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© MAP BioPharma Limited 2015
Christian Hill and Mark HarriesMAP BioPharma
[email protected] [email protected]
Market Access in Europe
Some EU overviews and England as a worked example
Why are there differences amongst Member States?
Differential pricing in EU
© Can Stock Photo Inc. / RTimages
Differences across the EU make Market Access efforts complicated, but are possible with effective coordination
• Medicine prices differ across EU due to factors which are often beyond control of companies:– Price setting by authorities – national, not EU competence,
National health and pharma policies and priorities, Wholesale / pharmacy margins, VAT rates, Pack sizes and distribution channels, Exchange rate fluctuations
• Member States compare and sometimes reference their prices to other countries prices. Such comparisons must be performed with great caution to avoid unanticipated impact
• IRP – choice of country basket should take differences between Member States into account: – Purchasing power, GDP per capita; Germany recently decided to
include the Czech Republic, Slovakia and Greece in the country basket…The German price is again referenced by 19 other Member States*
Differences across the EU
*P. Kanavos et al for European Parliament, ENVI „Differences in costs of and access to pharmaceutical products in EU”, 2011, p.80
• Nationally dependent variables mean that prices are not directly comparable among Member States– wholesale / pharmacy margins, VAT rates, different pack sizes, distribution channels, exchange rate fluctuations,
terms of payment, national price-setting process/outcome by payors governments– All of which render any direct comparison inappropriate.
• Prices are the result of complex evaluation/negotiation processes established by national rules• It is essential that the decision-making process for setting the price is objective and transparent which
underlines the importance of the Transparency Directive• A study by Kanavos et al (2011)1 – price differences largely due to the differences in national priorities
(even countries with equivalent income), pharmaceutical policies and market regulation• Example of successful differential pricing – vaccines have a differential pricing structure with reasonable
market prices in high income countries, low prices in Global Alliance for Vaccines and Immunisations (GAVI) and intermediate prices in middle-income countries2
• Danzon and Towse (2003)3 stress that differential pricing allows broader access for patients to innovative products in a sustainable way while promoting innovation
Price Differences between Member States: Reasons and Importance
1 P. Kanavos et al for European Parliament, ENVI „Differences in costs of and access to pharmaceutical products in EU”, 2011, available athttp://www.europarl.europa.eu/document/activities/cont/201201/20120130ATT36575/20120130ATT36575EN.pdf.2 P. Yadav, “Differential Pricing for Pharmaceuticals, Review of current knowledge, new findings and ideas for action”, A study conducted for the U.K. Department for International Development (DFID), August 2010, p.28.3 P.M. Danzon and A Towse (2003), „Differential Pricing for Pharmaceuticals: Reconciling Access, R&D, and Patents" International Journal of Health Care Finance and Economics, 3: 183-205, 2003
• IRP – acts as a barrier to price adaptation based on a country’s economic situation
• IRP mechanically leads to a stronger price convergence
• Some practices of cross-border reference pricing can also contribute to a heavy distortion of prices especially in times of financial crisis e.g. Greece!
• This is especially the case in countries where the price is set based on the lowest price in the country basket rather than on the average price in the country basket.
• Some practices of IRP may spill-over onto other countries and decrease the global incentives to innovate
• Companies may also consider the impact of launching a product in one country on the revenues of the other country
Implications of IRP
• Austerity is increasingly leading to restrictive pricing policy– These countries should be excluded from country baskets as those prices /
rebates are set under exceptional circumstances, may be temporary and should not be exported to other countries
• Transparency directive– Official list prices are already made public by Member States – The directive is aimed at guaranteeing transparent procedures and payor
decisions for pharmaceutical companies, not final prices• Ultimately, when IRP policy is aggressive, it directly impacts profitability
of product launch• Such developments impact the revenues of pharmaceutical companies
but also act as a delay to patient access to innovative treatments. The ESMT White Paper (p.17) finds that fewer projects are developed in low-margin therapeutic areas
• It is essential to balance the impact of lower prices with the costs associated with less innovation and with fewer products being launched1
Trends and the Future
1H. Friederiszick, N. Tosini, F. de Vericourt, S. Wakeman, ESMT White Paper, „An Economic Assessment of the Relationship between Price Regulation and Incentives to Innovate in the Pharmaceutical Industry, 2010, available at http://www.esmt.org/en/271562
Price level index for pharmaceutical products in 2005, EU25=100
Source: European Commission Directorate-General for Economic and Financial Affairs (DGECFIN); Cost-containment policies in public pharmaceutical spending in the EU By Giuseppe Carone et al 2012
Simulated savings due to a price convergence of countries with above EU level prices to EU level prices
Source: European Commission Directorate-General for Economic and Financial Affairs (DGECFIN); Cost-containment policies in public pharmaceutical spending in the EU By Giuseppe Carone et al 2012
• Germany is the largest EU state by population, the largest EU economy and accordingly the most important market for pharmaceuticals within the European Union. For a long time manufacturers were effectively free to determine the reimbursement price of patented drugs in the German health care system. In recent years, however, pricing and reimbursement in Germany has changed significantly. In January 2011 a new system was introduced to determine the reimbursement prices of new active substances entering the German market. This new system, known as the “AMNOG-System” foresees a 2-step procedure which new medicines have to undergo as soon as they enter the German market.
• The AMNOG-System is a quite recent concept (est. 2011) and is considered to be a “learning system” by the German legislator and the administrative bodies involved. Also, in some parts the legal framework governing the system is not very dense and leaves room for interpretation. Accordingly, many aspects are still being shaped and substantiated by court decisions, law decrees and, most of all, the administrative practice of the authorities involved. This website has been designed to support you when navigating the system to prepare the successful launch of innovative pharmaceuticals in Germany.
• In 2012-2014, G-BA assessed 99 new technologies and decided 48% of products had no additional benefit, 25% had minor additional benefit, 18% had considerable additional benefit and the remainder had unquantifiable additional benefit. No technologies have been classified as having major additional benefit.
• A high proportion of G-BA decisions have been of no or unquantifiable benefit indicating that obtaining a high price in Germany is challenging
Germany – an example of free pricing at launch but a challenging process overall
The UK
A more detailed review
Topics
1. An alternative guide to the NHS
2. It’s not as bad as you think though
3. Financial background to medicines in UK
4. NICE consultations, long grass and the doughnut
5. Rare diseases, HST and Chinese whispers
© MAP BioPharma Limited 2014
Alternative guide to the NHS
http://www.kingsfund.org.uk/projects/nhs-65/alternative-guide-new-nhs-
england
It’s not as bad as you think:Compare us to the US
http://kevinbrady.house.gov/uploadedfiles/
obamacarechart.pdf
PPRS context (pricing agreed on behalf of all UK nations) Total medicines expenditure / growth
Projecting Expenditure on Medicines in the NHS ; Phill O’Neilla, Jorge Mestre-Ferrandiza,
Ruth Puig-Peirob and Jon Sussexa ; OHE Research Paper 13/02 April 2013
Each of the three other nations in the UK has a slight variation on the English model which impacts on market access
Scotland: • Managed through 14 health
boards• GPs and pharmacy are
contracted through health board but work in community health partnerships based on local authority boundaries
• Guidance from SMC and SIGN• MTA Guidance from NICE
Northern Ireland: • Funded by the NI Executive through its
Health Department • The Health and Social Care Board (HSCB)
manage funding, commission services, and work with the HSC trusts
• The 6 HSC trusts are responsible for management of services at a local & regional level
Wales: • Managed through 7 local health boards
(LHBs), each deliver NHS services for local area
• Wales follow NICE and AWMSG guidance
Although funded centrally from national taxation, NHS services in England, Northern Ireland, Scotland and Wales are managed separately
Southern Ireland: • The Health Service Executive (HSE),
responsible for provision of healthcare in Ireland, follows guidance from the National Centre for Pharmacoeconomics (NCPE)
© MAP BioPharma Limited 2014
English NHS Organisation – an enormous organisation
There are two broad stages to successful market access in England
1. National market access
2. Market access commercialisation
Key desired outcomes
Desired rate of
commercial uptake
Local action plan to adopt new product
Positive NICE (HTA*) and associated national
implementation incentives
Launch
* HTA = Health Technology Assessment
Phase II/III
National market access begins pre-phase III and continues after launch
Before start of phase III or -4 years launch
On start of phase III or -3 years launch
-6 months launch
Post-launch, pre-NICE & post-NICE
Launch +3 months
Launch +12-18 months
Go/ no go decision
Go/ no go decision
Ensure appropriate endpoints for EMEA and HTA included in Phase III
Outcomes/ milestones:
1. Selection for NICE appraisal
2. Flagged for NICE guidelines
3. On radar of national service development makers
4. On radar of national clinical opinion leaders
Patient Access Scheme (PAS) price
approved
Favourable position in regional HTA guidance
Favourable position in NICE HTA
Favourable position in NICE guidelines, quality standards,
and incentives e.g. Quality Outcomes Framework (QOF), commissioning for Quality &
Innovation (CQUIN) & National Clinical Guidelines
Key desired outcome: positive NICE HTA and associated national implementation incentives
Stage 1
PenTAG, GMMMG, Keele,
UKMi etc.Academic
pharmacists, KOLs
…with a range of decision makers and influencers requiring a joined-up approach across the UK operating company…
Before start of phase III or -4 years launch
On start of phase III or -3 years launch
-6 months launch
Post-launch, pre-NICE & post-
NICE
Launch +3 months
Launch +12-18 months
NICEPharmaScan
National Horizon Scanning Centre
(NHSC)
• Input data into PharmaScan etc.• Meetings with
NHSC• 1:1 national
advocacy development
Department of health (DoH)
Patient Access Scheme Liaison
Unit (PASLU)
• Ad board to understand real-life NHS affordability/ positioning• Direct contact
with DoH, PASLU• Negotiating
price with Global
• Direct contact with organisations• Bespoke
submissions
NICEAcademics
decision support units, patient groups, KOLs, Royal Colleges
• Write submissions (9-12 months)• 1:1s and meetings
to create bespoke messages for all stakeholder groups
NICECo-opted KOLsNational KOLs
• Co-ordinating processes & feedback with commissioners• National advocacy
development
Typical activities should include:
Decision makers&
influencers:
Ensure appropriate endpoints for EMEA and HTA included in
Phase III
1. Selection for NICE appraisal2. Flagged for NICE guidelines3. On radar of national service
development makers4. On radar of national clinical
opinion leaders
Patient Access Scheme (PAS) price approved
Favourable position in regional HTA guidance
Favourable position in NICE HTA
Favourable position in NICE guidelines, quality standards, and incentives e.g. Quality Outcomes
Framework (QOF), commissioning for Quality & Innovation (CQUIN) &
National Clinical Guidelines
NICE
• Global ad boards
Stage 1
Focussed multi-disciplinary market access commercialisation is then essential to drive the desired rate of product uptake
-6 months – 2 years to launch during NHS annual planning cycle deadlines
0-90 days + 3 months post NICE
6-36 months post launch
Go/ no go decision
Local NHS planning cycle has new product on radar and associated impact on budget service configuration planning
and local priorities
Local action plan agreed on how product is to be developed
Implementation and monitoring support
Milestones:
Local CCG/ CSUPharmaScan, national horizon
scanning & regional HTA groups, local clinical KOLs
• Continue to input data into PharmaScan etc.• Continue direct contact with
regional HTA• Stakeholder mapping &
prioritisation of local accounts• 1:1 activity with MM & lead
commissioners using ABN
Local CCG/ CSUNICE & regional HTA groups,
local clinical KOLs
• Face to face activity from hybrid clinical/ payer role
• Tools to help payers identify local cost implications e.g. BIM
• Tools to support formulary inclusion (which will be mandated)
• Payer educational materials on key concepts for evaluating
• Proactive support and facilitation of creating costed pathways, business cases & service re-design
Local CCG/ CSU & clinical team as agreed in local plan
• On going clinical/ payer field role face-to-face with MDT• Support on monitoring
progress, real world data, case studies, learning sets• Educational support• Joint working and
partnership working
Typical activities:
Decision makers& influencers:
For each planning cycle Review in light of each new competitor
Key outcome: desired rate of commercial uptake
Stage 2
The roadmap for new medicines in NHS England may not always be obvious – specialised medicines for example have a range of routes to reimbursement
© Can Stock Photo Inc. / RTimages
Strategically there are many things to be considered as to which direction you may or may not want to go
NICE Single Technology Appraisal
(STA)
Cancer Drugs Fund
(CDF)
Commissioning Through
Evaluation
NICE Highly Specialized
Technologies (HST)
Programme
Commissioning Policy
Individual Funding
Requests (IFRs)
What do NICE do?
• Proposed addition of burden of illness and wider societal impact • These value elements are described as ‘modifiers’• NICE Appraisal Committees use these modifiers to help decide whether to recommend a
technology with an incremental cost effectiveness ratio above £20,000 per QALY
NICE - Explaining what was meant to change in 2014
UK example of a changing environment: Wider societal impact now kicked into the long grass
Current UK evaluation requirements:• NHS and personal
social services (PSS) perspective
• No societal costs included
• All societal benefits included (e.g. carer disutility)
The Netherlands evaluation requirements• Societal perspective• Some societal costs:
patient productivity losses and unpaid carer costs
• All societal benefits included (e.g. carer disutility)
Sweden evaluation requirements:• Societal perspective• All societal costs:
patient productivity losses and consumption; unpaid carer costs
• All societal benefits included (e.g. carer disutility)
VBA UK evaluation requirements:• Societal perspective• Weightings based on
BoI• Wider societal impact
based on patient ability to engage with society
Adapted from a slide provided courtesy of FIECON Ltd
£14bn
NHS England Consultation – Issued 27 January 201590 day consultation period
In prioritising treatments and interventions for the future financial year, NHS England will observe the following sequence
• First Order– NICE TA and HST– Estimated budget impact for NICE approvals in 2015/16 = £270m
• Second Order– NHS Constitution delivery requirements which affect specialised
services e.g. 18-week wait• Third Order
– Developments to support national service strategies e.g. increase access to transplantation
• Fourth Order– All other specialised services developments The Cancer Drugs Fund
currently remains outside
Five stages have for treatments and interventions that might typically be commissioned
2. Planning
3. Building the clinical case
1. Scanning
4. Impact
analysis and consultation
5. Governance
NHS England. Consultation Guide Investing in Specialised Services. 27 January, 2015https://www.engage.england.nhs.uk/consultation/investing-in-specialised-commissioning/supporting_documents/invspecservconslt.pdf
Five stages have for treatments and interventions that might typically be commissioned
• Coordinated at a Clinical Reference Group level– There are two published outputs from this stage
• The list of potential clinical policies that are identified as ‘Not being routinely commissioned’
• The list of potential service specifications for commissioning
1. Scanning
Five stages have for treatments and interventions that might typically be commissioned
• Where the National Programmes of Care, who coordinate the work of the CRGs into strategic groupings such as cancer, consider the proposals and select the ones that most fit the programme’s strategic priorities
• This will create an Annual Work Programme
2. Planning
Five stages have for treatments and interventions that might typically be commissioned
• Building the clinical case: where the Clinical Reference Group works with stakeholders, including patients and the public, to define the clinical proposal
• An independent review of clinical evidence will usually be commissioned
• Finally, a Clinical Appraisal Panel will form a view whether a clinical case is made
3. Building the clinical case
Five stages have for treatments and interventions that might typically be commissioned
• Where NHS England will develop, using the defined clinical criteria, a service impact analysis and hence a financial impact analysis
• This will result in a final policy or service specification that can be considered for commissioning
• The scale and duration of consultation will then be defined• Suite of 6 documents
1. Provisional service specification2. Activity projection report3. Service impact analysis report4. Finance impact analysis report5. Draft specification6. Engagement report
4. Impact
analysis and consultation
Five stages have for treatments and interventions that might typically be commissioned
• Where the Clinical Priorities Advisory Group assures the Board that the process has been completed and recommends a priority order of commissioning
• The NHS England Board approves the prioritisation• Commissioning against the priorities will be overseen by the
Specialised Commissioning Committee
5. Governance
• Equity– 'NHS England will not confer higher priority to a treatment or intervention
solely on the basis it is the only one available.’– This seems to be disenfranchising patient groups that currently have ‘no hope’ – Seems inconsistent with the DH’s own 'innovation health and wealth’ strategy
• Timeframe and backlog – NHS England has openly struggled with the backlog of proposed
commissioning policies and service developments– We welcome the transparent way that the process is laid out– But framework should not be paralysing
NHS England latest draft of the specialised commissioning information pack – our concerns
• NICE collaboration– The CRG accountable commissioner will be expected to confirm that there is
no planned or in progress NICE appraisal– Little evidence of consistency between the NICE appraisal process and that of
the NHS specialised services review process– Companies left with the need to plan for both, due to lack of predictability of
the system
• Appeal– 'The decision itself cannot be appealed.’ and 'A challenge that the correct
process has not been followed should be made in letter to the Director of Specialised Commissioning.’
– Not clear how such a challenge would be handled and suggests that only a ‘Judicial Review’ style of appeal would be an option?
NHS England latest draft of the specialised commissioning information pack – our concerns
• Challenging – companies slowing down their access efforts to ‘test’ markets first
• Unpredictable – companies looking to other markets first
• Most important things are:1. Comparators choosing the wrong one or PBO as comparator can lead to
perception of no or little benefit
2. Clinical outcomes in terms of some surrogates vs. validated or mortality measures – are outcomes meaningful?
3. Price – it’s not the most important thing, but it becomes increasingly important without 1 and 2
In conclusion
Thanks to MAP BioPharma for source material
Christian Hill and Mark HarriesMAP BioPharma
[email protected] [email protected]
© MAP BioPharma Limited 2014
