Aligned with Vision 2030 and the Saudi Ministry of Health’s national health transformation program, focused on creating a value-based healthcare system, the Saudi Food and Drug Authority (SFDA) has issued guidelines for the evaluation of economic studies. Its overall objective is to integrate pharmacoeconomic evaluation methods into the decision-making processes for pricing and reimbursement of novel drugs.
The recent Saudi Food and Drug Authority (SFDA) guidelines propose a gradual implementation of general requirements and economic studies as part of a new dossier submission.
General requirements will include local epidemiological data, market share, the drug’s marketing plan (including its targeted healthcare setting and distribution channel) as well as the planned access agreements (e.g., Patient Support Programs, entry agreements).
Economic evaluation pertains to the submission of the most appropriate economic evaluation study based on the product type (e.g., brand / biosimilar, biological / chemical). Study options include Budget Impact Analysis (BIA), Cost Minimization Analysis (CMA), Cost Effectiveness Analysis (CEA) and Cost Utilization Analysis (CUA).
Understanding the implications of the SFDA’s newly issued guidelines on economic studies is essential for pharmaceutical companies to achieve successful pricing and market access (P&MA) outcomes in the Kingdom of Saudi Arabia (KSA). Our experts explain how the new guidelines will affect the P&MA landscape, challenges, and opportunities implied by these guidelines, and the strategies pharmaceutical companies should adopt to ensure successful market entry.
What opportunities and challenges do these guidelines present for P&MA of new drug launches?
SFDA's new economic evaluation guidelines are accelerating the shift towards value-based pricing. As of January 2025, general requirements will become mandatory for a new dossier submission, followed by mandatory economic evaluations as of July 2025. As a result, this shift generates opportunities as well as challenges for pharmaceutical companies, requiring careful consideration and strategic planning.
Opportunities for pharma companies:
- Ability to alleviate payer concerns about a new product’s budget impact, addressable population size, and market share, starting with the provision of general requirements to be later backed by economic evaluation studies.
- Potential to enhance payer perception and visibility on the product’s market entry by providing information on planned access agreements, as part of the general requirements. This can support the pharmaceutical company in demonstrating its alignment with regulatory expectations and build further credibility among payers.
- Possibility of leveraging pharmacoeconomic standards from major markets such as NICE (UK) and CDA (Canada) in KSA. This can simplify the pharmaceutical company’s global market access strategies.
- Opportunity for pharmaceutical companies to optimize P&MA conditions by demonstrating the product’s therapeutic and/or economic value over existing therapies. This will be supported by the availability of economic studies for Saudi payers.
Challenges for pharma companies:
- Rapid mandatory implementation of general requirements by January 2025 followed by economic evaluation in July 2025. This may be perceived as a rapid rollout, particularly considering the need for local data availability for new launches.
- Greater resource allocation will be required in KSA due to the increase in evidence requirements, particularly the need for more comprehensive and locally relevant data.
- Extended access timelines are expected due to the increase in submission requirements and resource allocation at both the SFDA and manufacturer levels (for dossier preparation and review).
- Increased price pressure and reimbursement restrictions are likely outcomes of the new assessment approach, especially for high-cost products, such as cell and gene therapies, that may struggle to demonstrate relevant cost-effectiveness.
- Emerging need for more innovative and flexible pricing models in KSA that can reduce revenue potential and add complexity to the P&MA process for both manufacturers as a well regulators in the market.
What can manufacturers do to better prepare for new launches?
To strategically prepare for new launches in KSA, manufacturers must proactively anticipate time and resources required to meet local data requirements and to develop the economic studies as per the SFDA’s new guidelines.
Manufacturers can establish early and ongoing communication with the relevant stakeholders, including the SFDA, Ministry of Health, and other relevant government entities, to fully uncover the true impact and level of implementation of the new guidelines. This strategy can help clarify the new requirements for market access, potentially streamlining market entry timelines in KSA.
It is important to have a collaborative dialogue with stakeholders that goes beyond pricing and focuses on patient outcomes and healthcare efficiency to display alignment with KSA's shift towards a value-based assessment.
To facilitate access to patients and enhance payer perception, it is advised to explore opportunities for access agreements in the KSA. These agreements will serve as a means to localize efforts and accelerate access. Furthermore, it is essential to acknowledge that these access agreements will be an integral part of the dossier and are subject to evaluation by payers.
Lastly, manufacturers should consider early investment opportunities for collecting and producing real-world evidence through local partnerships. This will tailor the product’s value proposition to local market needs, which can in turn support P&MA negotiations and aid in developing Cost-Effectiveness Analysis (CEA) and Cost-Utility Analysis (CUA) studies for innovative products entering the market.
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Adequately analyzing the market's conditions and demands is vital. To achieve rapid reimbursement and optimal market penetration, pharmaceutical companies need to address the pricing, access, and time equation. Companies can improve the overall success of their products by integrating market access considerations at all stages of the product life cycle.
At Simon-Kucher, our pharmaceutical industry experts help companies understand and improve their products to meet market needs and deliver more value to customers. Our insights help strike the right balance between ambitious pricing and broad patient access. This ensures your products are not only profitable but also accessible in the market.
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