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'In danger of snatching defeat from the jaws of victory': How tension built ahead of Orkambi deal

HSE and Vertex employees were working long hours behind the scenes to secure the historic agreement.

“I WAS DELIGHTED to be able to announce in the Dáil this evening that today (11 April) the HSE and Vertex have reached an agreement in principle which will see Orkambi and Kalydeco made available for cystic fibrosis patients here in this country from next month.

“I know it has been an extraordinarily difficult time for cystic fibrosis patients, their families and their friends as they awaited this news, but finally we have an agreement. In the next few days Vertex and the HSE will work on the contractual terms to make sure we have the best and most robust deal possible…

“I want to thank and commend all of the many advocates right around this country – people with cystic fibrosis, mothers, fathers, brothers, sisters and friends who advocated and campaigned for certainty for themselves or their loved one in terms of access to new medication.”

Those were the words of Health Minister Simon Harris on 11 April, a historic day for cystic fibrosis (CF) campaigners in Ireland. After a long-running battle, hundreds of patients were set to gain access to Orkambi and Kalydeco.

Cystic Fibrosis Ireland has said around 590 people here have the potential to benefit from Orkambi (patients aged 12 and older) and Kalydeco (children aged two to five).

About 1,200 children and adults have CF in Ireland, which has more cases of the condition per head of population than any other country. It’s an inherited chronic disease that primarily affects the lungs and digestive system and can greatly impact the lifespan of those with the debilitating condition.

People who had already been granted access to Orkambi through a trial, such as Jillian McNulty, said the medication had been life-changing.

jillian 1 CF campaigner Jillian McNulty embraces Health Minister Simon Harris outside Leinster House in April after the announcement was made Source: Jillian McNulty/Twitter

The cost of Orkambi, about €159,000 per patient per year, was the primary sticking point in the talks. In 2016, the National Centre for Pharmacoeconomics (NCPE) assessed the drug and didn’t deem it cost-effective.

The medicines watchdog estimated that the drug would cost the State more than €390 million over five years. This figure was rejected by Vertex last December – the company said it was “incorrect, unrealistic and does not reflect discussions to date with the HSE”.

Records discussing the financial aspects of the agreement have not been made public due to the “confidential and commercially sensitive information” they contain, according to the HSE.

Last year Germany struck a deal with Vertex to pay €133,000 per patient per year for Orkambi.

As previously outlined by Fora, the CF ‘market’, for want of a better word, is underserved because it affects a relatively small number of people, and biopharmaceutical drugs that treat it are costly and take longer to develop.

germany An email Vertex sent to the HSE on 17 January discussing the price Germany is paying for Orkambi Source: HSE via FOI request

The road to achieving the agreement had many twists, and negotiations proved fraught at times as people worked tirelessly behind the scenes.

Documents released to TheJournal.ie under the Freedom of Information Act show how tensions built between the HSE and Vertex as staff edged closer to striking a deal.

This website previously published emails exchanged between the Department of Health and Vertex about the agreement.

‘A direct attack’

Amid the celebrations on 11 April, the wording of the agreement was still being bashed out between the HSE, the Department of Health and Vertex – even into the late hours.

On 11 May – shortly after 11pm – Carl-Michael Simon, the Vice President of Vertex’s international legal section, emailed Shaun Flanagan, Chief Pharmacist of the HSE’s Corporate Pharmaceutical Unit, a revised draft of the agreement.

The following day – just after midday – Flanagan replied to Simon, raising several issues with the draft.

Flanagan wrote: “I’m going to be direct and stark because fundamentally we may have serious problems as a result of this draft and it may be unintended and a misunderstanding of issues of principle.”

He said there were clauses within the Vertex draft “which not alone fail to recognise DoH/HSE sensitivities and concerns flagged throughout [the] process, they trample directly over them”.

it as written A section of Flanagan's 12 May email to Simon Source: HSE via FOI request

Flanagan said the clauses could, if one was so inclined, be “interpreted as a direct attack on those sensitivities”. He wrote that some of them “fetter statutory responsibilities”, saying this was “an issue clearly flagged to Vertex as something that was impossible for HSE to accept (it’s legally impossible)”.

Flanagan said elements of draft agreement were “unacceptable” and “a breach of faith around the goodwill we thought both sides were investing in the process over the last few weeks”.

“It, as written, could indicate to us, Vertex weren’t listening because it doesn’t bear any resemblance to verbal options we threw over and back in [the] room,” he wrote.

‘A contract both sides could stomach’

Flanagan said there were legal issues with the draft agreement, noting: “We were crystal clear that we cannot sign up to anything that fetters the powers of the HSE under the 2013 Health Act which represents the will of our Houses of Parliament and our lawyers have been and will always be 100% crystal clear on same. We know this because we get that advice every time anything comes near the Act.”

He said if he was incorrect in his “assumptions”, Vertex should withdraw the draft and work on it again over the coming weekend.

email 12 may A section of Flanagan's 12 May email to Simon Source: HSE via FOI request

Continuing with the very direct tone of the email, Flanagan wrote: “Just in case my benign interpretation is incorrect, PLEASE do not make the mistake of interpreting efforts by HSE staff over the last few weeks to be conciliatory (to make sure we could arrive at a contract that both sides could stomach) as a sign of weakness or softness that can be leveraged.

In our view, Vertex are now in danger of snatching defeat from the jaws of victory. There are clauses added which are fundamentally unacceptable, are re-negotiations or are resiling from issues of principle discussed and agreed in principle and not flagged as problems in face to faces [sic] over last fortnight or so.

Writing in all caps, he added: “IF THIS CONTRACT WERE TO BE THE ONE WE HAD TO SHARE WITH OUR GOVERNANCE STRUCTURES most Senior personnel will interpret it as Vertex seeking to renege from a deal.

“Within the room with Vertex, I can and did try to make a judgement around the tolerance level that the Health System could accept but I also know when the line has been crossed — the draft crosses it not on the margins but by a wide distance.

“I’ll try to keep the lid on my side over the weekend but I can’t guarantee that. The DOH is asking for the contract on a daily basis as are my internal HSE governance structures.

“If I release this contract I wouldn’t care to think of what might happen so I’d prefer if you would formally rescind the draft so that I can truthfully say we’re still waiting for it.”

An hour later, Vertex’s Senior Vice President Simon Bedson replied to Flanagan saying he had discussed the situation with Carl-Michael Simon and they were “confident that most of the issues in your email can be addressed”.

It was agreed to set up a teleconference call for the following Monday morning to discuss the outstanding issues.

‘Significant challenges remain’ 

Earlier in the negotiations – on 27 March – Bedson wrote to Flanagan saying that Vertex representatives were “increasingly perplexed” by the fact they had not received feedback from the HSE about their most recent proposal.

“As you are aware, it is now 11 weeks since Vertex submitted our most recent proposal to the HSE and, notwithstanding much press coverage and the encouraging statements made by the Minister, we are increasingly perplexed that we have yet to have receive any reaction or feedback to our proposal.

We continue to receive daily calls from patients and their families, desperate for a solution to make these medicines available to the individuals who need them.

“We are under significant pressure to provide an update to their enquiries and, while we understood that due process would take some time, they, like us, are increasingly frustrated that we are unable to provide them with any meaningful information,” Bedson wrote.

On 31 March, Flanagan emailed Bedson stating: “Following on from a detailed internal review within the HSE, a detailed engagement with HSE legal advisors and engagements with government departments, significant challenges remain in relation to the commercial offering received in January 2017…

It is clear from the outcome of this internal process that a significant improvement in both the commercial and the contractual elements of the current offer will be required.

Flanagan noted that the HSE’s proposed approach to overcoming these challenges would “include proposals to secure access for Irish CF patients to any additional new medicine from Vertex in a timely manner over the lifetime of the agreement”.

He said the HSE was also looking to “reduce the budget impact in year 1 and from year 4 onwards to a more sustainable level”.

31 march A section of Flanagan's 31 March email to Bedson Source: HSE via FOI request

Flanagan said the approach would also include proposals to “ensure that the publicly available pricing details and processes are clearly and transparently better or at least equal to [the] publically [sic] available details of any offering elsewhere in the EU”.

Flanagan told Bedson he and his team had “cleared our diaries for next week to enable the maximum availability to engage with you to reach agreement on the outstanding issues”.

‘Extremely disappointed’ 

Replying to Flanagan the next day, Bedson expressed disappointment with the situation.

He wrote: “It won’t surprise you that I am extremely disappointed to learn that the HSE, after 11 weeks of no contact and after 9 months of discussions, still have ‘significant challenges’ with our proposal — a proposal which was developed with input and direction from the HSE — to provide access to Kalydeco and Orkambi for all eligible patients.

“We believe our proposal meets all the criteria you requested and is, by any measure, a “transformational” proposal.

“We are further surprised because this news runs counter to the feedback received directly from you and your team as part of this process, media reports and indeed statements made by [Health] Minister [Simon] Harris and (then) Taoiseach Enda Kenny that “finalisation of the contractual and commercial details of the arrangements” is expected within weeks,” Bedson wrote.

bedson email to shaun 1 april A section of Bedson's 1 April email to Flanagan Source: HSE via FOI request

He said Vertex was awaiting “transparent and constructive feedback from you at the earliest possible opportunity”.

We remain committed to reaching a solution that would make both Kalydeco and Orkambi available in Ireland, without compromising the significant investment needed to help the two out of three CF patients who still need medicines like these. This is a transformational and sustainable proposal that we believe meets all the criteria requested by the HSE.

Stressing the time-sensitive nature of the negotiations, Bedson wrote: “As you know Shaun, Cystic Fibrosis is a chronic disease that is characterised by a progressive loss of lung function starting at birth. For people living with CF, each day matters and there is an urgent need for transformative medicines like Kalydeco and Orkambi.

“We continue to receive daily calls from patients and their families, desperate for a solution to make these medicines available to the individuals who need them. This has gone on for long enough, and we hope we can reach an agreement in the coming days.”

At various points throughout the negotiation process, representatives from Vertex wrote to the HSE and Department of Health expressing their concerns about media reports indicating the HSE was set to reject proposals by the company.

‘We went back hard’  

On 28 April, Flanagan emailed a number of HSE employees including John Hennessy, the HSE’s Primary Care National Director.

Flanagan informed them that representatives from the HSE spent three hours with Vertex and their lawyers that day “clarifying and explaining the intent of various clauses in the contract”.

He wrote: “There was a little bit of an attempt by them to renegotiate but we went back hard on any such attempt and made it clear there is nothing as far as we are concerned in our draft contract that didn’t feature in negotiations but if they disagreed to flag clearly any item and we’d look at it and provide back up and details of when it was discussed.”

Flanagan added that he had been in touch with Philip Watt, CEO of CF Ireland, “to let him know we are sorting out contracts”. He said the final contract was likely to be completed within the next week or two.

The outstanding issues appeared to have been ironed out by 1 June , when Vertex released a statement saying it had reached a long-term reimbursement agreement with the HSE regarding Orkambi and Kalydeco.

In the press release, Bedson stated: ”We are pleased that these additional Irish CF patients will finally join the thousands of others around the world who are already benefitting from Orkambi and Kalydeco.

We thank the leaders in Ireland for working with us toward an innovative reimbursement agreement that provides access to these important medicines and also recognizes the need for Vertex’s continued investment in the research and development of new medicines for those people with CF, many of whom are still waiting for a treatment for the underlying cause of the disease.

In an email sent to Vertex at the time, the HSE said that while it was “happy for Vertex to proceed” with issuing its statement, the HSE would not be issuing its own statement, rather “confirm the agreement has been signed in the event of any queries”.

TheJournal.ie was refused access to certain documents on the grounds they contained commercially sensitive or personal information.

Read: ‘Undue fear and confusion’: Read the emails Vertex sent to Department of Health about Orkambi

Read: ‘We are so, so happy that it’s finally here’: Cystic fibrosis patients celebrate deal on Orkambi

Read: ‘Not fit for purpose’: How an ‘arbitrary’ system decides what drugs get funded in Ireland

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Órla Ryan

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