances where they may be seen as actual or potential competitors, have historically been reluctant to engage in such negotiations.

CMA’s practical guidance seeks to ensure competition law is not a barrier to combination therapies

The CMA has now clarified that it will not prioritise investigation of (a) the exchanges of information in commercial negotiations of combination therapy collaborations; or (b) any subsequent agreements related to the payment of contribution payments entered into by component medicine manufacturers, as long as:

  1. specific market features are present; 
  2. negotiations are carried out in line with a negotiation framework; and
  3. certain other conditions are met. 

The CMA has said that if all of these conditions are met, there is limited scope for the exchange of information in negotiations and subsequent agreements to lead to higher prices to the NHS or poorer patient outcomes. 

1. Specific market features are present

The first condition that needs to be met is ensuring that the two following market features are present:

  1. Confidential net prices cannot go above the upper limit agreed with NHS. Medicines that may be used in combination therapies will typically have two prices: a list price (which is public) and a confidential net price paid by the NHS (reflecting an agreed discount to the net price). Once the confidential net price for the given patented medicine has been agreed between the supplier and the NHS, it cannot be increased unilaterally by the supplier and is not increased over time. 
  2. Prescribing decisions for the combination therapy medicines and components available on the NHS are driven by the relevant UK HTA agency which has established that the treatment is clinically and cost effective. Following approval from the relevant UK HTA agency that a medicine is ‘cost-effective’, an individual clinician’s decision about whether to prescribe a combination therapy to an NHS patient would not be based on cost, but, as for any prescribing decision, would be based on guidance issued by the relevant UK HTA agency, the clinician’s own evidence-based knowledge and experience, and the treatment preferences of the patient. 

2. Negotiations are carried out in line within the ABPI’s negotiation framework

The second condition is that negotiations must be carried out in line with the ABPI’s framework for the negotiation of agreements relating to the supply of combination therapies to the NHS at a ‘cost effective’ price. The framework is the result of discussions with the CMA, National Institute for Health and Care Excellence (NICE) and NHS England and is intended to permit life sciences companies to exchange information during the collaboration negotiation process, and at the same time, minimise any ‘spill over’ competition law risks. 

A key aspect of the negotiation framework is that the information exchanged between the suppliers as part of the combination pricing negotiations or in any subsequent agreement will be limited to what is strictly necessary to reach the commercial agreement and to implement the mechanism for the contribution payment.

The ABPI has stated to the CMA that the following information will need to be exchanged between the component medicine suppliers to agree a commercial agreement (which will not include, or allow to be calculated through reverse-engineering, confidential net prices for any of the component medicines):

  • Combination therapy and expected indication.
  • HTA agency evaluation timelines and requirement for a response, for example confirming the backbone company is willing to engage during the evaluation process.
  • Treatment pathway / line of therapy, including comparators / standard of care.
  • Expected patient population numbers for the indication and assumed duration of treatment (including extrapolation analyses if applicable).
  • The sum (£) the add-on company requires per patient to make their own (confidential) discount sufficient for a positive HTA agency evaluation and commercially viable.
  • Proposed implementation of the agreement: data to be shared, source and analysis of data; frequency of payments.
  • Proposed scoping meeting date, venue, agenda, terms of engagement if a discussion about the commercial agreement is required.
  • Proposed duration of agreement and any conditions for termination.

3.  Certain additional conditions are met

Three other conditions also need to be met: 

  1. The information exchanged between the component medicine manufacturers must be limited to (a) public information, (b) the information set out in the ABPI’s ‘strictly necessary’ list above, and (c) any additional information that is reasonably necessary for the component suppliers to agree the contribution payments, but should not include (or allow to be calculated through reverse-engineering) the confidential net price of an individual component medicine;
  2. The terms of any agreement reached 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 – i.e., within a price range that is both sufficiently discounted for a positive HTA agency evaluation yet still commercially viable); 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 (‘spill over’ effects); and
  3. The manufacturers involved implement adequate internal measures to ensure that information exchanged between them as part of the commercial negotiations or as part of any subsequent agreement are not disseminated more widely than necessary and are not used for any other purposes.

Guidance provides much needed clarity in current enforcement landscape

The CMA’s guidance comes at a time when commercial practices by life sciences companies, including e.g., in respect of pricing, discounting and patent strategies, have been subject to significant enforcement action and fines in both the UK and the EU (e.g., the CMA’s £260 million fines for overcharging the NHS in relation to the supply of hydrocortisone tablets). Against this backdrop, the CMA’s guidance provides welcome clarity and a clear, objective framework against which life sciences companies can self-assess and get comfortable that combination pricing negotiations have been conducted in a UK competition law compliant manner. Note, however, that the guidance applies only in respect of combinations treatments that are intended to be made available to NHS patients (and does not provide wider guidance about UK CMA enforcement priorities in the sector). It will be interesting to see if similar guidance will be considered by the European Commission in due course – especially given that UK and EU guidance on e.g., R&D and specialisation collaborations, continues to be broadly harmonised. 

For further information about this guidance and life sciences collaborations, please don’t hesitate to contact us or your usual contact in our Antitrust, Competition and Trade team.



antitrust and competition, cartels, life sciences, investigations, uk, europe