Global HTA and Pricing Mechanisms

Jennifer LeeDirector of Health Economics, Market Access & ReimbursementJanssen UK

September 2016

What can we learn from other countries around the world about national medicines pricing and procurement?NHS Expo Pop-up University Workshop

Disclaimer

The views expressed in this presentation are my own, as a health economist who has worked in several different countries across the world, and not necessarily those of Janssen

Objective of today’s workshopA ‘crash course’ of how a selection of other countries around the world assess and fund new medicines

What are the benefits and challenges of the various approaches? How are other countries dealing with the affordability challenge? What can the UK learn from international best practice?

Key question: How can the NHS ensure that patients can access new, clinically effective medicines in a timely fashion within a fixed budget?

Answer: You need to increase flexibility in the system

How do you assess the value of a new medicine?

Use of HTA in decision making

Assessment Appraisal

Evaluation of Evidence

(clinical, economic)

Coverage / Price Decision

(based on evidence)

Academic/Scientific Policy making

HTA in reimbursement decisionsTwo main approaches to assessing value

Two main approaches to coverage decision

Clinical value added compared with best existing treatment

• A two-step process: clinical, then price

• Germany, France, Spain, Italy

Incremental cost utility (eg £ per QALY)

• A one-step process: clinical and economics together

• UK, Canada, Australia, Sweden

Manufacturer sets price and HTA is used to assess value and hence coverage/reimbursement in relation to that price

• UK, Germany

HTA is used to determine value and hence price at which system will cover/reimburse

• France, Italy, Spain, Sweden, Canada, Australia

Purchaser – assessing

affordability

Value assessor of cost

effectiveness

Cost-effectiveness is not the same as affordability

Case in point: Hep C vs Cancer

What models are being used globally?

How are other countries dealing with the affordability challenge?

Germany

Joint Federal Committee (GBA): Decision body with 13 members (SHI, physicians, hospitals, (patients))

Institute for Quality and Efficiencyin health care: scientific institute,supports GBA

Head association of ‘sick funds’:Negotiation partner for prices

AMNOG: Key Players

AMNOG = Arzneimittelmarktneuordnungsgesetz“Act for the Restructuring of the Pharmaceutical Market in Statutory Health Insurance ”Effective since January 1st 2011

Assessment

Appraisal

Source: G-BA

Outcome of benefit evaluation

SMALLER BENEFIT

NONE

NOT QUANTIFIABLE

SLIGHT

IMPORTANT

MAJOR

The benefit of the medicinal product to be assessed is smaller than the benefit of the appropriate comparative

therapy

No additional benefit has been demonstrated

Because the scientific data basis does not allow it (non quantifiable can mean anything between slight and major)

A moderate and not just small improvement of the therapy-relevant benefit that was previously unattained compared

to the appropriate comparative therapy

A significant improvement of the therapy-relevant benefit that was previously unattained compared to the appropriate

comparative therapy

A sustained improvement of the therapy-relevant benefit that was previously unattained compared to the appropriate

comparative therapy

Extent of the additional benefit (categorization)

Determination of the additional benefit (probability)

PROOF INDICATION CLUE

Source: www.vfa.de

France

AssessmentAppraisal

Source: HAS

Source: HAS

Australia

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Australian HTA process

AssessmentAppraisal

Key features in the Australian system

• The Drug Utilisation Sub-Committee (DUSC) of the PBAC monitors the patterns and trends of drug use and makes such data available publicly – ability to control and monitor overall drug expenditure

• Each indication (not just drug) is tracked by a unique PBS number• No explicit cost per QALY threshold – ability for PBAC to flex according to

judgement• Comparative health gain assessed in terms of magnitude of effect and clinical importance/need• Budget impact• Level of R&D investment• Equity issues• Quality use of medicines• Risk share• Rule of rescue

• Ability to introduce flexible pricing arrangements• Alternative funding arrangements for treatments that do not fit the cost per

QALY framework – Life Saving Drugs Programme

Risk sharing arrangements (RSA) in AustraliaRSAs have been developed to address at least three types of risk: the overall cost to the PBS — this is affected by

uncertainties in the number of patients, daily dose and duration of therapy of the proposed drug

cost-effectiveness — this is affected by the volume of use beyond the restriction(s) and by the volumes of use of categories within the restriction(s) where cost-effectiveness is known to vary across categories

the extent of overall gain in health outcomes — these are managed entry agreementsResult: Flexible pricing arrangements for most new treatments listed on the PBS

Canada

HTA in Canada

• CADTH (Canadian Agency for Drugs and Technologies in Health):oNon-oncology health technologies for all public

provinces/territories/federal plans (except Quebec)• pCODR (pan-Canadian Oncology Drug Review):

oOncology health technologies for all public provinces/territories/federal plans (except Quebec) – uses a more clinically driven process than non-oncology CADTH

• INESSS (Institut National d’Excellence en Santé et en Services Sociaux):oAll health technologies for Quebec (replaced AETMIS in 2011)

HTA in Canada

1. The drug is submitted to the appropriate HTA agency to be evaluated. The agency provides a formulary listing recommendation based on economic and clinical criteria (Assessment)

2. Once the recommendation is provided to the provinces, the drug formulary committees are free to make their own listing decisions based on resource availability and budget constraints (Appraisal)

Provincial Drug Plans

pCODR/CADTH(via CDR)

INESSS

Canada - Pricing

• The Patented Medicine Prices Review Board (PMPRB) is a federal body that regulates the maximum price the manufacturer can charge in Canada based on the PMPRB Excessive Price Guidelines• Based on value, the drug is classified into one of 3 categories:

•Category 1 (Extension of existing drug) – existing drug price•Category 2 (Breakthrough) – price is limited to the higher of:

• Maximum price of comparable drugs in the same therapeutic class in Canada• Median price of the same drug in 7 comparator countries (UK, USA, France, Germany, Switzerland,

Sweden, Italy)

•Category 3 (Moderate/No Improvement) - price is limited to the maximum price of comparable drugs in the same therapeutic class in Canada

• If the price exceeds the guidelines, the manufacturer can provide additional evidence in support of the suggested price

• Price Listing Agreements (PLAs) have price volume agreements to allow different prices for different indications of the same drug

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Cancer-specific patient and clinician review committee

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pCODR decision-making criteria

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Key features of Canadian system

• Different process for cancer treatments (pCODR) with broader decision-making criteria

• National assessment with regional appraisal and pricing negotiations

• Positive recommendation from CADTH/pCODR does not mandate funding – this is up to the provinces to control their individual budgets

• No explicit cost per QALY threshold

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Sweden

Sweden HTA process

AssessmentAppraisal

Key features of Swedish system

Inclusion of multiple criteria in the HTA – TLV (Swedish Dental and Pharmaceutical Benefits Agency) is based upon three principles:

– Human value principle (equality of all human beings)– Need and solidarity principle (higher threshold for the ones in higher

need)– Cost-effectiveness principle (no fixed QALY threshold and pricing by

indication) ‘Collaboration Model’ implemented in 2013 - Three-way

reimbursement negotiations– County councils– TLV– Manufacturer

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Spain

Spain - A Decentralised HTA Process

Ministry of Health (MSSSI)

17 Autonomous Communities/Regions

Pricing & reimbursement decision

(Assessment)

Drug access decision in each region(Appraisal)

National Level Regional Level Local Level

Hospitals

Drug formularies

National LevelReimbursement Conditions (SGCMPS)

Main drivers for inclusion on reimbursement list

Disease severity and burden Unmet needs Therapeutic value Level of

innovation

Therapeutic alternatives and

pricesBudget impact

Pricing Decision (CIPM)

CIPM, Interministerial Commission for Pricing of Medicinal Products IRP, International Reference PricingSGCMPS, General Subdirectorate of Quality of Medicines and Health Products

Main drivers for pricing

Degree of therapeutic innovation

Budget impactDrug price in

other EU countries

Price of comparable

existing therapies in Spain

Company profit

R&D activity and manufacturing investment in

Spain

Total cost of the drug

• IRP is used as supportive criterion

• Country basket generally includes Eurozone countries

• R&D costs• Production costs• Promotional costs• Administrative costs

Italy

Italian HTA

• Important

• Moderate

• Modest

The HTA agency in Italy, the Italian Medicines Agency (AIFA), is responsible for both regulatory approval and for pricing and reimbursement decisions (including conducting HTA) of all new medicines in the market at the national level.

Manufacturers make a submission to AIFA, which first assesses clinical effectiveness and categorises the technology as an important, moderate or modest innovation

AIFA’s evaluations are taken into account when pricing medicines at a national level. Hospital formularies are defined at a regional level. The method and process for which regions decide what to include differ across regions, with some regions using a cost-effectiveness analysis to determine reimbursement.

Level of innovation

Source: AIFA

Source: AIFA

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What have we learned from these global examples?• Germany, France and Italy base their value assessment upon

added clinical benefit and level of innovation• Spain considers many different factors when assessing the price

and reimbursement status of new treatments• Australia, Canada and Sweden all use the cost per QALY but do

not have an explicit threshold, and all consider value elements beyond simply the cost per QALY (eg level of unmet need, severity of disease, wider societal benefits) – final price negotiations are handled separately

• Canada has a separate HTA process for cancer treatments, due to the methodological issues associated with the cost per QALY

• Italy has pioneered the use of registries to track drug expenditure and patient outcomes

• All countries have some form of flexible pricing arrangements to deal with affordability, beyond just simple discounts

Comparing the two main HTA models

QALYRelative

Effectiveness

Australia, Canada, Sweden, UK France, Germany, Italy, Spain

Cost/QALY vs ICER Threshold

2 steps: 1) Clinical benefit 2) Price negotiation on “added value”

and Budget Impact

Difficult for non-health economists to understand?

Technical limitations;eg. end of life,

data availability, not cost-effective at zero price

What is the right threshold?

Country

Concept

Applicability &

Learnings

Clinical benefit focus more understandable for patients and public?

What is the right local comparator?

Less resource intensive?More focus on budget impact?

The value (and limitations) of HTAA tool for value – not affordabilityWhy we may not see cost savings from medical advancements, and why we need to look across the entire patient pathway, including de-commissioning to create headroom

Drug therapyMoves patientfrom hospital

to home

One hospital bedMany willing

patients!

LOS reduced by use of

laparoscopicsurgery rather

than open

Bed re-filled

Minimally invasive techniques move

treatment to out-patient setting

Bed re-filled Bed re-filled

Where is NICE leading the way globally?

The HTA & decision making processes are transparent

Stakeholders are engaged formally in the HTA process

Independence between evaluators, decision-makers and payers

The HTA process has the right to appeal

How do we create greater flexibility within the UK model?

The complexity of multiple indications

Managed Entry Agreements Taxonomy

Managed Entry Schemes

Financial Schemes

Total cost for all patients

Discounts

Price/volume agreements

Total cost per patient

Patient/dose dependent

discount

Utilisation/price capping

Performance-based Agreements

Utilisation in real life

Outcomes guarantees

Patient registries

Evidence regarding decision

uncertainty

Coverage with evidence

development

Combination of financial and performance

elements

Some ideas…

Flexible pricing arrangements linked to value across the whole molecule across different indications

– Harness the power of NHS data to track drug usage and patient outcomes by indication

– Aligns with NHS objectives of outcomes based commissioning Broader value assessment beyond simply the cost per QALY

– Science has progressed dramatically in recent years (ie. increasingly personalised medicine) but methodology has not kept apace

– Broader decision-making framework including other criteria (ie beyond cost per QALY) that align with NHS objectives and patient priorities

De-commissioning less cost-effective technologies across the patient pathway (ie. not just medicines) to make room for newer innovations

– Aligns with NHS objectives of medicines optimisation and reducing wastage and inefficiencies in the system

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Thanks for listening – any questions?