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SHARING KNOWLEDGE ON INNOVATIVE MEDICINES FOR NON-COMMUNICABLE DISEASES: A COMPENDIUM OF GOOD PRACTICES FOR SUSTAINABLE ACCESS —Promoting a Dialogue among Payers and Manufacturers— November 21, 2018

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Page 1: SHARING KNOWLEDGE ON INNOVATIVE MEDICINES FOR …pubdocs.worldbank.org/en/792561542818915277/MSH...Nov 21, 2018  · executive summary 1 acronyms 8 section 1: introduction 10 1.1 the

SHARING KNOWLEDGE ON INNOVATIVE MEDICINES FOR NON-COMMUNICABLE DISEASES:

A COMPENDIUM OF GOOD PRACTICES FOR SUSTAINABLE ACCESS

—Promoting a Dialogue among Payers and Manufacturers—

November 21, 2018

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Management Sciences for Health, RTI International, & Global Health Insights

Project on Strengthening Global Knowledge on Access Solutions for Innovative Medicines

November 21, 2018

ManagementSciencesforHealth(MSH)HectorE.CastroRituKumarTanyaMalpica-LlanosColinGilmartinResearchTriangleinstitute(RTI)InternationalTroyScottMarwaSalemRachelNugentGlobalHealthInsights(GLOHI)LauraJ.FrostBethAnnePrattAcknowledgmentsThisdocumentwasdevelopedwithfinancialandtechnicalsupportfromtheWorldBank,withparticularthankstoAndreasSeiterforhiscontributionsthroughouttheproject.TheteamalsowishestoacknowledgethetechnicalinputofsubjectmatterexpertsonmanagedentryagreementsandtothankintervieweesinColombia,Kenya,andUkrainefortheinsightstheyprovidedduringcountryvisits.

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Table of Contents

EXECUTIVESUMMARY 1

ACRONYMS 8

SECTION1:INTRODUCTION 10

1.1THEPROBLEM 101.2ACCESSSTRATEGIESFORNCDMEDICINES 171.3FOCUSOFTHISCOMPENDIUM 18

SECTION2:CONTEXTUALCONSIDERATIONSFORIMPROVINGACCESSTONCDMEDICINESINLOW-ANDMIDDLE-INCOMECOUNTRIES 19

2.1INCOMELEVEL,POPULATION,ANDDISEASEBURDEN 192.2HEALTHSYSTEMSINLMICS,FRAGMENTATION,ANDACCESSTONCDMEDICINES 222.2.1INTERNATIONALANDREGIONALLEVELPOLICIESANDREGULATIONS 232.2.2NATIONALMULTI-SECTORALPOLICIES 252.2.3NATIONALHEALTHSECTORGOVERNANCEANDPOLICIES 262.2.4PRIORITYSETTINGANDTHEUSEOFHTAINLMICS 292.2.5HEALTHSERVICEDELIVERYSTRATEGIES 302.2.6STRATEGIESATTHEINDIVIDUAL,HOUSEHOLD,ANDCOMMUNITYLEVEL 302.3PHARMACEUTICALSANDPHARMACEUTICALPOLICYINLMICS 31

SECTION3:MANAGEDACCESSSTRATEGIES 43

3.1WHATAREMANAGEDACCESSSTRATEGIES(MASS)? 433.2UTILIZINGMASSTOIMPROVEACCESSTOINNOVATIVENCDMEDICINESINLMICS 443.3MANAGEDENTRYAGREEMENTS(MEAS) 453.3.1FINANCIALSCHEMES 483.3.2PERFORMANCE-BASEDAGREEMENTS 493.3.3WHEREARETHESEFINANCIAL-ANDPERFORMANCE-BASEDSCHEMESBEINGIMPLEMENTED? 523.3.4CHALLENGESANDLIMITATIONSOFMEAS 553.3.5INWHICHLMICSETTINGSAREMEASAPOTENTIALLYEFFECTIVESTRATEGY? 563.3.6DECISIONMAKINGONWHETHERTOPROCEEDWITHANMEASTRATEGY 60

SECTION4:CONCLUSIONSANDCONSIDERATIONSFORTHEFUTURE 70

4.1THECHALLENGEOFTRANSITIONINGFROMNATIONALESSENTIALMEDICINESLISTS(NEMLS)TOBENEFITPACKAGESINLMICS 704.2PROMOTINGEQUITABLEACCESSTOINNOVATIVENCDMEDICINES 714.3MASSASANACCESSSTRATEGYFORINNOVATIVENCDMEDICINES 72

REFERENCES 75

APPENDIXI:METHODOLOGY 88

APPENDIXII:USERGUIDETOTHREE-MODELSCENARIOSFORINCREASINGACCESSTOINNOVATIVEMEDICINESFORNON-COMMUNICABLEDISEASES 91

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EXECUTIVE SUMMARY

IntroductionNon-communicable diseases (NCDs)—including cardiovascular disease (CVD), cancers, strokes, chronicrespiratory infections,anddiabetes—presentlycontributeto70%ofworldwidemortality (GBD,2018).NCDsrepresentasignificantandgrowingcontributiontodisability-adjustedlife-years(DALYs)inlow-andmiddle-incomecountries(LMICs)andmanyofthesecountriesareconfrontedwithadualchallengesincea substantial burden of infectious diseases andNCDs coexist in these settings. The 2013 Global NCDMonitoringFrameworkaims fora25%reduction inprematuredeath fromNCDsby2025 (25x25)andSustainableDevelopmentGoal(SDG)3.4targetsanadditional5%(or30%overall)reductionofNCDsby2030.Both25X25andSDG3.4placeemphasisonpreventingthecausesofNCDsbutalsohighlightthecriticalrolethataccesstomedicinesmustplayinachievingnationalandglobalgoals.Equitable,sustainableaccessisneededforexistingNCDmedicines,aswellasfornew,breakthroughNCDinnovationsthatshowpotentialfortherapeuticeffectandlong-termcostreduction.Theseinnovationsare increasinglybeingrolledout inhigh-incomecountries,buttheiravailability inmostLMICsremainslimited due to high prices, fragmentation of sources of funding, and uncertainties about their clinicaleffectivenessandcost-effectiveness.Moreover,therearearangeofhealthsystemsconstraintsincludingthoserelatedtorationalselectionofmedicines,developmentanduseofevidence-basedclinicalpracticeguidelines, capacity amongst health professionals to manage NCDs, health information systems, andprocurementanddistributionsystems.Theconstraintsineachcountrydiffer,asdotheappropriaterangeofstrategiesforaddressingthem,duetovaryingcontextsacrossLMICswithrespecttoawiderangeoffactors including income level, population, disease burden, health expenditure and financing, andpharmaceuticalpolicies.Thiscompendiumisaglobalknowledgeresourcethatprovidesstakeholderswithinformationandtoolsabout access strategies for innovativeNCDmedicines in LMICs. It is intended to promote dialogueamong governments, other payers, andmanufacturers in LMICs, aswell as additional stakeholdersinvolvedinprovidingaccesstomedicines.Inparticular,thecompendiumfocusesonformal,negotiatedagreementsbetweenpharmaceuticalcompaniesandpayers(governmentpayers,privateinsurers,ordonors)referredtoasmanagedaccessstrategies(MASs).MASsinclude“compassionateneed”andnon-profit access programs, voluntary licensing, and confidential agreements known as managed entryagreements(MEAs).Intheaccesstomedicinesliterature,relativelylessattentionhasbeengiventhusfartoMEAs,andthesearrangementsarethereforeaparticularfocusofthecompendium.BasedonresearchcarriedoutbyManagementSciencesforHealth(MSH),thecompendiumincludesaliteraturereviewofthepublishedandgreyliteratureonMEAsandsemi-structuredinterviewswithkeyinformantsinthreeLMICs(Colombia,Kenya,andUkraine).Itisalsobasedonthedevelopmentandtestingofthreedecisionanalytic models by Research Triangle Institute (RTI) International in cooperation with MSH. ThecompendiumwascompiledandwrittenbyGlobalHealthInsights(GLOHI)inpartnershipwithMSHandRTI.

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AccesstoinnovativeNCDmedicinesinsegmentedmarketsFragmentationorsegmentationofpharmaceuticalmarketswithinthehealthsectorispresentinmanycountries.Inhigh-incomecountrieswherefragmentationoffundingsourcesforhealthcaretendstobemuch lessthan in lower incomesettings,mostfinancialresourcescomefromthepublicsector(eitherfrom taxes or national health insurance). Nonetheless, the private sector—such as through privateinsurance(complementary,supplementary,orsubstitutive)—addstothepotofavailableresourcesforpharmaceuticalproducts.Inthesesettings,out-of-pocket(OOP)paymentsusuallyplayalessimportantrole,especiallyafteruniversalhealthcoverage(UHC)hasbeenachieved.Onthecontrary,LMICsareatarangeofdifferentlevelsofdevelopment,andtheirsystemsmaythereforehavevaryingdegreesoffragmentation.Manylow-incomecountriesrelyheavilyondonorassistanceandOOPpaymentsasmainsourcesofhealthcarefinancing,withlimitedavailabilityofpublicresourcesforhealthcare.HighOOPpaymentsareathreattoensuringaccessandaffordabilityofmedicinesincountries.Atthesametime—forthosesegmentsofthepopulationwithmorefinancialresources—OOPpaymentsareanopportunityforpatientstochoosepreferredprovidersandmedicines.Middle-incomecountries,ontheotherhand,arefacedwithadoublechallengesincetheyarenoteligibleorhavetransitionedfromdonor assistance, but many of these countries remain constrained by limited public funding forhealthcare.Inmanymiddle-incomecountries,privatefundingremainssubstantialandlinkedtotheabilityof individuals topay. The roleof private insurance varies in different settings andhigh levels ofOOPpaymentsexposethepopulationtotheriskofcatastrophicexpenditureandimpoverishment.Thus, many health systems in LMICs have multiple payers and/or fragmented delivery systems. ThesegmentofthepopulationinmanycountrieswiththeabilitytopayforNCDmedicinesmaybeverylimitedbecauseofthescarcityoffinancialresourcesaswellasthehighcostsofinnovativemedicinesandthechronicity of treatment. In these contexts, it is necessary to identifymorenuancedmarket segmentswithin countries and to establishdifferentMASarrangements for thesedifferent segments to ensuregreaterreachofandaccesstoinnovativeNCDmedicines.Theengagementoftheprivatesectormayberequired—includingtheharnessingofprivate-sectortechnologicalinnovations—sincedemandinmulti-payercontextscanoftennotbefullymetthroughpublicsectorprovisionalone.Managedentryagreements(MEAs)MEAsareformalarrangementsbetweenpharmaceuticalcompaniesandpayersthatseektoshareriskwithrespecttotheintroductionofnewhealthtechnologies.Thesearrangementsarereferredtobyavarietyofothernamesincludingrisk-sharingagreements,performance-basedagreements,patientaccessschemes, and special pricing arrangements. MEAs involve two key stakeholders: a payer (either agovernment or public fund holder, or a private holder of pooled resources such as an insurer) and apharmaceutical company thatmanufactures and commercializes a new drug. A number of additionalstakeholdersmaybeinvolvedinthenegotiationandimplementationofMEAs,includingotherregulatory

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bodies,HealthTechnologyAssessment(HTA)agencies,andhealthprovidersinvolvedinimplementation.MEAarrangementshavethreeobjectives:1)toreducehighcostsanduncertaintiesaboutexpenditureona newmedicine; 2) to address uncertainties about a newmedicine’s clinical effectiveness and cost-effectiveness in a particular setting; and 3) to manage a medicine’s utilization in order to optimizeperformance(Kanavosetal.,2017).MEA agreements generally fall into two categories: financial schemes and performance-basedagreements.Financialschemesfocusontargetingthefinancialimpactofnewdrugstopatientsand/orhealth systems. Financial schemes leverage instruments such as discounts, price/volume agreements,patient/dosedependentdiscounts,andutilization-basedpricecapping.Performance-basedagreementsaddresstheuncertaintywithrespecttoevidenceonclinicaloutcomesoreligibilityofpatientpopulations.Instrumentsincludeoutcomeguarantees,patienteligibilityrequirements/registries,andcoveragewithevidence development. Hybrid models also exist, combining financial- and performance-basedinstruments.Researchcarriedoutforthecompendiumidentified285documentedMEAs,withmostofthesepresentin high-income countries. The majority of these MEA arrangements focus on treatments for NCDs,particularlydifferenttypesofcancer,withfinancialschemesslightlymorecommonthanperformance-basedagreements.DocumentationonMEAimplementationinLMICsisextremelylimitedandrequiresmorestudy.MEAsmayprovidemultiple advantages to stakeholders seeking to improve access to innovativeNCDmedicines.While potentially promoting earlier access to patients,MEAsmay help payers to addressbudget- and clinical-related uncertainties while also allowing them to respond to social pressure forexpandingaccesstoinnovation.Forpharmaceuticalcompanies,MEAsmayprovidesomepredictabilityaboutinitialpriceconditionsandpotentialmarketsizeestimations.MEAscouldalsohelpcreateamorecollaborativeenvironmentbetweenpayersandpharmaceuticalcompanies.Finally,MEAsmaybringanopportunity for policy action, allowing stakeholders to explore a wide range of different types ofinstrumentstoaddresscontext-specificneedsandmarkets.Despitetheseadvantages,MEAsmayalsobringchallengesandlimitations.Onekeychallengerelatestothe burden they place on the health system, in terms of administration, cost, and the need for datacollection and analysis. MEAs also require enabling legal and policy frameworks. In addition, ifimplementedunderstrictconfidentialityrequirements,thesearrangementsmaylimittheabilityofsomestakeholder groups to know about and participate inMEA processes.Moreover, the lack of publiclyavailableinformationmaypreventlearningacrosscountriesaboutwhatworksandwhatdoesnotintheimplementationofMEAarrangements.NegativeperceptionsaboutMEAsbysomerelevantstakeholdersmaymakeitunlikelyforthesearrangementstobeconsideredasapolicytool.AfinallimitationofMEAsisthepossibilitythatkeystakeholdersmay“gamethesystem”inregardtoskippingrobustHTAtoinformcoveragedecisions.

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Thecompendium’scasestudiesinKenya,Ukraine,andColombiaidentifiedasetofninefactorsthatcouldhelporhindertheuseofMEAsinthesesettings.ThesefactorsrequirefurthertestinginotherLMICs.

1. Contextualcharacteristicsof thecountry including income level,marketsize,political stability,levelsofcorruption,structureofthehealthsystem(centralizedordecentralized),previouslocalsuccesses,internationalcooperation,andlevelsofcoordination.

2. Characteristicsofthedruganditsevidenceanduncertainties:sufficiencyandqualityofavailableevidence about a new drug in a particular country, including real-world evidence, cost-effectiveness, and patient eligibility criteria; the possibility of generalizability/extrapolation ofclinicalresultstothelocalpopulation.

3. Capacityofthehealthsystemtoregulateandnegotiate,aswellascollect,monitor,andevaluatedata (for financial schemes, health systems require capacity to estimate volumes, and forperformance-basedschemes,healthsystemsneedtobeabletoassessoutcomes).

4. ExistenceofenablinglegalandpolicyframeworksonMEAs,includinglegalrequirementsabouttransparencyofpricingorconfidentialagreements.

5. Existenceofclearrules,roles,responsibilities,andimplementationplanswithinthehealthsector,particularlyintermsofpayersandpharmaceuticalcompanies.

6. UnderstandingoftheuseandlimitationsofMEAsbykeystakeholders,includingperceptionsofcomplexityofMEAimplementation,feasibility,andmarketattractiveness.

7. SupportforMEAsasapolicysolutionfromkeystakeholders,includingconsiderationofthepolicyprocess,coalitionsandnetworks,financialsupport,andpolicychampions.

8. Leveloftrustamongpayersandpharmaceuticalcompanies,andwillingnesstodialogue.9. Riskattitudesofpayersandpharmaceuticalcompanies(neutral,averters,andseekers),including

risk attitudes toward uncertainty, noncompliancewith agreement, effects on international orportfoliorevenues,andtheneedforassurancethatheavylosseswouldbecompensated.

Bearing inmind their limitations and challenges,MEAshave thepotential for promoting constructivedialogueamongpayersandmanufacturersandfacilitatingearlier,sustainableaccesstoinnovativeNCDmedicinesinLMICs.DecisionmakersinLMICscanapproachMEAarrangementsincrementallyandstartwithsimplerfinancialschemeswhiledevelopingahealthsystemstrengtheningpathwayfortheselection,adoption, and monitoring and evaluation required for more sophisticated MEAs in the future. Thisincrementalapproachrecognizesthattimeandresourcesneedtobedevotedtoestablishinglegalandpolicyenvironments.TheminimumhealthsystemcapabilitiesneededforthenegotiationandimplementationofMEAsinLMICsmaypreventtheuseofthisstrategy inthoseLMICsheavilydependentondonorassistance.However,thereisanopportunitytoestablishinternationalcooperationfordevelopingthefoundationsforMEAsinthe future. In those LMICs where capacities allow and where stakeholders have conducted acomprehensivedecision-makingprocessandin-depthriskassessmentaboutthepotentialuseofMEAsforaspecificinnovativeNCDproduct,akeyinitialstepisbringingpayersandpharmaceuticalcompaniestogetherfordialogue.

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We developed three decision analytic models to guide communication between payers andpharmaceuticalcompaniesbyallowingstakeholders,priortoMEAnegotiations,tofamiliarizethemselveswiththetermsandconcepts,optionsforvariousinstruments,andtradeoffs:

1. ADecisionTreeModel2. AContinuumor“Bridge”Model3. AQuantitativeSpreadsheetModel

Theoverallgoalofthesemodels is tohelpstakeholdersnavigatetheoptionsastowhatformofMEAagreementwouldbemostadequate,plausible,feasible,cost-effective,andbeneficialtotheparties.The first two models are qualitative and guide decision makers to a determination of whether anagreement is feasible.Theyarebuiltaroundtwokeyvariables:1) theamountofpublic,generalizableinformation regarding themedicine; and2) the institutional capacityof thehealth systemandpayer.Whentheoutcomefromthefirsttwomodelsispositive,athirdmodel—theQuantitativeSpreadsheetModel—maybeusedtocalculateexpectedvaluesandconfidenceintervalsforkeymetrics(suchasoverallbudgetimpactandcost-effectiveness)underdifferentpriceandcoveragescenarios.ThepurposeofthisthirdmodelistohelppayersdecideonnextstepstowardspecifictermsofalikelyMEAagreement,andtohelpstakeholdersunderstandtheimpactonkeyoutcomesofpricingandcoveragedecisions,takingintoaccountuncertaintyaroundfactorslikeefficacyandsafety,thesizeoftheeligiblepatientpopulation,physicians’ prescribing behavior, and patients’ adherence to prescribed treatment. The compendiumprovidesadetaileduserguideforallthreemodels.ConclusionsandfutureconsiderationsImproving access to innovative NCD medicines is challenging and requires a combination of accessstrategiesatdifferentlevelsofthehealthsystemandanarchitectureofindividualsandorganizationswhopartnerinthedesignandimplementationofthesestrategies.InthoseLMICsinwhichthebudgetimpact,effectiveness, and cost-effectiveness of innovative NCD treatments are not yet fully established, thiscompendiumdemonstratesthatnegotiatedsolutionsintheformofMEAsareapotentialpolicyaction.TheconsiderationandimplementationofMEAscanencouragecapacitybuildingandtheestablishmentof institutionalarrangements forsustainabledecisionmakingaboutNCDmedicines inLMICsthatmayleadtowiser,morestructuredallocationdecisions.ThiscompendiumrecommendsstrategiesforthosestakeholdersconsideringMEAsandoffersrecommendationsforfurtherresearchandpracticalguidance.

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RecommendationsforcountrieswithlimitedpreviousexperienceandcapacityforimplementingMEAs:

• Learn from the experiences of other countries—particularly other LMICs—in negotiating andimplementingMEAs.

• Collaboratewith organizations providing technical assistance related to pharmaceutical policyandpricinginordertoaccesssupportandexistingknowledgeonMEAarrangements.

• AssessthepotentialforanMEApilotforaninnovativeNCDmedicine.• BuildindividualandorganizationalcapacitiesrequiredforunderstandingMEAarrangements.• Workwithpharmaceuticalcompaniestoinitiatepolicydialogue.Forlow-incomecountrieswith

limitedfiscalspace,supportfromexternalfunderswouldberequired.• PrioritizeoneortwodiseaseareasthatcouldbepartofanimplementationpilotonMEAs.• ConsiderfinancialschemesasthebestpotentialMEAarrangement,dependentonthesetting.• Ensuresufficientresourcesforpilotimplementation.• Implement the pilot and assess the experience to identify capacity-building requirements for

potentialfutureuseofMEAschemes.• Publishanddisseminateresultsofthepilotasacasestudy.• ConsidertheinitiationofotherMEApilots.

Recommendations for countries with limited previous experience but higher capacity for MEAs(enablingenvironment,infrastructure,politicalwill):

• Learnfromtheexperiencesofothercountries—particularlyothersimilarLMICs—innegotiatingandimplementingMEAs.

• Collaboratewith organizations providing technical assistance related to pharmaceutical policyandpricinginordertoaccesssupportandexistingknowledgeonMEAarrangements.

• CreateastrategyofstartingsmallwithMEAarrangementsandincrementallyexpanding.• Prioritizeasmallsetofdiseaseareasthatcouldbepartofanimplementationpilot.• IdentifyandchoosethebestMEAinstrumentaccordingtothesetting.• Workwithpharmaceutical companies to implementpilot(s) andassess implications for future

MEAs.• Assess the experience from the MEA pilot to identify regulatory and capacity-building

requirements(bothindividualandorganizational)forpotentialMEAscaleup.• StrengthenadditionalresourcesforMEAimplementation(HTA,PBMs,andothertools).• Publishanddisseminateresultsofthepilotasacasestudy.• Reviewpolicieswithinthehealthsectorandacrossotherrelevantsectorsto identifypotential

barrierstolong-termimplementationofMEAarrangements.• Leveragereformprocessesinhealthandotherrelevantsectors,drawingfromtheexperiencesof

theMEApilots,toinstitutionalizeenablinglegalandpolicyreforms.

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RecommendationsforadditionalresearchandpracticeguidanceonMEAsinLMICs:

• ResearchandpublishcasestudiesonMEAsthathavebeennegotiatedandimplementedinLMICstobuildevidenceonprocesses,facilitatorsandbarriers,outcomes,andlessonslearned.

• Examine the findings from the compendium’s case study countries in other LMIC settings,involving focus groups and workshops with targeted audiences in order to better identifypotentialusesofMEAs.

• Testandrefinethecompendium’sdecisionmodelsandanalyticalframeworkinasetofLMICstofurther explore how to reach certain market segments, assess barriers and facilitators, andidentifysynergisticaccessstrategiesthatcanworkwithMEAstoreachmorepatients.

• Developpracticalguidance forLMICgovernments,aswellasdevelopmentpartners, regardingthestepsrequiredtobuildanenablingpolicyandlegalenvironment,capacityinnegotiationandimplementationofMEAs,andrationaldecisionmakingonNCDmedicinesmoregenerally.

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ACRONYMS

AIFA AgenziaItalianadelFarmacoATM Access-to-medicinesAU AfricanUnionBCCOE ButaroCancerCenterofExcellenceCED CoveragewithevidencedevelopmentCEPS ComitéEconomiquedesProduitsdeSantéCVD CardiovasculardiseaseCR ContributoryRegimeDAH DevelopmentassistanceforhealthDALY Disability-adjustedlifeyearDMT Disease-modifyingtreatmentEBM Evidence-basedmedicineEML EssentialMedicinesListEPS EntidadesPromotorasdeSaludERP ExternalreferencepricingEU EuropeanUnionGDP GrossDomesticProductGNI GrossNationalIncomeHAI HealthActionInternationalHCPD High-costprescriptiondrugHPV HumanpapillomavirusHTA HealthtechnologyassessmentICT InformationandcommunicationtechnologyIETS InstitutodeEvaluaciónTecnológicaenSaludIHME InstituteforHealthMetricsandEvaluationKEMSA KenyaMedicalSuppliesAuthorityLMIC Low-andmiddle-incomecountriesMAS ManagedaccessstrategyMEDS MissionforEssentialDrugsSupplyMOH MinistryofHealthMS MultipleSclerosis MSRSS MultipleSclerosisRisk-SharingSchemeMSH ManagementSciencesforHealthNCD Non-communicablediseaseNEML NationalEssentialMedicinesListNGO Non-governmentalorganizationNHIF NationalHealthInsuranceFund

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NICE NationalInstituteforHealthandCareExcellenceNMP NationalMedicinesPolicyNRA NationalmedicinesregulatoryagencyOOP Out-of-pocketPMPA PharmaceuticalManufacturingPlanforAfricaSDG SustainabledevelopmentgoalSDI Socio-demographicindexSR SubsidizedRegimeSTG StandardTreatmentGuidelineTBT TechnicalBarrierstoTradeTRIPS Trade-RelatedAspectsofIntellectualPropertyRightsUHC UniversalhealthcoverageUK UnitedKingdomUNCITRAL UnitedNationsCommissiononInternationalTradeLawVAT ValueaddedtaxWHO WorldHealthOrganizationWTO WorldTradeOrganization

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SECTION 1: INTRODUCTION

1.1Theproblem

“Imagineifanepidemicthreatenedtokill41millionpeopleeveryyear.It’salreadyhappening.This year. Last year. Next year, too. Non-communicable diseases are the global biggestkillers…”

Dr.TedrosAdhanom,DirectorGeneraloftheWHO,2018

Non-communicable diseases (NCDs)—including cardiovascular disease (CVD), cancers, strokes, chronicrespiratoryinfections,anddiabetes—presentlycontributeto70%ofworldwidemortality(GBD,2018).Asof2015,anestimated40milliondeathshavebeenattributedtoNCDs(WHO,2015a),anincreasefrom31millionin2000(WHO,2014a).Thisincludes17.7milliondeathsfromCVD,8.8millionfromcancer,3.9millionfromrespiratorydisease,and1.6millionfromdiabetes(WHO,2015a).Fordecades,theprevailingtheorywasthatNCDswereprimarilydiseasesofaffluence.Withdemographicandepidemiologicaltransition,populationsshouldbecomericher,fertilitydecline,sanitationandhygieneimprove,andaccesstopublichealthinterventionsincrease,therebyshiftingtheepidemiologicalburdenfrominfectiousdiseaseto“man-made”and/orchronicdiseases(suchasthosebasedonlifestyle,aging,andenvironmentalstress)(McKeown,2009).In practice, however, this theory has not been born out. While low-income countries do bear adisproportionateshareofinfectiousdisease,NCDsstillrepresentasignificantandgrowingcontributiontodisability-adjusted life-years (DALYs) in these countries (IHME,2016). Countries classifiedby “low,”“lower-middle,”and“middle”socio-demographicindex(SDI)intheGlobalBurdenofDiseaseStudyclearlystrugglewithadualburdenofinfectiousdiseasesandNCDs(Figure1).Moreover,inmanyinstances,infectiousdiseasesserveasimportantcontributorstoNCDs(Mercer,2014).Asa consequence,80%ofdeaths fromNCDsoccurnow in low-andmiddle-incomecountries (LMICs)(WHO,2015a).Asimportantly,trendswithrespecttooverallimprovementinglobaladultNCDmortalitythatareclearlyevidentinhigh-andupper-middleincomecountriesarehappeningatamuchslowerrateinlow-andlower-middleincomecountries(Nugentetal,2018).Thesocial,economic,political,andhealthsystemsburdenofNCDsfirstreceivedhigh-levelattentionin2011whentheUNGeneralAssemblyissuedadeclarationstatingthatNCDsarenowoneofthemajorchallenges of the twenty-first century, serving to undermine social and economic development andthreatening the achievement of internationally agreed development goals (UNGA, 2012). After thisdeclaration,the2013GlobalNCDMonitoringFrameworkwasestablishedwhichaimsfora25%reductioninprematuredeathfromNCDsby2025(25x25)(Beagleholeetal,2014).TheFrameworkwasfollowedbytheincorporationofNCDsintoSustainableDevelopmentGoal(SDG)3.4whichtargetsanadditional5%(or30%overall)reductionby2030(WHO,2015b).

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Figure1:GlobalBurdenofCausesofDisability-AdjustedLifeYears(DALYs),20161

Notes:Blue=Non-communicablediseases;Red=Communicable,maternal,neonatal,andnutritionaldiseases;Green=InjuriesSource:InstituteforHealthMetricsandEvaluation(IHME)(2016).GBDCompareDataVisualization.Seattle,WA:IHME,UniversityofWashington(http://vizhub.healthdata.org/gbd-compare,accessedJuly29,2018).

1Countriesareclassifiedbasedonasocio-demographicindex(SDI)oflow,lower-middle,middle,upper-middle,andhigh.SDIisasummarymeasureofincome,educationalattainment,andfertilityrates.

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Whileboth25X25andSDG3.4placeemphasisonpreventingthecausesofNCDs,theyalsohighlightthecritical role that access to medicines must play in achieving national and global goals. The 25X25framework, for example, sets targets for: 1) 80% availability of the affordable basic technologies andessentialmedicines,includinggenerics,requiredtotreatmajorNCDsinbothpublicandprivatefacilities;and2)atleast50%ofeligiblepeopleaccessingdrugtherapyandcounselling(includingglycemiccontrol)topreventheartattacksandstrokes(WHO,2013a).Meanwhile,SDG3.4includessub-goalsaimedat:1)supporting the research and development of vaccines and medicines for NCDs that primarily affectdevelopingcountries;and2)providingaccesstoaffordableessentialmedicinesandvaccines forNCDs(WHO,n.d.).RecentresearchhasclearlydemonstratedaninvestmentcaseforimprovedpreventionandtreatmentofNCDs,arguingthat—foranadditionalUS$1.50percapitaperyear—15milliondeathswouldbeaverted,including eightmillion incidents of ischemic heart disease and 13million incidents of stroke,with anaveragebenefit-costratioof5.6forstrictlyeconomicreturnsoninvestment,and10.9ifsocialreturnsareincluded(Bertrametal,2018).With respect to treatment, though, such an investment case is primarily focused on existing basic oressential medicines. But what of new, breakthrough innovations for NCDs? Many innovative NCDmedicinesexhibitgreatpromise for therapeuticeffectandpotential long-termcost reductionandareincreasingly being rolled out in high-income countries, resulting in improved access to new healthtechnologiesforNCDpatients.However,theiravailabilityinmostLMICsremainslimitedduetohighprices,fragmentationofsourcesoffunding,uncertaintiesabouttheirclinicaleffectivenessandcost-effectiveness,andotherconstraintsatsubnational, national, andglobal levels.Theseaccessbarriers toNCDmedicines in LMICsexist at fivedifferentlevelsofthehealthsystem,asshowninTable1:1)individual,household,andcommunity;2)healthservicedelivery;3)healthsector;4)publicpoliciescuttingacrosssectors;and5)internationalandregionallevel.AddressingtheseaccessbarrierstoNCDmedicinesinthesesettingsisanurgentpriority.ModelinghasestimatedtheprobabilityofdyingfromoneofthefourmainNCDsasrangingfrom19%intheAmericasto29%inSoutheastAsiaformen,and13%inEuropeto21%inSoutheastAsiaforwomen(Kontisetal,2014).TheprobabilityofdyingprematurelyfromNCDsisprojectedtodecreaseineveryregionovertime,except inAfricawhere it isprojectedto increase (Kontisetal.,2014).Toconfrontthesechallengestoregionalequity,itisimperativethatNCDpatientsinLMICsnotbedeniedaccesstotheinnovationsfromwhichtheirfellowpatientsinhigherincomesettingsincreasinglybenefit.

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Table1:AccessBarrierstoNCDMedicinesatDifferentLevelsoftheHealthSystem,andStrategiesforAddressingtheseBarriers2

Levelofthehealthsystem AccessbarrierstoNCDmedicines Strategiesforaddressingaccessbarriers,bylevelofhealthsystem

1.Individual,household,andcommunityDemand-sidebarriersand

strategies;health-seeking

behaviorsandattitudespertaining

toNCDsandNCDmedicines,

relatedtechnologies,andservices

areinfluencedbyindividual

preferencesaswellasthecultural

andsocialconstraintsof

householdsandcommunities

• PerceivedqualityofNCDmedicinesandhealth

services

• CostofNCDmedicines,relatedtechnologies

(diagnosticsandmonitoringtools),andservices

(clinicvisitsandhospitalstays)

• Perceivedopportunitycosts–timespenttraveling,

lostearningswhileseekingcare.

• Irrationalhealth-seekingbehavior,demandfor,and

useofmedicines

• Socialandculturalbarriers(stigmarelatedto

poverty,ethnicity,andgender)

§ Raiseindividual,household,andcommunity

awarenessaboutNCDsandavailableNCD

medicinesandservices

§ Strengthenpatientlinkagesalongthe

continuumofcare,fromNCDdiagnosisto

treatment

§ Financialriskprotectionschemes(subsidized

services,enrollmentinhealthinsurance)

2.Healthservicedelivery

Supply-sidebarriersandstrategies

atthesubnationalandnational

levelspertainingtothedeliveryof

NCDmedicines,related

technologies,andservices

• IrregularavailabilityofNCDmedicinesandrelated

technologiesinclinics,hospitals,pharmacies,and

shops

• HighpricesofNCDmedicines,relatedtechnologies,

andservices

• IrrationalprescriptionanddispensingofNCD

medicinesbyproviders

• Lowquality/substandardandcounterfeitNCD

medicines

• Lowqualityofhealthservices

• Competitionbetweenpublicandprivatehealth

servicedelivery

§ Trainhealthcareworkforceinpublicand

privatesectorstoimprovequalityofservice

delivery(appropriateprescribing,dispensing,

anduseofNCDmedicinesandrelated

technologies,aswellasappropriate

supervisionandmonitoringofpatients)

§ Separateprescribinganddispensing

functionstoavoidconflictsofinterest

§ Improvehealthfacilityinfrastructure

2Table1wasadaptedforthespecificcaseofNCDmedicinesfromBigdelietal(2013)whoanalyzedaccess-to-medicines(ATM)constraintsatdifferentlevelsof

thehealthsystemanddevelopedanATMframeworkfromahealthsystemperspective.Bigdelietal(2013)builtonthefive-levelframeworkofthehealth

systemfirstconceptualizedbyHansonetal(2003),aswellaspreviousATMframeworks(seeCentreforPharmaceuticalManagement,2003;WHO,2004;Frost

andReich,2009).

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3.Healthsector

Supply-sidebarriersandstrategies

atthenationallevelinthehealth

sector

• ExclusionofNCDmedicines,relatedtechnologies,

andservicesfrominsurancecoverageinmany

countrieswheresuchcoverageisavailabletothe

population

• LackofpublicresourcesforNCDmedicinesand

relatedtechnologies,duetounderfundingor

underbudgeting

• Inaccuratedemandforecastingandquantification

• Inefficientpublicsectorprocurement,storage,

supply,anddistributionsystems

• Fragmentationofservicedeliveryandprocurement

systemsthatleadstooverlapandduplicationof

distributionfunctions

• Lackofdataandinformationnecessaryforplanning,

forecasting,andbudgetingforNCDmedicine/related

technologyneeds

• Insufficientpharmaceuticalworkforce,bothinterms

ofnumbersandskillmix

• Lackof,orinefficient,systemsforselectingNCD

medicinesandrelatedtechnologies,andcontrolling

prices

• InsufficientevidencebaseforNCDmedicines

(particularlynew,innovativemedicines)inreal-life

settings

• Weakhealthsectorgovernanceaffectingallhealth

systembuildingblocks

• Healthsectorpluralismandstewardshipoverprivate

sector

§ Establishsystemstocentralizeprocurement

ofNCDmedicines

§ Strengthennationalregulatoryauthorities

foreffectiveregulationofthequalityand

safeuseofmedicines;ensureitisadequately

resourcedandstaffed,andhaslegalpowers

§ Conductgenericpromotionpoliciesincluding

preferentialregistrationprocedures,quality

assurance,genericsubstitution,andfinancial

incentives

§ Establishand/orstrengthensystemsfor

rationallyselectingNCDmedicines(ie

throughHTAprocesses)

§ Independentlydevelopevidence-based

clinicalguidelinestoenhanceappropriate

use

§ Updatenationalessentialmedicineslistsand

formulariesbasedonguidelines

§ ImplementUHCpolicies,includingthosethat

reduceout-of-pocketspendingandpromote

financialprotectionthroughriskpooling

§ Developastrategyforadequateand

equitablefinancingandbudgetingforNCD

medicines.Wherehealthinsuranceexists,

ensurethatNCDmedicinesandrelated

technologiesarecovered.Ensurebudget

includesprocurementofNCDmedicinesfor

vulnerablepopulationsnotcoveredby

insurance.

§ Assessandimplementstrategiesthrough

dialogueandnegotiationwithmanufacturers

topromoteaffordableNCDtreatmentin

publicandprivatesectors,including

voluntarylicensingforlocalproduction,

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differentialpricing,negotiatedconfidential

agreements,anddonationprograms.

§ ConsidertheutilizationofTrade-Related

AspectsofIntellectualPropertyRights

(TRIPS)flexibilities(iecompulsorylicensing),

analyzingadvantagesforpublichealth,as

wellasdisadvantagesforhealthandother

sectors,andpotentialalternativestrategies

§ Improveandsustainanadequate

pharmaceuticalworkforce

§ Ensurethat“expert”patientswithlong

experienceofNCDconditionsarefully

representedinpolicymaking

§ Reviewnationaldrugcontrolpoliciesand

legislationandconductregulatoryreform,

awarenessraising,healthprofessional

training,andcoordinationwithsuppliersto

improveprocurementanddistributionof

controlledmedicinesforpainreliefand

symptomcontrol

§ Establishsystemsforcollecting,monitoring,

andusingdataonNCDandothermedicines

inreallifesettings,includingavailability,

price,expenditure,usage,qualityandsafety

forevidence-basedpolicymaking

4.Publicpoliciescuttingacrosssectors

Supply-sidebarriersandstrategies

atthenationallevelinnon-health

sectorsbutwhichinfluence

policiesrelatedtoNCDsandNCD

medicines,relatedtechnologies,

andservices

• Lowpublicaccountabilityandtransparency

• Lowpriorityattachedtosocialsectors

• Highburdenofgovernmentbureaucracy

• Conflictbetweentrade/economicgoalsandpublic

healthgoals(ietaxesandtariffsonimportedNCD

medicines,aswellasmarkupsinthesupplychain,

bothofwhichcontributetohighprices)

§ Controlmarkupsthroughinitiatingdialogue

withagentsalongthesupplychainand

regressivemarkupschemes

§ ExemptessentialNCDmedicinesfromimport

dutiesandtaxes(includingVAT)

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5.Internationalandregionallevel

Supply-sidebarriersandstrategies

atinternationalandregional

levels;encompassesissuesrelated

tointernationalmarketsand

regulations

• Internationaldonors’agenda(andfunding)which

hasemphasizedinfectiousdiseasesmorethanNCDs

• Patentsandintellectualpropertyrights

• Internationaltreaties(specifically,internationaldrug

controltreatieswhichlimitavailabilityofcontrolled

medicinesforpainreliefandsymptomcontrol)

§ RaisepoliticalpriorityforNCDsinglobal

health

§ Expandexistingglobalhealthinitiativesto

includeNCDs(i.e.MedicinesPatentPool,

advancedmarketcommitments,Unitaid)

§ MobilizeandsustainfinancingforNCD

medicinesandrelatedtechnologies,aswell

aspublic-privatecollaborationsinvolving

NCDs(suchasGAVI’srolloutofHPV)

§ Poolprocurementregionallyand/orglobally

§ Investinoperationalresearchtostrengthen

theevidencebasetosupporttreatment

strategiesthatarefeasibleandappropriate

inallresourcesettings

§ Continuedialogueacrosskeystakeholder

groupson“unifyingprinciples”forresearch

anddevelopmentandbuildtrustbetween

thesegroups

§ DevelopanNCDstakeholderframework,

includinggroundrulesforstakeholder

involvementinprovisionofNCDmedicines,

relatedtechnologies,andservices

Sources:Bigdelietal.,2013;Hansonetal(2003),Abegunde(2011),TheNCDAlliance(n.d.b.),AccessObservatory,2018.

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1.2AccessstrategiesforNCDmedicines Therearemultiplestrategiesthatgovernments,pharmaceuticalcompanies,anddevelopmentpartnerscanusetoovercomebarrierstoaccessinginnovativeNCDmedicinesinLMIC,asalsoshowninTable1.These strategies were drawn from access-to-medicines frameworks (Centre for PharmaceuticalManagement,2003;WHO,2004;FrostandReich,2009;Bigdelietal.,2013)andataxonomyofaccessstrategies for NCD medicines (which includes demand, systems, production, and price strategies)developedfortheAccessObservatorybyBostonUniversity’sSchoolofPublicHealthinpartnershipwiththe Access Accelerated Initiative (Access Observatory, 2018). Access strategies for innovative NCDmedicinesarenotmutuallyexclusivebutrathercomplementaryandworktogethertoimproveaccess,asgovernmentandpartnerinitiativesoftendeployamixofapproachesatvariouslevelsofthehealthandbroadersystem.Section2providesmoreinformationaboutandexamplesofaccessstrategiesinLMICs.TheWorld Bank supports governments in developing health systems capacity necessary to purchase,distribute, and utilizemedicines effectively and efficiently. This includes technical assistance on HTA,pricingstrategies,andnegotiationstrategiesforinnovativemedicines.In summary, there are a range of different access strategies that are being utilized by governments,pharmaceuticalcompaniesanddevelopmentpartnerstoensurethatNCDpatientsinLMICshaveaccesstolife-savingorlife-extendingmedicines,relatedtechnologies,andservicesforCVD,diabetes,cancers,andotherchronicdiseases.One setofpricing strategies involvesnegotiatedagreementsbetweenpharmaceutical companiesandpayersinthepublic,private,ordonorsectors.Theseagreementsarereferredtointhiscompendiumasmanaged access strategies (MASs) to emphasize that the ultimate goal of these arrangements is toimproveaccesstoinnovativemedicinesforpatients.DependingonthetypeofMAS,theycanalsobeusedto bring costs down and expand the clinical andhealth systemevidence base.MASs involve two keystakeholders:apayer(suchasagovernmentorpublicfundholder,aprivateholderofpooledresourcessuchasaninsurer,oradonor)andapharmaceuticalcompanythatmanufacturesandcommercializesanewdrug.MASsinclude“compassionateneed”andnon-profitaccessprograms,voluntarylicensing,andconfidentialagreementsknownasmanagedentryagreements(MEAs).MEAshavebeenincreasinglyusedin high-income countries for new, promising treatments forNCDs forwhich their effectiveness, cost-effectiveness, availability, and acceptability are surrounded by uncertainty. They have been lesscommonlyused inLMICs, thoughare increasinglybeingconsideredbydecisionmakers (Carlsonetal.,2014). There are major gaps in the knowledge and skills required for countries to plan, negotiate,implement, andmeasureMEA impact. If these gaps can be filled,MEAs have the potential to be animportantaccessstrategytoaddresstheproblemsofhighpriceanduncertaintiesrelatedtoinnovativeNCDmedicines.

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1.3FocusofthiscompendiumThiscompendiumisaglobalknowledgeresourcethatprovidesstakeholderswithinformationandtoolsaboutaccessstrategiesforinnovativeNCDmedicinesinLMICs.Itisintendedtopromotedialogueamonggovernments,otherpayers,andmanufacturersinLMICs,aswellasadditionalstakeholdersinvolvedinprovidingaccess tomedicines.Thecompendium focuses inparticularonone typeofmanagedaccessstrategy(MAS)—managedentryagreements(MEAs).ItdescribesMEAsandhowtheyhavebeenusedindifferent contexts, presents advantages and limitations, and offers tools and good practices. ThecompendiumisnotmeanttoadvocateforMEAsastheonlystrategytoaccessnewmedicinesforNCDs.Rather,itseekstodescribehow,when,where,andwhyMEAsmightbeanappropriatestrategytoaddtostakeholders’accesstoolkit.ThecompendiumisbasedonresearchcarriedoutbyManagementSciencesforHealth(MSH),includingaliteraturereviewofthepublishedandgreyliteratureonMEAsandsemi-structuredinterviewswithkeyinformantsinthreeLMICs(Colombia,Kenya,andUkraine).ItisalsobasedonthedevelopmentandtestingofthreedecisionanalyticmodelsbyResearchTriangleInstitute(RTI) International injointcooperationwithMSH.ThecompendiumwascompiledandwrittenbyGlobalHealthInsights(GLOHI)inpartnershipwithMSHandRTI. AnnexIprovidesmoreinformationabouttheseresearchactivities. Thecompendiumconsistsoffoursections.Followingthis introductorysection,Section2describesthehealth systems context in LMICs in which access strategies for innovative NCD medicines areimplemented. Section 3 then presents MASs as a strategy for improving access to innovative NCDmedicines in LMICs, including in those countrieswithmultiple payers. The section places a particularemphasisonMEAsanddescribestherangeofinstruments,demonstrateshowthesehavebeenusedindifferentcountriesforarangeofmedicines,anddiscussesadvantagesandlimitations.ThissectionalsoincludesananalysisofwhereMEAsmightbemostproductive in LMICs,given thecontextoutlined inSection2,andpresentsthreedecisionanalyticmodelsthatcanbeusedbygovernments,otherpayers,andpharmaceuticalcompanies toexplore thepotentialuseof thisstrategyandtermsofagreements.Finally,Section4concludeswithsomeconsiderationsforfutureresearchandaction.

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SECTION 2: CONTEXTUAL CONSIDERATIONS FOR IMPROVING ACCESS TO NCD MEDICINES IN LOW- AND MIDDLE-INCOME COUNTRIES

LMICsareoftengroupedtogetherunderasingleconceptualheadingduetocertainsharedcharacteristicswithrespecttodriversofillhealth,constraintsonhealthsystems,challengeswithrespecttoequity,andprocessesbywhichhealthcare isplanned, financed,delivered,and regulated.However,despite somesimilarities,inpracticemanyofthesecharacteristicsvarydramaticallyacrossLMICs.ThissectiondescribeskeycontextualconsiderationsforimprovingaccesstoNCDmedicinesinLMICsinthreeareas:1)incomelevel, population, and disease burden; 2) health systems structure and sources of funding; and 3)pharmaceuticalsandpharmaceuticalpolicies.Throughoutthesection,andsummarizedinBoxes1-3,werefertothecontextandexperiencesinthreecasestudyLMICs:KenyaandUkraine(bothlowermiddle-incomecountries),andColombia(anuppermiddle-incomecountry).Thesethreecountrieswerechosenpurposively to representdifferentgeographical settings, levelsof income,socio-political contexts,andhealthcaresystems(seeAnnexIformoreinformationonmethodology).2.1Incomelevel,population,anddiseaseburdenTheWorldBankclassifiesLMICsbythreeseparatecategoriesbasedonacountry’sgrossnationalincome(GNI)perperson:low-income,lowermiddle-income,anduppermiddle-income.3Forthe2018fiscalyear,low-incomeeconomiesarethosewithaGNIpercapitaofunderUS$1,006.Thislow-incomegroupincludes31countriesthatrepresent9%oftheworld’spopulation(seeTable2).Communicable and neonatal diseases remain the leading causes of early death and disability in low-incomecountries—specificallydiarrheaandlowerrespiratoryinfections,neglectedtropicaldiseasesandmalaria,HIV/AIDSand tuberculosis, andneonatal disorders. Thesediseases represent59.43%of totaldisability-adjusted lifeyears (DALYs) in low-incomecountries (IHME,2017).However,asmentioned inSection 1, cardiovascular diseases (CVD) and other NCDs are increasing as causes of early death anddisabilityinthesecountries,andmakeup32.08%ofDALYs.TheremainingDALYsarecausedbyinjuries(8.49%)(IHME,2017).Middle-incomecountriesrepresent75%(5.5billion)oftheworld’spopulation(est.7.4billionpeople).Asof2018,theWorldBankclassifieslowermiddle-incomecountriesashavingaGNIpercapitaofbetweenUS$1,006 and US$3,955, and this group includes 53 countries and represents 40% of the world’spopulation(seeTable2).India—thecountrywiththesecondlargestpopulationof1.32billionpeople—liesinthislowermiddle-incomegroup,alongwithtwoofthiscompendium’scasestudycountries,KenyaandUkraine(seeBoxes1and2).Uppermiddle-incomecountriesarethosewithaGNIpercapitabetweenUS$3,956andUS$12,235,involving56countriesand35%oftheworld’spopulation.China,theworld’slargest population with 1.38 billion people, falls into this category and so does Colombia, thecompendium’sthirdcasestudycountry(seeBox3).

3Formoreinformation,seehttps://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.

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Table2:Worldpopulation,byincomegroup

Incomegroup Population,inmillions(2016)

Low-income 659.3(9%)

Lowermiddle-income 3,014.8(40%)

Uppermiddle-income 2,580.0(35%)

High-income 1,190.0(16%)

7,444.1(totalpopulation)

Source:https://data.worldbank.org/.(1)UnitedNationsPopulationDivision.WorldPopulationProspects:2017Revision.(2)Censusreportsandotherstatisticalpublicationsfromnationalstatisticaloffices,(3)Eurostat:DemographicStatistics,(4) United Nations Statistical Division. Population and Vital Statistics Report (various years), (5) U.S. Census Bureau:InternationalDatabase,and(6)SecretariatofthePacificCommunity:StatisticsandDemographyProgramme.

Countriesthatattainmiddle-incomestatusbegintoconfrontnewchallengesthatreflecttheirstageofdevelopment, including ageing populations. As infectious diseases are successfully addressed andpopulations age, NCDs account for a greater part of a country’s disease burden. This provides newpreventionandtreatmentchallengesforhealth-caresystems.Tables3and4,andFigure1(inChapter1),demonstratethisincreasingburdenofcardiovasculardiseasesandotherNCDsinbothloweranduppermiddle-incomecountries.In many lower middle-income countries, however, communicable diseases including diarrhea, lowerrespiratory infections,HIV/AIDS, tuberculosis, andneonataldisorders, continue tobemajor causesofearly death and disability. In these countries, the percentage of DALYs due to NCDs is 49.83%;communicable,maternal, neonatal, and nutritional diseases is 39.51%; and injuries is 10.65% (IHME,2017),thoughthereislargevariationacrosscountriesinthisgroup.InKenya,forexample,NCDsrepresent29.88%oftotalDALYsandseveralinfectiousdiseasescontinuetoaccountfor63.35%oftotalDALYs(Table3). In India,diarrhea, lower respiratory tract infections, andneonataldisordersarea leadingcauseofdeathanddisability(32.74%oftotalDALYs),butNCDsaccountfor55.41%oftotalDALYs.Incomparison,asdemonstrated inTables3and4,Ukrainehascharacteristicsofupper-middle incomecountriesandNCDsrepresentahigherproportionat82.55%(IHME,2017).Inupper-middleincomecountriesasagroup,NCDsaccountforalargerproportionofthediseaseburdenat79.34%,whilethepercentageoftotalDALYsduetocommunicable,maternal,neonatal,andnutritionaldiseasesis8.55%andinjuriesis12.11%(IHME,2017).ThishighburdenofNCDsinupper-middleincomecountriescanbeseenthroughthecaseofColombia,whereNCDsrepresent70%oftotalDALYs.

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Table3:Leadingcausesofearlydeathanddisability,2016,inlow-andlowermiddle-incomecountriesincludingKenya,India,andUkraine(allagesandgenders)

Low-income Lowermiddle-

incomeKenya India Ukraine

1

Diarrhea,lowerrespiratory,andothercommoninfectiousdiseases

Diarrhea,lowerrespiratory,andothercommoninfectiousdiseases

Diarrhea,lowerrespiratory,andothercommoninfectiousdiseases

CardiovascularDisease

CardiovascularDiseases

2

NeonataldisordersCardiovasculardiseases*

HIV/AIDS+Tuberculosis

Diarrhea,lowerrespiratory,andothercommoninfectiousdiseases

Neoplasms

3

Neglectedtropicaldiseasesandmalaria

Neonataldisorders

NeonatalDisorders

NeonatalDisorders

MentalDisorders

4

HIV/AIDSandtuberculosis*

Othernon-communicablediseases

OtherNon-CommunicableDiseases

OtherNon-CommunicableDiseases

MusculoskeletalDisorders

5

Cardiovasculardiseases*

Mentaldisorders* MentalDisordersChronicRespiratoryDisorders

OtherNon-CommunicableDiseases

6

Othernon-communicablediseases

HIV/AIDSandtuberculosis

CardiovascularDiseases

Diabetes,urogenital,blood,andendocrinediseases

UnintentionalInjuries

7Nutritionaldeficiencies

Neoplasms*UnintentionalInjuries

MentalDisordersNeurologicalDisorders

8

Unintentionalinjuries

Diabetes,urogenital,blood,andendocrinediseases*

NutritionalDeficiencies

UnintentionalInjuries

Self-Harm&Violence

9Mentaldisorders*

Unintentionalinjuries

Neoplasms NeoplasmsCirrhosis

10

Neoplasms*Chronicrespiratorydiseases

NeglectedTropicalDiseases&Malaria

NutritionalDeficiencies

Diabetes,urogenital,blood,andendocrinediseases

Notes:--*Causesthathaveahigherrankingthanin1990.--Orangerepresentscommunicable,maternal,neonatal,andnutritionaldiseases;Bluerepresentsnon-communicablediseases;andGreenrepresentsinjuries.Source:InstituteforHealthMetricsandEvaluation(IHME)(2018).GBDCompareDataVisualization.Seattle,WA:IHME,UniversityofWashington,2017(http://vizhub.healthdata.org/gbd-compare,accessedMay4,2018).

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Table4:Leadingcausesofearlydeathanddisability,2016,inuppermiddle-incomecountries,includingColombiaandChina(allagesandgenders)

Uppermiddle-income Colombia China

1

Cardiovasculardiseases OtherNon-CommunicableDiseases

CardiovascularDisease

2

Neoplasms CardiovascularDiseases Neoplasms

3Mentaldisorders* Self-Harm&Violence MentalDisorders

4

Othernon-communicablediseases

Neoplasms OtherNon-CommunicableDiseases

5Musculoskeletaldisorders*

MentalDisorders MusculoskeletalDisorders

6

Diabetes,urogenital,blood,andendocrinediseases*

MusculoskeletalDisorders

Diabetes,urogenital,blood,andendocrinediseases

7 Neurologicaldisorders* NeurologicalDisorders ChronicRespiratory

8

Unintentionalinjuries Diabetes,urogenital,blood,andendocrinediseases

NeurologicalDisorders

9Transportinjuries NeonatalDisorders TransportInjuries

10Chronicrespiratorydiseases*

UnintentionalInjuries UnintentionalInjuries

2.2HealthsystemsinLMICs,fragmentation,andaccesstoNCDmedicinesA country’s health sector is comprised of the resources, organizational structures, managerialrelationships,financing,andservicesthatenhanceapopulation’shealth(Roemer1993).TheWorldHealthOrganization (WHO) conceptualizes the health system in terms of six building blocks that whenfunctioning well, ensure increased access to safe, high quality health services and technologies. Thisultimately leads to improved health outcomes, equity, financial risk protection, efficiency, andresponsivenesstothepopulation.ThehealthsystemsinLMICshavesomesimilaritiesbutalsovaryinsize,form,sourcesoffundingandcomprehensiveness,dependingonpoliticalandeconomictrajectoriesandglobalandnationalcontexts,aswellasclassdynamicsandsocietalvalues(Birnetal.,2009).Thus,healthcoverage, including NCD care and treatment, is variable and heavily influenced by the capacity andeffectivenessofthehealthsystembuildingblocks.

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AccessbarriersforNCDmedicinesatfivelevelsofthehealthsystemwereidentifiedinTable1(inChapter1).Inthefollowingsub-sections,weoutlinehowthesebarriersateachlevelofthehealthsystemimpactaccesstoNCDmedicinesandLMICs’capacitytoaddressthem.

2.2.1InternationalandregionallevelpoliciesandregulationsTrade-Related Aspects of Intellectual Property Rights (TRIPS), initiated in 1995 by World TradeOrganization(WTO)memberstates,isaninternationalpubliclawthathashadanimportantimpactonglobalaccesstomedicines(Sell,2007).TRIPSstipulatesa20yearpatentperiodforinnovativeproductsandprocessesinsupportofmanufacturers’innovationwiththeaimoffosteringandcompensatingforresearchanddevelopment.Itisbindingandifviolated,TRIPSallowscountriestoinitiatesanctionsagainstthosethathaveviolatedit(Sell,2007).In2001,WTOmembersagreedtoincorporatecertainflexibilitiesforpublichealthoftenreferredtoastheDohaDeclaration(Huang,2013).TheseflexibilitiesallowLMICstoissuecompulsorylicensesforpublichealthemergenciesandepidemicsastheyhave“arighttoprotectpublichealthand,inparticular,topromoteaccesstomedicinesforall”(Hogerzeiletal2013).Additionally,theyallowforcountriestoimportandreceivedifferential(oftenreduced)pricingfromthosecountriesthat have issued compulsory licenses and produce generic versions of medicines for public healthemergencies(Huang,2013).CountrieslikeIndia,Brazil,andSouthAfricahavetakenadvantageoftheseflexibilitiesandissuedcompulsorylicensesforinfectiousdiseasemedicinestotacklelargescaleepidemicsofHIV/AIDSandtuberculosis(Huang,2013).Inrecenttimes,therehasbeenariseofbilateralormultilateraltreatiesbetweenhigh-incomecountriesandLMICs suchas theTrans-PacificPartnership, theCentralAmerica,DominicanRepublicandUnitedStatesFreeTradeAgreement,andtheEuropeanUnion(EU)-ThailandFreeTradeAgreement.Thesehaveprovided a platform for global pharmaceutical manufacturers to push tighter intellectual propertyregulationsinLMICsasconditionsformorefavorabletradeconditions.Theseconditions,broadlyknownasTRIPSPlus,includeregulationssuchasdelayedentryforgenericsthroughdataexclusivityforclinicaldata,linkingproductregistrationandmarketauthorizationtoproductpatentstatus,andpatentextensionforalternativeusesofthesamemedicine(Sell,2007).TherehasbeensignificantdebateandlegalbattlesonhowTRIPSflexibilitiescanbeappliedtomedicinesforNCDs.Countrieshavereacteddifferentlybasedontheirbuyingpower—determinedbytheircapacitytonegotiatepricing,nationaltradeandhealthpriorities,andlocalproductioncapacity.CountrieswithalargepharmaceuticalindustryhaveleveragedtheTRIPSflexibilitiestoissuecompulsorylicensesforcancerdrugsinthelastfewyears.Forexample,thiswasdoneinIndiawhereastricterdefinitionof“innovation”was included as not just reformulation but increased efficacy with the alternatives in the market(Hogerzeiletal2013).TalksbetweentheEUandIndiaforatradeagreementhavelongbeenstalledwithTRIPSPlusmeasuresasoneofthesourcesofconflict.BeingasignificantexporterofinfectiousdiseasemedicinestootherLMICs,IndiahasasubstantialopportunitytodothesameforNCDmedicinesasLMICsshifttheirfocustoaddressthegrowingNCDepidemicsintheircountries.

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Inanotherexample,Thailandissuedcompulsorylicensesin2008forkeycancerdrugsdocetaxel,letrozole,erlotinib,andimatinib.However,Novartisdesignedamutuallyagreeableaccessprogramforimatnibandthecompulsorylicensewastakenback(Lopesetal,2013).BrazilandColombiahaveeffectivelyutilizedthethreatofcompulsorylicensinginthepastbuthavenowshiftedtovoluntarylicensingwithguaranteedvolumepurchasebythenationalhealthinsuranceschemeasanincentiveforloweredpricing(Cherian,2016 and Vyas, 2016). Nevertheless, given their local manufacturing capacity and focus on thefundamental right to healthcare, both still retain significant buying power and capacity to issuecompulsorylicensesinthefuture.China,whichalsohasa largepharmaceuticalandvaccinesmanufacturing industry, incontrasthasnotissued as many compulsory licenses, opting to focus on encouraging foreign investments andcollaborations (Huang,2013). Still, China remainsaprice sensitivemarketwithpayersopting to issuetendersbasedonprices rather thanmedicinequality (Mossialos et al, 2016). This has led to a highlyfragmentedmarket open to low quality producers that could limitmarket growth for innovatorNCDmanufacturers(Mossialosetal,2016).Allofthishighlightstheneedforactivenegotiationofmutuallybeneficial purchasing agreements between LMICs and pharmaceutical companies (such as voluntarylicensingandnegotiatedMEAs).In addition to intellectual property, other aspects of global trade impact the progression of theNCDdiseaseburdenandsubsequently,theneedforNCDmedicines.NCDscanbepreventedbyreducingtheriskfactorsormodifyingthelifestylesassociatedwiththem,includingexposuretohighsugar,fat,salty,andprocessedfoods,lackofphysicalactivity,excessivealcoholconsumption,andsmoking(NCDAlliance,n.d.c).However,LMICsaregrowingmarketsformultinationalsthatmanufactureproductssuchassugar-sweeteneddrinks,unhealthysnacks,cigarettes,andalcohol.WHOhasmademanyrecommendationstocurbconsumptionoftheseproductsincluding“sin”taxesonsuchimports,improvedlabellingregulationsthat highlight the risks associated with the products or their ingredients, warning labels on tobaccoproducts,andlimitingtheadvertisingofalcoholandcigarettes(Barlowetal.,2018).Exportinghigh-incomecountrieshaveoften challenged suchmeasuresby leveraging conditions set intradeagreements.OnekeyinstrumenthasbeentheTechnicalBarrierstoTrade(TBT)Agreement,whichis binding for all WTO members. This agreement stipulates that new trade measures introduced bymembersforissuessuchaspublichealthmustnotaddunnecessarytradecostsiftherearelessexpensiveoptionsavailable(Barlowetal.,2018). In2009,Colombia initiatedaregulationthatwouldrequiretheprominentlabelingofrisksassociatedwithalcoholconsumptiononalcoholpackaging.TheE.U.andtheU.S.disputedthisregulationusingtheTBTAgreement,statingthatitwouldentailcostlychangesfortheirexportingalcoholproducers.Facedwithcontinuedpressure,Colombiamadeconsiderableamendmentstothelegislationwheremanyalcoholproductswereexemptfromneedingthehealthwarning(Barlowetal.,2018).AnotherbarrieratthegloballevelthathaslimitedaccesstoNCDmedicineshasbeenthelowprioritizationofNCDsontheglobalhealthagenda.AccesstovaccinesandmedicinesforinfectiousdiseasesinLMICs

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hasbeendrivenbysizabledevelopmentassistancefromgovernmentsinhigh-incomecountries,privatefoundations,multilateralorganizations,andlargefinancingvehiclesandprogramssuchasGavi,PEPFAR,andothers.AsmentionedinSection1,NCDshavegainedprominenceontheglobalhealthagendasince2010,beginningwiththeUNPoliticalDeclarationonNCDPreventionandControlin2011(UNGA,2012).Heads of state and other leading stakeholders will be meeting September 2018 at the UN GeneralAssembly to discuss actionable measures and commitments to address NCDs in the third High-levelMeetingoftheUNGeneralAssemblyonNCDs(NCDAlliance,n.d.d).Thatsaid,developmentassistanceand financing for NCDs has yet to see a significant increase. In 2017, of the $37.4 billion dollars indevelopmentfinancingforhealth,HIV/AIDSreceived24.2%,whereasNCDsreceivedonly2.20%(alargeportionofwhichwenttotobaccocontrolprograms)(IHME,2018).Additionally,theGlobalNCDActionPlan and the recent “Time to Deliver” set of recommendations by theWHO Independent High LevelCommission on NCDs emphasize commitment of domestic resources and inclusion of NCD relatedcommoditiesinUniversalHealthCoverage(UHC)programs(WHO,2018).Thus,thereisanurgentneedforinnovativestrategiesinLMICs,incollaborationwiththeprivatesector,forattainingtheseaccessgoals.

2.2.2Nationalmulti-sectoralpoliciesThe WHO constitution identifies health as a fundamental right of every human being and this hasinfluencedmanymemberstatestoadoptahumanrightsbasedapproachtohealth.Forexample,in2010,KenyaenshrinedahumanrightsframeworkinitsconstitutionstatinginArticle21(4)ofChapter4—TheBillofRights—that,“TheStateshallenactandimplementlegislationtofulfilitsinternationalobligationsin respectof human rights and fundamental freedoms.” The subsequentlydevelopedNationalHealthPolicy2012–2030bytheMinistryofHealth(MOH)recognizestheneedtomeethumanrightsobligationsandthusaimsfor“equitable,affordableandqualityhealthandrelatedservicesatthehighestattainablestandardstoallKenyans”(GovernmentofKenya,2014).Similarly,Colombiatreatsaccesstohealthcareasafundamentalrightafterat leasttwodecadesofheavy judicializationofhealthcareaccessandtheenactmentofahigherhierarchyLawfrom2015(1751).Ukrainerecentlypassedbillno.6327onfinancingthehealthcaresystemfromthecountry’sbudget,whichstipulatesthataminimumof5%oftheGDPwillneedtobespentonhealthcarethroughnationalhealthinsuranceprograms(VerkhovnaRadaofUkraine,2017). These policies not only demonstrate how governments respond to their populations’ healthdemandsbutalsohaveconsiderableimpactonthehealthaccessdecisionsofgovernments.Forexample,Section2.2.1referredtohowcivilsocietyincountrieslikeBrazilhaveleveragedtherighttohealthcaretoincreaseaccesstoinfectiousdiseasemedicinesthroughcompulsorylicensing.Therighttohealthandresourceallocationnotwithstanding,achievingpolicycoherenceacrosssectorsisacomplextask.Conflictbetweentrade,economicdevelopment,andindustrialpoliciesoftenarisesandthiscanconstraineffortstoprovideaccesstomedicines.Akeyexampleistaxationonpharmaceuticals.LMICsraisemostoftheirtaxrevenuesthroughindirecttaxessuchassalestax,valueaddedtax(VAT),andimporttariffsratherthandirecttaxes(WHOandHAI,2014).Duetosmallerformalsectoreconomiesandlimitedcapacityfortaxcollection,directtaxrevenuessuchasincomeorcorporatetaxrevenuesarelowercomparedtoindirecttaxrevenues.Thus,MinistriesofFinanceinLMICsarenotsupportiveofproviding

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exemptionson goods, includingmedicines (WHOandHAI, 2014).A studybyWHOandHealthActionInternational (HAI) in 2014 showed that VAT revenue frompharmaceuticals in 57 countries averaged$11.6million(WHOandHAI,2014).Indiaearnedcloseto$1billioninVATrevenuesfrompharmaceuticalsandBrazilcloseto$123million.ForhighpricedinnovativeNCDmedicines,thesepolicieswilllikelyhaveadirectimpactonpricenegotiations.

2.2.3NationalhealthsectorgovernanceandpoliciesHealthsectorgovernanceencompassesmeasuressuchasnationalhealthpolicies,treatmentguidelines,pharmaceutical policies, regulatory policies and infrastructure, health financing, and the overallinstitutionalstructureof thehealthcaresystem.Thesepoliciesdefinetheselection,procurement,anddistributionprocessesforNCDmedicinesandotherhealthtechnologiesbutalsohowtheyarefinanced,priced, and used. In this section, we explore some key health sector governance and policy issues.Pharmaceutical governance and sector policies and their influence on access to NCD medicines areoutlinedindetailinSection2.3.Healthspending incountriesvariessignificantlybetweenLMIC incomegroups. In2015,uppermiddle-incomecountriesspentonaverage$949perpersononhealth;lowermiddle-incomecountriesspent$266perperson;andlow-incomecountriesspent$110perperson(IHME,2018).Inaddition,largevariationsexistwithin these income groups. For example,within the low-income category, health spending perpersonin2015rangedfrom$28to$481;from$90to$849inthelower-middleincomegroup;andfrom$241to$1,850intheuppermiddle-incomegroup(IHME,2018).Countries’healthspendinghasvarioussources,including:1)governmenthealthspending,derivedfromdomesticsources;2)prepaidprivatespending,suchasprivatehealthinsuranceandservicesprovidedforfreebynon-governmentalorganizations (NGOs),3)out-of-pocket (OOP)spending, involvingpaymentsmade at the time of healthcare delivery including copayments or payments for deductibles; and 4)external financing known as development assistance for health (DAH), involving financial and in-kindresourcesgivenbyhealthdevelopmentagencies(IHME,2018).Ingeneral,thesourcesofcountries’healthspendingtransformswitheconomicdevelopment,asshowninTable5.Ascountriesmoveintotheuppermiddle-incomegroup,theysourcealargerproportionofhealthspendingfromdomesticresources,andtheynolongerhaveaccesstodevelopmentassistanceforhealthsinceeligibilitycriteriaformanydonorsistiedtoincomelevels.OOPspendingremainshigh,however,inmanylow-incomeandmiddle-incomecountries.Figure2 furtherdemonstrates thispointandshows thatcountrieswith lowergrossdomesticproduct(GDP)perpersononaveragefinancetheirhealthcarewithDAHandOOPspending.Ascountriesbecomemoreeconomicallydeveloped,DAHdecreasessignificantlyandcountriestransitiontofundingtheirhealthsector domestically (IHME, 2018). In Kenya, for example, health spending is accounted for equally bygovernmentspending(31%),OOPspending(30%),andDAH(27%)(IHME,2018).InUkraine,sourcesoftotalgovernmentspendingareprimarilyfromthegovernment(48.3%)andOOPexpenditures(46.8%),

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witha limited role forDAH(IHME,2018). Inuppermiddle-incomeColombia, themainsourceof totalhealthspendingisthegovernment(70.1%),andthecountrydoesnotreceivesignificantDAH.Table5:Totalhealthspendingandhealthspendingbysource,2015

WorldBankincomegroup

Totalhealthspendingperperson

Governmenthealthspendingpertotalhealthspending

Prepaidprivatespendingpertotalhealthspending

Out-of-pocketspendingpertotalhealthspending

Developmentassistanceforhealthpertotalhealthspending

High-income $5,551 64.2% 21.7% 14.1% 0%

Uppermiddle-income

$949 57.7% 10.1% 32% 0.2%

Lowermiddle-income

$266 31.9% 7.4% 57.7% 3.1%

Low-income $110 21.6% 7.1% 39% 32.3%

Source:IHME,2018

Figure2

Source:IHME,2018

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Healthsectorreformiscurrentlyunderwayinmanycountriestoaddressgapsinhealthcarecoverage.Inmanycountries,thesereformsfocusontheproblemofhighOOPspendingwhichcanleadtocatastrophichealth expenditures—especially in the context ofNCDswhich are often chronic and involve care andtreatment over an extensive period of time. Themajority of these reforms are focused on achievinguniversalhealthcoverage(UHC),apriorityobjectiveofWHOthatensuresthat“allpeoplehaveaccesstoneeded health services (including prevention, promotion, treatment, rehabilitation, and palliation) ofsufficientqualitytobeeffectivewhilealsoensuringthattheuseoftheseservicesdoesnotexposetheuser to financial hardship.”4While Colombia’s health system undertook reforms years ago (in 1993)throughtheestablishmentofamixofcontributoryandsubsidizedhealthcaresystem,inothercountriessuch as Kenya and Ukraine these reforms are just beginning. In Kenya, UHC is one of four pillars ofPresidentUhuruKenyatta’sfinaltermandthecountryplanstobeginhealthreformsfocusedonincreasingcoverage throughpublicandprivate insurance (seeBox1).Ukraine is currentlyundergoingamassivereformefforttowardsUHC,includingaguaranteedpackageofservicesforallcitizens,fundedbygeneraltaxation(seeBox2).Fortheseandothercountriesembarkingonhealthreforms,NCDswillneedtobeeffectivelyaddressedinordertoachieveUHC(NCDAlliance,n.d.a.).Forthoseloweranduppermiddle-incomecountriesintransitionfromahighdependenceonDAHtoagovernment-fundedhealthsystem,theremaybegapsinhealthcarecoverageandmedicinesavailabilityandcontinuedhighOOPpayments.Forexample,transitionofmiddle-incomecountriesfromGlobalFundand PEPFAR support forHIV/AIDS, tuberculosis, andmalaria in recent years has shownmixed results(Burrowsetal.,2016).TheexperienceofCostaRicaisacaseofsuccessfultransitionwhere,inanticipationof its graduation from Global Fund funding, the government created policies and mechanisms thatallowedHIVNGOsandkeypopulationstoaccessgovernmentfundsandsocialsecuritytocontinuetheirprograms. In contrast, Romania, Bulgaria, and Serbia—countries with large drug injecting keypopulations—sawadropinharmreductionandneedleexchangeprogramsandthegovernmentsdidnotstep in to fill the funding gaps (Burrows et al., 2016). There aremany lessons to be learned forNCDstakeholdersfromthetransitionexperienceoftheGlobalFund,PEPFAR,Gavi,andbilateraldonorsintheinfectiousdiseaseandvaccinespace.EffectiveplanningthatlinkstogovernmentfinancingmechanismssuchasUHCschemes,phasedtransitionoverfivetosevenyears,andthedevelopmentofspecifictargetsfor transitionhavebeencrucial in successful transitions (Burrowsetal., 2016). Takinga cue from theGlobalFundexperience,Gavihasdevelopedadetailedtransitionplanningapproachincollaborationwithcountriesasmanyhavegraduatedfromitsvaccinefundinginrecentyears(Gavi,n.d.).Akeyoutcomeofglobalfundingmechanismsforinfectiousdiseasesandvaccineshasbeenreducedpricingandpooledhighvolume procurement of commodities. Thus, LMICs have experience with Global Fund and Gavi withrespect to price/volume based agreements and investments have been made for sustainableimplementation. These factors need to be kept in mind to negotiate and build similarly sustainableagreementsandprogramsforNCDmedicines.

4Formoreinformation,seehttp://www.who.int/healthsystems/universal_health_coverage/en/.

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2.2.4PrioritysettingandtheuseofHTAinLMICsAs LMICs transition from international aidandmove towardachievingUHC, there is growing concernaboutthefinancialsustainabilityoftheprovisionofhealthservices(Glassmanetal.,2012),particularlyinthecontextoflimitedresourcesforhealth,uncertaintyarounddonorfunding,andwidespreadwastageandinefficiencieswithinthehealthsector.Toeffectivelymanageandallocatefiniteresourcesforhealth,particularly in the context of a growing burden of NCDs, there is an increasing need to improve therationingofscarceresourcesforhealthandinstituteexplicitmethodsforprioritysetting(Glassmanetal,2012). Explicit priority setting in health refers to “…making explicit choices about what to fund andweighingthetrade-offsbetweenthevariousoptionsintheprocess”(Chalkidouetal.,2016).Unlikead-hoc,implicitprioritysetting(e.g.throughwaitinglines,lowquality,andinequities),explicitprioritysettingatthenationallevelmostcommonlyrefertothedevelopmentofessentialmedicineslists,healthbenefitsplansorlists,andHTAagencies(Glassmanetal.,2012).HTAprovidesdecisionmakers,funders,healthprofessionals,andhealthconsumerswithevidenceonthebenefitsandcomparativevalueofhealthtechnologiestoinformpolicy,funding,andclinicaldecisions,aswell as assisting with consumer decision-making. As a multi-disciplinary process, HTA systematicallyevaluates the properties and effects (safety, efficacy, and effectiveness) alongside the economicimplications of health technologies such as pharmaceuticals, devices, procedures, and organizationalsystems(INAHTA,n.d.).Moreover,HTAaddressesthedirectandintendedeffectsofahealthtechnology,aswellasitsindirectandunintendedconsequencestoinformdecisionmakingandhasbecomeanissueofgreatinterestinmanysettingsandameansfortransitioningfromEssentialMedicinesLists(EML)toevidence-informedandmoredynamicBenefitsPackages.Over the past decades, the establishment of HTA agencies has increased as countries seek tosystematicallyuseHTAinsupportofachievingUHCandfacilitatingevidence-informeddecisionmaking(WHO,2015c).Althoughwell-establishedinhigh-incomecountries,theuseandinstitutionalizationofHTAin LMICs has beenmore recent and has built on the experiences of these high-income settings. HTAinstitutionsvaryaccordingtosetting,andsomeofthemusetheprinciplesofcomparativesafety,efficacyandeffectiveness,andeconomicanalysestoinformcoverage,reimbursement,procurement,quality,andmorerecentlypricingdecisions.Thismeansthat“onesizedoesnotfitall”andthereisneedtoconsiderkeyproceduralprinciplesfortheirrobustoperationwhilebearinginmindthelocalcontextinwhichtheywilloperate.HTAhasbeenparticularlyuseful for supportingevidence-basedrationing forNCDs,which representasignificantandgrowingdiseaseburdenglobally.Althoughanincreasingnumberofinnovativemedicineshavebecomeavailabletotreattheseconditions,manyofthemareexpensive,andpayersareconfrontedwiththechallengeofhowtoensurethatexpendituresontheseandothercompetingprioritiesfitwithinfinitebudgetswhilealsoprovidingcitizenswiththetreatmenttheyneed(Dunlop,2018).Formanyoftheseinnovativemedicines,therearealsouncertaintiesabouttheireffectivenessinrealworldconditionsbecauseoflimiteddataatthemomentofenteringthemarket.

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2.2.5HealthservicedeliverystrategiesStrategiesatthelevelofhealthservicedeliveryinvolveinvestinginhumanresourcesandservicedeliveryforNCDcasefindingandcasemanagement,improvingfacilityinfrastructureandlogistics,andseparatingthe NCD medicines prescribing and dispensing functions to avoid conflicts of interest. For example,Takeda’sprogramonCancerEducationforPrimaryHealthcareProfessionalsinKenyaprovidescoursesincancercontrolandcaretoprimaryhealthcareprovidersidentifiedbyKenya’scountygovernments(AccessAccelerated,2018a).Thisprogramseekstoaddresstheshortcomingsinprimaryhealthcaretrainingoncancermanagementtopicssuchasscreening,earlydiagnosis,timelyreferral,andpalliativecare(AccessAccelerated, 2018a). In Rwanda, recognizing the limited infrastructure for cancer care amongst poor,rural-based patients, the Ministry of Health, Partners in Health, and the Dana-Farber/Brigham andWomen’s Cancer Center collaborated in 2012 to establish the Butaro Cancer Center of Excellence(BCCOE)—a public, rural-based facility. At BCCOE, doctors and nurses receive foundational didactictraining in cancer care and long-term capacity building. Furthermore, cancer medicines used at thehospitalareselectedfromtheWHOEssentialMedicinesList(EML)andprocuredthroughthepublicsupplychain through stock orders every 6-12months (Tapela et al., 2016). Following its establishment, theBCCOEexperiencedlargepatientvolumes—2,326patientspresentedtothehospitalforcancerevaluationorcarerelatedtocancer,comparedto21patientspresentingtoButarohospitalforcancerevaluationorcareintheprevious12months(Tapelaetal.,2016).StrategiesatthislevelofthehealthsystemrecognizethatreducingpricesofinnovativeNCDmedicinesisinsufficientinachievingaccessintheabsenceofatrainedworkforceandinfrastructuretoactuallydeliverthesemedicines.Indeed,manyanalysesofhealthsystemsinLMICspointtocriticalservicedelivery,supplychain,andhumanresourcesbottlenecksastheprimarydownstreambarriersthatimpedeaccesstoeveninexpensive and long-proven essential health technologies, along with demand-side awareness andutilizationissues(Dicksonetal,2014;FrostandReich,2008).

2.2.6Strategiesattheindividual,household,andcommunitylevelThesedemand-generation strategies focuson raisingpersonal, household, andcommunity awarenessabouteither theNCDs targetedby themedicinesor themedicines themselves,ensuringpatientsandcommunitiesreceiveadequateinformation,education,andcommunicationinordertomakeinformedchoices. Additionally, demand-generation strategies seek to strengthen patient linkages along thecontinuumofcare,fromdiagnosistotreatment(BUSPH,2017).Forexample,toimprovehypertensioncontrolintheperi-urbanLowerManya-KroboDistrictinGhana’sEasternRegion,apublic-privatepartnershipinvolvingtheGhanaHealthService,FHI360,andtheNovartisFoundationisconductingtheCommunity-basedHypertensionImprovementProjectthatlinkscommunitymembers to the private sector, community health workers, and the public health system, usinginformation and communication technologies (ICT). The intervention involves: community-basededucationoncardiovasculardiseaseriskfactorsandhealthylifestyles;community-basedbloodpressure

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screening, monitoring, and dispensing of anti-hypertension drugs by licensed chemical sellers;telemedicineconsultationsbetweencommunity-basednursesandphysiciansandthereferralofpatients;ICTmessagesabouthealthylifestyles,treatmentadherencesupport,andtreatmentrefillreminders;andacloud-basedhealthrecordssystem(Lampteyetal.,2017).AnexamplemorespecifictoinnovativeNCDmedicinesisRoche’sBreastCancerNationalAccessProgram.ToimproveaccesstoHerceptin(trastuzumab)bypatientsinKenyawithhumanepidermalgrowthfactorreceptor2(HER2)positive+breastcancer,theprogramincludesacommunitycomponent,supportingtheKenyan Ministry of Health’s efforts to raise awareness of breast cancer and roll out breast cancerscreeningcampaigns(AccessAccelerated,2018b).Launchedin2016,theprogramhasengagedFirstLadyMargaret Kenyatta as a program champion, ensuring her presence at high profile events such as thelaunchofRoche’spublic-privatepartnershipwiththeKenyanMinistryofHealthandKenyattaNationalHospitalviatheBethMugoCancerFoundation(PSCU,2016).TheBreastCancerNationalAccessProgram,therefore,combinesdemandgenerationincommunitieswithsystemsstrengtheningactivitiesincludingtrainingofhealthworkers and improvementandupgradingofdiagnostic infrastructure, andapricingstrategybased,inpart,onacost-sharingagreementwiththeMinistryofHealthtoprovideHerceptinfreeofchargetopublicsectorpatients(AccessAccelerated,2018b).Demandgeneration strategiesat the individual,household, andcommunity levels arevital for scalingaccesstomedicinesforNCDs,sinceawarenessofrisksandsymptomsofNCDsalongsideknowledgeandavailability of screening activities serve as patients’ gateway to treatment. At the same time, thesestrategiesaloneareinsufficientandcanimpedeaccessifservices,supplies,andmedicinesarepersistentlyunavailableorunaffordableandpatientssubsequentlylosemotivationtofollowupontreatment.2.3PharmaceuticalsandpharmaceuticalpolicyinLMICsOverthelast35to40years,manycountrieshavecreatedaNationalMedicinesPolicy(NMP)whichisakeyreflectionofitsapproachtoaccesstomedicinesandhealthtechnologies.BasedonrecommendationsfromexpertsaftertheConferenceonRationaluseofMedicinesin1985,WHOhaspromotedtheconceptofNMPasasystematicapproachtowardsensuringaccesstoandrationaluseofmedicines(Hoebertetal,2013).Priortothis,pharmaceuticalsectorpolicywasdevelopedinafragmentedmannerwithdifferentpartsof thegovernment responsible fordisparateparts suchas regulatorypolicy, rationalusepolicy,procurementpolicy,andothers(Hoebertetal,2013).NMPshavebecomeameansofbringingcohesionand coordination between stakeholders across the spectrum of manufacturing, marketing, pricing,selection,distribution,coverageandreimbursement,quality,andrationaluseofmedicines(SIAPS,n.d.).Basedonasurveyof165countriesbyWHOin2011,81%ofcountrieshaveanNMP,althoughonly62.6%haveanassociatedimplementationplan(Hoebertetal,2013).Additionally,NMPsneedtobeupdatedevery fewyears toalignwithchangingenvironments.However, LMICshavehada lower frequencyofupdates compared tohigh-incomecountries (Hoebertet al, 2013). In this section,weexplorevariouscomponentsofanNMPanditsimpactonaccesstomedicines.

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2.3.1LocalproductionLocal production of pharmaceuticals has often been debated as a viable option for increasing theavailabilityandaccesstomedicinesinacountry.However,empiricalevidenceonlinkagesbetweenthetwois limitedfromLMICs(WHO,2011,Kaplanetal.,2016).Aswementionearlier,policymakersmayoftenhavecompetingprioritieswhen it comes topharmaceuticalaccessand industrialpolicy. Ideally,local production would increase availability, competition, and reduce prices. However, LMICmanufacturersmaynothavetheeconomiesofscaletoachievethesegoals.Intheinterestofaccesstoaffordable medicines, governments may subsequently choose to import lower cost medicines overpromotingitslocalmanufacturingindustry(WHO2011).Thus,whilesomemiddle-incomecountrieshaveasignificantdomesticpharmaceuticalindustry,mostLMICsimportthebulkoftheirmedicines(Birnetal.,2009).Kenya,forexample,isthestrongestproducerofpharmaceuticalsinEastAfricabutthesecompaniesonlysupply one-fourth of the domestic market and largely manufacture generics and over the counterproducts(Bandaetal.,2016)(seeBox1).Inanotherexample,Indiahasalargepharmaceuticalandvaccinemanufacturingcapacity,andexportsasignificantnumberofthesetootherLMICs(WHO,2011).However,thishasnottranslatedtouniversalaccesstoqualityassuredmedicinesforitsownpopulationasexportsaremoreprofitable for thedomesticpharmaceutical industry (Mackintoshetal,2016). In fact, Indianpharmaceutical manufacturers’ investments have steadily shifted to improving quality production ofgenerics (including for NCDs) for larger and profitable high-income markets. Colombia also has asignificant local manufacturing capacity that supplies 67% of the domestic market and also exportsregionally (Barbosa et al., 2016).Healthcare reform in 1993 included increasing the quality standardsrelatedtomanufacturingofpharmaceuticals,strengtheningthecountry’sabilitytocompetewithexports(Barbosaetal.,2016).However,thebusinessenvironmenthaschangedinrecenttimeswithunfavorableexchangeratesandsupplychaincostsofimportingrawmaterialsaswellaslocaldistribution.Thishassomewhat limited the industry’s growth and ability to innovate to produce complexmedicineswhichwouldincludethoseforNCDs(Barbosaetal.,2016).Insub-SaharanAfrica,theAfricanUnion(AU),incollaborationwithUNIDOandseveralotheragencies,launchedthePharmaceuticalManufacturingPlanforAfrica(PMPA)in2007(AU,n.d.).ManycountriesinAfricahaveahistoryoflocalproductionofpharmaceuticalsbuttheindustryinmostcountriessufferedduringtheperiodofstructuraladjustmentinthe1990s(Mackintoshetal2016).ThePMPAstemsfromarenewedfocusonself-sufficiencyandindustrialdevelopmentonthecontinent.Sincetheannouncement,the AU, its affiliates, UNIDO, and other have been working with countries to build capacity on localproduction.Forexample,Ethiopiahasanationalplanforpromotinglocalmanufacturingandisheavilyinvesting in creating an enabling environment to support its industry. While this may not serve asimmediate competition to international manufacturers of NCD medicines, the move towards self-sufficiencymayhavelongtermmarketimpact.Forexample,asmentionedintheearliersection,thelocalmanufacturingcapacityhasallowedthegovernmentsinIndia,Thailand,Brazil,SouthAfrica,andothercountriestohavesignificantbargainingpowerandabilitytoissuecompulsorylicensesifrequired.

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2.3.2SelectionandrationaluseofmedicinesWHOestimates thatoverhalf themedicines soldgloballyareprescribedorused inappropriately,andclosetohalfthepatientstheyareprescribedtodonottakethemproperly(SIAPS,2015).Irrationalusecontributestoadverseconsequencessuchasanti-microbialresistance,adversereactions,andwastage.Thecornerstoneofrationaluseisthedevelopmentofevidence-basedandregularlyupdatedStandardTreatmentGuidelines(STGs)andNationalEssentialMedicinesLists(NEMLs).Intotal,156countrieshaveNEMLswhichserveasthebasisofnational,regional,andfacilityformularies(SIAPS,n.d.).Additionally,NEMLsdeterminewhichmedicineswillbereimbursedbynationalorprivatehealthinsuranceschemesand/or provided for free through government financing. Since 1977, WHO has developed a modelEssentialMedicinesList(EML)thatservesasthefoundationforNEMLsformanycountries(WHOn.d.).These model EMLs are updated regularly every two years to include newer and more efficaciousmedicines(WHOn.d.).Themostrecentupdatein2017addedeightnewNCDmedicinestothelist.TheprocessforupdatingEMLsbyindividualcountriesvarieswidely.MostLMICdonotupdatetheirNEMLssystematicallyorasregularlyastheWHOduetoseveralreasons,includinglimitedtechnicalcapacityandfunding (SIAPS, 2015). Over the past decades, various countries have established specialized healthtechnology assessment (HTA) organisations aimed at better informing healthcare policies and clinicalpractice.AccordingtotheInternationalNetworkofAgenciesforHTA,HTAbodiesexistincertainLMICslikeBrazil,Colombia,Iran,Mexico,Thailand,Tunisia,andSouthAfricathathaveprogressivelytransitionedfromNEMLtomoredynamicbenefitpackages.Inthecaseofinfectiousdiseases,especiallythosefundedbydonors,governmentsinLMICshaveoftenchosentorevisediseasespecificSTGsandformulariesratherthaninitiateafullNEMLreview.However,giventhelimitedfundingforNCDs,governmentsmaynotupdatetheirNEMLsorSTGstoincludemanyNCDmedicines, thus restricting access (Quintiles IMS, 2016). A recent study on selection of essentialmedicinesforCVDinLMICsnotedthatofthe34countriesstudied,mosthadthemainclassesforCVDmedicines listed in their NEMLs but corresponding STGswere not developed (Bazargani et al, 2018).Furthermore,theWHO/HAIbaselinesurveyontheavailabilityofNCDmedicinesconductedin2016showslowavailabilityand/orpooraffordabilityofNCDmedicinesinmanyLMICs.2.3.3FinancingforpharmaceuticalsanditsfragmentationGlobally,pharmaceuticalsareasignificantandincreasingproportionoftotalhealthspending.Datafrom2006 suggest that pharmaceutical spending as a percentage of total health spending ranges from anaverageof30.4%inlow-incomecountriesto19.7%inhigh-incomecountries,withvariancewithintheseincome groups (see Table 6). In some low- and lower middle-income countries, pharmaceuticalexpenditureswereasmuchas67.6%oftotalhealthexpenditurein2006.

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Table6:Totalpharmaceuticalexpenditure,asproportionoftotalhealthexpenditure,2006(%)

Incomegroup Mean(%) Minimum(%) Maximum(%)

High-income 19.7 8.7 32.4

Uppermiddle-income 23.1 10.4 36.8

Lowermiddle-income 27.6 9.8 67.6

Low-income 30.4 7.7 62.9

Source:Luetal,2011Fragmentation or segmentation of pharmaceuticalmarketswithin the health sector is common in allincomegroups.Inhigh-incomecountries,wherefragmentationoffundingsourcesforhealthcaretendstobemuch less than in lower income settings,most financial resources come from thepublic sector(eitherfromtaxesornationalhealthinsurance).Nonetheless,theprivatesector—suchasthroughprivateinsurance(complementary,supplementary,orsubstitutive)—addstothepotofavailableresourcesforpharmaceuticalproducts.Inthesesettings,out-of-pocketpayments(OOP)usuallyplaysalessimportantrole,especiallyafteruniversalhealthcoverage(UHC)hasbeenachieved.Onthecontrary,LMICsareatarangeofdifferentlevelsofdevelopment,andtheirsystemsmaythereforehavevaryingdegreesoffragmentation.Manylow-incomecountriesrelyheavilyondonorassistanceandOOPasmainsourcesofhealthcarefinancing,withlimitedavailabilityofpublicresourcesforhealthcare.HighOOPisathreattoensuringaccessandaffordabilityofmedicinesincountries.Atthesametime—forthose segmentsof thepopulationwhicharewealthier—OOP isanopportunity forpatients to choosepreferredprovidersandmedicines.Middle-incomecountries,ontheotherhand,arefacedwithadoublechallenge since they are not eligible or have transitioned from donor assistance, but many of thesecountriesremainconstrainedbylimitedpublicfundingforhealthcare.Inmanymiddle-incomecountries,private funding remains substantial and linked to the ability of individuals to pay. The role of privateinsurance varies in different settings and high levels of OOP expose the population to the risk ofcatastrophicexpenditureandimpoverishment.Inthemajorityofhigh-incomecountries,mostmedicinesarefundedbythegovernment,suchasthroughinsuranceschemesorsocialsecuritysystems.However,inLMICs,atleasttwo-thirdsofpharmaceuticalexpendituresarefundedthroughprivatesources(seeTable7)(Luetal.,2011).Asmentionedpreviously,private spending in LMICs is primarily through OOP payments, making this also the main source ofpharmaceuticalspendinginthesecountries(Luetal.,2011).The fact that many people in LMICs must pay for medicines through OOP payments has multipleconsequences for patients, their families, and their communities. For instance, patientsmay have toforegotreatmentormayhavetointerrupttreatment.Householdsmaygointodebttoaffordpaymentor

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havetogowithoutpurchasingotherimportantitems,becauseofthehighcostofmedicines.Communitiesmaybecomedividedbecauseoftheproblemofinequitableaccesswithinandacrosspopulations(Bigdelietal.,2014).ThesegmentsofthepopulationinmanycountrieswiththeabilitytopayformedicationsforNCDsmaystillbeverylimitedbecauseofthescarcityoffinancialresourcesaswellasthehighcostsofinnovativeNCDmedicinesandthechronicityoftreatment.Table7:Compositionofpercapitatotalpharmaceuticalexpenditurebyincomegroup,2006

Incomegroup Totalpharmaceuticalexpenditure(%)

Public Private

High-income 61.3 38.7

Uppermiddle-income 38.8 61.2

Lowermiddle-income 33.5 66.5

Low-income 23.1 76.9

Source:Luetal,2011In addition to the problem of high OOP spending formedicines inmany LMICs, there is also limitedavailabilityofmanymedicinesinbothpublicandprivatesectors.Astudyconductedin40LMICsthroughfacility-basedsurveysfoundthattheavailabilityofwidely-usedgenericmedicineswassuboptimalacrossthesecountries,evenmoresointhepublicsector(57%)thanintheprivatesector(65%)(Cameronetal.,2011;Bigdelietal,2014).Inboththepublicandprivatesectors,medicinesforacuteconditionsweremoreavailable than those for chronic conditions that requireongoingmanagement (Cameronet al., 2011).AvailabilityofinnovativemedicinesfortreatingNCDsisevenmorelimitedinthesecontexts.2.3.4ProcurementanddistributionpoliciesandprocessesAccesstoNCDmedicinesisalsoinfluencedbydistributionandprocurementprocesses.Thedistributionof medicines in many LMICs is a government-run process from procurement to distribution throughcentralmedicalstoresandagovernmenttransportfleet,acomplexprocessthatcan leadtocontinualdelays and stock-outs (Yadavet al., 2011). Procurementanddistribution functionsareoften separatewhichleadstolimitedflowofinformation,compoundingthedelaysandstock-outs(Yadavetal.,2011).ThismodelofdistributionisoftenfoundinAfricancountries,themajorityofwhicharelow-incomeandlowermiddle-income countries. Funding constraints in these countriesmean that inmost cases it isimpossible to hold adequate quantities of safety stock (Yadav et al., 2011). Some countries areexperimentingwithdifferentdistributionmodelsincludingdecentralizedmedicalstores,quasi-private,orprivatedrugdistributionsystems(Yadavetal.,2011).Moreover,intheirhealthsystemreformsfocusedonUHC,manyLMICsaretryingtoshiftpharmaceuticalspendingtowardpooledfinancingsourcessuchaspublicbudgets,externalfinancingsources,andsocial

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or community-based health insurance (Yadav et al., 2012). The shift toward pooled funding reducesrelianceonOOPandtherelatedburdenonpatients,households,andcommunities,andallowsforpooledprocurementwhichcanleadtolowercostsandbettersupply(Yadavetal.,2012).Procurementanddistributionpoliciesarealsohighly influencedby thenational legal frameworkwithrespecttoprocurement.In1994,theUnitedNationsCommissiononInternationalTradeLaw designedtheModelLawonProcurementofGoods,Construction andServices(UNCITRALModel Law) to supportgovernmentsindevelopingtheirpublicprocurementsystemsandregulations(Arneyetal.,2014).Over30countrieshaveusedtheUNCITRALModelLawtoserveasabasisfortheirprocurementsystems(Arneyet al., 2014). The 1994Model Law focused on open tendering, restricted tendering, the request forquotations, and single-source procurement as key methods of procurement (UNICTRAL, 2011).Competitivetendersarecodifiedasthekeymethodsofprocurementandthereislimitedflexibilityforpricenegotiationswithpharmaceuticalcompanies.TheUNCITRALModelLawhasbeenupdatedin2011toincludenewerandflexibleprocurementmechanisms.However,aswithNEMLs,manyLMICshavenotupdatedtheirlegislationaccordingly(Arneyetal.,2014).2.3.5PricingpoliciesIn addition to effective processes for procurement and distribution, pricing policies across theprocurementanddistributionvaluechainimpactaccesstoNCDmedicines.WHOpublishedguidelinesforpharmaceuticalpricingin2015thatemphasizethatpoliciesshouldbeselectedbasedoncountrycontextand priorities. There aremany options for influencing prices for pharmaceuticals ranging from directinterventionssuchassettingpriceceilingsandstipulatingstatutorydiscountsonlargevolumepurchases.There are also indirect approaches such as regulating profit margins across the manufacturing,procurement,anddistributionvaluechainorusingHTAfordeterminingtheaddedvalueofaninnovativemedicine and its budget impact for price negotiation. Competitive bidding, therapeutic and externalreferencepricing(ERP),negotiatingpricesforgroupsofmedicines(bundling),andvalue-basedpricing,are additional approaches that countries have used for influencing pharmaceutical pricing. There issubstantialdataonthenuancedutilizationofthesestrategiesinhigh-incomecountriestoreduceoutofpocket expenditure and regulate prices. However, due to limited system capacity and constrainedbudgets,LMICslaginimplementingamixofcontext-specificstrategiestoincreaseaffordabilityandaccess(Nguyenetal.,2015).Inthecontextofhealthreforms,someLMICsarebuildingcapacityinHTA—the“systematicevaluationofproperties, effects and/or impacts of health technologies and interventions”—to inform policy anddecisionmaking on how to allocate limited funds to pharmaceuticals, other health technologies, andinterventions.HTAand itspolicyutilization iswell instituted inhigh-incomecountries;however,whileHTAinitiativesmightexistinLMIC,thelinkagebetweenevidenceandpolicyinmanycountriesremainsweak(Tantivessetal.,2017).Nevertheless,thedemandforHTAcapacityinLMICsisincreasingaspartofbroadereffortstoreachUHC.InKenyaandUkraine,forexample,noHTAprocessescurrentlyexistbutdiscussionsand initiativesareunderway(seeBoxes1and2).Colombiaestablished itsHTAInstitute in

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2012andquicklyinstitutionalizedtheapproach;itsfocusiscurrentlyonestablishingasystemofvalue-basedpricingofinnovativedrugs(seeBox3).PricingstrategiesareanecessaryingredientinensuringequityinaccesstoNCDmedicines,particularlyforinnovative,patentedtreatmentsthatareunaffordableformanygovernmentsandpatientsinLMICs.Atthesametime,thesestrategiesaloneareoften insufficientfor long-term,sustainableaccessforallpatientsinapopulation,andthisrequiresconsiderationofother,synergisticstrategiesinhealthandothersectors(FrostandReich,2009).2.3.6RegulationofpharmaceuticalsEnsuringthequalityofmedicines incountriesrequireseffectiveregulatorysystems, includingNationalMedicinesRegulatoryAgencies(NRAs)thatareresponsibleforregistrationofpharmaceuticalsandpost-marketing surveillance,amongstother functions (WHO,2010).WithinLMICs, there isawide rangeofcapacity amongst NRAs to handle product regulatory filings and this means that gaining regulatoryapprovalformedicinescanbecostly,complex,markedbydelays,andunpredictable.WHOestimatesthatatleast30%ofNRAsworldwidehaveinsufficientcapacitytocarryoutessentialregulatoryfunctions—manyNRAssufferfrominsufficientfundingandrecognition.5AstudyofNRAsinAfricafoundthateverycountryhasaNRAthoughfunctionalitiesvaryacrosscountries,withvaryinglevelsofgrowth,maturityand expertise (Ndomondo-Sigonda et al., 2017). Strategies that have been shown to improve theeffectivenessofNRAsincludingharmonizingregulatorystandardsacrosscountries,workandcostsharingarrangements,andcollaborationbetweenNRAs.

5Formoreinformation,seehttp://www.who.int/medicines/regulation/fact-figures-qual-med/en/.

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Box1:NCDburden,thehealthsystem,andaccesstoNCDmedicinesinKenya

Kenyaisalowermiddle-incomecountrywithapopulationof48.5millionin2016(WorldBankData,2018).In2015,thecountryallocatedapproximately5.2%ofitsGDPtohealthandhadtotalhealthspendingperpersonofUS$187(IHME,2018;WorldBankData,2018).Theprimarysourcesofhealthspendinginthecountryaregovernmentspending(30.6%),OOPexpenditures(30%),andDAH(26.4%)(IHME,2018).In2016,Kenyareceived1billioninDAH;thethirdhighestinSub-SaharanAfrica(IHME,2018).Prepaidprivatespendingmadeuptheremaining12.9%ofhealthspending(IHME,2018).

Figure3:DALYsinKenya,bycause,in2016(IHME,2018)

InfectiousdiseasesremainacauseofearlydisabilityanddeathinKenyaandareafocusofmanydonorinitiatives.Nevertheless,NCDsrepresentanincreasingproportionofthediseaseburden.AsFigure3shows,thepercentageoftotalDALYsduetocommunicable,maternal,neonatal,andnutritionaldiseasesis63.35%;NCDsrepresent29.88%;andinjuriesaccountfor6.77%(IHME,2017).

TheNationalHealthInsuranceFund(NHIF),establishedin1966,istheprimaryhealthinsuranceproviderinKenya.Itiscompulsoryforallsalariedemployeesandvoluntaryfortheself-employedandforworkersintheinformalsector.TheNHIFcoversonly18%ofthepopulation,withhighcoverageintheformalsectorbut limitedmembershipbyKenya’s large informal sector (Mwaura et al., 2015). An additional 2% of the population is covered by private,microfinance,andcommunity-basedinsurance(Mwauraetal.,2015).

PresidentUhuruKenyatta’s economicdevelopment agenda includesUHCas oneof four pillars of his final term(Kenyatta, 2017). To achieve UHC by the year 2022, the country will undergo health reforms with a focus onincreasinghealthcoveragethroughpublicandprivateinsurance.

Kenyahashadalocalpharmaceuticalindustrysincethe1940s,andtodayisthelargestproducerintheEastAfricanregion(Bandaetal.,2016).Kenyanpharmaceuticalcompanieshavebeenincreasingtheirexportssince2002,themarket for which is mainly countries in east and southern African. The Kenyan government in 2001 allowedcompulsorylicensingforthegenericproductionofHIV/AIDSmedicines,whichwaspossiblebecauseoftherelativeproductioncapacityofthelocalindustry,andlateragreedtovoluntarylicensing.However,Kenyancompaniessupply

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onlyanestimatedone-fourthofthedomesticpharmaceuticalmarketandmostmedicinescontinuetobesourcedinternationally(Bandaetal.,2016).

TheregulatoryagencyforpharmaceuticalsinKenyaisthePharmacyandPoisonsBoard.Fast-trackapplicationstakeuptothreemonthsforapproval,andotherapplicationshaveanapprovaltimeofbetween6-12months.ThereiscurrentlynoformalHTAprocessforprioritysettinginKenya,thoughdiscussionsareunderwayabouthowtomoveforwardindesigningandoperationalizingsuchaninitiative.

The two key pharmaceutical procurement agencies are the Kenya Medical Supplies Agency (KEMSA), a publicwholesaler,andtheMissionforEssentialDrugsSupply(MEDS),anon-profitwholesalerthatsuppliesthefaith-basedsector.Untilrecently,KEMSAhadthemandatetoprocure,store,anddistributemedicinestoallgovernmenthealthfacilities.TogetherwiththeMinistryofHealthatthenational-level,themanagementandsupplyofmedicineswasconductedthroughapullsystemthatoftenledtodelaysinthefulfillmentofordersandstockoutsinfacilities(Tsofaetal,2017).

ThissystemchangedasaresultofthedevolutionprocessinKenya(providedforinthe2010Constitution)thatgavesoleresponsibilityforprocurementtocountygovernments.Devolutionledtotheimprovementofdrugsupplyinsomecountiesbutnot inothers.While countiesnowhaveautonomyoverprocurementprocesses, theydonotbenefitfromtheeconomiesofscaleassociatedwithcentralizedprocurement(Tsofaetal.,2017).Inaddition,manydonors continue to use parallel procurement systems for vertical programs, leading to a fragmentedmedicinesmarket.

Withinthiscontext,akeychallengeforpatientaccesstoNCDmedicinesinKenyaiscost,sincesomanypatientscontinuetopayformedicinesout-of-pocket.Additionalaccessbarriersincludethelengthydrugregistrationprocess,remotenessandinaccessibilityofmanyruralcommunities,andotherhealthsystemschallenges.

PharmaceuticalcompanieshaveestablishedarangeofaccessprogramswiththegovernmentandotherpartnersforNCDsinKenya,including:

● TheNovartisAccessprogramrolledoutin2016thatoffersaportfolioof15NCDmedicinesatUS$1pertreatmentpermonth;

● TheTakeda-supportedpalliativecaretrainingproject;● TheCelgene-supportedprojectoneducationaboutmultiplemyelomaandanticoagulationcare;● TheRochepartnershipwiththeKenyanCancerAssociationforimprovingaccesstobreastcancer

medicines(trastuzumab);● HealthyHeartAfricabyAstraZenecathatfocusesoncardiovasculardiseaseandcancer;● AsthmaanddiabetesmellitusprogramsledbyGlaxoSmithKlineandNovoNordisk;(AccessAccelerated,2018c;MSH,2018).

AccessAccelerated,across-industrycollaborationonNCDsinLMICs,launchedpilotprogramsintwoKenyancountieswith theWorld Bank in 2017 targeting early screening, diagnosis, and treatment forNCDs (Access Accelerated,2018c). In addition, international NGOs and donors have provided funds and support for health systemsstrengtheningprograms such as theHealthCommodities and Supply Chainprogram (implementedbyMSHandfundedbyUSAID).

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Box2:NCDburden,thehealthsystem,andaccesstoNCDmedicinesinUkraine

Ukraineisalowermiddle-incomecountrywithapopulationof45millionin2016(WorldBankData,2018).In2015,thecountryallocatedapproximately6.1%ofitsGDPtohealthandhadtotalhealthspendingperpersonin2015ofUS$598 (IHME, 2018; World Bank Data, 2018). Sources of total government spending are primarily from thegovernment(48.3%)andOOPexpenditures(46.8%),withprepaidprivatespendingandDAHcontributingonly3.5%and1.4%respectively(IHME,2018).

Figure4:DALYsinUkraine,bycause,in2016(IHME,2018)

AsFigure4shows,NCDsaccountforthebulkofthediseaseburdeninUkraine,representing82.55%oftotalDALYs(IHME,2017).However,infectiousdiseasesarestillcriticalpublichealthissues.Ukrainehasthesecond-largestHIVepidemicinEasternEuropeandCentralAsia,concentratedinkeypopulations,andthesecondhighestTBburdeninEurope,withhighnumbersofmultidrugresistantTB.ThepercentageoftotalDALYsduetocommunicable,maternal,neonatal,andnutritionaldiseasesis5.97%andinjuriesis11.47%(IHME,2017).ThehealthsectorinUkraineisfurtherchallengedby thehumanitarianneedsand lackof access tohealth services in conflict-affectedareasof easternUkraine.Evenbeforetheconflictbegan,thisareawasamongstthosewiththehighestprevalenceofHIVandTB(UHCPartnership,n.d.;Twigg,2017).

Followingindependencein1991,Ukrainewasleftwithacentralizedpublicsectorhealthsystemandasmallprivatesector,primarilyconsistingofpharmacies,diagnosticfacilities,andsomeprivatephysicians(Lekhanetal.,2015).Thecentralizedsystemprovidedfewincentivesforrationaluseofresourcesorcostcontrol(Lekhanetal.,2015).AndwhileUkraineestablisheduniversalaccesstoaguaranteedbasicpackageofhealthservicesinthepublicsector,freetocitizensandregisteredlong-termresidents,therewerecontinuedchallengeswithfundingshortfalls,and“asweepinggapbetweenpeople’sexpectations,builtontheConstitutionalpromise,andreality”(Twigg,2018,p.3).

Averyhighpercentageofmedicinecostsarepaidbypatients,andmanymedicinesareunavailable.Itisestimatedthatbecauseofcorruption,theMinistryofHealthhaslost$100millionofits$250millionbudgetforpharmaceuticals(Twigg,2018).Thecountry’sessentialmedicineslistwasnotmodernizeduntilmid-2017,andpatientshavebeentreated with old medicines based on outdated treatment protocols. State procurements have suffered fromduplication,inefficiency,andconflictsofinterest.AnMSHstudyofpublicprocurementin2015foundthatmorethan4,630medicineswereprocuredusingpublicfundstheprioryear,butonlysevenmedicinesaccountedfor20%oftheexpenditure(KonduriandLebega,2015).

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Inthiscontext,internationalprocurementagenciestendtoengageindirectnegotiationswithmanufacturers,withthegovernmentnormallyplayingaminimalrole.OneexceptionisthenegotiationsthegovernmentconductedwithGilead Sciences in 2017 that led to extension of the voluntary license and the subsequent price reduction ofsofosbuvirforthetreatmentofhepatitisC.

Ukraineiscurrentlyundergoingafive-yearNationalHealthReformStrategytoworktowardsUHC.InJuly2016,Dr.Ulyana Suprun, a Ukrainian-Americanwith no affiliation to a political party, became acting healthminister andquickly pushed ahead reforms (Twigg, 2017). Key components of the reform include: a guaranteed package ofservicesforallcitizens, fundedbygeneraltaxation;restructuringofclinicsandhospitalstobecomeautonomousinstitutions with patients choosing their providers; implementation of a reference pricing approach for stateprocurementofmedicines; implementationofanewe-healthplatform;andthedevelopmentofaHTA initiative(supportedbyMSHwithUSAIDfunding).

Themain barriers to accessing innovative NCDmedicines are their limited availability and high cost. Currently,patientsaccessnewNCDmedicinesthroughclinicaltrials;medicinedonationsbymanufacturersonacase-by-casebasis;thirdparties(e.g.donorfunds,internationalmechanisms);andappealstomanufacturersforhumanitarianaid(MSH,2018).

PatientassociationsinUkrainehavepressuredthegovernmenttoprovideaccesstoinnovativeNCDmedicinesinthepast.Oneexampleisthepartiallysuccessful“righttolife”programinwhichthegovernmentcovered35%ofmedicineneedswhiletherestwascoveredbythemanufacturerashumanitarianneed(MSH,2018).Thereisalsoanewreimbursementprogramestablishedinmid-2017for21essentialmedicinesforthetreatmentofcardiovasculardisease,type2diabetes,andasthma,whichledtoan85%increaseindailydefineddoseconsumptionofmedicines(MSH,2018).Negotiatedmanagedentryagreementsarecurrentlybeingconsideredfororphandiseases,certaintypesofcancer,andhepatitisC(MSH,2018).Thesewillbefacilitatedbylegislationwhichiscurrentlybeingamendedby the Ministry of Health to include long-term agreements with manufacturers through a planned centralprocurementbody(MSH,2018).

Box3:NCDburden,thehealthsystem,andaccesstoNCDmedicinesinColombia

Colombiaisanuppermiddle-incomecountrywithapopulationof48.7millionasof2016(WorldBankData,2018).Thecountryallocated6.2%ofitsGDPtohealthin2015,andhadtotalhealthspendingperpersonofUS$861(IHME,2018;WorldBankData,2018).ThemainsourceoftotalhealthspendinginColombiaisthegovernment(70.1%),followedbyOOPexpenditures(18.6%),andprepaidprivatespending(11.1%)(IHME,2018).Likemanyotheruppermiddle-incomecountries,ColombiadoesnotreceivesignificantDAH.AsFigure5shows,NCDsmakeupthebulkofthe disease burden in Colombia at 70% of total DALYs, while the percentage due to communicable, maternal,neonatal,andnutritionaldiseasesis12.16%andinjuriesis17.79%(IHME,2017).

Colombia’s health system was reformed in 1993 (through Law 100 of the Constitution). Through this system,Colombians have access to a package of health services granted through health insurers known as EntidadesPromotorasdeSalud(EPS).Citizensareentitledtoenroll inoneofthepublicorprivateEPSentitiesthroughtwomajorinsuranceregimes:1)theContributoryRegime(CR),whichisfortheemployedandpensionerswhocontributeapercentageoftheir incometohealthcare;2)theSubsidizedRegime(SR)whichisfor low-incomepeopleandisfundedbythenationalgovernment,localgovernment,andtheCR.Thesetwoschemescurrentlycover95%ofitspopulation. In theearly1990s, thehealthcenterwasalsodecentralized,withresponsibility fordeliveringhealth

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servicesandpublicsectorprocurementofpharmaceuticalstransferredtothecountry’s32departmentsandtheirmunicipalities(Guerreroetal.,2015).

Figure5:DALYsinColombia,bycause,in2016(IHME,2018)

DespiteColombia’ssuccesseswithitsUHCreforms,thereareconcernsaboutthesystem’sfinancialsustainabilityduetoinsufficientcontrolofvolumeofservicesdeliveredandpredominanceofthefee-for-servicesystem(OECD,2015; Economist Intelligence Unit, 2016). Since 1991, access to health services has been considered a right inColombiaandthishasledtosubstantialjudicializationofhealthcarecoverage,particularlyamongthesocial-urbanmiddleclass.Every3.5minutesaColombiancitizenchallengesthehealthsystem’scoveragethroughjudicialclaims(MSH,2018).Manyofthelegalprocessesfiledbycitizensaretoensureaccesstomedicinesthatarenotincludedinthe guaranteed package of health services (Pinzón-Flórez et al., 2016). As many of these legal processes aresuccessful,thegovernmentsometimespaysfortreatmentsthatasofyethaveinsufficientevidencetoprovevalue(EconomistIntelligenceUnit,2016).

In2012,ColombiaestablishedaHTAInstitute—theInstitutodeEvaluaciónTecnológicaenSalud(IETS)—toimprovetheuseofevidenceforpriceandreimbursementdecisionmakinginthehealthsector.TheIETShasrecentlybeenfocusedonstrengtheningitscapacitytoassessthevalueofinnovativemedicinesandregulatepricesofnewdrugsbasedonvalue(Decree433).WhencompaniesrequestapprovalofamedicineinColombia,atthesametimetheywillsubmitanapplicationtoIETSforavalue-basedprice(EconomistIntelligenceUnit,2016).ItisanticipatedthatthissystemwillbeinplacebyDecember2018.

Inadditiontocitizens’useofthecourtstoaccessmedicines,anumberofotherstrategieshavebeenusedtoimproveaccess to innovativemedicines by a range of different stakeholders. TheMinistry of Health in 2017 decided toparticipate inacentralizedprocurementsystemestablishedbythePanAmericanHealthOrganizationwhichwillpurchasehepatitisCdrugsforparticipatinggovernmentsatlowerprices.ColombiahasrecentlymadeuseofTRIPSflexibilities for cancer drug imatinib (marketed as Glivec® by Novartis) through Resolution 2475 (2016). AccessAccelerated,across-industrycollaborationonNCDsinLMIC,ispartneringwiththeUnionforInternationalCancerControlineffortstoenhancecancercareincities.Oneofthesecity-basedinitiativesisinCalí,Colombia,thelargestcityinsouthwestColombia(AccessAccelerated,2018c).Additionally,thereareseveralpilotsofMEAswithinitialdialoguetakingplacebetweenthegovernmentandpharmaceuticalcompanies,especiallyformedicinesfororphandiseasessuchashemophiliaandMorquio’ssyndrome(arare,inheritedbirthdefect)(MSH,2018).

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SECTION 3: MANAGED ACCESS STRATEGIES

TheprevioussectiondescribedasetofchallengesthatmanyLMICsfacewhenseekingtoimproveaccesstoNCDmedicines.Thissectionintroducesasetofagreementsthatcanbeusedtoaddressthesechallenges—referredtointhiscompendiumasmanagedaccessstrategies(MASs).3.1Whataremanagedaccessstrategies(MASs)?MASs are formal, negotiated agreements between pharmaceutical companies and payers (includinggovernmentpayers,privateinsurers,ordonors)thatseektoimproveaccesstomedicinesforpatients.Dependingonthetypeofagreement,MASscanalsohelpbringcostsdownandexpandtheclinicalandhealthsystemevidencebase.MASsconsistofarangeofdifferenttypesofagreementsincludingproductdonationsandnon-profitaccessprograms,aswellasmanagedentryagreements(MEAs).Charitable access programs, involving product donations and non-profit models, have long beenimplementedinLMICs.Awell-knownexampleisMerck’sdecisionin1987todonateivermectinforthetreatmentofonchocerciasisforaslongasitmightbeneeded(Frostetal.,2002).Donationprogramshavefocusedparticularlyonneglectedtropicaldiseases(NTDs)butcompanieshavealsodonatedproductsforcommunicablediseases,usually targetedtospecificgroupsandtailoredtoparticularcountrycontexts(AccesstoMedicinesFoundation,2016).Donationprogramsandnon-profitaccessprogramsareoftenimplementedwiththesupportofNGOpartners.Forexample,MerckpartneredwiththeTaskForceforChildSurvivalandDevelopment,anAtlanta-basedNGO,fortheimplementationofitsivermectindonationprogram.Donationprogramshavebeenshowntoimproveaccesstomedicinesincertaincontextssuchasduringhumanitarianemergencieswhenhealthsystemshavebeendamagedorinaccessible(AccesstoMedicinesFoundation,2018).Donationprogramscanalsoprovideaccesstomedicinesforthepooresthouseholdswithlimitedabilitytopay(AccesstoMedicinesFoundation,2018).However,questionshavebeenraisedaboutthelong-termsustainabilityofproductdonations,andthisisofrelevancetochronicdiseasesthatrequirecareandtreatmentoveranextendedperiodoftime.Therefore,non-profitmodelswithlimitedco-paysprovideamoresustainablealternative.AnothertypeofMASareconfidentialagreementsbetweencompaniesandpayersknownasmanagedentry agreements (MEAs). These agreements are formal arrangements between pharmaceuticalcompaniesandpayersthatseektoshareriskwithrespecttotheintroductionofnewhealthtechnologies.Theyarealsoreferredtobyavarietyofothernames includingrisk-sharingagreements,performance-based agreements, patient access schemes, and special pricing arrangements (Kanavos et al, 2017;Ferrarioetal.,2017).

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3.2 UtilizingMASstoimproveaccesstoinnovativeNCDmedicinesinLMICsInSection2,weemphasizedthatwhileLMICsareoftenviewedasarelativelyhomogenousgroupduetocertain shared characteristics, in reality there is ahighdegreeof variability across LMICmarkets. TheGlobalFund,Gavi,Unitaid,andotherglobal financingmechanisms for infectiousdiseasecommoditieshavesuccessfullyutilizedMASssuchasprice/volumeagreementsinLMICs.Theseagreementsarelargelybased on market segmentation by income status as low, lower middle, and upper middle-incomecountries (which is intrinsically linked to the levelofdonor fundingcountries receive,anothermarketsegmentationstrategy).ForMASagreements,thecontextualfactorsoutlinedinSection2withineachofthesecountrieshaveasignificantimpactontheutilizationofthesestrategiesasanaccesstool.Atthesametime,thesefactorsprovidetheopportunitytoidentifymorenuancedmarketsegmentsatthecountrylevelandalsowithinthecountry.Stakeholdersoperating inLMICswithmultiplepayers—forexample, thosecountrieswithhighOOPspendingand/orfragmentedhealthsystems—canuseacombinationofMASstomaximizebothreach of and access to innovative NCD medicines. Box 4 provides a potential approach for howstakeholders can utilizeMASs to improve access to an innovative NCDmedicine. Additionally, Box 5describestwoinnovations inKenyathatareexamplesofprivate-sector,technological innovationsthatcanbeutilizedinLMICstoreachmorepatientswithinnovativeNCDmedicines.Box4:PotentialapproachfortheutilizationofMASstoimproveaccesstoaninnovativeNCDmedicineinamulti-payerLMICcontextNovel,synergisticuseofMASscanbeusedinLMICswithmultiplepayerstoensuregreaterreachofandaccessto an innovative NCD medicine. Such an approach would involve different arrangements to reach differentsegmentsofthepopulation,forexample:

A. Thepharmaceuticalcompanyandthegovernmentpayer (whichcoversworkers intheformalsector)mayagreeonamanagedentryagreement(MEA)(seesection3.3formoreinformationaboutMEAs).TheMEA’sgoalwouldbetolimitbudgetimpactwhileprovidingaccesstopatientsintheformalsector.Thecountry’shealthsystemwouldprovideclinicalcapacityfordiagnosisandmanagement.

B. ThepharmaceuticalcompanymaypartnerwithNGOsthatprovidetreatmenttothepopulationintheinformal sector, either through a donation or with a limited co-pay (to cover marginal costs ofmanufacturingplusthecostsofhandlingandprogrammanagement).Forpatientswhoareunabletopay,optionscouldincludefinancingthroughaloanorpaymentbyimpactinvestors,crowdfunding,orotherinnovativeoptions.

C. StakeholdersmayharnesstechnologicalinnovationsintheLMIC’shealthsectortoreachthosepatientswhopayforNCDmedicinesout-of-pocketatacostthatismoreaffordabletopatients.Thesetechnologyplatformsprovidetheopportunitytocollectquality,neededhealthdataonpatientsforwhichnohealthinformationwouldotherwiseexist(seeBox5forexamplesofthesetechnologicalinnovationsinKenya).

D. Thepharmaceuticalcompanymaypartnerwithprivatesectorhospitalstooffertreatmentpackagestopatientsinhigherwealthquintiles,withtheNCDmedicinepricedcomparablytointernationalprices.

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Forthisapproachtowork,confidentialityofagreementswouldbenecessarytoallowcross-subsidizationfromthewealthiertothelesswealthy.Thisgoesagainstanincreasingcallintheglobalhealthcommunityformoretransparencyondrugspricessothesetrade-offswouldneedtobefullyconsideredbeforeproceedingwithsuchanapproach.MorediscussionaboutthedrawbacksofconfidentialagreementscanbefoundinSection3.3.4.

Box5:TechnologicalplatformsinKenya:M-TIBAandMydawaSafaricom,PharmAccess,andCarePayinKenyalaunchedahealthpaymentproductinDecember2015calledM-TIBA.Thisproductisa“healthwallet”onamobilephonethatallowsanindividual,andtheirfriendsandrelatives,tosendandsave funds foruseonmedical treatmentwhen it isneeded.The fundsmustbespent topay forhealthcare in facilities within the nationwide M-TIBA network; the funds are managed by UAP Insurance.Individualscantransferfundstotheirownortheirfriends’andfamilymembers’M-TIBAaccountsforfreefromKenya’smobilemoneyplatformM-PESA. Inaddition,donorsand insurerscanutilizeM-TIBAforproducts likevouchersandlow-costhealthinsuranceforparticularsegmentsofthepopulation.AsofApril2017,M-TIBAhadanetworkof350providersaroundthecountry,hadregistered500,000users,andhadrecorded60,000clinicvisitsandoverKsh100million inmedicalpayments.An importantcomponentofM-TIBA is that theplatformprovidestransparencyandaccountabilitytodonors(bothindividualsandorganizations)sincethefundscanonlybeusedforhealthcareandtransactionscanbetrackedandaudited(Moodleyetal.,2017).AsecondtechnologicalinnovationinKenyaisMydawa,adigitalplatformlaunchedinMarch2017,withstart-upfunding from the Irish private equity firm Ion Equity.Mydawa provides amobile application through whichpatientscanpurchasemedicinesandwellnessproducts.Theseproductsarethendeliveredtopatients’homesortheycanchoosetopick-uptheproductsfromlocal,participatingpharmacies.Mydawaseekstoprovidevalueformoneyby cuttingoutmiddlemen in the supply chain anddoesnot charge for service fees, or transactionordeliverycosts.ItalsoseekstoaddresstheproblemofcounterfeitmedicinesandproductsbyenablingconsumerstotracktheentiresupplychainprocessandauthenticateproductsthroughaQRcodetrackingsystem.Finally,Mydawaenablesmonitoringofpatientoutcomesanddisseminationofhealthylifestylemessaging.

3.3Managedentryagreements(MEAs)Intheaccesstomedicinesliterature,relativelylessattentionhasbeengiventhusfartoMEAs,andthisaccessstrategyisthereforethefocusoftheremainderofthecompendium.MEAsaredesignedspecificallytoensureaccesstomedicinesforwhichthereisstilluncertaintywithrespecttotheircost-effectiveness,optimalandreal-lifeclinicalandhealthsystemutilization,accesspathways,andimpactonhealthsectorexpenditure(Ferrarioetal.,2017).Specifically,MEAshavethreeobjectives:1)toreducehighcostsanduncertaintiesaboutexpenditureonnewmedicines;2)toaddressuncertaintiesaboutanewmedicine’sclinical effectiveness and cost-effectiveness in a particular setting; and 3) to manage a medicine’sutilizationinordertooptimizeperformance(Kanavosetal.,2017).Box6showsthetypesofuncertaintiesthatcanbeaddressedthroughMEAs.

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EstablishingMEAsinvolvestwokeystakeholders:thepayer—eitheragovernmentorpublicfundholder,oraprivateholderofpooledresourcessuchasaninsurer)andthepharmaceuticalcompanywhichholdsmarket authorization for themedicine and is also itsmanufacturer (although theremay be separateentitiesforthesetwofunctions).Anumberofadditionalstakeholdersmaybeinvolvedinthenegotiationand implementation of MEAs, including regulatory authorities, an HTA agency, and health providersinvolvedinimplementation(necessaryforcertaintypesofMEAs)(Rotaretal.,2018).Frompayers’pointofview,MEAsareastrategyforlimitingthebudgetimpactofnew,high-costmedicinesandforensuringthatvalueformoneyestimatesareaccurate(Rotaretal.,2018;Wonderetal.,2012).Thisfocusonvalueformoneyfitswithinthecurrenttrendtowardvalue-basedpricing,whichbeganintheearly2000s,inwhichpayersrequestthatmedicinesbepricedaccordingtothebenefitstheyofferasawaytoefficientlyallocatelimitedresourcesinthecontextofincreasinghealthcarecosts(Piatkiewiczetal.,2017).

Government payers may haveadditional reasons for engaging inMEAs.Inhigh-incomeNewZealand,forexample,inadditiontowantingtolimitbudget impact, the government alsosoughttousethesearrangementswithcompaniestoensureasufficientsupplyof medicines for their small andisolated country. The contractsspecified that if a drug shortageoccurred, pharmaceutical companieswere required to compensate thegovernment(Morganetal.,2013).From pharmaceutical companies’perspective,MEAsareawaytoextendaccesstotheirinnovationsincountrieswithrestrictedbudgetsorwherethere

remains someuncertainty about an innovation’s performance in real-life conditions.MEAs are also ameansforpricedifferentiation inthecontextofagrowing interest inexternalreferencepricing(ERP).ERP,alsocalledinternationalreferencepricing,isapracticeinwhichthepriceofamedicineinacountryissetornegotiatedonthebasisoftheex-factoryormanufacturer’ssellingpriceinother,similarcountries(WHO,2013b).MEAsallowpharmaceuticalcompaniestodeterminepriceswitheachindividualcountryinaconfidentialarrangement, therebydisruptingthereliabilityofERPpublisheddatabecausethe listpricewillnotactuallyreflecttherealpricefacedbythepayers(Pauwelsetal.,2017).

Box6:UncertaintiesthatcanbeaddressedbyManagedEntryAgreements(MEAs)§ Uncertainefficacyandsafetyofanewdrug

o Canclinicaltrialresultsbegeneralizedtothiscountry’spatientpopulation?

o Fordrugsthattreatchronicconditions,istheresufficientlong-termdata?

§ Uncertaincost-effectivenesso Givenuncertaintiesaboutefficacyandsafetyina

specificcountry,whatisthecost-effectiveness?o Additionally,whoarethepatientswhoarelikely

tobenefitmost?§ Uncertainbudgetimpact

o Howmanypatientsareeligible?o Forwhichpatientswillphysiciansprescribe?o Howwellwillpatientsadheretoprescribed

dosing?Source:RTIInternational(2018)

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In this compendium, the term MEA serves as a general umbrella term under which many sucharrangementscanbeclassified;however,itisalsoimportanttorecognizethattheboundariesastowhatconstitutesanMEAarenotfixedandthatmanycountriesdifferintheirunderstandingofwhatanMEAisandwhenthetermshouldbeapplied(Ferrarioetal.,2017).Ferrarioetal(2017)notethatthenameswhichcountries,payers,andcompaniesapplytosucharrangementsrelatetotheirobjectives,nature,and mode of reaching agreement and sit on a spectrum of informal-to-formal with respect to theirinstitutionalization.Avarietyoftaxonomiesforthesearrangementsexist,butmosttaxonomiesroughlyclassifyarrangementsas fallingunder twomaincategories,as shown inFigure6: financial schemesandperformance-basedagreements(Kanavosetal.,2017).6Financialschemesfocusontargetingthefinancialimpactofnewdrugsto patients and/or health systems. These arrangements leverage instruments such as discounts,price/volume agreements, patient/dose dependent discounts, and utilization-based price capping(Kanavosetal.,2017).Performance-basedagreementsaddresstheuncertaintywithrespecttoevidenceonclinicaloutcomesoreligibilityofpatientpopulations.Instrumentsincludeoutcomeguarantees,patienteligibilityrequirements/registries,andcoveragewithevidencedevelopment(Kanavosetal.,2017).Hybridmodelsalsoexist,combiningfinancial-andperformance-basedinstruments.Additionally,MEAsarenotinfrequentlycombinedwithotheraccessstrategies—forexample,theymaybecombinedwithotherpricestrategies (such as donation programs for certain population groups) as well as demand and healthdeliveryandhealthsectorstrategies.Multipleapproachesareeffectiveaslongastheystrengthenandreinforceeachother(KibichoandPinkerton,2012).Figure6:Aframeworkoffinancialschemesandperformance-basedagreements

Sources:Kanavosetal,2017;FerrarioandKanavos,2015

6Forothertaxonomies,seeCarlsonJJetal.(2010);Klempetal.(2011);Bouvyetal.(2018).

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3.3.1FinancialschemesThe objective of financialMEAs is to address the high costs ofmedicines for patients and/or healthsystemsanduncertaintiesaboutfinancialimpact.Theseschemesaddressbudgetuncertainties,thoughdonotaddressuncertaintiesrelatedtooutcomes(thesearethefocusofperformance-basedagreementsdescribedinSection3.3).AgreementscanemployanumberoffinancialinstrumentsasshowninTable8.ThistypeofMEAmayseemmostappropriateformedicinesthatarelikelytohaveasignificantimpactonbudgetsbecauseofhighcostorpotentiallargevolumes(Luetal.,2015).

Table8:Instrumentsforfinancialschemes

Instruments Definitions Examples

Discountsandfreemedicines

Pharmaceuticalcompaniesagreewithpayerstoprovidediscountsonmedicinesorfreemedicinesforaperiodoftime.

In2010,MerckagreedwiththeRwandanMinistryofHealthtoprovidefreeGardasil®HPVvaccineforthreeyears,followedbyconcessionalpricingforfuturedoses(Binagwahoetal,2012).

Price/volumeagreementsalsocalledbudget-impactschemes

Payersandpharmaceuticalcompaniesagreeonapricebasedonaforecastvolumeofsales.Iftheactualsalesvolumeexceedstheforecast,thepriceofthemedicinemaybereviseddownwardsorthecompanymaybeaskedtopayarebate.

InFrance,twoprice/volumeagreementswerenegotiatedwithBioMarinandAlexionPharmaceuticalsin2008fortwoorphandrugsrespectively:Naglazyme®(galsulfase),atreatmentformucopolysaccharaidetypeIVdisease,andSoliris®(eculizumab),atreatmentforparoxysmalnocturalhaemoglobinuria(Moreletal,2013).Apricewasagreedtouptoabudgetceiling;salesmadebeyondtheceilingrequiredthecompaniestopaybackanyturnovermade.

Patient/dosedependentdiscount

Payersandpharmaceuticalcompaniesagreeonamaximumnumberofcyclesoftreatmentordoseofdrugreimbursedperpatient.Thepharmaceuticalcompanypaysforthedrugbeyondthisagreedamount.

IntheUK,anagreementwithCelgenein2009stipulatedthattheNHSwillfundRevlimid®(lenalidomide)forthetreatmentofmultiplemyelomafor26cycles(typically2years),afterwhichtimeCelgenewillfundthecostforpatients(Guardian,2009).

Utilization/pricecapping Payersandpharmaceuticalcompaniesagreeonamaximumamountspentforamedicineperpatient.Thepharmaceuticalcompanypaysforthedrugbeyondthisagreedamount.

In2008inChina,BayerofferedNexavar®(sorafenib),forthetreatmentofunresectableormetastatichepatocellularcarcinoma,at$7,000/monthperpatient,cappedatthreemonthsofuse(Lineberryetal.,2011).

Sourceofdefinitions:Cheemaetal,2012.

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Financial schemes have been implemented in many high-income countries around the world. Forexample,in2008theFrenchComitéEconomiquedesProduitsdeSanté(CEPS)negotiatedprice/volumeagreementsfortwoorphandrugswithBioMarinandAlexionPharmaceuticalsrespectively:Naglazyme®(galsulfase),atreatmentformucopolysaccharaidetypeIVdisease,andSoliris®(eculizumab),atreatmentforparoxysmalnocturalhaemoglobinuriawhichisoneofthemostexpensivedrugsintheworld(Morelet al., 2013). In these agreements, which were in effect until 2013, a price was determined up to amaximumbudgetceiling.Thecompaniesweretosupplythemedicinetoallpatientswhorequireditandthenpaidbacktothepayeranynetsalesmadeabovethemaximumbudgetceiling(Espinetal,2011).AnotherexampleofafinancialMEAinahigh-incomecountryisintheUnitedKingdom(UK),wheretheNational Institute for Health and Care Excellence (NICE) reached a dose dependent agreement withCelgenein2009inregardstoitsproductRevlimid®(lenalidomide)forthetreatmentofmultiplemyeloma.In the agreement, the UK funds Revlimid® for third-line use for patients for 26 cycles of treatment(typicallytwoyears),andanyfurthercostsarecoveredbyCelgene(TheGuardian,2009).FinancialMEAsto improveaccesstoNCDpharmaceuticalsarealsobeingused insomeLMICs, thoughthereiscurrentlylimiteddocumentationabouttheseschemes.OneexampleisinRwanda,inregardstoitsnationalcervicalcancerpreventionstrategy,whereanagreementwasmadebetweenMerckandtheRwandanMinistry ofHealth inDecember 2010 that guaranteed freeGardasil® humanpapillomavirus(HPV) vaccine for three years,with futuredoses at concessional pricing (Binagwahoet al, 2012). Thisarrangement assisted Rwanda in reaching 93.23% coverage following the initial three-dose course ofvaccination(Binagwahoetal,2012).Subsequently,GavibeganincludingHPVvaccines—whichhadbeenintroducedinhigh-incomecountriesasearlyas2006—toeligiblecountrieswithapriceofferedbyMerckatlessthan$5perdose.AnotherexampleofafinancialMEAinanLMICisNexavar®(sorafenib)forthetreatmentofunresectableormetastatichepatocellularcarcinoma.Nexavar®wasapprovedinChina in2008,andBayerofferedaprice per doseof approximately $7,000/monthwhichwas similar to thepriceoffered in high-incomemarkets(Lineberryetal.,2011).InChina,thepatient’scostwascappedatthreemonthsofuse(Lineberryetal.,2011).

3.3.2Performance-basedagreementsPayersinmanycountriesarewillingtopayhighpricesforinnovativemedicinesiftheyprovidevalueformoney.However,forsomenewproducts,theevidenceremainslimitedrightafterregistryastohowthesemedicineswillperforminreal-worldcircumstances(Wonderetal.,2012).Theobjectiveofperformance-based MEAs is to address this problem by focusing on patient and health system outcomes anduncertainty in regards to clinical and health system utilization. These schemes thus provide moreopportunitythanfinancialMEAsforrisksharingbetweenpayersandpharmaceuticalcompanies(Pauwelsetal.,2017).AgreementscanemployanumberofinstrumentsasshowninTable9.

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Ingeneral,theseagreementsaremostappropriateforinnovativemedicinesthatrequiremoreevidence—asisthecaseformanynewmedicinesthattreatchronicNCDssinceitisunlikelythattheywillhavelong-termdataatthetimeofsubmissionforapproval(Wonderetal.,2012).Additionally,theseschemesaremosteffectiveforproductsthathave:a)simplemethodsformeasuringeffectsoftreatment,andb)well-definedoutcomes (Carlsonetal.,2010).Box7presents fivequestions thatcanguidedecisionmakingaboutwhetherperformance-basedagreementsareappropriateforaparticularproductandcontext.Table9:Instrumentsforperformance-basedagreements

Instruments Definitions Examples

Outcomeguarantees

Thepharmaceuticalcompanyprovidesrebates,refunds,orpriceAdjustmentsiftheirproductdoesnotmeetpre-agreedoutcomesafterlaunchinrealworldsettings.

Anagreementwasnegotiatedin2008betweenHealthAllianceMedicalPlansintheU.S.withProcterandGambleandSanofi-AventisforActonel(risedronate)fortreatingosteoporosis.TheagreementstatesthatthemanufacturerswillhelppaythecostoftreatingnonvertebralfracturesamongpatientswhoexperiencethemdespitetakingActonel(Neumannetal2011;Pollack,2009).

Patienteligibility+patientregistry

Patienteligibilitycriteriaislinkedtoaregistrytoevaluateutilizationinclinicalpracticeandtocollectadditionaldata.

Italyutilizesamonitoringregistrywith78therapeuticindicationstotrackpatienteligibility,assessutilizationinthecontextofclinicalpractice,andcollectsafetyandotherdata(FerrarioandKanavos,2013).

Coveragewithevidencedevelopment(CED)

Thepayeragreestocoverthedrugundercertainconditionsthatfacilitatethedevelopmentofadditionalevidenceonamedicine’sperformanceinreallife,inordertohavedefinitiveevidenceontheproduct’sclinicalorcost-effectivenessimpact.(Truemanetal.,2010).CEDwithnegotiationinvolvestherenegotiationofpricingandcoveragebasedontheevidencedeveloped,butnotexplicitlytiedtoprespecifiedoutcomes.CEDwithprespecifiedagreementinvolveagreementsinwhichfuturepricingandcoverageareexplicitlytiedtopre-specifiedoutcomesofevidencedevelopment.

IntheUKin2002,aschemewassetuptoimproveaccessforpatientswithmultiplesclerosis(MS)todisease-modifyingtreatments(DMTs).Inthescheme,ifpatientoutcomeswerelessthanwhatwasrequiredforcost-effectiveness,theUKwouldbeabletoreducethepricepaidforDMTs(Faulkneretal.,2016).

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Country-specificinstruments

Instrumentsvarybycountry

Country-specificinstrumentsinItalyincludeAIFAnotesforconditionalreimbursement,andtherapeuticplanstolimitaccess(FerrarioandKanavos,2013).

Sourcesofdefinitions:Kanavosetal,2017;Coultonetal.,2012;Faulkneretal.,2016;Carlsonetal.,2010;Truemanetal.,2010;FerrarioandKanavos,2013.

Performance-basedagreementshaveprimarilybeenimplementedinhigh-income countries, as theyarerequiremorecapacitiesfor data collection andmonitoringandevaluation,hence are reliant on thewider health system fordata gathering andimplementation.IntheU.S.in 2008, a health insurercalled Health Alliance

MedicalPlansnegotiatedanoutcomeguaranteewithProcterandGambleandSanofi-Aventis,whojointlysellActonel (risedronate) for thetreatmentofosteoporosis.At thetime,Actonelcostedanestimated$100/monthperpatient(Pollack,2009).Intheagreement,thecompaniesagreedtohelppayforthecostofthetreatmentofnon-vertebralfracturesamongpatientscomplianttotreatmentthroughrebates—forexample, $30,000 for a hip fracture and $6,000 for awrist fracture (Pollack, 2009). In return, HealthAlliancehaskeptActonelona favorable tierof itsdrug list,with lower copayments forpatients thancompetingbrand-namedrugs(Neumannetal.,2010;Pollack,2009).Anexampleof a coveragewithevidencedevelopmentarrangementwas setup in theUK to improveaccess forpatientswithmultiple sclerosis (MS) todisease-modifying treatments (DMTs).TheMultipleSclerosisRisk-SharingScheme(MSRSS)wasestablishedin2002andfollowedadecisionbytheUK’sNICEthatthecost-effectivenessof theDMTswasdependentontheshort-termdisabilitybenefitsshown inclinical trials beingmaintainedover a sustainedperiodof time. TheMSRSS stipulated that if patientoutcomeswerelessthanwhatwasrequiredforcost-effectiveness,determinedthroughthemonitoringofapatientcohort,theUKwouldbeabletoreducethepricepaidforDMTs.TheschemeledtobetteraccessforpatientstoDMTs,increasedinvestmentinhealthcareforMSpatients,andthedevelopmentofaMSpatientregistry(Faulkneretal,2016).However,problemswereencounteredwiththegovernanceofthescheme,aswellasitsmethodologyanddatacollection(Raftery,2010).Notably,inthefirstreportoftheschemein2009,outcomeswereworsethanwhatwaspredicted,butthedecisiontomoveaheadwithpricereductionsdidnotoccurasitwasdeemedtooearlytomakethoseadjustments(Faulkneretal,2016).Additionally,thestudyteamandmethodsusedtodeterminetheoutcomesandcost-effectiveness

Box7:Guidingquestionsforperformance-basedagreements§ Isthereuncertaintyabouttheclinicaloreconomicbenefitsofthe

technologythatcanbereducedbefurtherstudy?§ Cantherelevantclinicaloreconomicoutcomesbeclearlydefinedand

measuredinasatisfactorymanner?§ Arethetimelinesforbeginningandimplementingthescheme

reasonable?§ Willthearrangementsfordatacollectionandanalysisbeeasily

implementableandaffordable?§ Canclaritybereachedonthelikelydecisionsfollowingthedatacollection

andanalysis?Source:Drummond(2015)

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of the DMTs were both changed throughout the period of study, highlighting the difficulties withevaluatingperformance-basedschemesandtheneedtodefineaclearmethodologyfromthebeginning(Faulkneretal,2016).InItaly,performance-basedagreementshavebeenusedsince2006andarecentrallymanagedbyAgenziaItalianadelFarmaco(AIFA)(Upton,2018).SeveraldifferentinstrumentsareutilizedinItaly,includingaregistrytomonitorpatienteligibility,assessutilizationinthecontextofclinicalpractice,andcollectsafetyandotherdata(FerrarioandKanavos,2013).Asoftheendof2011,themonitoringregistryincluded78therapeutic indications (Ferrario and Kanavos, 2013). Of these, 28 had conditional reimbursementagreementsincludingcost-sharing,risk-sharing,andpaybackschemes(FerrarioandKanavos,2013).Italyalsousestwoadditionalcountry-specificinstruments:1)AIFANotes,whichlimitreimbursementonlytospecificindications,andinsodoingseektoimprovetheappropriatenessofprescription;2)TherapeuticPlans,whichallowprescriptionandreimbursementonlyforthoseindicationsforwhichthereisreportedclinicalevidence(KockayaandWertheimer,2018).

3.3.3Wherearethesefinancial-andperformance-basedschemesbeingimplemented?A systematic search of the literature for MEAs, conducted for this compendium, identified 285documentedschemes,withmostofthesepresentinhigh-incomecountries(MSH,2018).InEurope,23countries(67.6%)implementedoneormoretypesofMEA,whiletherewereMEAsinsixcountriesinAsia(17.6%),twocountriesinNorthAmerica,twocountriesinOceania,andonecountryinAfrica(seeFigure7). The search found no documentation ofMEAs in Latin America or Africa, apart from the financialscheme for vaccines in Rwanda referred to in Section 3.2. It is likely thatMEAs exist inmany LMICs,particularlyfinancialschemes,butthesearenotdocumentedorperhapsusedifferentterminology.Thus,thedocumentationonMEAimplementationinLMICsisextremelylimited,andrequiresmorestudy.Box8 provides information about the awareness of MEAs in the compendium’s three LMIC case studycountries,andthefactorsthatmightfacilitateorlimittheuseofMEAsinthesethreecontexts.The majority of the 285 schemes found in the systematic search cover NCDs and their treatment,particularly different types of cancer. Financial schemes were slightly more common (50.2%) thanperformance-based agreements (44.9%), and the remaining schemeswerehybrid agreements (4.9%).ThisfindingwascorroboratedbyarecentstudyofschemesintheMiddleEastandNorthAfricathatfoundthat financialschemesweremorefrequent,particularlydiscountsandprice/volumeagreements, thanperformance-based schemes (Maskineh and Nasser, 2018). Financial schemes predominate in manycountriesbecausetheirimplementationtendstobelesscomplexthanperformance-basedagreements.AgeneraltrendoverthepastdecadeshasbeentowardMEAswithlessadministrativeburden(Carlsonetal,2014;Bouvyetal.,2018).Generally,performance-basedagreementsweremoreprominentinNorthAmerica,whilefinancial-basedschemesweremorecommoninEurope,Asia,andOceania.Italy,however,hasawell-establishedsystemofperformance-basedagreements.

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Figure7:ImplementationofMEAsbyregion

Source:MSH,2018

Asdiscussedthroughoutthissection,MEAshaveseveraladvantagesforstakeholders.Forpatients,theyprovideearlyaccesstonoveltreatments.Forpayers,MEAsareameansforgrantingearlieraccesstonewmedicinesthatwillhavehighbudgetimpactduetohigh-costand/orhighvolumeswhilehelpingthemaddressuncertaintiesabouteffectivenessandbudgetimpact.Andforpharmaceuticalcompanies,MEAsmayprovidesomepredictabilityabouttheinitialpriceconditionsandpotentialmarketsizeestimations,andinsodoing,advancefurtherinnovation(Kanavosetal.,2017).MEAscouldalsohelpcreateamorecollaborativeenvironmentbetweenpayersandpharmaceuticalcompanies(Upton,2018).Finally,MEAshavetheadvantageofincludingarangeofdifferenttypesofinstrumentstoaddressdifferentneedsandmarkets.Financialschemescanimprovebudgetuncertaintiesforinnovativemedicines,andperformance-based mechanisms can assist with the collection of information on real-world effectiveness. ThesedifferenttypesofMEAcanbecombinedandschemescanalsobeusedalongwithcomplementaryaccessstrategies.

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Box8:MEAsinKenya,Ukraine,andColombia

AstudyofMEAsinthethreeLMICcasestudycountriesfoundthatstakeholdershadsomeexperiencewithutilizingMEAstoimproveaccesstoinnovativeNCDmedicines,thoughthisexperiencewaslimited.InKenya,pharmaceuticalcompanieshaveworkedwiththegovernmentthroughpublic-privatepartnershipstoimproveaccesstomedicinesforinfectiousdiseasesandNCDsandtheseprogramshaveinvolvedbothdiscountsandprice/volumeagreements.In addition, global partnerships have negotiated price/volume agreements for the benefit of Kenya and othercountries,suchasGaviforvaccines(seeBox1).InUkraine,MEAsarecurrentlybeingconsideredfororphandiseases,certaintypesofcancer,andhepatitisC(seeBox2inSection2).Similarly,inColombia,thereisagrowingawarenessofandinterestinMEAsandinsurershaverecentlyinitiatedpilotMEAprojectsforNCDdiseasetreatment(seeBox3inSection2).

FewoftherespondentsinthethreecasestudycountrieswereawareofMEAterminologyandtherangeofavailableinstruments, butmost had an interest in learningmore about this policy tool. This limited knowledge ofMEAscontrastedwiththeirknowledgeofotheraccessstrategies,suchastheuseofTRIPSflexibilities.

ThecasestudiesidentifiedasetoffactorsthatcouldhelporhindertheuseofMEAsinthesethreeLMICs:

1. Contextualcharacteristicsofthecountryincludingincomelevel,marketsize,politicalstability,levelsofcorruption,structureofthehealthsystem(centralizedordecentralized),previouslocalsuccesses,internationalcooperation,andlevelsofcoordination.

2. Characteristicsofthedruganditsevidenceanduncertainties:sufficiencyandqualityofavailableevidenceaboutanewdruginaparticularcountry,includingreal-worldevidence,cost-effectiveness,andpatienteligibilitycriteria;thepossibilityofgeneralizability/extrapolationofclinicalresultsintolocalpopulation.

3. Capacityofthehealthsystemtoregulateandnegotiate,aswellascollect,monitor,andevaluatedata(forfinancialschemes,healthsystemsrequirecapacitytoestimatevolumes,andforperformance-basedschemes,healthsystemsneedtobeabletoassessoutcomes).

4. ExistenceofenablinglegalandpolicyframeworksonMEAs,includinglegalrequirementsabouttransparencyofpricingorconfidentialagreements.

5. Existenceofclearrules,roles,responsibilities,andimplementationplanswithinthehealthsector,particularlyintermsofpayersandpharmaceuticalcompanies.

6. UnderstandingoftheuseandlimitationsofMEAsbykeystakeholders,includingperceptionsofcomplexityofMEAimplementation,feasibility,andmarketattractiveness.

7. SupportforMEAsasapolicysolutionfromkeystakeholders,includingconsiderationofthepolicyprocess,coalitionsandnetworks,financialsupport,andpolicychampions.

8. Leveloftrustamongpayersandpharmaceuticalcompanies,andwillingnesstodialogue.9. Riskattitudesofpayersandpharmaceuticalcompanies(neutral,averters,andseekers),includingrisk

attitudestowarduncertainty,noncompliancewithagreement,effectsoninternationalorportfoliorevenues,andtheneedforassurancethatheavylosseswouldbecompensated.

Source:MSH,2018

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3.3.4ChallengesandlimitationsofMEAs

Despitetheiradvantages,theuseofMEAsasanaccessstrategycomeswithanumberofchallengesandlimitations.One key challenge is that some stakeholders havenegative perceptions aboutMEAs, andthereforeareunlikelytoconsidertheiruseasapolicytool.Payersinsomecountriesaresuspiciousthatschemes amount to marketing activities by pharmaceutical companies (Adamski, 2010). Others areconcernedthatthroughperformance-basedschemes,governmentsratherthancompaniesarefundingaportionofadrug’sdevelopmentcosts(Adamski,2010).Sometimestheseconcernsarefueledbyagenerallack of understanding and trust between payers and pharmaceutical companies (Bouvy et al., 2018).Others are influenced by the fact that what amounts to anMEA differs across countries, leading toconfusionaboutitsroleasastrategytoimproveaccessanditssynergywithotherinitiatives(Kanavosetal.,2017).AnimportantlimitationofMEAsrelatestotheburdenonthehealthsystem,intermsofadministration,cost, anddata collectionandanalysis. This isparticularly thecase forperformance-basedagreementswhichrequireaninfrastructureofdatacollectionandanalysis,arereliantonthehealthsystemforpatienttracking,leadtoextracostsforevidencecollection,andnecessitateagreementbetweenpartiesonthedetailsoftheschemeincludingwhatwillbemeasured,bywhom,andhow(Faulkneretal.,2016;Garrisonetal.,2013).Giventhesefinancial-andsystem-requirements,fewerperformance-basedschemeshavebeenimplementedthanfinancialschemes(Coultonetal.,2012;Neumannetal.,2011;Garrisonetal.,2013). While financial schemes involve less burden on the health system than performance-basedagreements, all typesofMEAsneed tobe renegotiatedperiodically (Ferrarioetal., 2017).ThehealthsystemrequirementsrelatedtoMEAsare,therefore,animportantconsiderationforstakeholdersastheyassessthetradeoffsofMEAsversusotheraccessstrategies.AnotherchallengerelatedtoMEAsisthattheycanonlybeusedincountrieswithenablinglegalandpolicyframeworks. For example, laws or regulations might prohibit coverage with evidence developmentschemes. Moreover, some countries have laws in place that do not allow negotiated prices to beconfidential;pharmaceutical companiesare reluctant toenter intoMEAs in these contexts since theyvalueconfidentialityinthecontextoftheERPsystem.Thelegalframeworkincountriesmayencompassdifferentlawsforhowpharmaceuticalcompaniescannegotiatewithgovernmentpayersascomparedtoprivate sectorpayers. Legal frameworks,however,arenotaprecondition forentering intoMEAs.Forexample, while the Czech Republic has no formal, national legislation onMEAs, schemes have beenimplementedinthecountrysince2013(Rotaretal.,2018).Moreover,inPoland,the2011ReimbursementActestablisheda legalbasis forMEAs;however,before that time,arrangementsbetweenpayersandcompaniesoccurredbutweregenerally informalanddescribedas“gentlemen’sagreements”(FerrarioandKanavos,2013;Kawalecetal.,2016).ConfidentialityisatthecoreofMEAagreements,andthusthedetailsofnegotiationsandagreementsarenotmadepublic.Butthis lackof informationhas implications. It limitstheabilityofsomestakeholder

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groups,mostimportantlypatients,toknowaboutandparticipateinMEAprocesses(Kanavosetal.,2017).It also prevents learning across countries about what works and what does not in regards to theimplementationofMEAs(Kanavosetal.,2017).TherearefewpublishedevaluationsofMEAs,makingitdifficult tosubstantiatetheirclaimedbenefits (Kanavosetal.,2017;Adamskietal.,2010).The lackofinformationalsomakesitdifficulttoassessequityinwhohasgainedaccesstomedicinesthroughMEAinitiatives—arecountrieswhocanleastaffordnovel,high-costmedicinesreceivingthelargestdiscounts(Ferrarioetal.,2017)?AnotherdrawbackofMEAsisthatkeystakeholdersmayattemptto“gamethesystem”whentheyareused incountries thatutilizeHTA fordecisionsaboutcoverage (Kanavosetal.,2017;Towse,2010). IfMEAsbecomethenorminthesecountries,pharmaceuticalcompaniesmayhavean incentivetoofferhighinitialpricesintheirfirstsubmissionfordrugapprovalthattheyknowwillberefused,asthiswillbeviewed as the opening bid. Equally, payers are more likely to turn down an initial price offered bypharmaceuticalcompanies,awarethatalowerpricewillbeofferedandnegotiatedthroughaMEA.Thisprocesscanresultinsignificanttransactioncostsforbothpayersandpharmaceuticalcompanies(Kanavosetal.,2017;Towse,2010).MEAshaveadditionallimitationsthatarespecifictocertainstakeholdergroups.ForpayerswhouseERPtoinformpricelevels,theywillnotbenefitfromconfidential,negotiatedpricesaspartofMEAselsewhere(Kanavos et al., 2017). For pharmaceutical companies,MEAs require concessions such as refunds forparticularoutcomes,discounts,orthecollectionofrealworldevidence(Kanavosetal.,2017,p.89).MEAsmayintroduceadditionaluncertaintyinregardstotheirexpectedreturns,andthiscoulddisincentivizethefurthercollectionofdata,(Kanavosetal.,2017).Finally,pharmaceuticalcompaniesmayfeelthatthemorecommonlyusedfinancial-basedMEAsdonotrepresentthevalueoftheirinnovations(Faulkner,etal.,2016).

3.3.5InwhichLMICsettingsareMEAsapotentiallyeffectivestrategy?

BearinginmindthelimitationsandchallengesofMEAsdiscussedinSection3.5,inthoseLMICswhereanenabling set of factors exist, or can be built, MEAs can be considered as a potential policy tool forincreasingsustainableaccesstoinnovativeNCDmedicines.Thisisparticularlythecaseinuppermiddle-incomecountriesthathavegreaternegotiationandinstitutionalcapacity,aswellasdatainfrastructure(see,forexample,thecontextinColombiainBox3,Section2).ThereisthusagreateropportunitytouseMEAs(withawiderrangeofinstruments)inthesecountries,particularlyinthosecontextswithpoliticalstability,commitmenttoUHC,anenablinglegalframework,HTAinitiatives,andlessfragmentedhealthsystems.MEAsareparticularlysuitablewherethereisonepredominantpurchaser(suchasasocialhealthinsurancescheme)or incountrieswhereresourcesarepooled inorder tobetternegotiatepricesandaggregatedemand.MEAsasastrategytoimproveaccesstoinnovativeNCDmedicinesaremorechallengingincountriesthathavethefollowingcharacteristics(foundinmanylow-incomeandlowermiddle-incomecountries):

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● Competingprioritiesforgovernmenthealthbudgetsduetoa“dualburden”ofinfectious

diseasesandNCDs.● Limitedhealthsystemcapacitytoregulate,negotiate,collect,monitor,andevaluatedata.● Fragmentedhealthsystems(theprocessofreachinganagreementonaMEAismoreeffectivein

thosecontextswhichhavecentralizeddecisionmakinganda“singlepayer”toconductnegotiations(Coultonetal.,2012));

Thereare,however,someinstancesinwhichsimpleMEAinstrumentsmaybeaneffectiveaccessstrategyforinnovativeNCDmedicinesinthesecountries.First,financial-basedMEAsareapotentialstrategywhentherearecentralized,singlegovernmentpayersfornegotiations(see,forexample,Table6aboutRwandaandtheHPVvaccine).Second,inthoselow-incomeandlowermiddle-incomecountrieswheredonorsareengaging in pooled purchasing for pharmaceuticals, financial-basedMEAs negotiated by donors withpharmaceuticalcompaniesareaneffectivestrategyforimprovingaccesstoinnovativeNCDmedicines.Giventhe limitedhealth informationinfrastructure inthesecountries,performance-basedagreementshaveminimalfeasibilityinthesesettingsuntilsufficientcapacityisbuiltforprocessessuchasHTA,healthinformationsystems,andimplementationstructures.CommentatorshavepointedoutthatoneofthemainbarrierstoutilizingMEAsinLMICs isthatmanycountries lack the administrative capacity andbargaining power to undertake price negotiationswithpharmaceuticalcompanies(Morganetal.,2013).LMICshavenavigatedtheseissuesbeforewithrespectto accessing antiretroviral medicines for HIV/AIDS, using a number of strategies to strengthen theirposition vis-a-vis pharmaceutical companies and achieving fair prices (Waning et al., 2009). In manyinstances,external,non-profit institutions—suchasWHOortheClintonHealthAccess Initiative—havehelpedsupportLMICsatthenegotiatingtable,buildingcapacity,establishingtransparencywithrespecttopriceinformation,andprovidingtechnicalexpertise(Morganetal.,2013).GoodpracticerequiresthatasimilarrolebecarvedoutforinternationalagenciesifMEAsaretobeconsideredviableaccessstrategiesforLMIC.Insum,countriescanapproachMEAsincrementallyinwhichtheybeginwithfinancialschemeswhiletheystrengthen systems for the selection, adoption, and monitoring and evaluation of innovative NCDmedicines. This incremental approach recognizes that time and resources may have to be put intosupporting governments to establish the requisite enabling environments related topolicy, legal, andhealth systems. This includes identifying existing legal and policy frameworks and how these mightconstrainorfacilitateMEAs(Morganetal.,2013)andbuildingimplementationstructuresfromthegroundup if they don’t already exist or, alternately, identifying existing institutions that might host suchstructuresandtargetingthemforsignificantcapacitybuilding.InTables10and11,wepresentananalytical framework to identifyopportunities forMEAs inLMICs,includingthosewithmultiplepayers,usingtwoofourcasestudycountries,KenyaandColombia:

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Table10:Kenya:Growingmarketwithsteadilyincreasingbuying/negotiatingpower,shiftingawayfromdonorfunding

ContextualFactors

SituationalAnalysis ImplicationsforMEAs

Internationalandregionallevelpolicies

TRIPScompliant,leveragesTRIPSflexibilitiesforimportofinfectiousdiseasedrugs;growinglocalmanufacturing.Fastgrowingeconomywithsignificantinterestfromforeigninvestors

Changestothenationalprocurementpolicy,limiteduseofCL,NEMLupdate,plusalargelyunregulatedpharmaceuticalpricingsystemprovidessignificantopportunityforpilotingMEAsforNCDmedicinesinthecountry.DecentralizationindicatespotentialfordesigninginnovativeMEAsbasedonregionalcontextandcapacity.However,pharmaceuticalcompanieswishingtoengagewillneedtoprovideorpartnerwithotherorganizationswhichcanprovidetechnicalassistanceandcapacity-buildingsupport.Public,private,andfaithbased/non-profitcouldbeseparatemarketsegmentstotargetforMEAsandmayhavevariablecapacitiesforimplementation.Startingwithsmallpilotswithinvarioussegmentswouldprovideanevidencebaseforexpansion.

Nationalmulti-Sectoralpolicies

NationalProcurementPolicymodifiedin2015toallowforcompetitivenegotiations,frameworkcontracts,directprocurement,andotherflexiblearrangements.NoVATonfinishedpharmaceuticals,thoughimpactsrawmaterial.

Healthfinancing 30%outofpocketspendingasignificant%ofwhichisintheprivatesector,healthsectorreformsunderwayfocusedonUHC,thoughcoveragefortheNHIFisstilllimited(18%).Shiftingawayfromdonorfundingaseconomydevelops.Purchasingofservicesismixed–49%publicand48%privateincludingfaithbasedandnon-profitproviders.

Pharmaceuticalpolicy

NEMLupdatedin2016basedonlatest2015WHOModelListandincludessignificantnumberofNCDmedicines.NEMLreviewprocessrecommendedHTAinstitutionalizationinthecountryforcontextspecificandevidencebaseddecisionmaking.NEMLprocessalsoreflectedcapacityandfundinggapswithinthesystemtoimplementnewinitiativesuchasHTA.

Procurementanddistributionprocessesandpolicies

Publicsectorpurchasinghasbecomedecentralized(unlessdonorfundedcommodities)leadingtochallengesinmanagingpricesandqualityofmedicines.Procurementprocessesstillfocusoncompetitivetendersandpricebasedbidding.

Pharmaceuticalpricingpolicies

Pricesarenotcontrolled–highandvariablemark-upsacrossthevaluechain.

Table11:Colombia:Uppermiddle-incomecountrywithUHC,highburdenofNCDs,andsignificantcapacityforhealthsectorreforms

ContextualFactors

SituationalAnalysis ImplicationsforMEAs

Internationalandregionallevelpolicies

TRIPScompliant,increasinginterestinusingTRIPSflexibilitiesforCLandpricereduction;stronglocalmanufacturingandlaboratories.Alsohasdataexclusivitydecreewhichprovidesprotectionforfirstentrantsforproductsintothemarket.

WithoneofthelargestpopulationsinLatinAmericaandincreasedburdenofNCDs,andhighjudicializationratesColombiaisanidealtargetmarketforMEAs.Changestothenationalprocurementpolicy,pressureofincreasingOOPexpenditureand

Nationalmulti-Sectoralpolicies

Hasflexibilitiesforframeworkcontractsandpotentiallyotherinnovativemethods.Healthisafundamentalrightwithintheconstitutionand

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influencesissuesonimportandpricingofmedicines.Colombiaisoneofthecountriesoneofthehighestnumberofjudicialcasesfiledfrompatientgroupsandotherstakeholdersdemandingaccesstovariousmedicines,includinginnovativeproductsaftertherighttohealthwasenshrinedwithintheconstitution.

increasedpricesofpharmaceuticals,andcontinuedfocusoncapacitybuildingandhealthsectorreformprovidesignificantopportunitiesforpharmaceuticalmanufacturerstoapproachvarioushealthinsuranceorganizationsandproviders(public/private)tocollaborateonMEAs.Additionally,asthegovernmentshiftstoevaluatingvaluebasedpricing,workingcollaborativelywiththemascollective,thepharmaceuticalsectorcancreatewin-winopportunitiesonbothsides.

Healthfinancing 70%totalspendingonhealthisbythegovernmentthroughitsnationalhealthinsuranceprograms(mandatorycontributionsfromformalsectorandsubsidized/taxbasedforinformalsector).TheOOPexpenditurehasgoneupinrecentyearsto18%in2015from6.8%in2000,stillconsideredtobelowcomparedtotheLMICaverage.Purchasingforservicesthroughbothprivateandpublichealthprovidersisdonebyvarioushealthinsuranceschemes.48%ofthepopulationiscoveredbythesubsidizedschemeandalmost47%iscoveredbythecontributoryscheme.Therearedifferencesintheservicesprovidedbetweenthetwoschemesbeyondabasicpackageofservices.However,withtheshifttowardsuniversalaccessforallservicesasapartofhealthasafundamentalright,thegovernmentisfocusingonreformstoprovideauniformpackage.

Pharmaceuticalpolicy

ColombiahasoneofthestrongestNationalRegulatoryAuthoritiesintheregionandassociatedsystemsformonitoringproductqualityandpharmacovigilance.Reimbursementofpharmaceuticalsisbasedonthebenefitspackagesfortherespectiveschemes.PrescriptionbyINNandofgenericsismandatoryinthepublicsectorbutpatientscanpayoutofpocketforbrandedmedicinesintheprivatesector.

Procurementanddistributionprocessesandpolicies

Drugdistributionforthepublicsectoristhroughprivatehealthsystemdistributiontothefacilities.Fortheprivatesectormanufacturerssupplytopharmacies,supermarkets,andothersupplystores.Tenders,negotiation,andashifttowardsvaluebasedprocurementareprocessesusedtoprocuremedicines.Highmarkuplevelsondistributionchannels.

Pharmaceuticalpricingpolicies

Pricesofdrugsareregulatedbyvariousmeansincludingfocusingonuseofgenerics,referencepricing,HTA,leveragingpooledprocurementmechanismssuchasonesmanagedbyPAHO.WithanagingpopulationandincreasingburdenofNCDsinadditiontodemandforequitableaccesstomedicinesviathehealthasalegalrightpolicy,Colombiafacescontinuedpressuretomanagebudgetimpactandreduceproductpricing

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3.3.6DecisionmakingonwhethertoproceedwithanMEAstrategy

Ultimately,decidingwhethertopursueanMEAinaparticularcontextrequiresacomprehensiveprocesstosupportdecisionmakingtowardadoption.Thisprocessbeginswithhorizon-scanning(e.g.whatsimilarproductsmightbeexpectedtoenterthemarket?Whatmightbethecostimplicationsofthese?Whatfuturefundingchallengesmightbeexpected?DoesanMEAmakesenseinthiscontext?)andcontinuingallthewaythroughpost-marketingdatacollectionandsurveillance(e.g.Willevidenceactuallyservetoreduce uncertainty?Will the MEA have truly resulted in increased access?) (Drummond, 2015). Thedecision-making process also should take into account whether timelines for implementation andevidence collection are realistic andwhether the overall negotiation, administrative, implementation,evidence collection, and dissemination costs are affordable and sustainable (Garrison et al., 2013;Drummond,2015;Pauwelsetal.,2017).Additionally,decisionmakingtowardadoptionshouldconsidertheprocessthatwilldeterminewhenandhowagreementsshouldbere-evaluated(Pauwelsetal.,2017).Importantly,decision-makingaboutwhethertomoveforwardwithanMEAshouldincludeadetailedandin-depthriskassessmentofthearrangement,includinganypotentialunintendedconsequences.Thisriskassessmentshouldassesspotentialchallenges—specificallyrisksandcosts—ofexitingtheMEAifitdoesnotturnouttobeafavorablearrangement.Moreover,risksassociatedwithpotentialpowerdifferentialsbetween LMIC payers and pharmaceutical companies should be addressed. As mentioned earlier,external,non-profitinstitutionshavehelpedsupportLMICsatthenegotiatingtablebeforebutthisthirdpartyinvolvementcouldbedifficultinnegotiationsrequiringconfidentiality.Finally,therisksassociatedwiththerequirementofconfidentialitymustbeassessedintermsofpotentiallong-term,negativeimpactontheaccountabilityofinstitutions.In those LMICs where decision makers have conducted these decision-making and risk assessmentprocessesandhavedecided toexplore thepotentialuseofMEAs fora specificproduct,akeystep isbringing payers and pharmaceutical companies together for dialogue. As we have seen in thecompendium’s three LMIC case studies, despite a shared goal to improve access to innovative NCDmedicines,therearechallengesandsometimesalackofwillingnessbetweenpayersandcompaniestoadvancedialogue.Decisionanalyticmodelsaretoolsthatcanguidecommunicationbetweenpayersandpharmaceuticalcompaniesbyallowingstakeholders,priortonegotiations,tofamiliarizethemselveswiththetermsandconcepts,optionsforvariousinstruments,andtradeoffs.Threesuchdecisionanalyticmodels,developedbyRTIInternationalinjointcooperationwithMSH,arepresentedinFigures8-10andcanbeusedforthispurpose.Thesemodelsare:

1.ADecisionTreeModel(Figures8aand8b)2.AContinuumor“Bridge”Model(Figure9)3.AQuantitativeSpreadsheetModel(Figures10a-10e)

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Thesemodelsofferprogressivelymorespecificapproachestofacilitatethedecision-makingprocess inconsideringtheformofagreementbetweencompaniesandpayers.Thegoalistodemonstratewhatformof agreementwouldbemost cost-effective andbeneficial tobothparties.Appendix II providesmoreinformationabouthowtousethesemodels.The first two models are qualitative and built around two key variables: 1) the amount of public,generalizableinformationregardingthemedicineand2)theinstitutionalcapacityofthehealthsystemandpayer.TheDecisionTreeModelmapsthesevariablestotheoptimalformofaMEAinaverysimpleframeworkasshowninFigure8a,orinmatrixforminFigure8b.Thismodeloffersadiscretecategorizationofthetwokeydeterminants,butmaybetoosimplisticorinflexibleforreal-lifesettings.Therefore,thesecond model—the Continuum Model—extends this representation to allow the amount of publicinformationandtheinstitutionalcapacityofthehealthsystemtovaryalongacontinuuminamannermoreconsistentwithreality(seeFigure9).Insomecases,thesimplicityofthefirstmodelmaymakeitthebesttool forsomestakeholders. Inothercases,stakeholdersmayfind itmoreuseful tostudythecontinuummodelfortheadditionalinsightsitprovides.Thesetwomodelsguidedecisionmakerstoadeterminationofwhetheranagreementisfeasibleandleadstakeholderstooneofthreepotentialoptions.Thefirstoption isthatthepayerdecidestoadoptandcover themedicinewithoutanMEA.Asasecondoption, thepayerdeclines tocover thedrug. In thisinstance,thepharmaceuticalcompanymaychoosetotryagainwithmoreevidence,orapplytoconductaclinicaltrialinthecountry.Thethirdoptionisthatthepayerandpharmaceuticalcompanynegotiateafinancial,performance-based,orhybridMEA.Whentheoutcomefromthefirsttwomodelsispositive,thethirdmodel—theQuantitativeSpreadsheetModel,accessibleinanexcelfileathttp://pubdocs.worldbank.org/en/437961542759879923/Quantitative-Model-Final-Version-7-30-2018.xlsx—maybeusedtocalculateexpectedvaluesandconfidenceintervalsforkeymetrics(suchasoverallbudgetimpactandcost-effectiveness)underdifferentpriceandcoveragescenarios.ThepurposeofthismodelistohelppayersdecideonnextstepstowardspecifictermsofalikelyMEAagreement,andtohelpstakeholdersunderstandtheimpactonkeyoutcomesofpricingandcoveragedecisions,takingintoaccountuncertaintyaroundfactorslikeefficacyandsafety,thesizeoftheeligiblepatientpopulation,physicians’prescribingbehavior,andpatients’adherencetoprescribedtreatment.Thespreadsheetmodelcontainsfivesections:

A. PayerBudget–Baseline:Providesthebaselinescenario(seeFigure10a).B. NewDrugImpact–PayerAdopts:Representsthescenarioofthepayeradoptingthenewdrug

withoutimplementinganMEA(seeFigure10b).C. NewDrugImpact–FinancialAgreement:AllowsforMEAscenarios,specifictofinancial

agreements,wherebyanumberofadditionalpatientsaretreatedatanagreedprice(seeFigure10c).

D. NewDrugImpact–Performance-BasedAgreement:AllowsforMEAscenarios,specifictooutcomesguarantees(seeFigure10d).

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E. NewDrugImpact–Performance-BasedAgreement:AllowsforMEAscenarios,specifictocoveragewithevidencedevelopmentagreements(seeFigure10e).

Figures10a–10eillustratescenariosthatmaybeimplementedtointroduceanewhigh-costprescriptiondrug(HCPD).AppendixIIprovidesaguidetohelppayersnavigatethespreadsheetmodeltoeffectivelyuseitforthedecision-makingprocess.

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Figure 8a. Representation of the decision tree model

1.How

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Figure 8b. A representation of the decision tree model in matrix form

Figure 9. A representation of the continuum model

Institutional Capacity of Payer/Health System

Limited

Financial Agreement

Payer Adopts (no MEA/RSA)

Performance-Based Agreement or Coverage with

Evidence Development

Payer Declines Coverage

Amount of Generalizable

Public Information about the Drug

Adequate

Adequate

Limited

AmountofGeneralizable

PublicInformationaboutthe

Drug

InstitutionalCapacityofPayer/HealthSystem

More

Less

More Less

I.PayerDeclines

II.FinancialAgreement

IV.PayerAdopts

III.a.PBA:OutcomesGuarantees

III.b.PBA:CEDwithNegotiation

III.c.PBA:CEDwith

PrespecifiedAgreement (PBA=Performance-BasedAgreement)

(CED=CoveragewithEvidenceDevelopment)

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Figure10a:QuantitativeSpreadsheetModel(PartA)

Key: Input Editonlyorangecells.Clickonothercellstoviewformulas,then'Esc'out.

A.PayerBudget—Baseline

1.Totalbudgetforhigh-costprescriptiondrugs(HCPD):2,500,000 USD peryear —Inputvalues TRUE

2.Totalnumberofpatientsreceivingthesedrugs: FALSE5,000 patients TRUE

285 USD peryear

Calculatedvalue: Totalnumberofpatients —Impliedaveragecostperpatient8772 285 USD peryear

Intableonright,pleasechooseonlytwoofthethreevariables:totalbudget,totalnumberofpatients,andaveragecostperpatient.Then,enterthenumbersintheirrespectiveboxesbelow

3.Averagecostperpatient

Temporalassumptions:

Tableofvariableinputs

AssumingthatplanpotentialisreachedinthetimeunitandtimehorizonspecifiedbytheuserinSectionB

TotalBudgetforHCPDTotalnumber ofpatientsreceivingAveragecostperpatient

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Figure10b:QuantitativeSpreadsheetModel(PartB)

B.NewDrugImpact—PayerAdopts1.Treatablepatientpopulation:® 10,000 patientswhocould benefit

2.Proposednumberofpatientstotreat:

Chooseonly onetypeofcalculation:

A. ### 20% year for 3 year —E.g.:20%peryearfor3yearsB. ### 20% year 3 —E.g.:20%byyear3

2,000 first year —impliesthefollowingoutcomes:6,000 year 3 BudgetImpact: 669,981 USD first year

( 27% increase)3.Treatmentexpansion: 2,009,943 USD year 3

( 80% increase)

33%

667 first year NewaveragecostperHCPDpatientperyear:2,000 year 3 newHCPDpatients 559 USD first year

( 96% increase)644 USD year 3

4.Treatmentreplacement: ( 126% increase)

285 USD peryear

5.Priceofnewdrugperpatienttreated:500

### FALSE FALSE Low-income(LI) 100Lower-middle-income(LMI) 250

500 Upper-middle-income(UMI) 350

6.Markupimposedbyintermediariesinthesupplychain:25

7.Finalpricetobuyerofnewdrugperpatienttreated:*525 USD peryear

NOTE:Ifoneoftheincomelevelsischosen,itwillsupercedethevalueintheorangeinputcellabove

Priceofnewdrug:

--Inthecaseofdifferentialpricing basedoncountryincomelevels,pleasechooseanoptionbelowandthecorrespondingpricewillbepulledfromthetableontheright.Ifchoosinganincomelevel,only choose one

Forthosepatientswhoare alreadyreceivingHCPD,whatistheaveragecostperpatientofdrugsthis

Ofthepatientstobetreated,howmanyarenot alreadyreceivingHCPD?

PriceofHCPDbasedoncountryincomelevel

Pleaseincludetypeofmarkuphere*Pricemarkuprepresentsadivergencebetweenwhatthedrugcompanychargesandwhatthepayerpaysandiscausedbytaxesorcustomsduties,wholesaleorretail mark-ups…etc.

NOTE:Iftreatmentdurationislessthanoneyear,thisissimplythepricefortreatingonepatient.

%ofpatientsnotalreadyreceivingHCPD

patientswhowillreceivetreatment

Low Low-middle Upper-middle

PerBy

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Figure10c:QuantitativeSpreadsheetModel(PartC)

C.NewDrugImpact—FinancialAgreementStillassuming: —impliesthefollowingoutcomes:

10,000 patientscouldbenefit,and BudgetImpact: 694,981 USD first year6,000 patientswillreceivetreatmentbythelasttimeunit ( 28% increase)

atanaveragepriceperpatientof 2,084,943 USD year 3525 USD peryear ( 83% increase)

1.Effectivelyreducedpriceforadditionalpatients:

25 USD peryear NewaveragecostperHCPDpatientpertimeunit(tobeachievedbycaps,rebates,orothermeans)

2.Percentageofadditionalpatientstreatedatreducedprice 510 USD first year(Note:thiswillfollowthesametimeunitsandtimehorizonasinSectionBabove) ( 79% increase)

10% 521 USD year 3( 83% increase)

3.Numberofadditionalpatientstreatedatreducedprice:1000 first year Basedonthefollowingtreatmentassumptionsforlasttimeunit:3000 year 3 9,000 totalpatientstreatedwithnewdrug

5,200 werealreadyreceivingHCPD4.Treatmentexpansion: 3,800 werenotalreadyreceivingHCPD

60%

600 first year1800 year 3

5.Treatmentreplacement:notapplicable*

—Savingsfromimplementationofthefinancialagreement(movingfromsectionBtosectionC)

--ChangeintotalbudgetbetweensectionBtosectionCinlasttimeunitandbeyond:

75,000 USD peryear( -19% decrease)

--ChangeinaveragecostperHCPDpatientfromsectionBtosectionCinlasttimeunitandbeyond:

-123 USD peryear( -19% decrease)

73% positiveresponserate -266.7

0.85 -221.0

(CosteffectivenessisdefinedasUSD/DALY)

(Difference=costeffectivenesswithafinancialagreement-costeffectivenesswithpayeradopts)

patientstreatedatreducedprice

Oftheseadditionalpatients,whatpercentagewerenot alreadyreceivingHCPD?

*AnegativedifferencevalueindicatesthatthecostofaDALYislowerwithafinancialagreementcomparedtopayeradopts

**PleaserefertoSheet1forthepossiblevaluesforthepositiveresponserateandtheDALYperyearoftreatment

Ofthese,...

Differenceincost-effectivenesswithDifferenceincost-effectivenesswith

DALYperyearoftreatmentforpositiveresponders

*Assumption :NewtreatmentatreducedcostwillnotbeusedtoreplaceotherHCPDusage;patientsforwhomthenewtreatmentwillreplaceHCPDwillbecoveredatthenegotiatedprice;coverageatthereducedpricewillberestrictedtopatientsnotalreadyreceivingHCPDforthiscondition .

newHCPDpatients

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Figure10d:QuantitativeSpreadsheetModel(PartD)

D.NewDrugImpact—Performance-BasedAgreement

1.Percentageoftreatedpatientsexpectedtorespond: —impliesthefollowingoutcomesstartingthelasttimeunitandbeyond:

55% expectedpositiveresponserate BudgetImpact: 1,458,693 USD peryear

2.Averagehealthimpactperrespondingpatient ( 58% increase)0.85 DALY peryear oftreatment NewaveragecostperHCPDpatientperyear:

450 USD peryearAssumptions: ( 58% increase)

Expectedcosteffectiveness:347 USD per DALY

Rebateswillbegivenforanynon-respondingpatients.Rebateswillbegivenatthereducedpriceaslongasthetotalnumberofrespondingpatientsisgreaterthanthenumberpayingthenegotiatedprice.Ifthenumberofrespondingpatientsfallsshortofthenumberpayingthenegotiatedprice,thedifferencebetweenthenumberrespondingandthenumberpayingthenegotiatedpricewillberebatedatthenegotiatedprice.

OutcomesGuarantees

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Figure10e:QuantitativeSpreadsheetModel(PartE)

E.NewDrugImpact—Performance-BaseAgreement

Stillassuming:

0.85 DALY peryear oftreatment6,000 patientswillreceivetreatment

atanaveragepriceperpatientof525 USD peryear

55% expectedpositiveresponserate

1.Minimumnumberofpatientsfromwhomcompletedatamustbecollectedtofully implementpricediscounts/bonuses:

1,000 patientsmonitored

2.Minimumnumberofpatientsfromwhomcompletedatamustbecollectedtoimplementany pricediscounts/bonuses:

500 patientsmonitored

3.Percentagebonusifpositiveresponserateisgreaterthanthetarget/benchmark(discountifitislessthanthetarget/benchmark):

10% bonusordiscount

Assumptions:

Forthis example ofaCEDagreement,expectedpositiveresponserateistakenastheperformancemeasure

Betweenthehighandlownumbersofpatientsmonitored,thepricediscounts/bonusesareassumedtophaseoutlinearly:fullyimplementedforanythingatorabovethehighernumberofpatients,nothingiflessthanthelowernumberofpatients.Foranythinginbetween,thediscount/bonusispro-rated.Forexample,ifwearetomonitoratleast500patientstohaveanypriceeffectandatleast1,000patientstohavethefullpriceeffect,thenifweendupmonitoring750patientsthediscount/bonuswillbehalfthefullamount.

CoveragewithEvidenceDevelopment

InPartE,CoveragewithEvidenceDevelopment, wemodeltwothings:(1)thenegotiatedpriceincreasesifthepercentageofpositiverespondersexceedsatargetanddecreasesifthepercentageofpositiverespondersfalls

shortofthetarget;(2)themagnitudeofthepricebonusordiscountdependsonthenumber ofpatientsmonitored todetermine thepercentageofpositiveresponders:morepatientsareequatedwithstronger

evidenceandhencegreaterimpactsonthenegotiatedprice.

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SECTION 4: CONCLUSIONS AND CONSIDERATIONS FOR THE FUTURE

UHC is a tridimensional policy challenge that considers the population to be covered (breadth), theservicestobeincluded(depth),andthelevelofcostsharingtobefacedbythepopulation(height).FormanyLMICs,achievingUHCrepresentsasubstantialendeavor.AsnotedinSection2,althoughLMICsareoftengroupedtogetherunderasingleconceptualheading,inpracticemanystructuralcharacteristicsvarydramatically across countries. Reaching more comprehensive and sustainable UHC and ensuringexpanded access to innovativeNCDmedicines requires the implementation of a ‘potpourri’ of policyactionsthatgobeyondMEAimplementation.ThisconcludingsectionpresentsomeconsiderationsforLMICsthataretransitioningfromNationalEssentialMedicinesLists(NEMLs)tomoredynamicbenefitspackages,discussespricingstrategies(includingMEAs)andotheraccessstrategiestopromoteequitableaccess to innovative NCD medicines, and offers some preliminary recommendations for MEAimplementationandresearchagendasinLMICs. 4.1ThechallengeoftransitioningfromNationalEssentialMedicinesLists(NEMLs)tobenefitpackagesinLMICs Theneedforbuildingamulti-pronged,capacity-buildingstrategyplacessignificantadditionalchallengeson already resource-constrained health systems in LMICs. In September 2015, UN member statesreiteratedtheircommitmenttosustainableUHCbyadoptingtheSustainableDevelopmentGoals(SDG),withSDG3.8specificallyfocusedonUHC.Ascountriesgearuptomeetthesetargets,bothpolicymakersandthepopulationstheyservewanttomaximizethequalityofcaretheyreceiveforthemoneyinvested.However,priority-settingandresource-allocationdecisionmaking inmanyLMICsremains inconsistentandunstructured.NEMLsareoftenutilizedasameansofrationingand,asdescribedinSection2,mostLMICs do not update their NEMLs regularly and systematically due to limited technical capacity andfunding.Inastudyofdecisionmakingin25LMICsimplementinghealthcoverageschemes,evidenceusedtoinformcoveragedecisionsfocusedonmedicalliterature,regionalandglobalguidance,andcoveragepoliciesofother coverage schemes (Hornberger et al., 2014),while coverage restrictionswere basedmostly onlimitationsinfunding(Hornbergeretal.,2014).Thesefindingsemphasizethatimportantfactorssuchascost-effectiveness,budgetimpact,andequityarenotalwaystakenintoconsideration.Ifthoseinstanceswheretheyhave,ithasoftenbeendoneinanad-hocmannerwithlimitedacknowledgementastohowthesefactorshaveimpactedafinaldecision(Baltussenetal.,2006).Implicitandcovertrationingthroughwaitinglines,lowquality,andinequitiesisnotinfrequentinLMICs(Glassmanetal.,2012).Asnoted,manyLMICsstruggleatthesametimewithadualburdenofinfectiousdiseasesandNCDs,butmostattentionandresourcesarestillgiventoverticalmedicalinterventionsandtechnologiesforinfectiousdiseases.Therefore,inthecontextofUHC,thereisanopportunityforassistingLMICstotransitionfromNEMLstomoredynamicbenefitspackagesabletoexpandcoverage,takingintoconsiderationtheabovementioneddualburdenofdisease.

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As a result, explicit priority setting that usesHTAhas becomean issueof great interest, not only forcountriesbutalsofordonors,becauseithelpspromoteefficiencyofresourceallocation.HTAprocessesexaminetheconsequencesoftheapplicationofhealthtechnologiesandiscloselyrelatedtoevidence-based medicine (EBM). Both HTA and EBM are aimed at better informing decision makers. HTAmechanismshavegainedspace in taxation-basedandsocialhealth insurancesystems,andmosthigh-incomecountriesutilizesomeformofHTAprocesstofacilitatetheirdecisionmakingforpricing,coverage,and reimbursement (Castro, 2017). More recently, LMICs, including Philippines, Brazil, Thailand,Colombia,Tunisia,SouthAfrica,andUkrainehaveadvancedtheuseofHTAtodiscriminateamongalistofcompetingprioritiesanddeterminethosehealthcareinterventionsthatare“worthdoing”andatwhatpricesshouldbereimbursedtoeffectivelyproceedtowardsustainableUHC.Adoption of explicit priority-setting mechanisms such as HTA have varied across different types ofmarkets. In uppermiddle-income countries such as Colombia andBrazil, thehealth as a human rightpoliciesenshrinedinthecountries’constitutionshasresultedinsignificantpoliticalandfinancialsupportathighlevelsofthegovernmenttoinstitutionalizeHTA.Inlowermiddle-incomecountriessuchasGhana,Tanzania,andUkraine,HTAcapacitybuildinghasbeensupportedbydonor-fundedinitiativessuchastheInternational Decision Support Initiative and USAID-funded SAFEMED projects (IDSI, MSH, 2018). Forexample,inVietnam,ministerial-levelcommitmentledtotheMOHcommissioningThailand’sHTAagency,HITAP,toprovidesupportforrevisingVietnam’sbenefitspackageforhighcostmedicinesandmedicaldevices(Tantivessetal2017).4.2PromotingequitableaccesstoinnovativeNCDmedicines NCDsareemergingontheglobalhealthagenda,andthereisanincreasingunderstandingofthesocial,economic,political,andhealthsystemsburdenofthesediseasesforcountriesaroundtheworld.Boththe25x25framework,establishedin2013andseekinga25%reductioninprematuredeathfromNCDsby2025,andSustainableDevelopmentGoal3.4,targetinganadditional5%(or30%overall)reductionby2030, highlight the critical importance of promoting equitable access toNCDmedicines for achievingnationalandglobalgoals.ImprovingaccesstoNCDmedicinesrequiresacombinationofaccessstrategiesatdifferentlevelsofthehealth system, and an architecture of individuals and organizations who partner in the design andimplementationofthesestrategies(FrostandReich,2009).Fornew,breakthroughinnovationsforNCDs,pricingstrategies(suchasMEAs,voluntarylicensing,differentialpricing,andtheuseofTRIPSflexibilities)can help address high prices that are unaffordable for most LMIC payers. These pricing strategies,however,arealoneinsufficientforaccessinmostsettingsandattentionmustalsobegiventorationalselection of medicines; development and use of evidence-based clinical practice guidelines; capacitybuilding amongst health professionals to manage NCDs; establishment of systems for collecting,monitoring,andusingdataonNCDs;strengtheningofprocurementanddistributionsystems;andarangeofotherpoliciesandstrategiesatdifferentlevelsofthehealthsystem(NCDAlliance,n.d.b.)(SeeTable1,Section1).

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Whatcangovernments,pharmaceuticalcompanies,anddevelopmentpartnersdotosupportthedesignandimplementationofthesepoliciesandstrategiesforimprovingaccesstoinnovativeNCDmedicines?OneconsiderationrelatestopolicycoherenceandtheUHCreformsbeingprioritizedandundertakenbymany countries. It is vital that national and global stakeholders seeking to improve access to NCDmedicines,andthoseundertakinghealthsystemsstrengtheningandUHCefforts,workincooperationtoensurepolicycoherenceratherthanverticallywithinsilos(Bigdelietal.,2014).ThispointwasemphasizedbytheWHOIndependentHigh-LevelCommissiononNCDsthroughitsrecommendationthatgovernmentsincludeNCDandmentalhealthservicesinUHCpublicbenefitpackages,includingessentialmedicinesandtechnologies(WHO,2018).Anotherconsiderationishowtoimprovecollaborationandbuildtrustbetweenstakeholders.Dialogueacrossstakeholdergroupson“unifyingprinciples”forresearchanddevelopmentandaccessisongoing,but disagreements and mistrust between stakeholder groups remain. Efforts to build trust andunderstandingshouldcontinue,andcouldincludethedevelopmentofanNCDstakeholderframework—modelledontheframeworkcreatedbyHIV/AIDSstakeholders—toestablishgroundrulesforinvolvementintheprovisionofaccesstoNCDmedicines.Finally,futureresearchandanalysisshouldfocusoninnovative,synergisticaccessstrategiesforensuringthatNCDmedicinesgettopatientsinallmarketsegmentsofLMICwithmultiplepayers,suchascountrieswithhighOOPspendingand/orfragmentedhealthsystems.Chapter4offersinitialideasforhowtoutilizeMEAsindifferentmarketsegmentsandtoharnesstheprivatesectorandinnovativetechnologyplatformsinLMICs,butmoreresearchanddevelopmentofcasestudiesisneeded.4.3MASsasanaccessstrategyforinnovativeNCDmedicinesIn those settings inwhich thebudget impact, effectiveness, and cost-effectiveness of innovativeNCDtreatmentsarenotyetfullyestablished,negotiatedsolutionsintheformofmanagedaccessstrategies(MASs) arepotentialmechanisms for further considerationbypayers andpharmaceutical companies.MASsprovideanalternativetopolicysolutionsallowedbyTRIPSflexibilities,suchascompulsorylicensing,anapproachadvocatedbymanyinternationalhealthactivists.Thebenefitofcompulsorylicensingisthatitcanprovidequickaccesstoneededmedicinesintheshort-term.However,asdiscussedinSection2,thisstrategyhas,insomesettings,alsoledtochallenges,suchasconflictintradeagreements.MASssuchasmanaged entry agreements (MEAs) could provide an alternative approach and can encourage thebuilding of capacities and institutional arrangements for sustainable decision-making about NCDmedicines.MEAshavemanyadvantagesforstakeholders,butalsocomewithanumberofchallenges.CriticsofMEAsconsider them as means for conducting confidential negotiations and agreeing on non-transparentportfoliodiscountsinordertocreateadditionalfiscalspacefornewproducts’marketaccess.FewLMICshavesufficienthumanresourcesandinformationsystemscapacitytocollectandanalyzerealworlddata

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on theirown. Even if theywill, theymaybe reluctant to commit since these resourcesmaybemoreefficiently employedelsewhere givenotherpressing tasks. Therefore, it isworth consideringwhetherpilotingMEAsinaLMICcouldbeasharedactivitybetweenpharmaceuticalcompaniesandpublicpayers.Thecollateralpositiveeffectsofjointcooperationthroughpublicandprivatepartnershipswouldmeanthatbothpartieswillbeincentivizedtopromoterationalprescribing,anddevelopmentanduseofclinicalguidelines.Otherwise,underseverebudgetconstraintsandlimitedcapacitiestocollectrealworlddata,MEA arrangements may turn out to be financial schemes only rather than performance-basedagreements.Fromaclinicalstandpoint,performance-basedagreementsrequiretheex-anteagreementofsurrogateandclinicalmeasurableendpointstoguaranteethefulfilmentofthepromiseofvalue.However,responseratewilldependonmanyotherfactorsthatgobeyondthetherapeuticeffectofanewdrug,includinghowitisused(choosingtherightpatientsandtiming,complementarytreatment,adherence,andfollow-up). Therefore, without checks and balances and case or disease management tools in place,manufacturersandmarketingauthorizationholdersmayobjecttobeingtheonlyonestakingalltherisk.This compendium recommends strategies for those stakeholders considering MEAs and offersrecommendationsforfurtherresearchandpracticalguidance.RecommendationsforcountrieswithlimitedpreviousexperienceandcapacityforimplementingMEAs:

• Learnfromtheexperiencesofothercountries—particularlyotherLMICs—innegotiatingandimplementingMEAs.

• CollaboratewithorganizationsprovidingtechnicalassistancerelatedtopharmaceuticalpolicyandpricinginordertoaccesssupportandexistingknowledgeonMEAarrangements.

• AssessthepotentialforanMEApilotforaninnovativeNCDmedicine.• BuildindividualandorganizationalcapacitiesrequiredforunderstandingMEAarrangements.• Workwithpharmaceuticalcompaniestoinitiatepolicydialogue.Forlow-incomecountrieswith

limitedfiscalspace,supportfromexternalfunderswouldberequired.• PrioritizeoneortwodiseaseareasthatcouldbepartofanimplementationpilotonMEAs.• ConsiderfinancialschemesasthepotentialbestMEAarrangement,dependentonthesetting.• Ensuresufficientresourcesforpilotimplementation.• Implementthepilotandassesstheexperiencetoidentifycapacity-buildingrequirementsfor

potentialfutureuseofMEAschemes.• Publishanddisseminateresultsofthepilotasacasestudy.• ConsidertheinitiationofotherMEApilots.

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RecommendationsforcountrieswithlimitedpreviousexperiencebuthighercapacityforMEAs

(enablingenvironment,infrastructure,politicalwill):

• Learnfromtheexperiencesofothercountries—particularlyothersimilarLMICs—innegotiatingandimplementingMEAs.

• CollaboratewithorganizationsprovidingtechnicalassistancerelatedtopharmaceuticalpolicyandpricinginordertoaccesssupportandexistingknowledgeonMEAarrangements.

• ConsiderstrategyofstartingsmallwithMEAarrangementsandincrementallyexpanding.• Prioritizeasmallsetofdiseaseareasthatcouldbepartofanimplementationpilot.• IdentifyandchoosethebestMEAinstrumentaccordingtothesetting.• Workwithpharmaceuticalcompaniestoimplementpilot(s)andassessimplicationsforfuture

MEAs.• AssesstheexperiencefromtheMEApilottoidentifyregulatoryandcapacity-building

requirements(bothindividualandorganizational)forpotentialMEAscaleup.• StrengthenadditionalresourcesforMEAimplementation(HTA,PBMs,andothertools)• Publishanddisseminateresultsofthepilotasacasestudy.• Reviewpolicieswithinthehealthsectorandacrossotherrelevantsectorstoidentifypotential

barrierstolong-termimplementationofMEAarrangements.• Leveragereformprocessesinhealthandotherrelevantsectors,drawingfromtheexperiences

oftheMEApilots,toinstitutionalizelegalandpolicyreformssupportiveofMEAs.RecommendationsforadditionalresearchandpracticeguidanceonMEAsinLMICs:

• ResearchandpublishcasestudiesonMEAsthathavebeennegotiatedandimplementedinLMICs

tobuildevidenceonprocesses,facilitatorsandbarriers,outcomes,andlessonslearned.• Examine the findings from the compendium’s case study countries in other LMIC settings,

involving focus groups and workshops with targeted audiences in order to better identifypotentialusesofMEAs.

• Testandrefinethecompendium’sdecisionmodelsandanalyticalframeworkinasetofLMICstofurther explore how to reach certain market segments, assess barriers and facilitators, andidentifysynergisticaccessstrategiesthatcanworkwithMEAstoreachmorepatients.

• DeveloppracticalguidanceforLMICgovernments,aswellasdevelopmentpartners, regardingthestepsrequiredtobuildanenablingpolicyandlegalenvironment,capacityinnegotiationandimplementationofMEAs,andrationaldecision-makingonNCDmedicinesmoregenerally.

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TowseA(2010).Valuebasedpricing,researchanddevelopment,andpatientaccessschemes.WilltheUnitedKingdomgetitrightorwrong?BrJClinPharmacol.70(3):360-6.doi:10.1111/j.1365-2125.2010.03740.x.TsofaB,GoodmanC,GilsonL,MolyneuxS(2017).Devolutionanditseffectsonhealthworkforceandcommoditiesmanagement–earlyimplementationexperiencesinKilifiCounty,Kenya.InternationalJournalforEquityinHealth.16:169.doi:10.1186/s12939-017-0663-2. TwiggJL(2017).Ukraine’sHealthSector:SustainingMomentumforReform.Washington,DC,CSIS(https://www.csis.org/analysis/ukraines-health-sector,accessed29July2018).UHCPartnership(n.d.).UkraineFactSheet(http://uhcpartnership.net/country-profile/ukraine-2/,accessed29July2018).UnitedNationsCommissiononInternationalTradeLaw(UNICTRAL)(2011).UNICTRALModelLawonPublicProcurement.Vienna,Austria:UNICTRAL(http://www.uncitral.org/uncitral/en/uncitral_texts/procurement_infrastructure/2011Model.html,accessed30July2018).UNGA(2012).Politicaldeclarationofthehigh-levelmeetingoftheGeneralAssemblyonthepreventionandcontrolofnon-communicablediseases.A/RES/66/2.UnitedNationsGeneralAssembly,sixty-sixthsession,agendaitem117(http://www.who.int/nmh/events/un_ncd_summit2011/political_declaration_en.pdf,accessed29July2018).UptonJ(2018).RiskSharing,ItalianStyle.PharmaceuticalExecutive.38(3).VerkhovnaRadaofUkraine(2017).DraftbillNo.6327onstatefinancialguaranteesforhealthservicesandmedicationshasbeenadoptedbytheVerkhovnaRadaofUkraineonthefirstreading(http://www.rada.gov.ua/en/news/News/145751.html,accessed30July2018).VyasK.“ColombiaThreatenstoOverrideNovartis’sPatentonGleevec.”TheWallStreetJournal.(https://www.wsj.com/articles/colombia-threatens-to-override-novartiss-patent-on-gleevec-1463770091,accessed20September2018).WaningB,KaplanW,KingAC,LawrenceDA,LeufkensHG,FoxMP(2009).Globalstrategiestoreducethepriceofantiretroviralmedicines:evidencefromtransactionaldatabases.BulletinoftheWorldHealthOrganization.8(7):520-528.WHO(n.d.).NCDsandtheSustainableDevelopmentGoals.WHOGlobalCoordinationMechanismonthePreventionandControlofNCDs.Geneva:WorldHealthOrganization(http://www.who.int/global-coordination-mechanism/ncd-themes/sustainable-development-goals/en/,accessed29July2018).

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APPENDIX I: Methodology

Thiscompendiumwasinformedbythreeresearchactivities:1)literaturereviewofpublishedandgreyliteratureonMEAs;2)semi-structuredinterviewswithkeyinformantsinthreeLMIC(Colombia,Kenya,andUkraine);and3)developmentandtestingofthreemodels.1.LiteraturereviewAsystematicsearchofpublishedliteraturewasundertakenbyManagementSciencesforHealth(MSH)between December 2017 and February 2018 to identifyMEA initiatives. Search terms were in threecategories—risk-sharing agreements, patentedmedicines, and improved access—andwere translatedinto French and Spanish in order to include non-English publications. The following databases weresearched for publications between January 1, 2007 and December 31, 2017: Biomedical ReferenceCollection, Cochrane Central Register of Controlled Trials, Cochrane Database of Systematic Reviews,Embase,Medline,andPubmed.Apurposefulreviewofthegreyliteraturewasundertakensimultaneouslytocomplementthesystematicreview.Publications thatwere included in the review include original data, literature reviews, editorials, andauthorcommentaries.Eligibilitycriteriawere:1)thepapermustdescribefinancialorperformance-basedschemesforgrantingaccesstoinnovativepatentedmedicinesandgenericsglobally;2)thepapermustdescribe lessons learned and previous experiences withMEAs. Excluded papers included conferenceabstracts(becausetheyhadinsufficientdetailsonMEAs)andstudiesofothermarketaccessmechanisms(sincetheywerenotthefocusoftheliteraturereview).Papers were screened in two phases: first, titles and abstracts were reviewed, and all studies wereremoved that did not meet the inclusion criteria or were duplicates; second, the remaining full-textarticleswerescreenedbytworeviewerswhoagreedonafinalselectionofstudies,basedontheeligibilitycriteria.Theliteraturesearchretrieved330recordsandafterscreening,atotalof34publicationswereultimatelyconsideredforqualitativeanalysis.Moreinformationaboutsearchtermsandeligibilitycriteria,the34publicationsidentified,andliteraturereviewfindingscanbefoundinMSH(2018).2.Semi-structuredinterviewsInterviewswithkeyinformantsinthreeLMICwereconductedbyMSHtoidentifycontextualfactorsthatcould influence the implementation of MEAs. Three case study countries—Colombia, Kenya, andUkraine—werechosenpurposivelytorepresentdifferentgeographicalsettings,levelsofincome,socio-political contexts, and healthcare systems. All three countries have demonstrated a political will forUniversalHealthCoverage(UHC)fortheircitizens.

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Stakeholdermappingwasundertakentoidentifyhigh-leveldecisionmakersinthethreecountriesinthefollowinginstitutions:theMinistryofHealth,nationaldrugregulatoryauthorities,publichealthinsuranceagencies,privatepayersandinsurers,NCDpatientassociations,andpharmaceuticalindustryassociations.A total of 32 stakeholders in the three countrieswere identified for semi-structured interviews. Eachstakeholderwasgivenan informationsheetaboutthestudyandconsentformforparticipation intheinterview.Interviewswereconductedinpersonbytwodatacollectorsutilizinganinterviewguidethatcoveredthefollowingtopics:theindividual’sknowledgeand/orperceptionofcurrentaccesschallengesforNCDs,theirlevel of awareness ofMEAs and ongoing initiativeswithin their setting, and their views on potentialbarrierstoandfacilitatorsfortheimplementationofMEAsintheircountry.InterviewswereconductedinEnglishandSpanish(andwithaninterpreterasneededinUkraine),lastedbetween30-40minutes,andwererecordedwhengivenconsent.Each interviewwas transcribed and then coded, using a deductive and inductive approach. Informalinterviews inMarch 2018 were conducted with four subject matter experts inMEAs to validate thefindingsfromboththeliteraturereviewandthecasestudies.Moreinformationaboutthesemi-structuredinterviewmethodsandfindingscanbefoundinMSH(2018).3.ModellingThreemodelsweredevelopedbyRTIInternationaltohelpimproveaccesstoinnovativemedicinesinLMIC(AppendixII).ThefirsttwomodelsprovideaframeworkfordialoguebetweenpharmaceuticalcompaniesandpayersinLMIC.Thepurposeofthesemodelsistoinformdiscussionsaroundwhetheranagreementcanbereachedthatprovidespatientsaccesstoapatentedmedicineand,ifanagreementcanbereached,what itmight look like. By presenting options—various types of contractual arrangements,managedaccess, or risk-sharing agreements—and describing circumstances where different options are mostappropriate, the models are intended to expand opportunities for stakeholders to reach mutuallybeneficialagreements.Thethirdmodel isaworkingspreadsheetintendedtosupportquantitativeplanningwithscenarioandsensitivity analyses, helping stakeholders—especially payers—understand the impact of pricing andcoverage decisions. To help payers see how different contractual arrangementsmight assist them tomanagevarioussourcesofuncertainty,thespreadsheetmodelshowsgraphicallytheeffectofvariationinuncertainfactors(e.g.efficacyandsafetyofthenewdrug,thesizeoftheeligiblepopulation,physiciansprescribingbehavior,andpatients’adherencetoprescribedtreatment)oncost,cost-effectiveness,andotheroutcomesofinterest.Ideallythespreadsheetmodelwillserveasasetofexamplesonwhichpayerscanbuildtotailoranalysestosuittheirneeds.

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Themodelswerediscussedwithrepresentativesfrompharmaceuticalcompanies,theWorldBank,andother stakeholders in twoworkshops: 1)WashingtonDC (6 June2018); and2)Ukraine (5 July 2018).Followingthesetworoundsoffeedback,themodelswerefurtherrevised.

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APPENDIX II: User Guide to Three-model Scenarios for Increasing Access to Innovative Medicines for Non-Communicable Diseases7

TheThree-ModelFramework

I. Introduction

ThissectionprovidesadescriptionofthreedecisionanalyticmodelsdevelopedbyRTI Internationaltoguide communication between payers8 in developing countries and drug companies with the aim ofincreasedaccesstonewNCDmedications.Themodelsofferprogressivelymorespecificapproachestofacilitate the decision-making process in considering the form of agreement between companies andpayers.Thegoalistodemonstratewhatformofagreementwouldbemostcost-effectiveandbeneficialtobothparties.Thethreemodelsare:

1. ADecisionTreeModel2. AContinuumor“Bridge”Model3. AQuantitativeSpreadsheetModel

Models1and2depictadecisionprocesswith twokeyvariables: theamountofpublic, generalizableinformationaboutthedrugandtheinstitutionalcapacityofthehealthsystemandpayer.Whereasthedecisiontreemodeloffersadiscretecategorizationofthetwokeydeterminants,thecontinuummodelextendsthisrepresentationtoallowtheamountofpublicinformationandtheinstitutionalcapacityofthehealthsystemtovaryalongacontinuuminamannermoreconsistentwithreality.Thesefirsttwomodelsguidedecisionmakerstoadeterminationofwhetheranagreementisfeasible.Whentheoutcomeispositive,thequantitativespreadsheetmodelmaybeusedtocalculateexpectedvaluesandconfidenceintervalsforkeymetrics—likeoverallbudget impactandcost-effectiveness—underdifferentpriceandcoveragescenarios.

II. TheModels

The threemodels assume that increasingaccess to anewdrug in a givenpopulationwill typicallybegovernedbysomeformofManagedEntryAgreement(MEA)orRisk-SharingAgreement(RSA),specifyingpricingandcoverageconditions.9Beforedelvingmoredeeplyintomodeldetails,itisworthnotingthattheoptionsavailabletotheplayersinanysituationcanbesummarizedinthefollowing:

7NugentR,ScottT,SalemM(2018).UserGuidetoThree-modelScenariosforIncreasingAccesstoInnovativeMedicinesforNon-CommunicableDiseases.PreparedbyRTIInternationalandsubmittedtoMSHforinclusionin“ACompendiumofGoodPracticesforSustainableAccess.”8Apayermaybeagovernmentsinglepayeroraprivateinsurer.Thepayerisassumedtohavesomedegreeofabilitytoperformhealthtechnologyassessment(HTA),eitherinternallyorbyleveragingthecapabilityofanothergroup,likeanationalHTAorganization.9WeintendthetermsMEAandRSAtobeverybroad,encompassinganyformofconditionalcoverageagreement.

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1.Payeradopts/coversthedrug–NoMEA/RSA.

Thisoptionisappropriateifthepayerintendstomanageincreasedaccesswithouthelpfromthedrugcompany,sothatthecostandtimerequiredtonegotiateanMEA/RSAisnotworthwhile.

2.Payerdeclinestocoverthedrug–Thisoptionisappropriateif/whenitisapparentthatnegotiationwillnotconcludewithanagreement.Insuchcases,thedrugcompanymayreapplyforentrywithmoreevidence,orapplytoconductaclinicaltrialinthecountry.

3.PayeranddrugcompanynegotiatesomeformofMEA/RSA

a. Thedecisiontreemodel

Thismodelmapstheaforementioneddeterminants(publicinformationaboutthedrugandinstitutionalcapacity of thepayer and country’s health system) to theoptimal formofMEA/RSA in a very simpleframework,depictedbyFig.A1.Toavoidredundancy,amatrixmightbeusedtoorganizethisinformationmoreeffectively,asrepresentedbyFig.A2.

Itisreasonabletoobservethatthematrixmodelisinflexible:(1)itforcesthetwokeydeterminantsintodiscrete categories,when theyarebetterdescribedona continuum;and (2) it forces theboundariesbetweenregionstobeverticalandhorizontal.Therearesituationswhereanimprovementintheamountofgeneralizablepublicinformationaboutthedrugcouldmoveusfrom“PayerDeclinesCoverage”toaCED,holdinginstitutionalcapacityconstant.Thecontinuummodelprovidesanextensiontothesimplematrixrepresentationofthedecisiontreemodel.Insomecases,thesimplicityofthedecision-treeandsimple matrix models may make them the best tools for some stakeholders to use. In some cases,stakeholdersmayfinditusefultostudythecontinuummodelfortheadditionalinsightitprovides,butstillusethedecision-treeorsimplematrixmodelsforeasyreferencetofocusmainideas.

b. Thecontinuum“bridge”model

Figure3showsthecontinuummodelwiththesamefourregionsasthesimplematrixmodeldescribedintheprevioussection.Thisrepresentation,however,introducestwoinnovations:

1. Thetwokeyconsiderations–amountofgeneralizableinformationandinstitutionalcapacity–arevariable.Whereadrug-countrypairingwouldbelocatedinthisspacewoulddependondifferentindicatorsforeachdeterminant.10

10Fortheamountofgeneralizablepublicinformation,indicatorsofwhereadrug-countrypairingwouldbelocatedcould include, e.g., whether the company had made clinical trial results available in a public registry, likeclinicaltrials.gov (https://clinicaltrials.gov/) or the WHO International Clinical Trials Registry Platform(http://www.who.int/ictrp/en/),whethertheresultsofanypost-marketingsurveillanceinothercountrieshadbeenmadepublic,andifsosomecharacterizationofthesimilaritiesanddifferencesbetweentheseothercountriesandtheoneinquestion.Fortheinstitutionalcapacityofthehealthsystem,broadindicatorslikehealth-systemspending,per-capita and as a percentage of GNP, could help benchmark against other countries.More practice-orientedindicatorsarethecapacityformonitoringspecifichealthoutcomes(specifictoadisease/druginquestion)orthereadinesswithwhich that capacity could be provisioned; the capacity for developing evidence – gathering andassessingdata(again,consideringwhatisinplaceandthereadinesswithwhichcapacitycouldbeaddedinaspecific

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2. The boundaries between regions are sloping, showing the more realistic situation that adifferenceineitherkeyconsiderationcouldchangetheoptimaldesignofMEA/RSA.

Note:AnMEA/RSAcouldhavebothfinancialandperformancebasedfeatures.

Wedescribe thedecision-making process in a stepwise fashion that spans the range from the regionwherethepayerdeclinescoveragecompletely to theregionwherenoMEA/RSA ismadebecausethepayeradoptsthedrugwithasimplecoverageagreement.InbetweenthereareseveralMEA/RSAformsofagreementthatcanbereacheddependingonthelocationofthedrug-countrypairingontheplane.

PayerDeclines:Toomuchuncertaintyabout thedrugcombinedwiththecountry’s limitedcapacity tomonitoroutcomesanddevelopevidencemaymakeitnotappropriateforthepayertocoverthedrugatthistime.Thecompanymayreapplywithmoreevidence,orapplytoconductaclinicaltrialinthecountry.Asinformationimprovesorinstitutionalcapacityincreases,makingthepayerbetterabletocopewithagivenlevelofuncertainty,possibilitiesforagreementsopenup.

FinancialAgreement:Budgetcap,discounts,andothersimplemechanismscanhelpthepayermanageuncertaintyaroundbudget impact.Eventhoughbetter informationaboutthedrugisavailable,payersmay be limited in their ability to estimate the size of the eligible population and predict physicians’prescribingbehaviorandpatients’adherence.Recognizingtheselimitationsofthecountry’sinstitutionalcapacity,togetcoveragethedrugcompanymayneedtoaccepttermsthathelpthepayermanagetheiruncertaintyaroundbudgetimpact.Thiswilltypicallyinvolvethecompanytakingonsomeadditionalriskthereforereachingafinancialagreementwilldependonthecompany’swillingnesstotakeonthisrisktoobtaincoveragefortheirdrug.

Performance-BasedAgreements(PBA)cantakeseveralforms:

a. OutcomesGuarantees:Capacityformonitoringexistsorcanbedeveloped,makingoutcomesguaranteesfeasible.Somedegree of uncertainty about howwell the drugwill work in this setting combinedwith limitedcapacitytomanagethatriskinotherwaysjustifiesoutcomeguaranteesaspartofMEA/RSA.b. CoveragewithEvidenceDevelopment(CED)withnegotiation:Forthefeasibilityofthistypeofagreement,thepresenceofcapacityfordevelopingevidenceeitherexistsorcanbedevelopedalongwiththecapacityfornegotiatingpricingandcoveragetermsbasedonnewevidence.Ajustificationforthistypeofagreementisthehigherdegreeofuncertaintyabouthowwellthedrugwillworkinthissettingoringeneral,orthelikelihoodofsubstanceupdatestoclinicalpracticeguidelinesbasedonevidencedeveloped.c. CEDwithpre-specifiedagreement:InregionIII.c.inFig.3,thecountry’sinstitutionalcapacitymakesitpracticaltodevelopevidenceonwhichbindingmedium-termandlonger-termcontractsarewritten—andwherethedearthofpublicinformationaboutthedrugjustifiesthecostofdoingso.

Writingabindingagreementwithprovisionsbasedonthecollectionandassessmentofclinicaloutcomes

area); the capacity to negotiate pricing and coverage termswith drug companies on the basis of evidence; thecapacitytowritebindinglong-termcontractsbasedonevidencetobedeveloped.

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dataisnottrivial.Thecountrymusthavetheinstitutionalcapacityto(1)collectandassessdataon,e.g.,survival,diseaseprogression,diseaserecovery,significantevents,symptomsscores,and(2)craftlegallybindingagreementsthatbasefuturepricingandcoverageonthoseassessments.

To be worth the cost of this approach, theremust be very little relevant public information alreadyavailableonthedrug,implyingarealpotentialtoaddvaluebydevelopingnewevidence.Inthissituation,withverylittlepriorinformationtogoon,itwouldbereasonableforthedrugcompanytoacceptasastartingpointlowpricesandlimitedcoverage.Forthecompanytobewillingtoacceptsuchtermsaspartofalong-termcontract(longenoughtoallowforthedevelopmentofclinicalevidence),thecompanywillneedtobeconvincedthattheevaluationapproachtobeimplementedwillbeadequatelypowered—thatgood performance by the drug will be recognized, triggering higher prices and expanded coverage.Similarly, thepayerwillneed tobeconvinced that theevaluationwillnotbind it tohigherpricesandexpandedcoverageunlessthedrugtrulydoesperformwell.

Stronger institutionalcapacityenablespayerstocontrolcostsandpromotecosteffectivenessthroughthe health system (by means of, e.g., evidence-providing registries; limiting prescribing to specialtreatment centers; requiring physicians to certify patients’ eligibility, backed up by monitoring andverificationsystems).Thisapproachmaybeespeciallyattractiveifthedrugiscomplicatedtoadministerorveryexpensive.

PayerAdopts:

Evidencegatheredthroughthehealthsystemcouldalwaysbeusedtonegotiatepricesoradjustcoverage,so the line betweenRegion IV andRegion III.b is somewhat soft. The idea is that in Region IV publicinformationaboutthedrugitselfisalreadysogoodthatrenegotiationwiththedrugcompanyisunlikely.

Likewise, themeasurespayersuse inRegion IV to control costs andpromote cost effectiveness (e.g.,evidence-providing registries; limitingprescribing to special treatment centers; requiringphysicians tocertifypatients’eligibility,backedupbymonitoringandverificationsystems)couldalsobeusedintheupper-rightmostpartsofRegionsIIandIII,aslongaspublicinformationaboutthedrugisgoodenoughtoinformbestpracticesandinstitutionalcapacityisadequatetosupportthesemeasures.

c. Thequantitativespreadsheetmodel

ThepurposeofthespreadsheetmodelistohelppayersdecideonnextstepstowardspecifictermsofalikelyMEA/RSAagreement.Themodelcanbeusedtocalculateexpectedvaluesandconfidenceintervalsforkeymetrics–likeoverallbudgetimpactandcost-effectiveness–underdifferentpriceandcoveragescenarios.Thepurpose is tohelpstakeholdersunderstandthe impactonkeyoutcomesofpricingandcoveragedecisions,takingintoaccountuncertaintyaroundfactorslikeefficacyandsafety,thesizeoftheeligible patient population, physicians prescribing behavior, and patients’ adherence to prescribedtreatment.Whatfollowsisaguidetohelppayersnavigatethespreadsheetmodeltoeffectivelyuseitforthedecision-makingprocess.

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Howtousethespreadsheetmodel:

The spreadsheet model can be found in an excel file athttp://pubdocs.worldbank.org/en/437961542759879923/Quantitative-Model-Final-Version-7-30-2018.xlsx.It iscomprisedoftwosheets:BudgetImpactandCalculations.Theusershouldonlyinteractwiththeformer,theBudgetImpactsheet.Therearetwotypesofcellsthattheusercanedit:

1. Orangecells:theseare“Input”cellsthatprovidethenumbersusedinfurthercalculations2. Yellowcells:theseare“Note”cells.Therearethreeinstancesoftheminthespreadsheet(cells

L44,L45andL46).Theyaretobepopulatedwhendifferentialpricingbasedoncountryincomelevelsisplanned.

Inadditiontothesecells,therearegrey“Calculation”cellsthatareautomaticallyupdatedastheinputcellsareedited.Theusercanclickonagreycelltoviewtheformulaandthenpress“Esc”toexitthecell.

Themodelassumes that the full impactsof theplanare reached inyear3,wherebyone thirdof theimpactsareachievedinyear1,twothirdsinyear2andfullimpactsinyear3.Thisappliestothefollowingvariables,whichbuildononeanothersequentially:

- Theproposednumberofpatientstotreat- Thetotalbudgetimpacts- TheaveragecostoftreatmentperHCPDpatient

The file illustrates scenarios of MEA/RSAs that may be implemented to introduce a new high-costprescription drug (HCPD). The spreadsheet contains five sections, A through E, andwhat follows is adescriptionofeachsection:

SectionA:PayerBudget–Baseline

Thissectionprovidesthebaselinescenario.Therearefiveinputboxesinthissection:

- CellD11,inwhichauserwouldinputtherelevantcurrency- CellE11,whichcontainsthetemporalunitinusewithinthemodel- CellC11:thetotalbaselinebudgetofHCPD- CellC13:thetotalnumberofpatientsreceivingtheHCPDdrugs- CellC15:theaveragecostperpatient

To construct the baseline scenario, a userwould only need to input twoof the three variables: totalbudget,totalnumberofpatientsandaveragecostperpatient.Thethirdwouldbecalculatedaccordingly.

Important:Thereisatablelocatedontherightwiththreecheckboxes,eachrepresentingoneofthethreevariables.Pleasecheckonlytwoofthethreecheckboxesandinputthecorrespondingnumbersintotheirrespectiveboxes.

SectionB:NewDrugImpact–PayerAdopts

This section represents the scenario of the payer adopting the new drug without implementing aMEA/RSA.Thereareseveralsub-sectionshere:

1. Thetreatablenumberofpatients:thetotalpopulationofpatientswhomthisdrugcouldtreat,whichtheusershouldinput

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2. Theproposednumberofpatientstotreat:thisisasubsetoftheabovepopulationandtheusershouldinputthetotalnumbertheyexpecttotreatannuallybyyear3intheorangecell(C27).

3. Treatmentexpansion:thissectionshowsthenumberofpatientsbeingtreatedwiththenewdrugwhohadnotbeenalreadyreceivingHCPD.Aswithsub-section2,theusershouldinputthetotalnumberofnewpatientsintheorangebox(C33)foryear3andthecorrespondingnumbersofyears1and2willbecalculated.

4. Treatmentreplacement:Theaveragecostperpatientofthedrugsthisnewdrugwillreplace.Thisisalsoaninputbytheuser.

5. Priceofthenewdrugperpatienttreated:Intheabsenceofdifferentialpricing,theusershouldinputthepriceofthenewdrugincellC40.If,however,thereexistsdifferentialpricingbasedoncountryincomelevel(inwhichcasetheyellowcellsL44,L45,andL46,willbepopulatedwithapricingguide), theusershouldcheckoneofthecheckboxesinline44indicatingtheappropriateincomelevel.Important:Onlyoneofthecheckboxesshouldbecheckedatanyonetime.Ifmorethanoneischosen,analertwillbegiventotheuser.Further,ifanyoneofthecheckboxesischosen,thedifferentialpricewilloverridethenumbertheusermayhaveputincellC40.

6. Markupimposedbyintermediariesinthesupplychain:Ifthereamarkupappliedtothepriceimposedbythepharmaceuticalcompany(taxes,customsduties,etc.),theusershouldinputthatnumberincellC51.

7. FinalpricetobuyerofnewdrugperpatienttreatedincellC56.Thiscelladdsupthepriceimposedbythedrugcompanytothemarkuppriceifthelatterisnotzero.

Whenalltheinputcellsarepopulatedontheleft,thegreycalculationcellstotherightofthem(cellsL23– L36) will update to the calculated total budget and average cost per patient in each year. Thesecalculationsalsodisplaythedifferencebetweenthisscenarioandthebaseline(SectionA)intermsoftotalbudgetandaveragecostperpatient.

SectionC:NewDrugImpact-FinancialAgreement

ThissectionallowsforMEA/RSAscenarios,wherebyanumberofadditionalpatientsaretreatedatanagreedprice.ThisrepresentsanexpansiontosectionBandincludesthefollowingsub-sections:

1. Effectivelyreducedpriceforadditionalpatients:thisshouldbeenteredintocellC66.2. Numberofadditionalpatientstreatedatthereducedprice.AswithsectionBabove,theuser

shouldenterthetotalnumberofadditionalexpectedpatientstotheyear3cell(C71)andthecorrespondingnumbersforyears1and2willbepopulatedautomatically.

3. Treatmentexpansion:similartothecorrespondingsub-sectioninsectionB.4. Treatmentreplacement:Notapplicable.Theassumption isthatnewtreatmentatreduced

costwillnotbeusedtoreplaceotherHCPDusage;patientsforwhomthenewtreatmentwillreplaceHCPDwillbecoveredatthenegotiatedprice;coverageatthereducedpricewillberestrictedtopatientsnotalreadyreceivingHCPDforthiscondition.

AswithsectionB,thetotalbudgetimpact,theeffectonaveragecostandthetotalnumberofpatientstreatedunderthenewplanwillbecalculatedbyyearontheright(cellsL70–L80).

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Belowtheaforementionedsub-sectionsisaboxthatwilldisplaythetotalbudgetimpactoftheexpansionfromsectionBtosectionCaswellasthedifferenceinaveragecostperpatient.Furthermore,incellsD92andD94,theusercouldinputapercentagepositiveresponserateandDALYperyearoftreatmentforpositive responders, respectively and the calculation boxes (cells I92 and I94) will populate with thedifferenceincost-effectivenessingoingfromscenarioBtoC.

SectionD:NewDrugImpact–Performance-BasedAgreement(PBA)

InthecaseoftheimplementationofaPBA,ausershouldinputtheexpectedpositiveresponserateincellC106andtheDALYperyearoftreatmentincellC108.Ontheright,theaveragecostperpatient,totalbudgetimpactandtheexpectedcost-effectivenesswillbecalculated.

Theassumptioninthisscenarioisthatrebateswillbegivenforanynon-respondingpatients.Rebateswillbe given at the reducedprice as long as the total number of responding patients is greater than thenumberpayingthenegotiatedprice.Ifthenumberofrespondingpatientsfallsshortofthenumberpayingthe negotiated price, the difference between the number responding and the number paying thenegotiatedpricewillberebatedatthenegotiatedprice.

SectionE:NewDrugImpact–PBA:CoveragewithEvidenceDevelopment(CED)

InPartE,CoveragewithEvidenceDevelopment,wemodeltwothings:(1)thenegotiatedpriceincreasesif thepercentageof positive responders exceeds a target anddecreases if thepercentageof positiveresponders falls shortof thetarget; (2) themagnitudeof thepricebonusordiscountdependsonthenumberofpatientsmonitoredtodeterminethepercentageofpositiveresponders:morepatientsareequatedwithstrongerevidenceandhencegreaterimpactsonthenegotiatedprice.Theuserinputsthefollowing:

1. Minimumnumberofpatientsfromwhomcompletedatamustbecollectedtofullyimplementpricediscounts/bonuses

2. Maximumnumberofpatientsfromwhomcompletedatamustbecollectedtoimplementanypricediscounts/bonuses

3. Percentagebonusifpositiveresponserateisgreaterthanthetarget/benchmark(discountifitislessthanthetarget/benchmark)

Theassumption inthisscenario isthatbetweenthehighand lownumbersofpatientsmonitored,thepricediscounts/bonusesareassumedtophaseoutlinearly:fullyimplementedforanythingatorabovethehighernumberofpatients,nothingiflessthanthelowernumberofpatients.Foranythinginbetween,thediscount/bonusispro-rated.Forexample,ifwearetomonitoratleast500patientstohaveanypriceeffectandatleast1,000patientstohavethefullpriceeffect,thenifweendupmonitoring750patientsthediscount/bonuswillbehalfthefullamount.

Ontherightoftheall theaforementionedsectionsaregraphsthatplotthe impactsontotalbudgets,average cost per patient and cost-effectiveness for the aforementioned scenarios to facilitate visualcomparison.

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Figure A1. Representation of the decision tree model

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Figure A2. A representation of the decision tree model in matrix form

Figure A3. A representation of the continuum model

Institutional Capacity of Payer/Health System

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Financial Agreement

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Amount of Generalizable

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PrespecifiedAgreement (PBA=Performance-BasedAgreement)

(CED=CoveragewithEvidenceDevelopment)