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Value Based ReimbursementDo we want it? Do we already have it?
David Shum, PharmD, MBADirector, Reimbursement & Health EconomicsRoche Pharmaceuticals
CADTH SymposiumVancouver, April 2011
Agenda
1. Value based reimbursement – do we have it?
2. Benefits and challenges with our current VBR framework
3. Do we want it? Future considerations…
Disclaimer: Viewpoints expressed are of the presenter, not Roche or other organizations
The context – the business of pharmaceuticals
Ref: OECD 2008
Key Implications
Source: OFT
Agenda
1. Value based reimbursement – do we have it?
2. Benefits and challenges with our current VBR framework
3. Do we want it? Future considerations…
Disclaimer: Viewpoints expressed are of the presenter, not Roche or other organizations
What is value-based reimbursement?
•Canada, •UK•Australia•New Zealand
•Sweden •Norway •Germany •Italy
•Belgium •Portugal •Switzerland•…
The use of clinical and economic evidence to assess the benefits and value of innovation
Countries already using a form of VBR:
Soruce: OFT Report 2007
There are a number of ways to determine value
HTA markets favour QALYs as the ‘currency’ for appraisals
Optional
NoneUpcoming
Mandatory
IMS Health
Value: Weighing incremental costs vs. incremental benefits
Is decision making based on value (as defined by cost/QALY)?
Source:
1. Clement, Harris, Li, Yong, Lee, Manns; JAMA 2009
2. Ciapanna, Yunger, Shum, Milliken, Aissa, Longo: ISPOR 2010
Value informed reimbursement (VIR)
DecisionDecisionDecisionDecision
Clinical Clinical Clinical Clinical ValueValueValueValue
AffordabilityAffordabilityAffordabilityAffordability
Patient/PublicPatient/PublicPatient/PublicPatient/PublicOthers*Others*Others*Others*
* E.g. BOI, ethics, precedence, policy, legal, uncertainty, etc
Agenda
1. Value based reimbursement – do we have it?
2. Benefits and challenges with our current VBR framework
3. Do we want it? Future considerations…
Disclaimer: Viewpoints expressed are of the presenter, not Roche or other organizations
Benefits and challenges with the current VIR approach
Multi-factorial decision
making
QALYs are a useful tool, can
be used to compare health
gains across diverse
diseases
Patient and public input
into decision making
BenefitsBenefitsBenefitsBenefits ChallengesChallengesChallengesChallenges
a) Value of a drug is dynamic
b) QALY limitations –may not represent the true value
c) Value – a broader perspective
a) The value of a drug can change over the product life cycle
Value
Time
Indication 2Indication 2Indication 2Indication 2
New dataNew dataNew dataNew data
Indication 1Indication 1Indication 1Indication 1
b) QALY limitations: some disease states are disadvantaged
DrugDrugDrugDrug Condition (prognosis where Condition (prognosis where Condition (prognosis where Condition (prognosis where
available)available)available)available)
Survival gainSurvival gainSurvival gainSurvival gain NICE (manufacturer) NICE (manufacturer) NICE (manufacturer) NICE (manufacturer)
estimated cost /QALY (£000)estimated cost /QALY (£000)estimated cost /QALY (£000)estimated cost /QALY (£000)
Bevacizumab (1st line) Colorectal cancer (metastatic) 4.7 months 63 (88)
Cetuximab (2nd Colorectal cancer (metastatic) 2.6 months TTP A30 (33)
Pemetrexed Lung cancer (metastatic) None 60 (19)
Fludarabine (1st line) Leukaemia lymphocytic PFS 31% v 23% at 3
years
A30 (26)
Bevacizumab Renal cancer (metastatic) 5 months PFS 171 (75)
Sunitinib Renal cancer (metastatic) 6 months PFS 72 (29)
Sorafenib Renal cancer (metastatic) 3.3 months PFS 103 (91)
Temsirolimus Renal cancer (metastatic) 3.6 months 94 (102)
Lenalidomide Multiple myeloid leukaemia 1.8 months 47-69 (47)
Lapatinib Breast cancer (metastatic) 9.5 weeks PFS 70-94 (81)
Cetuximab (1st line) Colorectal cancer (metastatic) 0.5 week PFS A30 (63)
Ref: BMJ 2009;338:b67
Resource-allocation decisions (based on value) are not understood by the public.
Value to patients, caregivers, etc?
How are societal benefits, preferences, and WTP incorporated into trade-off decisions?
Ref: Toronto Star - Nov 2010
c) Value – a broader perspective
c) Value – a broader perspective WTP for the private / out-of-pocket market
Bev mCRC patients enrollingin RPAP
877
With Private Insurance647 (74%)
Without Private Insurance230 (26%)
Approved Coverage310 (48%)
Denied Coverage337 (52%)
Received Therapy204 patients (65%)
Received Therapy (paid cash)135 (40%)
Received Therapy (paid cash)
120 patients (52%)
Patients with private insurance: 48% approvedPatients with no coverage: 45% elected to pay for bevacizumab
Ref: S. Yunger, P. Douglas, P. Anglin, M. Crum , D. Shum, L. Phillips, D. Milliken – ASCO 2009
c) Value – a broader perspective Private market approval for IV oncology agents
Source: Roche Patient Assistance Program (RPAP)
Agenda
1. Value based reimbursement – do we have it?
2. Benefits and challenges with our current VBR framework
3. Do we want it? Future considerations…
Disclaimer: Viewpoints expressed are of the presenter, not Roche or other organizations
VIR, do we want it? Future considerations…
• Maintain reimbursement decision making as a multi-criteria endeavor (where efficiency is not the sole objective)
• Formally weight inputs that are not captured in the current framework
– patient / public input into decision making (at the policy level and drug decision level)
• Broaden the perspective and definition of value – e.g. end of life treatments, social value judgments
• How do we capture the value of innovation beyond health benefits?
VIR, do we want it? Future considerations…Opportunity to create value in the development process
Target Product Profile
Marketing
Payer Value
Early Development Integration & Alignment
Clinical
Technical
Full Development & Marketing
Selected Affiliates
Key Claims
Phase I Phase IIa NDA Filed Launch Post-LaunchPhase IIb Phase IIIPre-Clinical
Idea Successful Product
We Innovate Healthcare