Reimbursement Strategies of Follow-on
Medicinal Products
Prof. Dr. Thomas D. Szucs
Director, European Center of Pharmaceutical Medicine,
University Basel
Three perspectives: Academia – Insurer - Provider
2
3
Disclaimer
The explanations, opinions and facts expressed relate to the personal point of view of the lecturer. The perspective hereby represented does not particularly correspond to the official point of view of Helsana, Hirslanden or the University of Basel and is accordingly not binding in any way for Helsana, Hirslanden or the University of Basel.
4
Overview § Background Where
are we coming from?
§ Basics: What are the key concepts?
§ Boundaries: What is happening in major markets?
§ Beyondness: Where are we heading to?
4
5
§ Background Where are we coming from?
§ Basics: What are the key concepts?
§ Boundaries: What is happening in major markets?
§ Beyondness: Where are we heading to?
5
Overview
Society has three approaches to harmonise ...
6
Acces
Cost management
Innovation incentives
7
High value medical services, equitiy
Contribution to GDP, economic strength and employment
Stabilising and/or reducing costs
... and three conflicting goals to resolve
8
§ Background Where are we coming from?
§ Basics: What are the key concepts?
§ Boundaries: What is happening in major markets?
§ Beyondness: Where are we heading to?
8
Overview
9
Elements to define the optimal target price of a pharmaceutical
Price
Socially responsible
Politically acceptable
Financially sound
Medical-scientifically sustainable
9
Dicit Oscar Wilde
10
„A cynic is a man who knows the
price of everything but
the value of nothing.“
What is value?
11
Defining innovation and benefits
„Customers don‘t buy a drill, but rather a hole in the wall.“
„Payors don‘t buy a technology, but rather a patient benefit.“
13
Value is never a constant parameter
14
Establishing true value is difficult
14
15
Healthcare value criteria
Medical System
Patient Societal
Σ
16
Value elements
Medical value
• Meaningful outcomes
System value
• Benefit to the healthcare system
Patient value
• Patient experience
Societal value
• Improvement of patients and their caregivers productivity
17
Value criteria
17
Medical value System value Patient value Societal value
• Efficacy / effectiveness (final endpoints, surrogate markers, intermediate outcomes, overall survival, progression free survival, response rate)
• Safety • Reduction adverse
events • Relief in symptoms • Tolerability èInnovation
• Reduction in: • Hospitalizatio
n • Physician
visits • Diagnostic
tests • Emergency
visits • Costs of treating
adverse events
• Medical value • Quality of life gain • Easy use / ap-
plicability • Compliance
• Productivity gain • Reduction caregiver
burden (e.g. social ac- tivities, work, education, etc.)
• Indirect costs
Tools to measure medical value: • Instruments / scales • Biomarkers • Clinical tests • PRO • Registries
Tools to measure system value: • CEA • CUA, CMA, PROs • MCDA • Budget impact
(direct costs)
Tools to measure patient value: • PRO
Tools to measure societal value: • Surveys • QALY • LYG • Surveys (EQ-5D) • Willingness to pay
OPTIONS FOR REIMBURSEMENT
19
Elements to define the optimal target price of a pharmaceutical
Price
Socially responsible
Politically acceptable
Financially sound
Medical-scientifically sustainable
19
Value and the “No Differentiation Zone”
21
Cost-sharing
22
High cost sharing reduces adherence
23
Risk-sharing
24
Schemes
Financially-based
Outcomes-based
24
25
Financial-based schemes can be broadly classified into four types
Price Volume Agreement
Budget cap
Dose cap Disease-specific
management schemes
30
Financial-based pricing schemes and examples from global experience
Scheme Examples from global experience
Price volume agreement
In France, Gilead and the Economic Committee for Health Products (CEPS) negotiated a 27% discount from the original price and then further discounts were applied when different volumes were reached (structure is undisclosed). A year later, Germany also achieved the same price (e41,000 for a 12-week course).
Budget cap Total spend growth cap: In the UK, annual growth in the spending of branded pharmaceuticals has been capped from 2014–2018 with clawbacks in place to recover yearly overspending. Total spend cap: In Italy, pharmaceutical companies are allocated a national level budget by AIFA and clawbacks are in place to recover annual overspending.
Dose cap In the UK, Celgene has agreed to a Patient Access Scheme for lenalidomide (Revlimid) in multiple myeloma in which it has agreed to fund the cost of patients who need more than 26 cycles; typically longer than 2 years of treatment.
Disease-specific management
Both Canada and the UK have additional pricing and reimbursement schemes targeted at oncology. The UK’s reformed CDF will allow use of oncology medicines with a conditional reimbursement where a full reimbursement recommendation cannot be made by NICE. The fixed budget for 2016–2017 is £340 million.
30
31
Outcome-based schemes can be broadly classified into four types
Conditional reimbursement
Success-based payments (pay-for-
performance)
Outcome-based rebates
Indication-based pricing
36
Outcome-based pricing schemes and examples from global experience
Scheme Examples from global experience
Conditional reimburse-ment
The Netherlands is the most well-known example of a country having implemented conditional reimbursement for drugs lacking sufficient evidence at the point the HTA process is conducted. Data are collected over the next 4 years and the product is reevaluated again for cost-effectiveness.
Success-based payments
Janssen’s pay-per-clear scheme for simeprevir (Olysio) agreed in England involves Janssen paying for pretreatment blood tests to predict whether sime- previr is likely to be effective in genotype 1 hepatitis C patients and offering to fund alternative treatments if after 4 weeks sufficient response is not seen with triple therapy. NHS England only pays for patients who show successful clearance of the virus posttreatment.
Outcome-based rebates
Procter & Gamble agreed to fund the medical costs of nonspinal fractures in women taking risedronate (Actonel) with the US-based private health insurer, Health Alliance Medical Plans. Results from that time indicate a 79% reim- bursement rate.
Indication-based pricing
In 2015, Express Scripts (US) announced plans to rollout an indication-based pricing program for cancer medicines, such as Roche’s erlotinib (Tarceva), to differentiate price based on likely clinical benefits
37
Interesting but very challenging: pay-per-use/indication-based pricing
Indication x = price X Indication y = price Y
38
Novel schemes
Scheme Description Deferred payments
Payment for a medical technology is spread over a pre-agreed period of time to manage the upfront cost.
Guaranteed revenue model
Revenue is guaranteed to innovators in indications where it is necessary to stagger or restrict access (eg. antibiotics).
Product-service bundling
Products and services are bundled along a particular disease pathway or for a patient at a particular point in time, at a price discount.
Indication-based pricing
Prices for the same medical technology is different when used for different indications, particularly for cancer products.
BIOSIMILARS STRATEGIC MARKET ACCESS / P&R CONSIDERATIONS
4012.05.17
41
P& R strategic considerations
1. Clear definition of Biosimilar strategy and stick to it 2. P&R / market access strategy should be a coherent
element of the global Marketing Strategy 3. The product has to be clearly defined:
1. Differentiated Biosimilar, e.g. Biobetter 2. Low cost Biosimilar, e.g. improved manufacturing process
41 12.05.17
Biosimilar strategic alternatives
42 12.05.17
Biosimilar differentiation - Expanded product applciations, biobetters - Safer mor patient friendly delivery systems - Simplified dosing - Innovative services (e.g.mobile tracking)
Biosimilar cost-leadership - Innovative manufacturing, clinical, regulatory processes - market access maximizing efficiency - Discounting when necessary
vs
2.Target Price Fin vs Pol
Biosimilar P&R Strategy Factors
4512.05.17
1.Biosimilar Policies (P&R, Substitution)
3. QESUNC (Value, HTA)
4. Ref. Pricing (Therap, IRP)
5. MEA Hosps
7. Country Launch Sequence
6. Formularies
8. Payers Education Program
Differentiation vs Cost-Leadership
46
EU HTA requirements
§ For biosimilars HTAs are required in 13/29 countries § Mainly where therapeutic reference pricing is
applied and in indications where there is no reimbursment for the original
12.05.17 46
Ger, Ita, UK show high potential for biosimilars in RA
4712.05.17
§ Background Where are we coming from?
§ Basics: What are the key concepts?
§ Boundaries: What is happening in major markets?
§ Beyondness: Where are we heading to?
52
Overview
COUNTRY SPECIFICS
53
Comparing prices among countries is difficult and complex
§ Most price agreements of medicines are bound to confidentiality, therefore, what is generally public is the reference price
§ Contractual conditions are frequently rather complex and not in public domain
57
Country comparison – Clinical value
AUS CDN SWE UK FRA GER SWI Target patient population and indications
x x x x x x x
Efficacy x x x x x x x Effectiveness x x x x x x x Safety x x x x x x x Availability of treatment alternatives
x x x x x x x
Severity of disease x x x x x x x
58
Country comparison – System value
AUS CDN SWE UK FRA GER SWI Cost-effectiveness x x x x x x x Budget impact x x x x x x Direct costs x x x x x x x Indirect costs x x x
58
59
Country comparison – Patient value
AUS CDN SWE UK FRA GER SWI Quality of life x x x x x x x
59
60
Country comparison – Societal value
AUS CDN SWE UK FRA GER SWI Productivity loss x x x Caregiver burden
Country comparison – Price determination methods
AUS CDN SWE UK FRA GER SWI • REA • Cost-
Effective-ness
• Negotia- tion
• REA • Cost-
Effective-ness
• APV • Negotia-
tion
• REA • Cost-
Effective- ness
• Negotia- tion
• REA • Cost-
Effective- ness
• Negotia- tion
• REA • Cost-
Effectiv-ness
• Negotia- tion
• REA • (Cost-
Effective-ness)
• Fixprice system
• Negotia-tion
• REA • Comparative
Effectiveness
• APV • Negotiation
CASE FOLLOW-ON MEDICINAL PRODUCTS
63
66
Saving Potential Biosimilars
66
IGE S Ins t i t u t G mbH · www. i ges .deFriedrichstraße 180 · 10117 Berlin · Germany +49 30 230 80 90 · � +49 30 230 80 911
Results
Berlin, July 22nd 2011
Bertram Häussler, Ariane Höer, Christoph de Millas
Savings for European Health Care Systems through Biosimilars
Study
67
§ Expected savings from substituting biosimilars for biologicals
§ 8 EU countries (Germany, France, United Kingdom, Italy, Poland, Romania, Sweden and Spain)
§ Between 2007 and 2020. § Limited to:
§ Erythropoetin § GCSF, for which biosimilars already exist § monoclonal antibodies
74
EU8: yearly savings through biosimilars (mabs)
75
EU8: Cumulative savings by launch of mabs (from launch of first mab biosimilar until 2020)
76
EU8: Expenditures for GCSF until 2020
77
EU8: Cumulative savings through GCSF biosimilars (until 2020)
EU8: Cumulative savings through EPO biosimilars (until 2020)
79
EU8: Cumulative savings through biosimilars (all compounds, until 2020)
80
81
EU27: Expenditures for biologicals until 2020
81
82
EU27: Cumulative savings by launch of biosimilars until 2020
83
Conclusions of IGES study
§ Considerable savings potential based on use of biosimilars.
§ EPO und filgrastim: compared to the base scenario, savings between 20% and 25% of the expenditures are possible.
§ High savings potential in MAB class thanks to biosimilars.
§ By 2020, savings of a maximum of € 11.3 billion (14.9%) can be realized via introduction of biosimilars for etanercept, rituximab and trastuzumab alone.
84
§ Background Where are we coming from?
§ Basics: What are the key concepts?
§ Boundaries: What is happening in major markets?
§ Beyondness: Where are we heading to?
84
Overview
88
What makes a product valuable ? Payers perspective
1. Unmet clinical need of high priority 2. Meaningful clinical differentiation 3. Clinical and other evidence that cannot
easily be “ignored” or “discredited” § regulatory label claims § head to head RCTs § hard endpoint outcomes § certainty of promised results
4. Manageable budget impact 5. Acceptable benefit-to-cost ratio
12.05.17 88
Perceived value: speed
90
Traditional versus adaptive licensing
90
Parallel worlds
93 Federal Register 17.9.2010
94
Find the balance in a system which is…
available affordable
96
Finally...
97
Questions?
Contacts
Thomas D. Szucs, MD MBA MPH LLM Professor of Medicine Institute of Pharmaceutical Medicine European Center of Pharmaceutical Medicine Klingelbergstrasse 61 CH-4056 Basel
T +41 61 207 19 50 F +41 61 207 19 48 E [email protected] W www.ecpm.ch
98