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Reimbursement Systems for

Pharmaceuticals in Europe

ISPOR 18th Annual European Congress


November 2015
Presenters

Åsa KORNFELD

• Åsa Kornfeld is a pricing, reimbursement and market access professional


with 20 years international experience in the life science industry. She is
Director, Pricing and Market Access at Creativ-Ceutical.
• She holds a MSc degree in Pharmaceutical and Healthcare products from the Victor Segalen
University in Bordeaux II and a BSc in chemistry from the University of Lund.
• Åsa initially worked on international projects in clinical research, observational studies and
health economics.
• She worked 10 years at Lundbeck, building their corporate pricing & market access department,
elaborating and implementing international pricing & market access strategies. She worked on
products at all stages in the product lifecycle and worked on the conception and implementation
of internal processes information systems and price databases.
• As a consultant Åsa has managed many international pricing, reimbursement and market access
projects for pharmaceuticals, medical devices. She has extensive therapeutic knowledge working
across multiple disease areas
• She has extensive knowledge of the European health care systems and hands-on experience of
negotiations with payers.
• Åsa is Swedish and speaks English, French and Swedish fluently.
2
Presenters

Mondher TOUMI
• Prof. Mondher Toumi is M.D. by training, M.Sc. in Biological Sciences and Ph.D. in Economic Sciences.
Mondher Toumi is Professor of Public Health at Aix-Marseille University.
• After working for 12 years as Research Manager in the laboratory of pharmacology at the University of
Marseille, he joined the Public Health Department in 1993. He worked from 1995 in the pharmaceutical
industry for 13 years.
• Mondher was appointed Global Vice President at Lundbeck A/S in charge of health economics, outcome research, pricing,
market access, epidemiology, risk management, governmental affairs and competitive intelligence.
• In 2008, he founded Creativ-Ceutical, an international consulting firm dedicated to support health industries and authorities in
strategic decision-making.
• In February 2009 he was appointed Professor at Lyon I University in the Department of Decision Sciences and Health Policies.
The same year, he was appointed Director of the Chair of Public Health and Market Access. He conducted the first European
University Diploma of Market Access (EMAUD) in Paris, France. Additionally, he recently created the Market Access Society to
promote research and scientific activities around market access, public health and medico-economic assessment. Since 2009, he
also chairs the Annual Market Access Day, a purely academic event sponsored by EMAUD that has become a reference event in
the area.
• Since September 2014, he joined the research unit EA3279 of the public health department, at Aix-Marseille University (France)
as Professor. Mondher Toumi is also visiting Professor at two famous Chinese universities: Shenyang Pharmaceutical University
and Beijing University (Third Hospital).
• In addition to contributing as a reviewer on several editorial boards, he is Chief Editor at an online Journal of Market Access and
Health Policy. Furthermore, he did two mandates as Co-Chair of the Research Review Committee of ISPOR in 2012 and 2013.
• He is a recognized expert in drug development and an authority on market access and risk management. He has more than 200
scientific publications and oral communications, and has contributed to several books. He has just finished a book on Market
Access to become soon available.

3
Course Learning
Objectives
1. To provide an overview of the European reimbursement
policies

2. To identify and generate payers’ evidence requirements

3. To understand the strategic considerations for a


successful reimbursement application
Following 1. Understand the current context of reimbursement of
completion pharmaceuticals in Europe
of this 2. Understand the diversity of approaches of reimbursement
course, decisions across Europe
participants 3. Understand the requirements for successful payers coverage
4. Understand the importance to closely monitor the
will be able reimbursement decisions to anticipate the changes in
to decisions and requirements overtime
4
Part I. Reimbursement Concepts and
Definitions
Health as a Good
Healthcare Market Specificities

• We need health but we • Medicines are intended


buy a proxy: healthcare to produce health
• We can’t share health • When funding
• Health is not well medicines, payers intend
regulated by the to buy health production
market – There is uncertainty about
– Buyer the actual health
– Consumer produced by a medicine
– Payer – There is no uncertainty
about the cost of
medicine

7
Determinants of Health

• Clean fresh water and hygiene


• Life style
• Environment Pollution
• Quality of food
• Genetic
• Education
• Social services
• Primary care

8
Pharmaceutical Spending
in Europe
Widening the Gap?

Unsustainable gap between healthcare expenditure level on


one side and , affordability and demand on the other side

10
Current Situation

While the healthcare


budget is decreasing

The number of very


promising molecules in
development is increasing

11
Pharmaceutical Spending
Total, % of health Spending (2012)

Source: OECD; https://data.oecd.org/healthres/pharmaceutical-spending.htm 12


Pharmaceutical Spending
per Capita, 2013 vs 2018

13
Global Pharmaceutical
Spending and Growth

The Global Pharmaceutical Market is Expected to Grow to Nearly $1.3 Trillion


14
by 2018
Geographic Distribution of
Medicine Spending

North America Continues to Contribute the Largest Proportion to


Growth, but Asia is Gaining
15
Average Annual Growth in Per Capita Health
Spending, in Real Terms, 2001-2014

OECD; Organisation for Economic Co-operation and Development 16


Source: OECD Health Statistics 2015
Global Project Spending on
Medicines by 2016

Source:Vogler S, Zimmermann N, Habl C, Piessnegger J, Bucsics A. Discounts and rebates granted to public payers
for medicines in European countries. South Med Rev. 2012;5(1):38–46
17
Change in public spending on health as a share
of total public (government) spending,
2007–2011
1

0.8

0.6

0.4

0.2

-0.2

-0.4

-0.6
Sweden Germany Poland UK Italy Hungary France Spain

Source: Thomson S, Figueras J, Evetovits T, Jowett M,Mladovsky P, Maresso A et al., eds (2014). Economic crisis, health systems and health in Europe: impact and implications for policy.
18
Maidenhead: Open University Press.
Healthcare expenditure in 2013
(US$ per capita)
Sweden

Spain*

Germany

France % Public healthcare expenditure


% private healthcare expenditure
UK % out of pocket expenditure

Italy

Hungary

Poland

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Source: OECD data on healthcare 19


*Spain healthcare expenditure in 2011 expenditure in 2013
Resource Allocation under
Budget Constraint
is the Issue
Priority Setting in Traffic
(France)
• Saving one extra life from train traffic accident:
incremental cost of 80 000 €
• Saving one extra life from car traffic accident:
incremental cost of 800 €

Where should I put my money?

• Budgetary impact should be considered


• As well as the number of individuals affected

21
All is About Affordability

• US society accept to pay increase in life expectancy of


1.2 months $80,000
• By extrapolation survival of 1 year is valued at
$800,000
• 550,000 Americans die of cancer annually
• To extend their life by one year 440 billion would be
needed
• Even US will not afford it

22
The Oncology Tsunami

• 10 years ago, they were one blockbuster cancer drug; today


more than a dozen
• Pipeline is filled with hundreds of targeted cancer drugs
that will reach the market like a tsunami
• Targeted cancer drugs systematically expand indication

Investing in oncology means depriving patients suffering from


other diseases access to effective medicine and prevent
channeling public funding to other critical area that affect
population health (social, education, environment, etc)

23
The Reverse Blockbuster
Pyramides

BLOCKBUSTER
GP Product 1 00 000
1 000

Specialist
100 000 10 000
product
X =
Orphan 10 000 100 000

Ultra-orphan 5 000
200 000

Orphan drug is the other pending tsunami with a couple of thousand of designated
orphan drugs

24
EBM used by HTA Will NOT Help
Containing the Cost
Co
“Some fear that evidence based medicine will be hijacked by
purchasers and managers to cut the costs of health care. This
would not only be a misuse of evidence based medicine, but
suggests a fundamental misunderstanding of its financial
consequences. Doctors practicing evidence based medicine will
identify and apply the most efficacious interventions to
maximize the quality and quantity of life for individual patients;
this may raise rather than lower the cost of their care.”

(Sackett et al, BMJ, 1996)

25
Is Incremental Cost
Effectiveness Ratio The
Solution?

26
Could Cost Effectiveness
Resources Allocation?

Drug ICER ($ / QALY)

A 40,000

B 53,300

C 57,100

D 125,000

27
Could Cost Effectiveness Help
Allocating Resources?

Drug Health Gain (QALY) ICER ($ / QALY)

A 250 40,000

B 300 53,300

C 70 57,100

D 80 125,000
Need for Budget Impact?

Drug Health Gain (QALY) Cost (m$) ICER ($ / QALY)

A 250 10 40,000

B 300 16 53,300

C 70 4 57,100

D 80 10 125,000

29
Affordability
Drive the Decision

Drug Health Gain (QALY) Cost (m$) ICER ($ / QALY)

A 250 10 40,000

B 300 16 53,300

C 70 4 57,100

D 80 10 125,000

Assume your budget is 20 m$


30
From Cost-Effectiveness to
Budget Impact

Cost-
Effectiveness Budget Impact

31
From Price to Value and
Incremental Value
Innovation Pillars for
Pharmaceuticals
1. Prevent copy cat
– Patent
– Data protection

2. Value-based pricing
– Often unknown and source of multiple
confusion

33
Value-Based Pricing
“Value-Based Pricing or Value optimized pricing is a business
strategy. It sets selling prices on the perceived value to the
custumer, rather than on the actual cost of the product, the
market price, competitors prices, or the historical price.”

1
Consequences

How to link value perceived and value delivered?


2
Value depends on how customers appreciate it
3
Value appreciation may evolve over time

34
What is Value?

“Price
is what you pay
and value
is what you get”

Warren Edward Buffett is an American business magnate,


investor and philanthropist. He is the most successful
investor of the 20th century.

35
VBP With No CAP Price

Price E

C
B

Benefit 36
VBP with CAP Price, Over Costs
Charged by Private Insurance

Price Charged by private


CAP Price
E insurance

C
B

Benefit 37
VBP with CAP Price
Managed by NHS

Price
E CAP Price

D
C

A Benefit 38
There is No Solution and
No Wish to Find a Solution
• Today no country does a reasonable resource allocation
under budget constraint
• QALY is a wonderful universal measure instrument but
carry substantial limitations
• Excluding QALY means excluding the only way to allocate
fairly resource across heterogeneous conditions
• Relying primarily or exclusively on QALY is as wrong as
excluding QALY
• The solution is likely a multi-criteria decision, but we
still don’t know or don’t want to make it reproducible,
reliable and meaningful
• We operate under a deliberative process
39
Confusion Around
‘Paying for Innovation’
Payers buy health production measured through the proxy of
‘medicines’

• The payer does not buy ‘innovation’ for its own sake
• Innovation might not deliver improved outcomes
• Increased R&D cost of biologics might not translate into patient
benefits
• The innovative step is stimulated through national research policy
incentives and not through health insurance

What exactly constitutes ‘sufficient compensation’ for R&D, and whether each
country should contribute equally to R&D is heavily debated

40
Market Access Paradigm
Pharmaceutical Business
Environment
Drug Value Chain

Development Market Access Marketing Affiliates

Approvable Accessible Marketable Profitable

Market Access is becoming more and more a


crucial element
of the value chain

42
Market Access is Different
From Regulatory
Regulatory Market Access
Fulfil the requirements
Negotiate with payers
of market authorisation

Determine trade-offs between price


Meet criteria for efficacy,
and market access to achieve optimal
safety and quality
return on investment

Deal with certainty Deal with uncertainty

Transparent regulation Not transparent, fast changing rules

Global National to local

43
Market Access Is Different
From Marketing
Marketing Market Access
Perception based Evidence based

Audience not accountable Price sensitive audiences

Opinion leaders are Key Multiple stakeholders influence

Innocent until proved guilty Guilty until proved innocent

44
Market Access Is…

• Country and even local specific process


• Heterogeneous and complex area
• Multidisciplinary field
• Interface activity
• Which target price sensitive audience
• Driver of all business cases (critical)

45
From Approval to Funding

National
Payers
agency

Safety
Funding, Price &
Efficacy
Reimbursement
Quality

46
From Approval to Funding

National
HTA Payers
agency

Efficacy, effectiveness
Safety
& ICER Funding, Price &
Efficacy
Evaluation for funding Reimbursement
Quality
or formulary listing

47
From Approval to Funding

National
EMA HTA Payers
agency

Efficacy,
Safety Transpose
effectiveness & ICER Funding, Price &
Efficacy decisions at a
Record for funding Reimbursement
Quality national level
or formulary listing

48
Payers are Heterogeneous
Who are the Payers? (1/3)

Any price sensitive audience who impacts price,


reimbursement, access or adoption is a payer

• Could be directly or indirectly incentivised


• Could be decision maker or not
• Could be a prescriber or not
• Acting for his own organization or not

50
Who are the Payers? (2/3)
Member of
HTA
committees
Private health GPs in UK and
insurance Germany

Pharmacists Member of
in some
countries
Payers pricing
committees

Hospital
managers, Employers
Doctors

Patients
51
Who are the Payers? (3/3)

The Payer’s audience is:

With diverse
Growing fast Heterogeneous
perspectives

Approach and value proposition needs to


be adapted to the type of payer

52
What are the Payers Doing?

• Because affordability is the issue


• Because payers have limited resources
• Because the demand increases very fast
• Because the offer increases fast

Payers spend their time containing costs through increasingly


complex and irrational but sometimes (very) effective measures

53
Cost-Containment Measures

Budget cap Index brand


per product prices on
generic
Budget cap
External
for Bundled
reference
therapeutic payment
pricing
class

Price cut Restricted Restricted


distribution prescription

Price- Reduced Restricted to


volume reimbursem hospital use
agreement ent

54
General P&R Policies
Drug Reimbursement
Policies

Health
Technology • Conditional reimbursement on meeting specific clinical and/or
Assessment economic (cost-) effectiveness criteria
(HTA)

• All EU Member States have positive lists specifying which specific


Positive/
pharmaceuticals are reimbursed
negative
• A few countries have negative lists, excluding specific pharmaceuticals
lists
from reimbursement

56
Reimbursement Policies in EU
Countries
Systematic literature review identified policy measures related to pharmaceutical
reimbursement in EU Member States (including Croatia) and the EEA countries (Iceland,
Lichtenstein, Norway) from 1995-2013
Co-payment
Reimbursement rates
Reference price systems
Positive list
Reimbursement process
Pharmaco-economic evaluation
Generic substitution
Reimbursement review
Tendering
INN prescribing
Negative list
HTA
Discounts/ Rebates/ Clawback/ Price negotiations
Managed entry agreements
Value based pricing
Policies linked to rational use
Pharmaceutical budgets

0 20 40 60 80 100 120 140

57
Source: Vogler S, Zimmermann N, Habimana K, Study of the policy mix for the reimbursement of medicinal products,january 2014, Vienna
Price Regulation Policies
International • Applied in 26 EU Member States (except Sweden and UK)
reference • Benchmarks product prices in one country against prices of the same
pricing product in a selected basket of other countries

• 20 EU Member States set the price to be paid by the public payers


National by comparing prices of equivalent or similar products in a chemical,
reference pharmacological or therapeutic group
pricing • The patient pays the difference between the retail price and the
"reference price", in addition to any co-payment arrangement

Price updates • Regularly according to pricing regulations

58
Expenditure Control Policies
Discounts/ • Imposed upon manufacturers and pharmacists, such that they have to
rebates return a part of their revenue

Clawback • Applied to pharmacies, requiring them to pass a part of their turnover


to third party payers

• Requires manufacturers to pay back a share of their revenue, if a pre-


Payback specified budget ceiling for public pharmaceutical expenditures is
exceeded

Risk-sharing • Financial or performance-based schemes which trigger lower prices or


arrangements refunds from the manufactures if pre-agreed targets are not reached.

Price freezes • Prices are frozen or cut by law or as an outcome of a negotiated


and cuts agreement

Public • Currently, the Netherlands and Germany are well known examples for
tendering ample use of public tendering
59
A Matter of Culture Across
Countries
France

• Objective
– Secure all products gain access at the right price
• Process
– Driver: Public health relevance of benefit over the next
best alternative
– Method: Single double blind reference randomized clinical
trial
– Effect size
• Impact
– Gate-keeper for price and reimbursement

61
United Kingdom

• Objective
– Obtain rational allocation of resources
• Process
– Driver: Maximization of efficiency of the health care
output
– Method: Cost utility
– Threshold is £ 20,000/QALY
• Impact
– Recommendation for prescriber
– Formulary listing

62
Germany

• Objective
– Obtain savings on drug spending with no impact on
safety/efficacy
• Process
– Driver: Same effect same price (Jumbo group)
– Method:
– Meta-analysis
– Efficiency frontier
• Impact
– Reimbursement decreased

63
Other Countries Fall
in Between

• Sweden
– Between UK and Germany

• Canada
– Between France and UK

• Etc.

64
Overview and Comparison of
Reimbursement Processes of
Pharmaceuticals in a Selection of
European Markets
Content
• Health care funding
• Decision Makers
• Pricing &
Reimbursement
SE
processes
UK • Pricing &
Reimbursement drivers
• Key specificities and
trends
PL
DE • Cost-containment tools
FR
HU

ES
IT

66
FRANCE
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % GDP

2013 2013 2013


France: 10.9% GDP France: 8.6% GDP France: 1.7% GDP
OECD: 8.9% GDP OECD: 6.5% GDP OECD: 1.4% GDP

Healthcare expenditure in 2013 US$/capita


Public healthcare expenditure
Private healthcare expenditure
Out of pocket expenditure
0% 20% 40% 60% 80% 100%
Sources:
1. OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm 68
2. OECD Country Note: How does health spending in France compare? Accessed September 2015 at http://www.oecd.org/health/health-systems/Country-Note-FRANCE-
OECD-Health-Statistics-2015.pdf
Healthcare System
Funding
Public health insurance system Private healthcare insurance
divided in several schemes (~90% of the population)

General scheme (~90% of French


Universal health Mutual insurance association
population)
insurance (« Mutuelles ») (covering the
coverage (CMU) majority of the population)
Agricultural scheme created for low-
income people/
Scheme for non-salaried and non- unemployed Private insurance companies
farming, self-employed workers

Special schemes (e.g. sailors, Provident Institutions


railway employees, etc) (« Institution de prévoyance »)

• Public health care insurance funding : Mainly social contributions as proportion of


wages/salaries and taxes
• 3 main principles: Equal access to treatment for all citizens, quality of treatment,
solidarity
69
Decision Making Bodies
European Medicines Agency European Level
(EMA)/European Commission
Marketing authorization
National Agency for the
Safety of Medicine and National Level
Health Products (ANSM)

Transparency Committee
Health Technology French National Authority for (CT)

Opinion
Assessment Health (HAS)
Economic and Public Health
Assessment Committee
(CEESP)

National Union of Health


Reimbursement Rate Insurance Funds (UNCAM)

Decision
Economic Committee for
Pricing Healthcare Products (CEPS)

Final Decision Ministry of Health (MoH)

ANSM, Agence Nationale de Sécurité du Médicament et des Produits de Santé; HAS, Haute Autorité de Santé ; CEESP, Commission Evaluation Economique et de Santé
70
Publique ; CT, Commission de la Transparence; CEPS, Comité Economique des Produits de Santé ; UNCAM, Union Nationale des Caisses d’Assurance Maladie
P&R Process
Marketing Authorisation
EU Level: European Medicines Agency (EMA)/European Commission
Timelines National Level: National Agency for the Safety of Medicine and Health Products (ANSM)
(Months)**

Health Technology Assessment


French National Authority for Health (HAS)
~3.5

Transparency Committee (CT) Economic and Public Health Assessment Committee


Assessment of actual benefit (AB), improvement in actual (CEESP)
benefit (IAB), target population Health economic assessment

Pricing & Reimbursement Decision


~3-4.5

Economic Committee for Healthcare Products


National Union of Health Ministry of Health (MoH)
(CEPS)
Insurance Funds (UNCAM) Inclusion in hospital list and
Price negotiation with pharmaceutical
Reimbursement rate reimbursement list
company*

*Price notification for hospital drugs outside


**P&R decision timelines about 1-2 months for
~1-3

performance-based costing system (T2A)


hospital drugs Publication in the Official Journal

Reimbursement and pricing decisions are endorsed by the Ministry of Health and
published in the official journal
71
Medical Assessment by CT
Key Decision Drivers
• Disease severity
Actual benefit • Efficacy /safety
(AB) • Position in the therapeutic strategy Driver of
Service Médical • Impact on public health reimbursement rate
• Type of treatment (preventive, curative or
Rendu (SMR) symptomatic)

Improvement in • Assessment by indication vs. comparators or


actual benefit therapeutic strategy
(IAB) • Benefit mainly driven by the effect size of Driver of price
the incremental clinical efficacy benefit negotiation
Amélioration du • Safety and QoL considered if substantial
Service Médical burden
Rendu (ASMR)

• Quantitative estimation of
Target population prevalence/incidence in France of the Driver of price-volume
population who might benefit from the
product in claimed indications
agreements
72
Medical Assessment by CT
AB and IAB
5 levels of AB 5 levels of reimbursement
Major 100%* or 65%
Actual benefit (AB) Important 65%
Service Médical Rendu Moderate 30%
(SMR)
Weak 15%
Insufficient 0%
* Can be 100% for specific drugs, such as drugs in oncology or transplantation

IAB I Therapeutic breakthrough


Important improvement in terms of efficacy or
IAB II
safety
Improvement in
Modest improvement in terms of efficacy or
actual benefit (IAB) IAB III
safety
Amélioration du Service
Minor improvement in terms of efficacy or
Médical Rendu (ASMR) IAB IV
safety
IAB V No improvement
73
Health Economic
Assessment by CEESP
First Listing/Relisting of Drugs

Significant impact on health insurance budget


IAB claimed by the company: I, II, or III + (> €20 million)

Health Economic Assessment

• Data submitted by the manufacturer to CEESP and CEPS, along with the request for
inclusion/renewal of inclusion of the product on the reimbursable drugs formulary
• No publication of CEESP opinions until the end of price negotiation
 Expected to inform on the compliance of health economic evaluations with the HAS
guidelines, but not to inform on whether the intervention is cost-effective or not 74
Pricing & Reimbursement
per Channel
Channel Retail Hospital
Some retail medicines
used for hospital care

Listing of Not Reimbursed Retrocession Supplementary DRG


medicines reimbursed list*

Distribution Outpatient Inpatient

Reimburs- 0% 15%-100% 65-100% 100%


ement rate
Free Price negotiation with Ceiling price for reimbursement Free pricing
pricing CEPS based on: (price notification to CEPS) (Commercial
•IAB level discounts)
•IRP (Germany, Italy, Spain,
UK for IAB I-III)
•Competitors price
Price setting •Target population
•Budget impact
•Health economics evaluation
(for innovative drugs)
•French financial
context/situation of *« Liste en sus » for costly medicines
pharmaceutical industries funded on top of DRG tariff 75
Key Trends in
Market Access
Increasing request for robust evidence
•Importance of head-to-head trials to secure reimbursement
•Importance of transferability of clinical trial results
•Importance of complying with French clinical practice in clinical trials (one crucial
point will be the choice of comparator)
•Effect size requested for the acknowledgment of drug innovation has substantially
increased

Importance of real world data


• Basis of re-assessment of drug
• Conditions of use price/reimbursement
• Efficacy, safety and tolerability in real-life • Request of these data can lead to conditional
• Efficiency: to verify ICER in real life prices and/or reimbursement
• Impact on health care system: use of health care resources

Future of health economic assessment?


• Inefficiencies and confusions of the current
• Extension of evaluation to IAB IV and V?
process
• Merging of CT and CEESP?
• Setting of ICER threshold?
• New CEESP’s mission to broadly inform CEPS (review of forecast models and market access
agreements)?
76
Key Cost-Containment
Measures (1/2)
Rebates

• Pharmaco-therapeutic class rebates: For each therapeutic class, the CEPS attributes
an annual sales growth target; Manufacturers are ‘taxed’ if sales exceed the target
• Rebates at product level (frequently used by CEPS): price-volume agreements, cost
clauses for daily dosages, dosage clauses: If the clauses are exceeded, a price
reduction or rebates will be applied

Risk-sharing agreements

• Used in strict conditions, for innovative or potential innovative medicines

Price cuts & delisting

• Each year, the Social Security funding law provides price cuts to generate savings (E.g.
For 2014, the target was €1 billion savings from price cuts of patented drugs and
generics)
• Drugs delisted following CT re-assessment
77
Key Cost-Containment
Measures (2/2)
New regulations to contain pharmaceutical budgets to
deal with growing development of innovative medicines

• Social security funding bill for 2015: Proposal regarding hepatitis C therapies to
contain potential impact on healthcare budget of costly medicines (Solvadi®)
• To create a progressive contribution mechanism for hepatitis C drug if annual
turnover exceeds a threshold set by law

National reference pricing system

• CEPS is responsible for creating reference price groups (including generic and
reference medicines) where generic penetration rates are below fixed levels at set
intervals following generic market launch  Patient co-payment if product price is
over the reference price
• Financial incentives for physicians based on proportion of generic prescriptions
within five therapeutic classes (antibiotics, proton pump inhibitors, antidepressants,
statins, anti-hypertensives)
• Financial incentives for pharmacists to achieve substitution targetsFor 2015, this
target is fixed at 85%
78
GERMANY
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % GDP

2013 2013 2013


Germany: 11% GDP Germany: 8.4% GDP Germany: 1.5% GDP
OECD: 8.9% GDP OECD: 6.5% GDP OECD: 1.4% GDP

Healthcare expenditure in 2013 US$/capita


Public healthcare expenditure
Private healthcare expenditure
Out of pocket expenditure
0% 20% 40% 60% 80% 100%
Sources:
1. OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2. OECD Country Note: How does health spending in Germany compare? Accessed September 2015 at http://www.oecd.org/els/health-systems/Country-Note-GERMANY- 80
OECD-Health-Statistics-2015.pdf
Healthcare System
Funding
Healthcare Funding

Health insurance is compulsory since 1 January 2009 but patients are free to choose their
health insurance fund

Statutory health insurance funds Private Insurance, Private


Gesetzliche Krankenversicherung, GKV Krankenversicherung, PKV
• ~90% of the population • ~10% of the population
• More than 130 statutory health insurance • More than 50 private insurers
funds (Krankenkasse) • Only for civil servants, the self-employed
• All are obliged to charge the same and employees with a gross annual income
premium-recently set at 14.6% of gross exceeding a certain threshold (€53,550 in
annual income since January 2015 (from a 2014)
previous 15.5%)* • GKV members may opt for supplementary
• Premium is split evenly between employees private health insurance for pharmaceutical
(7.3%) and employers (7.3%) or other co-payments, dental treatment
and other services not covered by the GKV

3 main principles: Equal access, social


Based on new legislation (GKV-Finanzstruktur- und Qualitäts-
solidarity, self-administration Weiterentwicklungsgesetz, GKV-FQWG) published in the Federal Law Gazette
(Bundesgesetzblatt) on 24 July 2014 81
Decision Making Bodies
European Medicines Agency European Level
(EMA)/European Commission
Marketing authorization
Federal Institute for Drugs and
Medical Devices (BfArM)/ Paul- National Level
Ehrlich-Institut (PEI)

Health Technology

Opinion
Institute for Quality and
Assessment Efficiency in Healthcare (IQWiG)

Early Benefit Assessment Federal Joint Committee (G-BA)

Decision
Federal Association of Health
Pricing Insurance Funds (GKV-SV)

BfArM, Bundesinstitut für Arzneimittel und Medizinprodukte; G-BA, Gemeinsamer Bundesausschuss; IQWiG, Institut für Qualität und Wirtschaftlichkeit im
Gesundheitswesen; GKV-SV, Gesetzliche Krankenversicherung-Spitzenverband
82
Market Access Process
Overview

Automatic reimbursement following marketing autorisation


Reimbursement
(some exceptions: non-prescription drugs, lifestyle drugs)

• Early benefit assessment (EBA) for newly launched active


substance, new combination, new indication
• Free price up to 12 months after launch
• EBA dossier to be submitted by manufacturer to G-BA
Pricing
• From 2nd year onwards, reimbursement price is based on
a discount negotiation or reference pricing following EBA
• EBA exemptions and free pricing: non reimbursed drugs,
hospital-only medicines, generics

83
P&R Process for
Timelines
New Drugs, EBA
(Months)
Marketing Authorisation
EU Level: European Medicines Agency (EMA)/European Commission
National Level: Federal Institute for Drugs and Medical Devices (BfArM)// Paul-Ehrlich-Institut (PEI)
Early Benefit Assessment
3

Manufacturer submits dossier to Can commission


initiate AMNOG process preliminary EBA
G-BA IQWiG
Early Benefit Assessment Recommen- Advice on level of benefit
(decision & publication) dation
3

No additional
Additional benefit benefit Reference price
Not eligible possible or possibility to
Eligible for reference price create a reference group
for premium price
negotiation/arbitration

Manufacturer/GKV-SV
Manufacturer/GKV-SV
6

Reimbursement price
Reimbursement price negotiation Reference price
negotiation (Not exceeding the cost of comparative
Discount

(List price minus a negotiated therapy)


discount)

No
No
agreement X Arbitration board X agreement
3

(Neutral, manufacturer and GKV-SV)


Reimbursement price
negotiation
(applies retroactively from the first Manufacturer and GKV-SV can request a
day of the 13th month after product cost-benefit assessment prepared by the
launch) IQWiG if not satisfied with the arbitration
board’s decision; price discount may be 84
renegotiated
EBA: Methodology and
Decision Drivers (1/2)
Importance of robust comparison vs.
Drug benefit and drug additional benefit appropriate comparative therapy to
gain positive additional benefit
assessment

Drug benefit Drug additional Appropriate comparative therapy


• The patient-relevant benefit • Set out by the G-BA
therapeutic effect in • The quantitative • Can be a non-/pharmaceutical
regards to: or qualitative treatment or best supportive care
• Improved state of added benefit for • If pharmaceutical: must have a market
health patients compared authorisation in the therapeutic
• Shorter duration of to the appropriate indication
the disease comparative • Preferably already assessed by G-BA
• Increased survival therapy in • Should be appropriate therapy based
• Fewer side effects different on current medical knowledge
• Improved quality of subpopulations
life

85
EBA: Methodology and
Decision Drivers (2/2)
4 Outcome Quality of Extent of Effect
Categories Available Evidence Size
Additional benefit
Mortality Proof (High) Major assessment based on
available evidence,
Morbidity Considerable
Indication assessment of quality of
Health-related (Moderate)
Minor available evidence and extent
quality of life
Hint (Low)
of effect size at outcome level
Adverse events Not quantifiable

6 levels of additional benefit

Sustained and large improvement in outcome not previously achieved with the appropriate
1 Major comparator
2 Considerable Significant improvement in outcome not previously achieved with the appropriate comparator

3 Minor Moderate and not just small benefit not previously achieved with the appropriate comparator
There is evidence that additional benefit exists, however the scientific information is not sufficient
4 Not quantifiable to estimate the size of the additional benefit
5 None No additional benefit demonstrated
No additional
6 Inferior Less benefit than the appropriate comparator benefit 86
Specific Considerations
in EBA
Extent of benefit based on the 95% upper limit of the confidence
interval of the relative risk ratio
•Mortality:
• Major : UL CI95% < 0.85; Considerable : UL CI95% < 0.95; Minor : UL CI95% <1
•Morbidity/QoL
• Major : UL CI95%< 0.75; Considerable : UL CI95%< 0.90; Minor : UL CI95%< 1
•Adverse events or minor symptoms
• Major: Not possible; Considerable : UL CI95%< 0.80; Minor : UL CI95%< 0.90

Additional benefit rated at sub-population level


• Definition of sub-populations can differ between IQWiG/G-BA and manufacturer

Importance of head-to-head trials


• Indirect comparisons may be used if well justified and with robust methodology

Hard endpoints preferred/required vs surrogate endpoints


•Solid validation required for surrogate endpoints

Increased number of conditional decisions


• About 30%
• Time limited decisions between 1 to 5 years
87
Pricing
Channel Retail Hospital*

Non eligible for EBA Eligible for EBA Hospital-only drugs


EBA eligibility
Reimburs- 0% 100%
ement rate

Free pricing Reimbursement price: Free pricing


 No additional benefit : reference pricing (if
eligible)
 Additional benefit/No additional benefit (if
not eligible for reference pricing): price
Price setting negotiation with GKV-SV based on:
• EBA vs comparator
• IRP (15 EU countries)
• Prices of comparators
• Affected GKV-target population
• Budget impact

*Hospital drugs funded through DRG;


Costly medicines can be funded on 88
top of DRG tariff
Key Cost-Containment
Measures (1/2)
Price freeze and rebates
• Price freeze which holds drug prices at 2009 levels until 2017
• Since April 2014, mandatory discounts for reimbursed drugs outside the reference
price scheme (7% for patented drugs, 6% for off-patented drugs, and 6% for non-
prescription drugs )
• Mandatory discounts sets at 10% for generics and off-patent originals dispensed to
out-patients, except if priced 30% below reference price
• Increasing number of confidential voluntary rebate agreements with health insurance
funds

GKV Patient co-payment


• 10% co-payment on retail price of reimbursed drugs, at a minimum of €5 per pack
and a maximum of €10 (with exemptions)

National reference pricing system


• It might include reimbursed patented drugs, off-patent originators and generics
• New reference price group set by the G-BA for drugs with the identical or similar
substances or with comparable efficacy
• Patient co-payment if product price is higher than the reference price
89
Key Cost-Containment
Measures (2/2)
Increasing number of drugs subject to tenders

Prescribing controls

• G-BA can set binding prescribing conditions for new drugs (e.g. indication, dosage,
patient population)
• GKV-SV and manufacturers can also agree on prescribing conditions following price
negotiation

Generic incentives

• Physicians: prescribing controls


• Pharmacists: substitution rules
• Patients: co-payment if the patient opts to take originator instead of generic drug
90
ITALY
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % GDP

2013 2013 2013


Italy: 8.8% GDP Italy: 6.8% GDP Italy: 1.6% GDP
OECD: 8.9% GDP OECD: 6.5% GDP OECD: 1.4% GDP

Healthcare expenditure in 2013 US$/capita Public healthcare expenditure


Private healthcare expenditure

0% 20% 40% 60% 80% 100% Out of pocket expenditure


Sources:
1. OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2. OECD Country Note: How does health spending in Italy compare? Accessed September 2015 at http://www.oecd.org/els/health-systems/Country-Note-ITALY-OECD-Health- 92
Statistics-2015.pdf
Healthcare System
Funding
Central government responsible for healthcare policy
• Controls the distribution of tax revenue for publicly financed health
care
• Provides funds to regions unable to raise sufficient resources

Regions responsible for healthcare provision and funding


National Health • 19 regions and 2 autonomous provinces
Service (Servizio • Responsible for healthcare resource allocation and budget planning,
Sanitario Nazionale, healthcare service planning, health technology assesssment
SSN) • May raise taxes or implement co-payments in order to supplement
funding allocations

• National Health Service funding : general taxation at


national/regional level
• 2 main principles: universal and equal access to healthcare
• Decentralized system

Private Insurance (~5% of the population)


93
Decision Making Bodies
European Medicines
Agency (EMA)/European European Level
Commission
Marketing authorization
Italian Medicines Agency National Level
(AIFA)

Central Technical-Scientific
Commission (CTS)

Decision
Italian Medicines Agency Pricing & Reimbursement
Pricing & Reimbursement (AIFA) Committee (CPR)

AIFA Board of Directors

Opinion
Regional
Regional HTA Bodies

Drug regional access

Decision
Regional authorities
AIFA, Italiana del Farmaco; CTS, Commissione Tecnico Scientifica;
94
CPR, Comitato Prezzi e Rimborso
P&R Process
Marketing Authorisation

EU Level: European Medicines Agency (EMA)/European Commission


Timelines*
(Months) National Level: Italian Medicines Agency (AIFA)

Pricing & Reimbursement Decision


Italian Medicines Agency (AIFA)

Technical-Scientific Commission (CTS)


Clinical evaluation and advice on reimbursement classifications

Pricing & Reimbursement Committee (CPR)


Price negotiation with pharmaceutical company
6

AIFA Board of Directors


Ratification of pricing and reimbursement decision

Inclusion in National Pharmaceutical Formulary (PFN) and Publication in the Official Journal (Gazzetta
Ufficiale)

* In theory, the pricing and reimbursement process should


take 6 months, while in practice it often takes longer 95
CTS Reimbursement
Criteria
3 key drivers for inclusion on reimbursement list

Disease criteria Product profile Economic criteria

• Therapeutic value • Price of therapeutic alternatives


• Disease severity and burden
• Level of innovation • Budget impact
• Unmet needs
• Therapeutic alternatives

Reimbursement Reimbursement
Description
class rate
A 100% Essential pharmaceuticals
Prescription-only pharmaceuticals reimbursed only under specific
A with notes 100%
conditions
Prescription-only pharmaceuticals reimbursed only when used in
H 100%
hospitals under specialist supervision
C 0% Prescription-only pharmaceuticals which are not reimbursed
C bis 0% Over-the-counter pharmaceuticals (non-prescription drugs)
Temporary class for new drugs with marketing approval but not yet
C nn 0%
assessed by AIFA

Reimbursed drugs are included into the National Pharmaceutical Formulary


(Prontuario Farmaceutico Nazionale, PFN) 96
CPR Pricing Negotiation
Criteria
CTS assessment of degree of innovation & therapeutic value

Drug prices in other EU countries

Price of comparable existing therapies in Italy

Budget impact

Sales forecast

Cost-effectiveness
• Not a main driver in pricing decisions but can be provided by companies for innovative
products and be used for pricing negotiations

• For non-reimbursed medicines (Class C), prices are freely determined (with some limitations: price
declaration) by manufacturers and monitored by AIFA
• For hospital drugs, regional/local negotiations or tenders to set drug prices (max. price sets by AIFA)

97
Key Market Access
Specificities
Whole P&R process is not completely transparent
•No publication of assessments at national and few at regional level
•Uncertainty on impact of cost-effectiveness analyses in reimbursement decisions
•Level of innovation criteria unclear

Highly decentralised system


•Disparities in drug access and cost-containment policies across regions with disparities in
terms of:
•Hospital formulary listings
•Prescribing guidelines/incentives
•Tenders
•Patient co-payments: Regions are legally allowed to implement co-payment fees for retail
drugs (varying between regions)
•Market access hurdles for hospital drugs: regional dossier for inclusion of the drug in the
regional hospital formularies (process can take 6-7 months up to 50 months)
•Mandatory inclusion of drugs recognised as innovative by AIFA

Hospital drug funding


• DRG used by regions
• Costly drugs funded on top of DRG tariff and listed in file F (regional level decision) 98
98
Key Cost-Containment
Measures (1/2)
Increasing use of managed entry agreements by AIFA

• Set on case-by-case basis for innovative and expensive products to manage budget impact
and uncertainty about clinical benefit and/or cost-effectiveness
• Non-outcome-based (cost-sharing, budget cap, price volume agreements) or outcome-
based (risk-sharing and payment for performance)

Use of patient registries to closely monitor high-cost


medicines
• Some drugs monitored through specific AIFA patient registries to follow-up prescription
conditions, effectiveness, safety issues, managed entry agreements (about 170 registries)

Revenue cap and payback

•Retail drugs : 11.35% of total budgeted healthcare expenditure


•Spending above the cap is fully paid by the manufacturer
•Hospital drugs: 3.5% of total budgeted healthcare expenditure
•Spending above the cap is split between manufacturers (50%) and regions (50%)

99
Key Cost-Containment
Measures (2/2)
Mandatory discount and PFN review
• Annual 5% mandatory price discount on public prices of all drugs or payback system option
for equivalent savings (manufacturer choice) and 1% mandatory discount on retail drugs
• AIFA is reviewing the National Pharmaceutical Formulary (PFN) since Balduzzi Law
(189/2012): Expected to lead to price revision and reimbursement delisting

National reference pricing


• Reference pricing for off-patent originators and generics
• Reference price based on the cheapest-priced product (+ average prices in France,
Germany, Spain and the United Kingdom for new clusters)
• Off-patent drugs included in « transparency list » (reference price list)
• Physicians must prescribe drugs by INN
• Pharmacists must dispense the cheapest available version of the drug
• Patient co-payment for any excess over the reference price

Prescribing restrictions
• Prescribing restrictions set by the CTS issuing prescribing guidelines (or AIFA nota) specifying
the conditions under which certain products can be reimbursed
100
SPAIN
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % GDP

2012 2012 2012


Spain: 8.9% GDP Spain: 6.4% GDP Spain: 1.5% GDP
OECD: 8.9% GDP OECD: 6.4% GDP OECD: 1.5% GDP

Healthcare expenditure in 2011 US$/capita Public healthcare expenditure


Private healthcare expenditure

0% 20% 40% 60% 80% 100% Out of pocket expenditure


Sources:
1. OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2. OECD Health Statistics 2014 How does Spain compare? Accessed September 2015 at http://www.oecd.org/els/health-systems/Briefing-Note-SPAIN-2014.pdf
Healthcare System
Funding
Ministry of Health responsible for healthcare policy

Regions responsible for healthcare provision and funding


National Health • 17 autonomous communities
Service (Sistema • Responsible for healthcare resource allocation and budget planning,
Nacional de Salud, healthcare service planning, health technology assesssment
SNS)
• National Health Service funding : general taxation at national level
• 2 main principles: universal and equal access to healthcare
• Decentralized system

Private Insurance (~13% of the population and varying between regions)

103
Decision Making Bodies
European Medicines
Agency (EMA)/European European Level
Commission
Marketing authorization
Spanish Medicines
Agency (AEMPS) National Level

Central

Opinion
National health
Health Technology Technology Assessment
Assessment Agency (AETS)
General Subdirectorate of
Quality of Medicines and Health
Products (SGCMPS)

Decision
Ministry of Health
Pricing & Reimbursement (MSSSI) Interministerial Commission for
Pricing of Medicinal Products
(CIPM)

Opinion
Regional
Regional HTA Bodies
Drug regional access

Decision
Regional authorities

AEMPS, Agencia Española del Medicamento y Productos Sanitarios; CIPM, Comisión Interministerial de Precios de los Medicamentos ; MSSSI, Ministerio de Sanidad, Servicios
104
Sociales e Igualdad; SGCMPS, Subdirección General de Calidad de Medicamentos y Productos Sanitarios; AETS, Agencia de Evaluación de Tecnologías Sanitarias
P&R Process
Marketing Authorisation

EU Level: European Medicines Agency (EMA)/European Commission


Timelines*
(Months)
National Level: Spanish Medicines Agency (AEMPS)

Pricing & Reimbursement Decision


Ministry of Health (MSSSI)
National
health
General Subdirectorate of Quality of Medicines and Health Products (SGCMPS), part of the Directorate technology
General of the Basic Services Portfolio of the National Health System and Pharmacy (DGCBSF) assessment
Pricing & reimbursement recommendations agency
6

(AETS)
Support for
Interministerial Commission for Pricing of Medicinal Products (CIPM)
P&R
Final pricing decision
decisions

Final pricing and reimbursement decision

* In theory, the pricing and reimbursement process should


take 6 months, while in practice it often takes longer 105
SGCMPS Reimbursement
Criteria
3 key drivers for inclusion on reimbursement list

Disease criteria Product profile Economic criteria

• Therapeutic value • Price of therapeutic


• Disease severity and burden alternatives
• Level of innovation
• Unmet needs • Budget impact
• Therapeutic alternatives

Reimbursement conditions
• Negative list for products excluded from reimbursement
• Hospital drugs reimbursed at 100%
• Co-payment for retail drugs:
• Based on patient’s income for drugs indicated for non chronic/severe diseases:
o Workers: 0% co-payment for long-term unenmployed, 40%, 50% or 60% co-payment based on
income with no maximum co-payment
o Pensioners: 0% co-payment for underpriviledged pensioners, 10% or 60% co-payment based on
income with a maximum co-payment
• Fixed co-payment system for drugs indicated for chronic/severe diseases:
o 10% co-payment with a maximum co-payment per prescription
106
CIPM Pricing Negotiation
Criteria
Degree of therapeutic innovation

Drug prices in other EU countries

Price of comparable existing therapies in Spain

Budget impact

Total cost of the drug

Company profit

R&D activity and manufacturing investment in Spain

• Confidential rebates negotiated between CIPM and manufacturers


• For hospital drugs, maximum prices are set at national level and actual prices
negotiated between hospitals/groups of hospitals and manufacturers or determined
at central level through regional/national purchasing
107
Key Market Access
Specificities
Whole P&R process is not completely transparent

•No publication of assessments at national and few at regional level

Highly decentralised system

•Disparities in drug access and cost-containment policies across regions with disparities in
terms of:
•Formulary listings
•Prescribing guidelines/incentives
•Use of market access agreements
•Drug assessment performed by numerous healthcare department (7regional HTA agencies
and drud evaluation committees in each region)

Hospital drug funding

•Annual global funding system for hospitals by regional authorities


•There is no provision for Spanish hospitals to return to the regions for extra funding should
a new drug exceed their total budget 108
108
Key Trends in
Market Access
Health Economic Assessment

•To date, no formal health economic assessment BUT expected since Decree-Laws 9/2011
and 16/2012
•A new committee composed by health economics experts would be responsible for cost-
effectiveness and budget impact evaluation
•Its recommendations would support the CIPM pricing decisions
•At this time, no details on the implementation have been released

Market Access process harmonisation

•Therapeutic Positioning Reports (IPT) were introduced in 2013 to harmonise market


access process through a single national report
•In the long term, expected to facilitate market access by avoiding re-assessment at regional
or local level
•Reports developed by AEMPS and reviewed by 2 assigned regions (publicly available on
AEMPS website)
•Assessment of the added therapeutic value of new drugs in the current therapeutic
strategy
109
109
Key Cost-Containment
Measures (1/2)
Market access agreements
• National risk-sharing agreements for high-cost drugs in place since 2013

Prescribing control through visas


•Prior dispensing authorisation system is applied through prior inspection patient visas
(visados) to guarantee the appropriate use of medicines (e.g. drugs with specific restrictions
due to safety, drugs only reimbursed for specific indications, medicines having potential impact on
healthcare expenditures)
• Drugs having a visa can only be dispensed after verification of the prescription by the
regional inspection service

Mandatory price discounts


•Mandatory price discounts to be applied on the public prices of retail and hospital drugs
shared between manufacturers, wholesalers and pharmacists at a defined level
•7.5% discount on patented drugs (5% for manufacturers) and 4% discount on orphan drugs
•15% discount on products marketed for over 10 years (11 years if a new indication was
approved) (10% for manufacturers)

Payback system
•Payback based on percentage of quarterly turnover of reimbursed drugs (1.5% if turnover
<€3 million and 2% if turnover >€3 million)
110
Key Cost-Containment
Measures (2/2)
Price cuts & delisting

•In 2012, price cut of 20% for drugs to treat urinary incontinence
•In 2012, 417 drug presentations belonging to 19 drug classes were delisted from the public
funding (reimbursable for specific chronic conditions)

National reference pricing

•Reference pricing for off-patent originators and generics


•Cheapest price list based on the cheapest-priced generic
•Physicians must prescribe drugs by INN, except for continuing treatment for chronic
patients or if there is no generic available
•Pharmacists must dispense the cheapest available version of the drug
•No reimbursement of drugs priced above reference price

Patient co-payment changes

•In 2012, co-payment rate for the working population has been based on annual incomes
with no maximum threshold, and has been extended to pensioners
111
United Kingdom
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % GDP

2013 2013 2009


UK: 8.5% GDP UK: 7.3% GDP UK: 1% GDP3
OECD: 8.9% GDP OECD: 6.5% GDP OECD: 1.4 % GDP

Healthcare expenditure in 2013 US$/capita Public healthcare expenditure


Private healthcare expenditure

0% 20% 40% 60% 80% 100% Out of pocket expenditure


Sources:
1.OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2.OECD Country Note: How does health spending in the United Kingdom compare? Accessed September 2015 at http://www.oecd.org/health/health-systems/Country-Note-UNITED%20KINGDOM-
OECD-Health-Statistics-2015.pdf 113
3.OECD Health at a Glance 2011 OECD Indicators: Pharmaceutical Expenditure. Accessed September 2015 at
http://www.oecdilibrary.org/docserver/download/8111101ec063.pdf?expires=1442566496&id=id&accname=guest&checksum=E3633A5D02F4402C504F936897BD28B2
Healthcare System
Funding
Central funding through central UK government

4 separate administrations: Regional authorities responsible for


healthcare funding
NHS England NHS NHS NHS Northern
Wales Scotland Ireland

• 211 Clinical Commissioning Groups • Regional/local health boards


(CCGs) buying (commissioning) responsible for healthcare
National Health healthcare services including planned commissioning
Service (NHS) hospital care, urgent and emergency care,
rehabilitation care, community health
services, mental health and learning
disability services
• CCG boards are made up of GPs
from the local area and at least
one registered nurse and one
secondary care specialist doctor

• National Health Service funding : general taxation


• One core principle: universal access to healthcare

Supplementary private insurance (~11% of the population)

114
Decision Making Bodies
European Medicines Agency European Level
(EMA)/European Commission
Marketing authorization
Medicines and Healthcare
Products Regulatory National Level
Agency (MHRA)

National Institute for Health and


Care Excellence (NICE)
Health Technology

Opinion
Scottish Medicines Consortium
Assessment (SMC)

All Wales Medicines Strategy


Group (AWMSG)

Pricing UK Department of Health (DH)

Decision
Funding Regional authorities

115
P&R Process
Marketing Authorisation
EU Level: European Medicines Agency (EMA)/European Commission
National Level: Medicines and Healthcare Products Regulatory Agency (MHRA)

Pricing (Retail/Hospital*) Funding & Access

UK Department of Health (DoH) •Generally automatic full reimbursement of drugs upon


Acknowledgment of branded medicine launch notification marketing authorisation, however funding will depend
including the proposed NHS list price and SmPC on health technology assessment (HTA)
Central UK Government
Branded Drugs (including branded generics) Central funding

2 different schemes chosen by pharma companies


1. Pharmaceutical Price Regulation Scheme (PPRS) National HTA agencies assess the efficient use of NHS
resources
•Free pricing for new active substances and price
negotiation for other products NHS
NHS NHS
•Indirect profit control NHS Wales Northern
England Scotland
2. Statutory Price Regulation Scheme Ireland
•Statutory price limits on sales of prescription drugs NICE NICE/ SMC NICE***
AWMSG**
Generics
Regional authorities
•Free pricing (price to be below off-patent original price) Responsible for drugs funding
**AWMSG normally considers appraising a product if not/not yet appraised by NICE
*** Northern Ireland adapts as appropriate determinations by NICE to be endorsed by
*Actual prices negotiated between hospital and manufacturer, or via tenders Department of Health, Social Services and Public Safety (DHSSPS) of Northern Ireland
116
HTA Process
Cost-Effectiveness Evaluation
Funding Decisions by Regional Authorities based on Cost-Effectiveness
Assessment from HTA Agencies
• Comparison of healthcare interventions using Incremental Cost-Effectiveness Ratio (ICER)
which quantifies the cost per unit of benefit gained from using one treatment versus another
• Quality-Adjusted Life Years (QALYs) is the preferred outcome of benefit gained

ICER (Cost/QALY) is a key driver of the decision, but no formal threshold

ICER < £20,000 £20,000 < ICER < £30,000 ICER > £30,000
Recommendation likely to Recommendation not Recommendation likely to
be positive predictable be negative

• NICE adopts a more flexible approach for life-extending treatment at the end of life
 Short life expectancy<24 months
 Life extension with drugs>3 months vs current NHS treatment
 Small patient populations
• Drugs which meet end-of-life criteria can potentially be recommended at higher ICER
threshold (usually between £30,000 and £50,000)
117
NICE & SMC Process
NICE in England SMC in Scotland
Scope • Binding guidance in England and Wales • Binding guidance in Scotland

Assessments • Limited number of drugs identified though • All new medicines


specific criteria: • New formulations of existing medicines
• Patient clinical benefit, public health interest, • New indications for existing medicines
potential cost to the NHS
Remit • Excludes vaccines and HIV therapies • Excludes vaccines, generics, non-prescription-
only medicines, blood products, plasma
substitutes and diagnostic drugs
Methodology • Two different technology appraisal processes • Two-stage process to decision-making
1. Single-technology assessment (timelines: 6 1. New Drugs Committee (NDC) makes
months): Appraisal of a single treatment for a recommendations on basis of clinical and
single indication economic evidence submitted by the
2. Multiple-technology assessment (timelines: manufacturer
12 months): Appraisal of more than one 2. Deliberative process and final advice by
treatment, or one technology, for more than SMC committee
one indication
Impact A drug can either be recommended, recommended with restrictions, or not recommended
• If a drug received a positive appraisal , regional authorities are required to fund the drug
• If a drug received a negative appraisal (or not assessed), regional authorities are not required
to fund the drug
118
NICE & SMC
Decision Drivers

NICE: 4 main decision drivers SMC: 3 main decision drivers


1. Appropriateness and relevance of comparator 1. Clinical efficacy/safety
technologies 2. Cost-effectiveness analysis (ICER, cost/QALY)
2. Clinical effectiveness and health-related 3. Budget impact
factors
3. Cost-effectiveness analysis (ICER, cost/QALY)
4. Non-health factors: that are considered
socially valuable but not directly related to
health and not easily captured in a cost per
QALY analysis

119
Key Market Access
Specificities
Cancer Drugs Fund in England

•Managed by NHS England


•Additional funding source for cancer drugs established in 2010 and will run until the end of
March 2016 (funding of £560 million in 2014-16)
•Cancer drug fund is for additional drugs/indications that would not otherwise be funded
by the NHS (not recommended by NICE/not yet reviewed by NICE)

Orphan Drugs Fund in Scotland

•£21million fund launched in 2013 for one year to cover the cost of medicines not available
for routine prescription for rare diseases (not recommended by SMC) and extended until
2016

Hospital drug funding

•Hospital drugs in England are funded by the CCGs through Diagnosis-Related Group (DRG)
system called Payment by Results (PbR) (do not apply to Scotland, Wales or Northern
Ireland)
•Some high-cost medicines may be excluded from PbR and directly funded by the CCGs 120
120
Key Cost-Containment
Measures (1/2)
Payback

• PPRS Scheme members have to payback the Department of Health for expenditure on
branded medicines above allowed growth rate (0% in 2014 and 2015, 1.8% in 2016 and
2017, 1.9% in 2018)

Patient access scheme

• Manufacturers are able to submit a PAS to secure reimbursement in the NHS


• PAS can improve the cost-effectiveness of a medicine
•Financial-based: company offers confidential discount/rebate on the drug prices
•Outcome-based: Total or partial refund by the manufacturer applied for non-responder
patients
• In the recent years, PAS have become mostly financial-based

Prescribing controls

• Prescribing budgets for general practitioners


• Financial incentives for physicians to meet prescribing targets
121
Key Cost-Containment
Measures (2/2)
Cancer Drugs Fund delisting

• Delisting by NHS England of drugs eligible for funding from Cancer Drugs Fund budget
• In November 2015, 16 therapies will be delisted

Generic policies

• Physicians: INN prescribing is not mandatory but is strongly encouraged


• Pharmacists: Substitution authorised only if the prescription is written by INN

122
POLAND
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % of GDP

2013 2013 2013


Poland: 6.4% GDP Poland: 4.5% GDP Poland: 1.4% GDP
OECD: 8.9% GDP OECD: 6.5% GDP OECD: 1.4% GDP

Healthcare expenditure in 2013 US$/capita


Public healthcare expenditure
Private healthcare expenditure
124
Out of pocket expenditure
0% 20% 40% 60% 80% 100%
Sources:
1.OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2.OECD Health Statistics 2015 Country Note: Poland. Accessed September 2015 at http://www.oecd.org/els/health-systems/Country-Note-POLAND-OECD-Health-Statistics-2015.pdf
Healthcare System
Funding
Ministry of Health (Ministerstwo Zdrowia) responsible for healthcare
policy

National Health Fund (Narodowy Fundusz Zdrowia, NFZ) responsible for


healthcare system administration
• 16 regional branches
National Healthcare
System
• National Health Service funding : employee contributions,
central/regional government funding
• Compulsory system
• One main principle: universal coverage but relatively high co-payments
(underfunded system)

Supplementary Private • Increasing since recent years to cover procedures and treatments not
Insurance covered by NFZ plan

125
Decision Making Bodies
European Medicines Agency
European Level
(EMA)/European Commission

Marketing authorization Office for Registration of


Medicinal Products, Medical National Level
Devices and Biocidal Products
(URPL)

Agency for Health Technology


Health Technology Transparency Council

Opinion
Assessment and Tariff System
Assessment (AOTMiT)

Economic Committee
Reimbursement & Pricing (representatives of Ministry of
Health and NFZ)

Decision
Final Decision Ministry of Health

126
AOTMiT, Agencji Oceny Technologii Medycznych i Taryfikacji ; URPL, Urząd Rejestracji Produktów Leczniczych, Wyrobów Medycznych i Produktów Biobójczych
P&R Process
Marketing Authorisation
Agency for Health Technology Assessment and Tariff
EU Level: European Medicines Agency (EMA)/European System (AOTMiT)
Commission Assessment of pricing & reimbursement applications
when no reimbursed therapeutic alternatives
National Level: Office for Registration of Medicinal Products,
available in Poland
Medical Devices and Biocidal Products (URPL)
Timelines AOTMiT
(Months) Initial verification and methodological
assessment of application
Pricing & Reimbursement Decision
Ministry of Health
Transparency Council
Appraisal of the application
Opinion
Economic Committee ( representatives of Ministry of Health
AOTMiT President
and NFZ)
Reimbursement recommendation
Pricing negotiations & reimbursement recommendations
6

Ministry of Health
Final pricing & reimbursement decision

If positive decision, publication of P&R conditions


127
Reimbursement
Criteria
Multiple criteria
Public health
Recommendations Product profile Economic criteria
impact
• Economic Committee • Public healthcare • Effectiveness & • Cost (vs therapeutic
• AOTMiT priorities safety (importance alternatives)
• Organizational of transferability • Price competitiveness
implications of clinical trial • Budget impact*
Disease criteria
• Ethical and social data) • Cost-effectiveness (CUA
• Disease severity and aspects • Therapeutic preferred, or CEA
burden alternatives alternatively)

Reimbursement Levels
100% Proven efficacy in the treatment of malignant cancers, psychotic disorder, mental
impairment, developmental disorder or infectious disease that constitutes serious threat to
the population
100%+fixed co- Use >30 days + high monthly cost with 30% co-payment (exceeds 5% of minimum wage)
payment (PLN Use ≤30 days + high monthly cost with 50% co-payment (exceeds 30% of minimum wage)
3.20)
70% Use >30 days but do not meet criteria for 100% reimbursement
50% Use ≤30 days but do not meet criteria for 100% reimbursement
128
*Rationalization analysis (if budget impact demonstrates increase in reimbursement expenditure)
Pricing Criteria
Pricing decision drivers
The following criteria are considered:
• AOTMiT recommendations
• Drug prices and any price agreements in other EU/EFTA countries where the drug is reimbursed
• Treatment cost of the new drug versus therapies already available
• Budget impact
• Cost-effectiveness (cost/QALY or cost/life-year gained)

No reimbursed
therapeutic •Price negotiation between the manufacturer and the Economic Committee
alternatives
Reimbursed •One alternative: maximum ex-factory price≤75% ex-factory price of
therapeutic alternative
alternatives •More than one alternative: maximum ex-factory price≤reference price

• “Ex-officio” pricing procedure allow the Ministry of Health to set the drug price without the
manufacturer (notification and request for information about drug) for generally highly
expensive medicines under specific conditions
• Free prices for non-reimbursed drugs
• For hospital drugs, maximum prices set as defined above and actual prices negotiated with
hospitals 129
Key Market Access
Specificities (1/2)
Drug programmes

•To cover high-cost medicines not reimbursed through the standard reimbursement process
•Named-patient basis for specific conditions
•Application through the standard P&R process with additional requirements (proposed
programme, inclusion criteria, drug use within the programme and monitoring)
•List of programmes updated every 2 months

Chemotherapy programmes

•For chemotherapy drugs


•Similar application process than for drug programmes

List of guaranteed health benefits

•List of basic healthcare covered by NFZ


•Drugs (for hospital treatment, nursing services in long-term care, palliative and hospice
care etc.) used within guaranteed health benefits are not included in any of the other
schemes (may be subject to “ex-officio” pricing procedure)
130
Key Market Access
Specificities (2/2)
Multiple P&R decision criteria

•Outcome cannot easily be broken down into simple associations or easily predicted
•Decision more driven by budget impact than cost-effectiveness

Hospital drug funding

•Diagnosis-Related Group (DRG) system called JGB


•Separate funding for high-cost medicines (see different programmes on previous
slide)

Various reforms pending to amend the Reimbursement


Act (postponed till new election in October 2015)
•For example:
•New Health Insurance Authority to replace NFZ
•Abolition of AOTMiT
•Voluntary health insurance system to choose either public or private system
•Less frequent updates in reimbursement list
131
Key Cost-Containment
Measures
National reference pricing
• Active ingredient and therapeutic reference pricing system (ATC 4 and 5 – jumbo groups)
• Reference pricing for originators (patented/off-patent) and generics (within the same jumbo
group)
• Reference price set at the lowest daily treatment cost
• New reference price groups set by the Ministry of Health on the advice of the Economic
Committee
• Pharmacy mark-ups based on the reference price
• INN prescribing is not required (but permitted)
• Patient co-payment for any excess over the reference price

Managed entry agreements


• Negotiated between the manufacturer and Economic Committee
• Simple discount or price-volume agreements or outcome-based agreements
• It allows exemption from payback to NFZ if pharmaceutical budget ceiling is exceeded

Paybacks
• Payback shared by pharmaceutical companies if total annual prescription drug
reimbursement budget exceeds 17% of the total annual healthcare budget

Delistings & price cuts


• In 2015, more than 20 drugs were delisted and 70 drugs seen price reduction 132
HUNGARY
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % of GDP

2013 2013 2013


Hungary: 7.4% GDP Hungary: 4.8% GDP Hungary: 2.3% GDP
OECD: 8.9% GDP OECD: 6.5% GDP OECD: 1.4% GDP

Healthcare expenditure in 2013 US$/capita Public healthcare expenditure


Private healthcare expenditure
Out of pocket expenditure
0% 20% 40% 60% 80% 100%
Sources:
1.OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2.OECD Health Statistics 2015 How does Hungary compare? Accessed September 2015 at: http://www.oecd.org/els/health-systems/Country- 134
Note-HUNGARY-OECD-Health-Statistics-2015.pdf
Healthcare System
Funding
Ministry of Human Resources (Emberi Erőforrás Minisztérium, EMMI)
responsible for healthcare policy

National Health Insurance Fund Administration (Országos


Egészségbiztosítási Pénztár, OEP) responsible for healthcare system
National Healthcare administration
System

• National Health Service funding : employer/employee contributions,


general/local taxations
• One main principle: universal coverage

Private Insurance (~2% of population)

135
Decision Making Bodies
European Medicines Agency
European Level
(EMA)/European Commission

Marketing authorization
National Institute of Pharmacy National Level
and Nutrition (OGYÉI)

Health Economics Group


Health Technology

Opinion
OGYÉI Health Technology
Assessment Assessment Office (TÉI)
Medical Professionals
Group

Health Technology
Assessment Committee
National Health Insurance (TÉB)
Reimbursement & Pricing Fund (OEP)
Director-General of the

Decision
National Health
Insurance Fund (OEP)
Ministry of Human Resources Ministry of Human
Final Decision with consent from Ministry of Resources, Secretariat
Economy (NGM) for Health Care
136
NGM, Nemzetgazdasági Minisztérium; OEP , Országos Egészségbiztosítási Pénztár; OGYÉI, Országos Gyógyszerészeti és Élelmezés-egészségügyi Intézet;
TÉI , Technológia Értékelő Iroda; TÉB , Technológia Értékelő Bizottság
P&R Process
Marketing Authorisation

EU Level: European Medicines Agency (EMA)/European Commission


Timelines*
(Months) National Level: National Institute of Pharmacy and Nutrition (OGYÉI)
Health Technology Assessment
Pricing & Reimbursement Decision Office (TÉI)
Cost-effectiveness assessment
National Health Insurance Fund (OEP) (Department of
Reimbursement)
Medical Professionals Group
Assessment of drug’s clinical
Health Technology Assessment Committee (TÉB) effectiveness
6

Pricing & reimbursement recommendations


Opinion
TÉI Panel
Director-General of the National Health Insurance Fund (OEP) Review of submitted evidence and
Final reimbursement decision recommendation provided to OEP

Opinion
Health Economics Group
Ministry of Human Resources with consent from Ministry of Assessment of health economic
Economy (NGM) data
Final ratification of the decision for first-in-class products/drugs
approved in specific indications (issue of ministerial decree)
* Branded drugs: pricing and reimbursement
process takes 90 days for medicines in already
reimbursed ATC4-groups and without indication
Inclusion in OEP formulary limitation. For all other medicines, it takes much 137
longer because of ministry involvement
Reimbursement Process
& Categories
Pre-condition for reimbursement:
Drug must be reimbursed in at least 3 other EU countries
Standard reimbursement procedure Simplified reimbursement procedure
• New active substances, new presentation, • Bioequivalent products (mostly generics)
new indication, new combination • New strength, new pack size
• Price increase

Health technology assessment by TÉB based on: No Health technology assessment


• Disease severity & burden, unmet needs • OEP has all decision rights
• Clinical efficacy/effectiveness
• Cost-effectiveness analysis
• Budget impact

Reimbursement categories
Normative reimbursement: Special reimbursement categories:
• Unrestricted prescription rights for all physicians in • Drugs approved in specific indications (e.g. cancer,
all authorised indications diabetes, epilepsy, asthma) and prescribed by a
• 3 rates: 80%, 55% and 25% depending on drug specialist or on recommendation of a specialist:
effectiveness, disease severity/burden, public • 4 rates: 100%, 90%, 70%, 50% depending on
health impact drug effectiveness, disease severity/burden

Full reimbursement for low income patients (up to HUF 12,000 per month) 138
TÉI Cost-Effectiveness
Assessment
Methodology
• Payer perspective required
• CEA, CUA, CMA acceptable
• All health economics models should be adapted using Hungarian data
• No explicit QALY threshold
• Financially-driven evaluation
• No public hearing or publicly available reports

• Positive HTA is not sufficient for drug listing


• Negative HTA is normally used by OEP for non reimbursement decision

139
Key Market Access
Specificities
Centralised hospital drug procurement

•Centralised procurement for selected hospital drugs since 2012


•Management of this system under responsibility of the National Centre for Health Supplies
(ÁEEK)

“Beneficiary status” reimbursement category

•Introduced in 2014 for some drugs considered as “essential medicines” to avoid drug
withdrawal due to low prices/volumes
•Specific exemptions from administrative fees for marketing/distribution and from 20%
clawback on drug sales

Hospital drug funding

•Central tenders by OEP for high-value orphan and onco-hematology medicines


•Diagnosis-Related Group (DRG) system called HBCs for established agents 140
140
Pricing Criteria
Main criteria: International reference pricing (IRP)
Lowest ex-factory price of the same drug in the following country basket: 27 EU MS+
Iceland, Norway, Lichtenstein, Switzerland

• Informal negotiations
• Price-volume agreements and outcome-based agreements between manufacturers
and OEP required for new active substances (and some extensions of indications of
drugs included in special reimbursement categories) (see cost-containment
section)
• For hospital drugs, maximum prices cannot exceed the IRP price as defined above
• Free prices for non-reimbursed drugs

141
Key Cost-Containment
Measures (1/2)
National reference pricing
• Active ingredient and therapeutic reference pricing system (ATC 4 and 5)
• Reference pricing for originators (patented/off-patent) and generics/biosimilars
• Reference price set at the lowest daily treatment cost
• New reference price groups set by OEP on a quaterly basis
• Preferred pricing policy with specific rules to ensure preferred reimbursement conditions
for drugs priced at the reference price (lower patient co-payments)
•Reimbursement at the level of reference product for drugs priced up to 15%
•Reduced reimbursement rate of 15% for drugs priced between 15% and 100% (50% for
biologics) above the reference price
•No reimbursement for drugs priced more than 100% (50% for biologics) above the
reference price
• Financial incentives for pharmacists to dispense products from the « preferred » list
• Higher patient co-payments for drugs which are not on the « preferred » list
• Physicians must prescribe drugs by INN for statins only

Delistings
• If drugs in reference pricing systems are priced above defined threshold (see above)
• If ex-factory price of a drug exceed by more than 20% the average ex-factory price of the
same drug in 3 EU reference countries with the lowest price (only in theory, not applied)
142
Key Cost-Containment
Measures (2/2)
Reduction in the level of reimbursement
• Since 2012, dietary habits monitoring for patients treated with insulin analogues: potential
reduction in the level of reimbursement if no compliance with physician’s recommendations
(assessed by blood sugar level)

Price cuts
• In 2013, average price cut of 13.5% for more than 680 drugs
• In 2014, average price cut of 7% for more than 30 drugs

Paybacks
• Paybacks in case OEP’s drug budget excess
• 20% payback on reimbursed drugs sales (+10% for single-source substances reimbursed for more
than 6 years)
•Exemptions for drugs priced below the reference price and products with more than 50% price cuts, R&D
cost rebate

Managed entry agreements


•Price-volume agreements between OEP and the manufacturer: payback by the manufacturer in
case sales exceed the fixed volume
•Outcome-based agreements:
•Therapeutic outcome-based agreements: payback to OEP if real-life therapeutic effectiveness lower than
expected
•Agreements related to compliance: payback to OEP if patient adherence lower than expected
143
SWEDEN
Health & Pharmaceutical
Expenditure
Total health expenditure, % of GDP Public health expenditure, % of GDP Pharmaceutical expenditure, % GDP

2009
Sweden: 1.1% GDP
OECD: 1.4 % GDP

2013 2013
Sweden: 11% GDP Sweden: 9.2% GDP
OECD: 8.9% GDP OECD: 6.5% GDP

Healthcare expenditure in 2013 US$/capita Public healthcare expenditure


Private healthcare expenditure
Out of pocket expenditure
0% 20% 40% 60% 80% 100%
Sources:
1.OECD Data on Health Expenditure. Accessed September 2015 at http://www.oecd.org/els/health-systems/health-expenditure.htm
2.OECD Country Note: How does health spending in the Sweden compare? Accessed September 2015 at http://www.oecd.org/health/health-systems/Country- 145
Note-SWEDEN-OECD-Health-Statistics-2015.pdf
Healthcare System
Funding
Ministry of Health and Social Affairs (Socialdepartementet) responsible
for healthcare policy

County councils and municipalities responsible for healthcare system


administration and funding
• 20 county councils/290 municipalities
National Healthcare • Municipalities specifically responsible for funding and administration of
System long-term care for elderly and mentally ill

• Health Service funding : local taxation (80%) and national


gouvernement funding
• 2 main principles: universal and equal access to healthcare
• Decentralized system

• Around13% of employed people have additional private health


insurance in addition to the public health insurance
Private Insurance
• Private insurance ensures faster access to health care and funding of
private care

146
Decision Making Bodies

European Medicines Agency European Level


(EMA)/European Commission
Marketing authorization
Medical Products Agency (MPA) National Level
Läkemedelsverket

Health Technology

Decision
Dental and Pharmaceutical
Assessment & Benefits Agency (TLV)
Reimbursement Decisions

20 County councils

Opinion
Regional Access Pharmaceutical Committées

147
TLV,Tandvårds- och läkemedelsförmånsverk
P&R Process Retail drugs
Marketing Authorisation
EU Level: European Medicines Agency (EMA)/European Commission
National Level: Medical Products Agency (MPA)
Timelines
(Months)
SBU
- Swedish Agency for
Health Technology Assessment Health Technology
Assessment
Dental and Pharmaceutical Benefits Agency (TLV)
• Do not directly
Department for Value based Pricing Scientific committee influence P&R
Evaluation of the submission to be included in Can contribute to the evaluation with clinical decisions
the pharmaceutical benefit scheme expertise • Source of knowledge
for decision-making
Pharmaceutical Benefits Group for County Councils Company bodies in general
Requested to comment on the evaluation Possibility to comment (but not submit new • Evaluate medical
before decision data) if decision is not general reimbursement products without
3-6

manufacturers’
submission
Pricing & Reimbursement Decision
Dental and Pharmaceutical Benefits Agency (TLV)
Pharmaceutical Benefits Board
Decides if the pharmaceutical is to be included in the pharmaceutical benefit scheme, and if any
restrictions or conditions should be applied Pricing of
hospital drugs is
free
Publication of decision on TLV website
148
TLV Reimbursement
Criteria
The TLV’s Pharmaceutical Benefits Board meets once every month to make
decisions about inclusion of drugs in the pharmaceutical benefit scheme

Reimbursement decision drivers


Fundamental principles
The following criteria are considered:
• The cost-effectiveness principle - • Cost-effectiveness versus SoC
the cost of using a medicinal • Similar benefit and less expensive than SoC
product should be reasonable from • Need for alternative treatments
a medical, humanitarian and • Severity of the disease
socioeconomic perspective • Vulnerable patient group with high need
• The need and solidarity principle -
those with the most pressing Decision
medical needs should have more of
• General Reimbursement
the health care system's resources
• Reimbursement with restrictions
than other patient groups
• Specific indication or population or duration
• The human value principle - the
• Reimbursement with conditions
health care system should respect • Manufacturer must take additional steps such as
the equal value of all human life submission of additional data, etc.
• No reimbursement

There are no price negotiations and the board does not suggest any price level
If the submission is rejected the company can resumbit with more data or lower price 149
Reimbursement System
• The annual spending for products included in the pharmaceutical benefit
scheme is limited for the patient
• During a 12 month period a patient can pay maximum 2200 SEK
• The level of co-payment decreases with increasing overall spending.

Cost up to 1100 SEK


The patient pays 100% of the cost

Cost of 1101 to 2100 SEK


The patient pays 50% of the cost

Cost of 2101 to 3900 SEK


The patient pays 25% of the cost

Cost of 3901 to 5400 SEK


The patient pays 10% of the cost

Cost of more than 5400 SEK


100% Reimbursed - Patient do not pay any co-payment
150
TLV Cost-Effectiveness
Assessment
TLV uses a value-based pricing system to decide to reimburse a drug

Requirements of pharmacoeconomic analysis according to TLV guidelines


(May 2003)

•Be performed from a societal perspective and should use Swedish data where
possible
•Cover the entire patient population for which reimbursement is being sought
•Use quality-adjusted life-years (QALY) as well as other metrics where appropriate
•Include data on benefits and cost versus the most appropriate comparator
(typically the moste widely used treatment in Sweden)
•Set out costs in terms of the drug’s proposed pharmacy sales price (AUP)

151
Future P&R Trends

Increased Collaboration between County Councils


• The creation of a Council for New Therapies (NT-råd) to supplement the existing new drug
therapies group
• The establishment of various sub-bodies within the NT-råd, including a new delegation to
apply “increased price pressure” on manufacturers
• Greater collaboration in terms of purchasing new medicines.
• Improved monitoring of new drugs

TLV Hospital Drug Assessments


• A pilot project until 2014, is to be made permanent
• TLV makes an heath-economic report on the drug, without decision or clear recommendation

152
Key Cost-Containment
Measures (1/2)
Generic policies
• Automatic substitution by pharmacies to the cheapest generic
• Patient out-of-pocket payment if the patient takes the branded medicine instead of the
generic
• Severe price competition, prices updated every month

Prescribing control
• Both TLV and County councils may impose restrictions and/or conditions on the use of
reimbursed drugs
• Prescribing budgets decentralised to individual healthcare centres
• County drug committees set prescribing targets and incentives to help ensure compliance
with the prescribing budget
• Electronic prescribing with support systems to assist physicians with their prescribing
decisions.
• Prescription monitoring and counties may send prescribing advisors

Non reimbursement of drugs for non serious disease


• TLV has de-reimbursed drugs for non-serious conditions and are less likely to reimburse new
drugs
153
Key Cost-Containment
Measures (2/2)
Patient co-payment

• Patient co-pay increased in 2012 and overall patient funding increased from 26 to 29%

Price cuts

• The prices of reimbursed off-patent brands subject to generic competition are cut by 65%
once the pharmacy purchase price of the lowest priced generic version is at least 70% below
the pre-patent expiry price of the off-patent original
• From 2015, certain older drugs (ie those that have held marketing authorisation for 15 years
or more but that have not had their prices cut under the ceiling price system [see above])
will be subject to a 7.5% price cuts

Market Access agreements

• The county councils can individually (or collectively via the New Drug Therapies group) enter
into discount agreements (eg risk-sharing, outcome guarantees, price-volume) with
manufacturers for high-cost hospital drugs
154
Cross-Country Comparison of
MA Pathways

SE

UK

DE PL

FR
HU

ES
IT

155
Formal vs Informal HTA
• A term and mission are set
• Transparent decision framework
process
Informal • Do not meet formal HTA criteria
Formal HTA • Meeting agenda available
HTA • No decision report is published
• Decisions are publicly available and
argued based on evidence submitted
by manufacturer

Formal Informal
France  
Germany  
Hungary*  
Italy   *Available decision
framework but not
Poland   transparent (no
publication of
Spain   assessments)

Sweden  
156
UK  
HTA Key Decision
Criteria
Absolute Relative Budget Cost-
therapeutic therapeutic impact effectiveness
value* value**
France     (innovative
products)
Germany    
Hungary    
Italy    
Poland    
Spain    
Sweden    
UK    
*Disease severity and burden, unmet needs, efficacy/safety of the product 157
**Incremental efficacy/safety versus available comparators
Pricing Rules for Reimbursed
Prescription Drugs
Free pricing International National reference Price Managed
reference pricing pricing negotiations entry
agreements
France   (main criteria for  (by active substance)  
innovative drugs)

Germany   (supportive criteria)  (By active substance,  (drugs eligible to 


• Drugs eligible to EBA: up pharmacological class, EBA with added
to 12 months after therapeutic class) benefit or no
launch reference price
• Drugs non eligible to EBA groups)

Hungary   (main criteria)  (By active substance,  (informal) 


pharmacological class,
therapeutic class)

Italy   (supportive criteria)  (by active substance)  

Poland   (supportive criteria)  (By active substance,  


pharmacological class,
therapeutic class)

Spain   (supportive criteria)  (by active substance)  

Sweden     (acceptance of 
rejection)

UK  (indirect profit control   (indirect profit 


through PPRS) control through 158
PPRS)
Managed Entry Agreements
Price-volume P4P individual CED Price discount Cap
agreement volume/dose
France     

Germany     

Hungary     

Italy     

Poland     

Spain     

Sweden     

UK     

159
Conclusion

Future Trends and Coming Challenges


Cost-contrained Environment

Unprecedent
increase
demand Affordability?

Decrease
funding

Need of
adoption of cost-containment measures, to reduce
expenditure growth for public health
Rapid Pace of Therapeutic
Innovation
Dramatic advances in technology

Advanced-Therapy Digitised medicine and big


Personalized Medicines
Medicinal Products data

• Gene therapy medicinal • Medicines tailored to the • Electronic-health-records


product specific characteristics of • Computer based medical
• Somatic cell therapy a patient (e.g. targeted decision
medicinal product therapies in oncology) • Lost of clinical power in
• Tissue engineered Rx decision
product

Easier analysis and utilization


Therapies that might substantially extend survival times, even of rapidly growing, large
cure chronic and/or severe diseases repositories of health
information

162
New Challenges in Drug
Development
Development of companion diagnostic

Genomics leading to slicing population and combining innovative expensive


treatment

Large benefit in small trials leading to early approval with limited evidence

• Uncertainty to be addressed post-launch

Shift of life-threatening disease to chronic diseases

• Validation of new surrogate endpoints to be considered

Fast development of available therapeutic alternatives, often making


obsolete the comparator used in the drug development program
• Indirect comparison becoming unavoidable

New types of clinical trials emerging , known as clinical trials using genomic
profiling
• Imply new methodologies such as integrated protocols (several phases in only one trial), use and
comparisons of several treatments without marketing authorisation, new endpoints and adaptive
designs 163
Targeted Therapies
• New developments involved highly targeted therapies
– Highly sliced population
– Benefits in small populations
– Request for crossover for ethical reasons

• Payers impact
– Considerable potential social value
– Low level of payers evidence
– Difficulty to quantify the benefit
Genomics is a Moving Target
Traditional view 1987 2004 2009 PI3KCA
AKT1
MAP2K1
MET
BRAF
EGFR HER2
Large-cell KRAS EML4-ALK

KRAS Unknown
Adenocar EGFR
cinoma
Squamous Unknown
Unknown

KRAS

Pao, Lancet 2011 Kris et al, JAMA 2014


Sources of Uncertainty
for Payers
Regulatory
Context
requirement

Prescribers
medical
?
Uncertainty

Patient
behaviour
practice

Study design
166
Shift in Payer Model
• The promised benefit must be evidenced in real life clinical
practice
• Outcomes must be shown in well designed real world studies
with limited or no intervention on the field or within databases
• The internal validity will be the door entry outcome
• The external validity will be the value acquired by payers

Clinical trials revolution will be challenging for payers


Recent international concept of “Adaptive Pathways” defined as a
prospective planned and flexible approach to licensing and coverage of
drugs and learning from real-world data

167
US-EU Closer Models

US model: broader coverage to allow most uninsured access to at least the


minimum healthcare services

• Multiple plans with a variety of coverage


• Depending on one’s revenue, various options are accessible

EU model: a multiple layer coverage according to the individuals’ private


complementary plan

• Access to uncovered products through the National Public Insurance via the private
insurance
• Depending on one’s revenue, various options are accessible
Key Trends and Future Perspectives
in P&R of Drugs in Europe
Greater pan-European coordination of HTA, and greater dialogue
between regulatory and HTA bodies

More pragmatic approaches to clinical trial design pre- and post-


launch

Increasing number of post-launch observational studies

• To meet outstanding regulator and HTA body requirements for relative effectiveness
evidence

New funding mechanisms for high costs medicines

More adaptive approach to pricing and reimbursement

Openings to biosimilar substitution

Increasing use of managed entry agreements


169
Innovation is threatening sustainability of health insurance
Traditional reimbursement setting rules have to change
ISPOR Global Health Care
Systems Road Map
ISPOR Global Health
Care Systems Road Map

172
http://www.ispor.org/HTARoadMaps/Default.asp
ISPOR Global Health
Care Systems Road Map-France

173
http://www.ispor.org/HTARoadMaps/France.asp
ISPOR Global Health
Care Systems Road Map-Germany

174
http://www.ispor.org/HTARoadMaps/Germany.asp
ISPOR Global Health
Care Systems Road Map-Hungary

175
http://www.ispor.org/HTARoadMaps/Hungary_Pharm.asp
ISPOR Global Health
Care Systems Road Map-Italy

176
http://www.ispor.org/HTARoadMaps/Italy.asp
ISPOR Global Health
Care Systems Road Map-Poland

177
http://www.ispor.org/HTARoadMaps/Poland.asp
ISPOR Global Health
Care Systems Road Map-Spain

178
http://www.ispor.org/HTARoadMaps/Spain.asp
ISPOR Global Health
Care Systems Road Map-Sweden

179
http://www.ispor.org/HTARoadMaps/Sweden.asp
ISPOR Global Health
Care Systems Road Map-UK

http://www.ispor.org/HTARoadMaps/Scotland.asp
http://www.ispor.org/HTARoadMaps/UK.asp 180
Thank you
Prof. Mondher Toumi, MD, PhD, MSc
Chairman Public Health & Market Access
+33 6 86 66 35 50

Åsa Kornfeld
Director, Pricing Reimbursement Market
Access, Creativ-Ceutical

www.emaud.org

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