Drug Reimbursement Regulation in 6 Peer Countries

Availability and Coverage of New Drugs in 6 High-Income Countries With Health Technology Assessment Bodies

This cohort study analyzes review times and approval outcomes of health technology assessments conducted in 6 high-income countries for novel therapeutic agents approved by the US Food and Drug Administration.

The role of insurance policies in the drug pricing landscape

INTRODUCTION

This overview paper aims at summarizing and analyzing the available literature on healthcare system organization and pricing policies of 11 European countries, comparing them to the Bulgarian pharmaceutical system. The countries were selected based on the reference basket for the pricing of pharmaceuticals in Bulgaria - Belgium, Greece, Spain, Italy, Latvia, Lithuania, Romania, Slovakia, Slovenia, and France.

AREAS COVERED

In the first part, we explore the health system models in the above-mentioned countries. In the second part we explore the pricing and reimbursement policies, and in the third part we analyze healthcare and pharmaceutical economic indicators, as well as life expectancy. The major focus of the review is the outpatient care.

EXPERT OPINION

In this work, we attempted to outline differences and similarities between the countries of interest. Despite the differences in their healthcare system organization, health and pharmaceutical expenditures constantly increased during the observed 2 decades. This increase in expenditures, however, has not had a significant impact on life-expectancy. Minor increases were observed - from 2 to 4 years total. No country had an expectancy above 85 years of age. It might be said that other factors are influencing the life expectancy to a greater extent.

Long-term effects of the global budget program and periodic price adjustment on antibacterial agents: A nationwide decomposition analysis between 2001 and 2016

BACKGROUND

Previous studies have shown that financial strategies are beneficial for improving the appropriate use of antibiotics within a limited period of time. Long-term effects have rarely been explored.

METHODS

This study evaluated the changes in expenditure and prescription patterns of antibacterial agents under the global budget (GB) program and drug price adjustment of a National Health Insurance scheme. Two structural methods, that is, the Laspeyres method and Fisher's Ideal Index decomposition method, were used to illustrate the impacts of price, volume, and drug change.

RESULTS

During the first 5 years of the GB program (ie, 2001-2006), the expenses of antibacterial agents increased by 54.1%, while the volume decreased by 11% to 21.3%. Therapeutic choice was the predominant cause of expense growth. In the second and third 5-year periods (ie, 2006-2011 and 2011-2016), the driving force of therapeutic choice gradually decreased. The antibacterial expense remained stable with a slight increase in prescription volume. Periodic price adjustment contributed steadily to cost containment, by 21.9% to 39.9%.

CONCLUSIONS

The GB program led to a remarkable increase in antibacterial expenses mainly attributed to therapeutic choice, especially in the early stage. In contrast, periodic price adjustment, provided steady benefits to pharmaceutical budget control without a noticeable increase in drug volume.

Defining 'therapeutic value' of medicines: a scoping review

OBJECTIVES

In recent years, discussions on the importance and scope of therapeutic value of new medicines have intensified, stimulated by the increase of prices and number of medicines entering the market. This study aims to perform a scoping review identifying factors contributing to the definition of the therapeutic value of medicines.

DESIGN

Scoping review.

DATA SOURCES

We searched the MEDLINE, CINAHL, Embase, Business Source Premier, EconLit, Regional Business News, Cochrane, Web of Science, Scope and Pool databases through December 2020 in English, German, French, Italian and Spanish.

ELIGIBILITY CRITERIA

Studies that included determinants for the definition of therapeutic value of medicines were included.

DATA EXTRACTION AND SYNTHESIS

Data were extracted using the mentioned data sources. Two reviewers independently screened and analysed the articles. Data were analysed from April 2021 to May 2022.

RESULTS

Of the 1883 studies screened, 51 were selected and the identified factors contributing to the definition of therapeutic value of medicines were classified in three categories: patient perspective, public health perspective and socioeconomic perspective. More than three-quarters of the included studies were published after 2014, with the majority of the studies focusing on either cancer disorders (14 of 51, 27.5%) or rare diseases (11 of 51, 21.6%). Frequently mentioned determinants for value were quality of life, therapeutic alternatives and side effects (all patient perspective), prevalence/incidence and clinical endpoints (all public health perspective), and costs (socioeconomic perspective).

CONCLUSIONS

Multiple determinants have been developed to define the therapeutic value of medicines, most of them focusing on cancer disorders and rare diseases. Considering the relevance of value of medicines to guide patients and physicians in decision-making as well as policymakers in resource allocation decisions, a development of evidence-based factors for the definition of therapeutic value of medicines is needed across all therapeutic areas.

Added Therapeutic Benefit of Top-Selling Brand-name Drugs in Medicare

Importance

The Inflation Reduction Act of 2022 authorizes Medicare to negotiate prices of top-selling drugs based on several factors, including therapeutic benefit compared with existing treatment options.

Objective

To determine the added therapeutic benefit of the 50 top-selling brand-name drugs in Medicare in 2020, as assessed by health technology assessment (HTA) organizations in Canada, France, and Germany.

Design, Setting, and Participants

In this cross-sectional study, publicly available therapeutic benefit ratings, US Food and Drug Administration documents, and the Medicare Part B and Part D prescription drug spending dashboards were used to determine the 50 top-selling single-source drugs used in Medicare in 2020 and to assess their added therapeutic benefit ratings through 2021.

Main Outcomes and Measures

Ratings from HTA bodies in Canada, France, and Germany were categorized as high (moderate or greater) or low (minor or no) added benefit. Each drug was rated based on its most favorable rating across countries, indications, subpopulations, and dosage forms. We compared the use and prerebate and postrebate (ie, net) Medicare spending between drugs with high vs low added benefit.

Results

Forty-nine drugs (98%) received an HTA rating by at least 1 country; 22 of 36 drugs (61%) received a low added benefit rating in Canada, 34 of 47 in France (72%), and 17 of 29 in Germany (59%). Across countries, 27 drugs (55%) had a low added therapeutic rating, accounting for $19.3 billion in annual estimated net spending, or 35% of Medicare net spending on the 50 top-selling single-source drugs and 11% of total Medicare net prescription drug spending in 2020. Compared with those with high added benefit, drugs with a low added therapeutic rating were used by more Medicare beneficiaries (median 387 149 vs 44 869) and had lower net spending per beneficiary (median $992 vs $32 287).

Conclusions and Relevance

Many top-selling Medicare drugs received low added benefit ratings by the national HTA organizations of Canada, France, and Germany. When negotiating prices for these drugs, Medicare should ensure they are not priced higher than reasonable therapeutic alternatives.

Medicaid Spending on Antiretrovirals From 2007 Through 2019

BACKGROUND

Antiretroviral (ARV) medications to treat human immunodeficiency virus (HIV) are a major contributor to Medicaid prescription drug spending. Despite having been used for over 3 decades, the first generic ARVs only recently became available, and many newer versions continue to be sold at high prices despite within-class competition. We estimated Medicaid spending on ARVs from 2007 through 2019.

METHODS

Using public Medicaid State Drug Utilization data, we identified trends in ARV spending and use from 2007 through 2019. We estimated net spending and average prices (spending per 30-day supply), accounting for statutory Medicaid rebates, including a 15%-23% base rebate plus additional rebates if a drug's price increased faster than inflation.

RESULTS

Among 48 ARVs, estimated net Medicaid spending from 2007 through 2019 was $25 billion for 17 million 30-day supplies. Annual use increased 118%, from 0.7 million 30-day supplies in 2007 to 1.6 million in 2019. During this time, estimated annual net spending increased 178%, from $1.1 billion to $3.0 billion, and average net prices increased 28%, from $1432 to $1830 per 30-day supply.

CONCLUSIONS

Annual Medicaid net spending on ARVs nearly tripled from 2007 to 2019, due to a combination of expanded use and rising prices. Medicaid did not extract expected benefits from its mandatory inflationary rebates because they were offset by use of newer, more expensive ARVs. To better control spending related to products with incremental innovation, the US government should be authorized to assure that launch prices for new drugs are aligned with the added benefit they offer over existing therapies.

Evolving Trends in Consumption of Direct Oral Anticoagulants in 65 Countries/Regions from 2008 to 2019

BACKGROUND

Direct oral anticoagulants (DOACs) have been increasingly utilised over warfarin. However, little is known about the relative consumption trends and costs of each DOAC at the global level.

METHODS

An ecological study using pharmaceutical sales data from IQVIA-MIDAS database was used to estimate consumption and cost of individual DOACs in 65 countries from 2008 to 2019. Consumption was estimated from the volume of DOACs sold, expressed as defined-daily-dose/1000-inhabitants/day (DDDTID). Compound and absolute annual growth rates were reported to quantify consumption changes over time. Costs were estimated as manufacturer price per day-of-therapy.

RESULTS

Global consumption of dabigatran, rivaroxaban, apixaban and edoxaban were 0.31, 1.05, 1.08 and 0.78 DDDTID, respectively, in Q2-2019, compared to 0.23, 0.54, 0.21 and 0.03 in Q2-2015, with highest consumption in Western Europe, Northern Europe and Oceania (18.2, 14.07, 13.14 DDDTID). In most countries (46/65, 70%), rivaroxaban contributed to most DOAC consumption (35%-100%), whereas dabigatran accounted for less than one-third. Edoxaban accounted for < 20% of the total in Northern America and Europe but contributed significant proportions in Japan (28.58%) and South Korea (31.37%). Longer median time-to-adoption from FDA approval for apixaban and edoxaban was observed. Costs of all DOACs were ~2-4 times higher in the USA, Puerto Rico and Thailand than in other countries.

CONCLUSIONS

Regional differences exist in consumption pattern and trends of individual DOACs over the past decade. Consumption of rivaroxaban and apixaban overtook dabigatran in most countries, whereas use of edoxaban remains limited except in East Asian countries. The USA pays higher prices for DOACs than other countries.

Simulated Medicare Drug Price Negotiation Under the Inflation Reduction Act of 2022

Importance

The Inflation Reduction Act of 2022 gives Medicare the authority to negotiate prices for certain prescription drugs. Which drugs will be selected and how prices will be negotiated remain unclear.

Objective

To simulate drug selection and the minimum savings that would have been achieved at statutory ceiling prices if Medicare drug price negotiation had been implemented from 2018 to 2020.

Design, Setting, and Participants

In this cross-sectional study, a policy simulation analysis of high-spending prescription drugs in Medicare Part B and Part D that were eligible for negotiation from January 2018 to December 2020 was performed from August 5 to November 20, 2022.

Exposures

Eligibility criteria for selection and discounts afforded by the statutory ceiling prices for negotiation.

Main Outcomes and Measures

The main outcomes were characteristics of drugs subject to negotiation and estimated Medicare savings from 2018 to 2020 that would have been achieved through spending at ceiling prices compared with existing net prices accounting for price concessions.

Results

Among the 40 selected drugs, 35 were primarily reimbursed through Medicare Part D and 5 through Part B and 10 were biologics. The most common therapeutic classes were endocrine (11), neurologic or psychiatric (5), pulmonary (4), rheumatologic or immunologic (4), and cardiovascular (4). Median time from US Food and Drug Administration approval to selection was 12 years (IQR, 10-14 years). Three drugs faced generic competition in the 2 years between selection and price negotiation. For the remaining 37 drugs, estimated net Medicare spending from 2018 to 2020 was $55.3 billion; spending at ceiling prices would have been reduced by an estimated $26.5 billion, which represented 5% of estimated net Medicare drug spending during those 3 years.

Conclusions and Relevance

In this cross-sectional study, simulating the drug price negotiation provisions in the Inflation Reduction Act of 2022 revealed important limitations, including strict selection criteria and the potential for drugs to become ineligible for negotiation during the 2 years between selection and prices taking effect. Despite these limitations, the policy still delivered substantial savings because ceiling prices offered steep discounts, in part, by erasing excess spending from price increases faster than inflation.

Getting the Price Right: Lessons for Medicare Price Negotiation from Peer Countries

The USA pays more for brand-name prescription drugs than any other country and new legislation from August 2022 gives Medicare the authority to directly negotiate certain drug prices with manufacturers starting in 2026-something the federal insurer had been prohibited from doing for its prior history. As the USA prepares for negotiations, we therefore surveyed how comparable industrialized countries use statutory requirements and procedures to negotiate brand-name drug prices. Guidance documents, regulations, government and academic publications were reviewed to identify the process of negotiating drug prices in peer countries that have been cited as potential examples for US payment reform: Australia, Canada, France, Germany, and the UK. Processes for arriving at a final price for a drug generally fall under three approaches: statutory rebates, setting a maximum price, and arbitration between national (public) insurers and manufacturers. Each approach to price negotiation could be adopted by Medicare and reduce spending even if Medicare does not adopt an exclusionary or closed formulary. Much remains to be determined about how the new price negotiation authority in the USA will be implemented, and policymakers can learn from comparator countries' statutory and regulatory strategies for price negotiation.

Appraising Drugs Based on Cost-effectiveness and Severity of Disease in Norwegian Drug Coverage Decisions

IMPORTANCE

Rising health care costs are a major health policy challenge globally. Norway has implemented a priority-setting system intended to balance cost-effectiveness and concerns for fair distribution, but little is known about this strategy and whether it works in practice.

OBJECTIVE

To present and evaluate a systematic drug appraisal method that uses the severity of disease to account for a fair distribution of health in cost-effectiveness analysis, forming the basis for price negotiations and coverage decisions.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional study uses confidential drug price information and publicly available data from health technology assessments and logistic and linear regression analyses to evaluate drug coverage decisions for the Norwegian specialized health care sector from 2014 to 2019.

MAIN OUTCOMES AND MEASURES

Drug coverage decisions by Norwegian authorities and incremental cost-effectiveness and severity of disease measured as absolute shortfall of quality adjusted life years.

RESULTS

Between 2014 and 2019, a total of 188 drugs were appraised, of which 113 were cancer drugs. The overall coverage rate was 73% (138 of 188). The number of annual appraisals increased during the observation period. Based on 83 chosen decisions, regression analysis showed that incremental cost-effectiveness ratios (ICER) based on negotiated drug prices, adjusted for severity-differentiated cost-effectiveness thresholds, was the variable that best projected drug approvals (OR, 0.60; 95% CI, 0.42-0.86). An increase in the ICER by $10 000 was associated with a reduction in the odds for approval of 40% for drugs assessed from 2018 to 2019.

CONCLUSIONS AND RELEVANCE

This cross-sectional study demonstrated how concerns for efficiency and fair distribution of health can be implemented systematically into drug appraisals and reimbursement decisions. New, expensive drugs are expected to escalate health care costs in the years to come, and it may be feasible to control costs by negotiating the prices of new drugs while appraising both their cost-effectiveness and how their health benefits are distributed.

A Proposal to Increase Value and Equity in the Development and Distribution of New Pharmaceuticals

The process of developing and marketing new pharmaceuticals in the United States is driven by a need to maximize returns to shareholders. This results all too often in the production of new medications that are expensive and of marginal value to patients and society. In line with our heightened awareness of the importance of social justice and public health—and in light of our government‘s alliance with private companies in bringing us COVID-19 vaccines—we need to reconsider how new pharmaceuticals are developed and distributed. Accordingly, we propose the creation of a new agency of the Food and Drug Administration (FDA) that would direct the whole process. This agency would fund the research and development of high-value medications, closely monitor the clinical studies of these new drugs, and manage their distribution at prices that are value-based, fair, and equitable.

Coverage of New Drugs in Medicare Part D

Policy Points Only a small minority of new drugs in "nonprotected" classes are widely covered by Part D plans nationwide in the year after US Food and Drug Administration (FDA) approval. Part D plans frequently apply utilization management restrictions such as prior authorizations to newly approved drugs in both protected and nonprotected classes. Drug price influences both formulary inclusion (in nonprotected classes) and coverage restrictions (in both protected and nonprotected classes), while other drug characteristics such as therapeutic benefits are not consistently associated with formulary design. Plans do not seem to favor the minority of drugs that are determined to offer added therapeutic benefit over existing alternatives.

CONTEXT

Medicare Part D is an outpatient prescription drug benefit for older Americans covering more than 46 million beneficiaries. Except for mandatory coverage for essentially all drugs in six protected classes, plans have substantial flexibility in how they design their formularies: which drugs are covered, which drugs are subject to restrictions, and what factors determine formulary placement. Our objective in this paper was to document the extent to which Part D plans limit coverage of newly approved drugs.

METHODS

We examined the formulary design of 4,582 Part D plans from 2014 through 2018 and measured (1) the decision to cover newly approved drugs in nonprotected classes, (2) use of utilization management tools in protected and nonprotected classes, and (3) the association between plan design and drug-level characteristics such as 30-day cost, therapeutic benefit, and the US Food and Drug Administration (FDA) expedited regulatory pathway.

FINDINGS

The FDA approved 109 new drugs predominantly used in outpatient settings between 2013 and 2017. Of these, 75 fell outside of the six protected drug classes. One-fifth of drugs in nonprotected classes (15 out of 75) were covered by more than half of plans during the first year after approval. Coverage was often conditional on utilization management strategies in both protected and nonprotected classes: only seven drugs (6%) were covered without prior authorization requirements in more than half of plans. Higher 30-day drug costs were associated with more widespread coverage in nonprotected classes: drugs that cost less than $150 for a 30-day course were covered by fewer than 20% of plans while those that cost more than $30,000 per 30 days were covered by more than 50% of plans. Plans were also more likely to implement utilization management tools on high-cost drugs in both protected and nonprotected classes. A higher proportion of plans implemented utilization management strategies on covered drugs with first-in-class status than drugs that were not first in class. Other drug characteristics, including availability of added therapeutic benefit and inclusion in FDA expedited regulatory approval, were not consistently associated with plan coverage or formulary restrictions.

CONCLUSIONS

Newly approved drugs are frequently subject to formulary exclusions and restrictions in Medicare Part D. Ensuring that formulary design in Part D is linked closely to the therapeutic value of newly approved drugs would improve patients' welfare.

Impact of reimbursement restriction on drug market sales under the National Health Insurance in Japan

AIM

National health care expenditures have been increasing each year, although the Japanese government has annually revised official drug prices. Managing the health care system to pay for expensive drugs is a major concern. The reimbursement restriction, which is the only way that a drug can be implemented before market entry in Japan, is crucial for managing expenditures. Therefore, this study identifies the impact of the reimbursement restriction on drug market sales in Japan, particularly in the situation where health technology assessment or other market access regulations are not applicable before market entry.

METHOD

All new drugs listed in fiscal years 2011-2019, along with their market size forecast, were identified using the materials from the Central Social Insurance Medical Council. We then calculated the percentage rate of reimbursement amounts based on the National Database of Health Insurance Claims relative to the predicted market size as a dependent variable. Using the reimbursement restriction for each drug as an independent variable, we performed descriptive and univariate analyses on each variable, followed by generalized linear mixed-effects model regression analysis.

RESULTS

We identified 211 drugs. The mean rates of drugs that required physicians, facilities, and patients to meet criteria for use were 30.85% (n = 2), 31.42% (n = 2), and 72.11% (n = 6), respectively. The mean rate of drugs that required diagnostic testing was 22.99% (n = 7), which was 3.7 times lower than the rate of drugs that did not require such testing (p < .05).

CONCLUSION

Our results indicate that the reimbursement restriction requiring diagnostic testing has a substantial impact on decreasing market sales. As the number of cases for each requirement is small, further study is needed to measure the impact of the other reimbursement restrictions.

Real-world Use of and Spending on New Oral Targeted Cancer Drugs in the US, 2011-2018

Importance

Launch prices of new cancer drugs in the US have substantially increased in recent years despite growing concerns about the quantity and quality of evidence supporting their approval by the US Food and Drug Administration (FDA).

Objective

To assess the use of and spending on new oral targeted cancer drugs among US residents with employer-sponsored insurance between 2011 and 2018, stratified by the strength of available evidence of benefit.

Design, Setting, and Participants

In this cross-sectional study, dispensing claims for oral targeted cancer drugs first approved by the FDA between January 1, 2011, and December 31, 2018, were analyzed. The number of patients with drugs dispensed and the total payment for all claims were aggregated by calendar year, and these outcomes were arrayed according to evidence underlying FDA approvals, including pivotal study design (availability of randomized clinical trials) and overall survival (OS) benefit, as documented in drug labels. This study was conducted from July 17, 2019, to July 23, 2021.

Main Outcomes and Measures

Annual and cumulative numbers of patients who had dispensing events, and annual and cumulative sums of payment for eligible drugs.

Results

Of 37 348 patients who had at least 1 of the 44 new oral targeted drugs dispensed between 2011 and 2018, 21 324 were men (57.1%); mean (SD) age was 64.1 (13.1) years. Most individuals (36 246 [97.0%]) received drugs for which evidence from randomized clinical trials existed; however, a growing share of patients received drugs without documented OS benefit during the study period: from 12.7% in 2011 to 58.8% in 2018. Cumulative spending on all sample drugs totaled $3.5 billion by the end of 2018, of which 96.8% was spent on drugs that were approved based on a pivotal randomized clinical trial. Cumulative spending on drugs without documented OS benefit ($1.8 billion [51.6%]) surpassed that on drugs with documented OS benefit ($1.7 billion [48.4%]) by the end of 2018.

Conclusions and Relevance

The findings of this cross-sectional study suggest that drugs used for treatment of cancer without documented OS benefits are adopted in the health system and account for substantial spending.

Competition From Biosimilars Drives Price Reductions For Biologics In The French Single-Payer Health System

France has a single-payer health insurance system that has the authority to impose pharmaceutical price reductions but relies on decentralized market negotiations between hospitals and manufacturers to establish prices for injected and infused biologics. Hospitals rely on biosimilars-less expensive but therapeutically equivalent variants of biologic medications-to stimulate competition. Price reductions negotiated by hospitals subsequently are adopted by the health insurance system, driving hospitals to negotiate a new round of discounts. This article measures 2004-20 trends in prices, price reductions, utilization, and market shares for three prominent biologics-Remicade, Enbrel, and Humira-and their eleven competing biosimilars. Biosimilar launches are associated with a sequence of price reductions for the reference biologic, for other biologics that treat similar conditions, and for all related biosimilars. The French experience provides lessons for the US in its efforts to use competition from biosimilars to drive price reductions and savings from biologics.

Evidence-based public policy making for medicines across countries: findings and implications for the future

Aim: Global expenditure on medicines is rising up to 6% per year driven by increasing prevalence of non-communicable diseases (NCDs) and new premium priced medicines for cancer, orphan diseases and other complex areas. This is difficult to sustain without reforms. Methods: Extensive narrative review of published papers and contextualizing the findings to provide future guidance. Results: New models are being introduced to improve the managed entry of new medicines including managed entry agreements, fair pricing approaches and monitoring prescribing against agreed guidance. Multiple measures have also successfully been introduced to improve the prescribing of established medicines. This includes encouraging greater prescribing of generics and biosimilars versus originators and patented medicines in a class to conserve resources without compromising care. In addition, reducing inappropriate antibiotic utilization. Typically, multiple measures are the most effective. Conclusion: Multiple measures will be needed to attain and retain universal healthcare.

Economics of Multiple Sclerosis Disease-Modifying Therapies in the USA

PURPOSE OF REVIEW

Multiple sclerosis (MS) is a prevalent and debilitating neuroinflammatory disease associated with a significant economic burden. Direct healthcare costs, which can average $70,000 a year, have risen rapidly over the last decade and are driven by the escalating cost of disease-modifying therapies (DMTs). Despite a growing number of DMTs, annual increases in price for most DMTs have commonly exceeded 10% over the last 15 years. The high cost of MS DMTs has created economic hardships for patients in terms of high out-of-pocket costs and insurance company-induced barriers. Although generic versions of glatiramer acetate and dimethyl fumarate have provided some lower cost options, the median annual price for branded products currently exceeds $90,000. The goal of this paper is to examine the economic landscape of MS DMTs in the USA.

RECENT FINDINGS

Recent economic analyses have provided new insights into the relative value of DMTs. Robust economic modeling studies suggest that costs per quality-adjusted life-year for most DMTs exceed commonly endorsed thresholds for what is considered a reasonable value in the USA. Because of higher efficacy and lower net costs, ocrelizumab and alemtuzumab are considered the best value. It is likely that generic versions of dimethyl fumarate and glatiramer acetate are also economically attractive. DMTs provide clinical benefit for patients with MS; however, their high cost can be a financial burden and impede access. High DMT prices are the principal reason why cost-effectiveness studies have indicated the economic value of most DMTs is questionable.