Current status and trends in performance-based risk-sharing arrangements between healthcare payers and medical product manufacturers

Design and Features of Pricing and Payment Schemes for Health Technologies: A Scoping Review and a Proposal for a Flexible Need-Driven Classification

BACKGROUND AND OBJECTIVE

In a context of growing clinical and financial uncertainty, pricing and payment schemes can act as possible solutions to the problems of affordability and access to health technologies. However, a comprehensive categorization of the available schemes to help decision makers tackle these challenges is lacking. This work aims at mapping existing types of pricing and payment schemes, and proposes a new approach for their classification, in order to help decision makers and other stakeholders select the best type of scheme to meet their needs.

METHODS

A Preferred Reporting Items for Systematic Reviews and Meta-Analyses extension for Scoping Reviews (PRISMA-ScR)-compliant scoping literature review was performed between 2010 and 2023 in three databases (PubMed, Web of Science, Scopus). The search strategy was developed around two groups of keywords, "pricing/payment schemes" and "scheme innovativeness". Eligible studies were those illustrating the unique design and features of each scheme type, which were extracted by two independent reviewers, and synthesized using a narrative format, including a detailed tabular description of each type of scheme.

RESULTS

A total of 70 unique types of pricing and payment schemes were identified. Around one third (33%) was only specified in principle, while two thirds (67%) had been implemented in practice. About half of the scheme types were proposed for drugs (34/70, 49%), and the vast majority were not designed for a specific therapeutic area (55/70, 79%). Each scheme type was categorized based on distinctive characteristics: the objectives, the outcome component, the timing/modalities of payments, and the evidence collection requirements.

CONCLUSIONS

Instead of trying to fit the retrieved schemes into a rigid taxonomy, we propose a new approach that suggests a flexible need-driven use of the available scheme types, driven primarily by the specific objective that one might have, and allows leveraging of the other key characteristics of each type of scheme.

Digital health technologies and innovation patterns in diabetes ecosystems

Background

The global rise in type-2 diabetes (T2D) has prompted the development of new digital technologies for diabetes management. However, despite the proliferation of digital health companies for T2D care, scaling their solutions remains a critical challenge. This study investigates the digital transformation of T2D ecosystems and seeks to identify key innovation patterns. We examine: (1) What are emerging organizations in digital diabetes ecosystems? (2) What are the value streams in digital T2D ecosystems? (3) Which innovation patterns are present in digital T2D ecosystems?

Methods

We conducted a literature review and market analysis to characterize organizations and value streams in T2D ecosystems, pre- and post-digital transformation. We used the e3-value methodology to visualize T2D ecosystems (RQ1 and RQ2) and conducted expert interviews to identify emerging innovation patterns in digital diabetes ecosystems (RQ3).

Results

Our analyses revealed the emergence of eight organization segments in digital diabetes ecosystems: real-world evidence analytics, healthcare management platforms, clinical decision support, diagnostic and monitoring, digital therapeutics, wellness, online community, and online pharmacy (RQ1). Visualizing the value streams among these organizations highlights the crucial importance of individual health data (RQ2). Furthermore, our analysis revealed four major innovation patterns within the digital diabetes ecosystem: open ecosystem strategies, outcome-based payment models, platformization, and user-centric software (RQ3).

Conclusions

Our findings illustrate the transition from traditional value chains in T2D care to platform-based and outcome-oriented models. These innovation patterns can inform strategic decisions for companies and healthcare providers, potentially helping anticipate new digital trends in diabetes care and across other chronic disease ecosystems.

Managed Entry Agreements for High-Cost, One-Off Potentially Curative Therapies: A Framework and Calculation Tool to Determine Their Suitability

OBJECTIVE

To construct a framework and calculation tool to compare the consequences of implementing different payment models for high-cost, one-off potentially curative therapies and enable decision making to ultimately enhance timely patient access to innovative health interventions.

METHODS

A framework outlining steps to determine potentially suitable payment models was developed. Based on the framework, a supporting calculation tool operationalised as an Excel-based model was constructed to quantify the associated costs for an average patient during the timeframe of the intended payment agreement, the total budget impact and associated benefits expressed in quality-adjusted life-years for the total expected lifetime of the patient population. To demonstrate the potential of the framework, three case studies were used: onasemnogene abeparvovec (Zolgensma®), brexucabtagene autoleucel (Tecartus®) and etranacogene dezaparvovec (Hemgenix®). A hypothetical case study was used to illustrate the output of the calculation tool.

RESULTS

Part 1 of the framework presents steps for matching a suitable reimbursement and payment model with the disease and treatment characteristics. The reimbursement and payment models are further specified in Part 2. Part 3 guides end users through the setup of a calculation tool with which the financial impact can be calculated of two payment models: a price discount model and an outcome-based spread payment model with a discount. Part 4 concerns the output of the calculation tool, showing how different payment models lead to different financial consequences under three assumptions of longer term effectiveness.

CONCLUSIONS

The presented framework provides decision makers with insight into the financial consequences of their chosen payment model under different assumptions. This can aid reimbursement negotiations by clarifying the optimal choice given a therapy's characteristics.

Evaluation of a risk-sharing agreement for atezolizumab treatment in patients with non-small cell lung cancer: a strategy to improve access in low-income countries

BACKGROUND

Using immune checkpoint inhibitors (IO) is a promising approach to maximize clinical benefits for patients with non-small cell lung cancer (NSCLC). PD-L1 expression serves as a predictive factor for treatment outcomes with IO. However, the high cost of this treatment creates significant barriers to access. Substantial evidence demonstrates the sustained clinical benefits experienced by patients who respond to immunotherapy. While IOs show promise in NSCLC treatment, their high cost poses access barriers.

AIM

This study focused on a prospective cost analysis conducted at a high-specialty health facility to assess the economic implications of implementing a risk-sharing agreement (RSA) for atezolizumab in NSCLC.

METHODS

The study included 30 patients with advanced NSCLC, with the pharmaceutical company funding the initial cycles. If patients responded, a government program covered costs until disease progression.

RESULTS

A median progression-free survival of 4.67 months across populations, rising to 9.4 months for responders. The 2-year overall survival rate for the response group was 64%, significantly higher than for non-response. Without an RSA, a total treatment cost of $881 859.36 ($29 395.31/patient) was reported, compared to $530 467.12 ($17 682.24/patient) with an RSA, representing a 40% cost reduction. In responders, the average cost per year of life per patient dropped by 22%. Risk-sharing, assessed through non-parametric tests, showed a statistically significant difference in pharmacological costs (P < .001).

CONCLUSION

Implementing RSAs can optimize resource allocation, making IO treatment more accessible, especially in low-income countries.

Escalating costs of innovative medicines: perspective and proposals

Public healthcare systems are challenged by the soaring costs of medications that require increasing resources, often at the expense of other investments. The increasing pharmaceutical budget poses a threat to the allocation of funds for essential preventive and primary healthcare services while also raising concerns about equitable access, particularly in models where patients bear part of the costs out of their own pockets. Proposals on how to ensure ongoing and long-term accessibility, efficiency, and financial stability are required. The escalating costs of medicines may be explained in part by the mismatch between the traditional value-based pricing and reimbursement frameworks and the type of clinical development of targeted therapies and precision medicine in clinical practice. New appraisal methods and managed access strategies should be adapted to therapies targeting small populations and addressing increased uncertainty. Fair pricing strategies, transparent healthcare investments based on problems and outcomes, regulatory reforms, international cooperation, and critically examining the drug acquisition model are potential solutions. Transitioning from an industry-driven pricing approach to a health-driven payment model can help align the cost of treatments with actual health outcomes, establishing a foundation for a healthcare system that addresses immediate challenges and fosters long-term well-being. Acknowledging the lack of a universally applicable solution, the practical implementation of interventions requires a reframing of the pricing and access system and adaption to the targeted therapeutic approaches. Balancing innovation with financial sustainability necessitates a collaborative, adaptive, and transparent approach, as well as transitioning toward health-driven payment models, moving the focus from the cost of medications to the well-being of populations worldwide.

Mapping Payment and Pricing Schemes for Health Innovation: Protocol of a Scoping Literature Review

INTRODUCTION

Innovative pricing and payment/reimbursement schemes have been proposed as one part of the solution to the problem of patient access to new health technologies or to the uncertainty about their long-term effectiveness. As part of a Horizon Europe research project on health innovation next generation pricing and payment models (HI-PRIX), this protocol illustrates the conceptual and methodological steps related to a scoping review aiming at investigating nature and scope of pricing and payment/reimbursement schemes applied to, or proposed for, existing or new health technologies.

METHODS

A scoping review of literature will be performed according to the PRISMA guidelines for scoping reviews (PRISMA-ScR) guidelines. The search will be conducted in three scientific databases (i.e., PubMed, Web of Science, and Scopus), over a 2010-2023 timeframe. The search strategy is structured around two blocks of keywords, namely "pricing and payment/reimbursement schemes," and "innovativeness" (of the scheme type or scheme use). A simplified search will be replicated in the gray literature. Studies illustrating pricing and payment/reimbursement schemes with a sufficient level of details to explain their characteristics and functioning will be deemed eligible to be considered for data synthesis. Pricing and payment/reimbursement schemes will be classified according to several criteria, such as their purpose, nature, governance, data collection needs, and foreseen distribution of risk. The results will populate a publicly available online tool, the Pay-for-Innovation Observatory.

DISCUSSION

The findings of this review have the potential to offer a comprehensive toolkit with a variety of pricing and payment schemes to policymakers and manufacturers facing reimbursement and access decisions.

It Takes 2 to Tango. Setting Out the Conditions in Which Performance-Based Risk-Sharing Arrangements Work for Both Parties

OBJECTIVES

Faster regulatory approval processes often fail to achieve faster patient access. We seek an approach, using performance-based risk-sharing arrangements, to address uncertainty for payers regarding the relative effectiveness and value for money of products launched through accelerated approval schemes. One important reason for risk sharing is to resolve differences of opinion between innovators and payers about a technology's underlying value. To date, there has been no formal attempt to set out the circumstances in which risk sharing can address these differences.

METHODS

We use a value of information framework to understand what a performance-based risk-sharing arrangements can, in principle, add to a reimbursement scheme, separating payer perspectives on cost-effectiveness and the value of research from those of the innovator. We find 16 scenarios, developing 5 rules to analyze these 16 scenarios, identifying cases in which risk sharing adds value for both parties.

RESULTS

We find that risk sharing provides an improved solution in 9 out of 16 combinations of payer and innovator expectations about treatment outcome and the value of further research. Among our assumptions, who pays for research and scheme administration costs are key.

CONCLUSIONS

Steps should be undertaken to make risk sharing more practical, ensuring that payers consider it an option. This requires additional costs to the health system falling on the innovator in an efficient way that aligns incentives for product development for global markets. Health systems benefits are earlier patient access to cost-effective treatments and payers with higher confidence of not wasting money. Innovators get greater returns while conducting research.

Implementing outcomes-based risk-sharing agreements: an integrative review of applications in blood cancer in the UK and beyond

INTRODUCTION

Outcomes-based risk-sharing agreements (OBRSA) have been increasingly used worldwide to manage uncertainty in value assessments. This review aimed to summarize motivations, barriers, and facilitators to implementing OBRSAs with a specific focus on therapies for hematological cancer.

AREAS COVERED

An integrative review was conducted based on a scoping of existing reviews on the topic and reports published by UK NICE. Findings from 16 articles and 10 reports were summarized and categorized into three themes: applications in blood cancer drugs, motivations for adoption, and barriers and facilitators to implementation.

EXPERT OPINION

There was a dissociation between the theoretical basis for opting for OBRSAs, and reasons stated or inferred from practice. The administrative burden was considered a notable barrier to implementation, which affects not only payers and manufacturers but also healthcare providers. Effective stakeholder engagement and building mutual trust among key groups were identified as factors enabling successful implementation. The review raises essential considerations in implementing OBRSAs and implications for their future role, particularly for blood cancer drugs where uncertainty is rife. Carefully designed and managed schemes may remain an option for health systems to manage risks involved when funding high-cost treatments.

Clinical Impression of Severity Index for Parkinson's Disease and Its Association to Health-Related Quality of Life

Background

Clinical Impression of Severity Index for Parkinson's Disease (CISI-PD) is a simple tool that can easily be used in clinical practice. Few studies have investigated the relationship between health-related quality of life and the CISI-PD.

Objective

To analyze the association of CISI-PD scores with those of generic (EQ-5D-5L) and Parkinson's disease (PD) disease-specific (Parkinson's Disease Questionnaire-8 [PDQ-8]) health-related quality of life assessments.

Methods

Persons with idiopathic PD in the Swedish Parkinson's Disease registry with simultaneous registrations of CISI-PD and EQ-5D-5L and/or PDQ-8 were included. Correlations with EQ-5D dimensions were analyzed. The relationships between the CISI-PD, EQ-5D-5L, and PDQ-8 were estimated by linear mixed models with random intercept.

Results

In the Swedish Parkinson's Disease registry, 3511 registrations, among 2168 persons, fulfilled the inclusion criteria. The dimensions self-care, mobility, and usual activities correlated moderately with the CISI-PD (r s = 0.60, r s = 0.54, r s = 0.57). Weak correlations were found for anxiety/depression and pain/discomfort (r s = 0.39, r s = 0.29) (P values < 0.001). The fitted model included the CISI-PD, age, sex, and time since diagnosis. The CISI-PD had a statistically significant impact on the EQ-5D and PDQ-8 (P values < 0.001).

Conclusions

The CISI-PD provides a moderate correlation with the EQ-5D and could possibly be useful as a basis for defining health states in future health economic models and serving as outcomes in managed entry agreements. Nonetheless, the limitation of capturing nonmotor symptoms of the disease remains a shortcoming of clinical instruments, including the CISI-PD.

Healthcare Systems across Europe and the US: The Managed Entry Agreements Experience

This systematic study aims at analyzing the differences between the approach of the European healthcare systems to the pharmaceutical market and the American one. This paper highlights the opportunities and the limitations given by the application of managed entry agreements (MEAs) in European countries as opposed to the American market, which does not regulate pharmaceutical prices. Data were collected from the Organisation for Economic Co-operation and Development (OECD), the European Medicines Agency, and the national healthcare agencies of US and European countries. A literature review was undertaken in PubMed, Scopus, MEDLINE, and Google for a period ten years (2010-2019). The period 2020-2021 was considered to compare health expenditure before and after the SARS-CoV-2 pandemic. Scarce information from national agencies has been given in terms of MEAs related to the COVID-19 pandemic. The comparison between the United States approach and the European one shows the importance of a market access regulation to reduce the cost of therapies, increasing the efficiency of national healthcare systems and the advantages in terms of quality and accessibility to the final users: patients. Nevertheless, it seems that the golden age of MEAs for Europe was during the examined period. Except for Italy, countries will move to other forms of reimbursements to obtain higher benefits, reducing the costs of an inefficient implementation and outcomes in the medium term.

Value Insider Season 1 Episode 3: How Does Budget Impact and Affordability in Healthcare Work? (BI and Affordability) [Podcast]

How does budget impact and affordability in healthcare work? In this episode of the Value Insider podcast, host Mike Chambers speaks with Prof. Sean Sullivan about affordability and budget impact for the "payers" of healthcare interventions. Prof. Sullivan is Dean of the University of Washington School of Pharmacy. He is past president of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) and served as chair of the health technology assessment (HTA) committee of US Health Insurer Premera Blue Cross, was part of the US Governmental Medicare coverage evidence committee and led the ISPOR Task Force on Methods for Conducting and Reporting Budget Impact Assessments. Prof. Sullivan explains how budget impact and affordability are intertwined and how this plays a role in decisions in the US, but also the rest of the world.

Performance-based risk-sharing arrangements for devices and procedures in cardiac electrophysiology: an innovative perspective

There is an increasing pressure on demonstrating the value of medical interventions and medical technologies resulting in the proposal of new approaches for implementation in the daily practice of innovative treatments that might carry a substantial cost. While originally mainly adopted by pharmaceutical companies, in recent years medical technology companies have initiated novel value-based arrangements for using medical devices, in the form of 'outcomes-based contracts', 'performance-based contracts', or 'risk-sharing agreements'. These are all characterized by linking coverage, reimbursement, or payment for the innovative treatment to the attainment of pre-specified clinical outcomes. Risk-sharing agreements have been promoted also in the field of electrophysiology and offer the possibility to demonstrate the value of specific innovative technologies proposed in this rapidly advancing field, while relieving hospitals from taking on the whole financial risk themselves. Physicians deeply involved in the field of devices and technologies for arrhythmia management and invasive electrophysiology need to be prepared for involvement as stakeholders. This may imply engagement in the evaluation of risk-sharing agreements and specifically, in the process of assessment of technology performances or patient outcomes. Scientific Associations may have an important role in promoting the basis for value-based assessments, in promoting educational initiatives to help assess the determinants of the learning curve for innovative treatments, and in promoting large-scale registries for a precise assessment of patient outcomes and of specific technologies' performance.

Perks and Pitfalls of Performance-Linked Reimbursement for Novel Drugs: The Case of Sacubitril-Valsartan

BACKGROUND

Rising drug costs have increased interest in performance-linked reimbursement (PLR) contracts that tie payment to patient outcomes. PLR is theoretically attractive to payers interested in reducing the risk of overpaying for expensive drugs, to manufacturers working to improve early drug adoption, and to patients seeking improved access. Multiple PLR contracts were developed for sacubitril-valsartan. We evaluated how the characteristics of a PLR contract influence its performance.

METHODS

We used a published cost-effectiveness model of sacubitril-valsartan. We evaluated hypothetical PLR contracts that adjusted drug payment based on observed therapy effectiveness. Ideally, these contracts reduce the uncertainty around the value obtained with purchasing sacubitril-valsartan. By reducing the financial risk in covering an ineffective therapy, PLR incentivizes insurers to increase patient access. We measured the uncertainty in value as the SD of the incremental net monetary benefit (INMB), an estimate of therapy value incorporating costs and clinical benefits. We evaluated the change in INMB SD under a variety of different assumptions regarding contract design, therapy effectiveness, and population characteristics.

RESULTS

Over 2 years, sacubitril-valsartan led to 0.042 additional quality-adjusted life-years at an incremental cost of $4916. Using a willingness-to-pay of $150 000 per quality-adjusted life-year, this led to a mean INMB across simulations of $1416 (SD, $1720). A PLR contract that adjusted payment based on cardiovascular mortality reduced the INMB SD moderately by 20.7% while a contract based on all-cause mortality was more effective (INMB SD reduction of 27.3%). A contract based on heart failure hospitalization reduction was ineffective. PLR effectiveness increased with greater uncertainty regarding therapy effectiveness or in sicker cohorts (eg, New York Heart Association Class III/IV heart failure). Contracts required precise estimates of treatment effect in addition to trust or verifiability between manufacturers and payers concerning patient selection.

CONCLUSIONS

The development of accurate prospective estimates of treatment effectiveness using actual enrollee characteristics will be critical for successful PLR. If able to meet these requirements, PLRs could incentivize insurers to expand access to expensive treatments by reducing financial risk.

Performance-based risk-sharing arrangements for devices and diagnostics in the United States: a systematic review

BACKGROUND: Performance-based risksharing arrangements (PBRSAs) have continued to emerge and evolve over the last 2 decades. To date, most of the attention and available literature have focused on pharmaceuticals. OBJECTIVE: To assess the current status and trends regarding the use of PBRSAs for diagnostics and devices in the United States. METHODS: We reviewed publicly available PBRSAs for diagnostics and devices using the University of Washington Performance Based Risk Sharing Database. We augmented the review using PubMed, Google, and payer and industry websites. Key words and phrases such as outcomes-based, value-based, coverage with evidence development, performance-based, and risk-sharing were used in combination with device or diagnostic. To characterize arrangements in terms of product and market attributes, we extracted data for each product, including arrangement descriptions, arrangement type, year, therapeutic area, product manufacturer, payer, and product type. Arrangements were analyzed using descriptive statistics. RESULTS: Fifty-two arrangements were identified between the years 2001 and 2019, with 30 (57.7%) for devices and 22 (42.3%) for diagnostic tests. Among these, 23 (44.2%) were coverage with evidence development (CED), only in research; 17 (32.7%) were performance-linked reimbursement (PLR); and 12 (23.1%) were CED, only with research. The majority of arrangements for devices were developed in cardiology (12, 40%), endocrinology (4, 13.3%), and radiology (3, 10%). Most of arrangements for identified diagnostic tests were in oncology (17, 77.3%). Over time, there has been a trend towards increasing adoption of PLR and CED, only with research, especially since 2014. CONCLUSIONS: This is the first study to comprehensively review PBRSA arrangements for diagnostics and devices in the United States. Our findings demonstrated that there is substantial PBRSA activity for devices and diagnostics, and the pace of PBRSA adoption appears to be increasing in terms of frequency and variety. These arrangements have implications for managed care into the future as the health care system shifts towards value-based care and value-based pricing to contain cost for payers and ensure value in the patient populations. DISCLOSURES: No funding supported this study. The authors have nothing to disclose.

Managing the economic challenges in the treatment of heart failure

Background

Treatment of heart failure is complex and inherently challenging. Patients traverse multiple practice settings as inpatients and outpatients, often resulting in fragmented care. The Center for Medicare and Medicaid Services is implementing payment programs that reward delivery of high-quality, cost-effective care, and one of the newer programs, the Bundled Payment for Care Improvement Advanced program, attempts to improve the coordination of care across practices for a hospitalization episode and post-acute care. The quality and cost of care contribute to its value, but value may be defined in different ways by different entities.

Conclusions

The rapidly changing world of digital health may contribute to or detract from the quality and cost of care. Health systems, payers, and patients are all grappling with these issues, which were reviewed at a symposium at the Heart Failure Society of America conference in Philadelphia, Pennsylvania on September 14, 2019. This article constitutes the proceedings from that symposium.

Using the Delphi method to identify meaningful and feasible outcomes for pharmaceutical value-based contracting

In an effort to demonstrate measurable value of pharmaceuticals in the United States, many payers and drug manufacturers have entered into value-based purchasing contracts that link payment for prescription medications to patient outcomes, creating shared risk between the 2 entities. These agreements have emerged as part of a larger movement within the health care landscape to transition away from volume-based payment models and towards value-based designs that promote high-quality and affordable care. Key to the success of pharmaceutical value-based contracting is agreement on meaningful and measurable outcomes that reflect drug performance. Traditional value-based contracts are developed by pharmaceutical companies and payers and may not reflect values of other important stakeholders, such as patients, providers, and employers (when applicable). One approach to more effectively align the interests of all key stakeholders and to maximize the effect and transparency of value-based pharmaceutical contracts is to use the validated Delphi surveying technique, which can gather information and build stakeholder consensus on key elements before contract development. In this Viewpoints article, we describe our experience conducting Delphi studies in 5 disease contexts to inform pharmaceutical value-based contract development, including insights learned and practical considerations for real-world application. In addition, we outline advantages to using this validated consensus-building tool to solicit vital and underrepresented stakeholder input, foster transparency in the contract development process, and promote shared learning for future value-based initiatives. DISCLOSURES: No outside funding supported this project. All authors are or were employed by UPMC Health Plan at the time of this study and have no other disclosures to declare.

How Risky Is That Risk Sharing Agreement? Mean-Variance Tradeoffs and Unintended Consequences of Six Common Risk Sharing Agreements

Background. Pharmaceutical risk sharing agreements (RSAs) are commonly used to manage uncertainties in costs and/or clinical benefits when new drugs are added to a formulary. However, existing mathematical models of RSAs ignore the impact of RSAs on clinical and financial risk. Methods. We develop a model in which the number of patients, total drug consumption per patient, and incremental health benefits per patient are uncertain at the time of the introduction of a new drug. We use the model to evaluate the impact of six common RSAs on total drug costs and total net monetary benefit (NMB). Results. We show that, relative to not having an RSA in place, each RSA reduces expected total drug costs and increases expected total NMB. Each RSA also improves two measures of risk by reducing the probability that total drug costs exceed any threshold and reducing the probability of obtaining negative NMB. However, the effects on variance in both NMB and total drug costs are mixed. In some cases, relative to not having an RSA in place, implementing an RSA can increase variability in total drug costs or total NMB. We also show that, for some RSAs, when their parameters are adjusted so that they have the same impact on expected total drug cost, they can be rank-ordered in terms of their impact on variance in drug costs. Conclusions. Although all RSAs reduce expected total drug costs and increase expected total NMB, some RSAs may actually have the undesirable effect of increasing risk. Payers and formulary managers should be aware of these mean-variance tradeoffs and the potentially unintended results of RSAs when designing and negotiating RSAs.

Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

Background: The challenging market access of high-cost one-time curative therapies has inspired the development of alternative reimbursement structures, such as outcome-based spread payments, to mitigate their unaffordability and answer remaining uncertainties. This study aimed to provide a broad overview of barriers and possible opportunities for the practical implementation of outcome-based spread payments for the reimbursement of one-shot therapies in European healthcare systems. Methods: A systematic literature review was performed investigating published literature and publicly available documents to identify barriers and implementation opportunities for both spreading payments and for implementing outcome-based agreements. Data was analyzed via qualitative content analysis by extracting data with a reporting template. Results: A total of 1,503 publications were screened and 174 were included. Main identified barriers for the implementation of spread payments are reaching an agreement on financial terms while considering 12-months budget cycles and the possible violation of corresponding international accounting rules. Furthermore, outcome correction of payments is currently hindered by the need for additional data collection, the lack of clear governance structures and the resulting administrative burden and cost. The use of spread payments adjusted by population- or individual-level data collected within automated registries and overseen by a governance committee and external advisory board may alleviate several barriers and may support the reimbursement of highly innovative therapies. Conclusion: High-cost advanced therapy medicinal products pose a substantial affordability challenge on healthcare systems worldwide. Outcome-based spread payments may mitigate the initial budget impact and alleviate existing uncertainties; however, their effective implementation still faces several barriers and will be facilitated by realizing the required organizational changes.

Characterization and analysis of the basic elements of health payment mechanisms and their most frequent types

Introduction Healthcare systems are developed in imperfect scenarios, in which there are constant failures (uncertainty, information asymmetry, agency relationship problem, and supply-induced demand). These failures, based on the imperfection of the sector, determine the relationships and incentives between the actors. It is within this context that payment mechanisms regulate aspects of the system behavior and incentives, acting as instruments for the purchasing of health care from providers, mediated by health insurance on behalf of users. Objective To characterize the basic elements of most frequent payment mechanisms to help providers in their relationship with payers. Methods A review of the evidence was conducted in PubMed, Google, Google Scholar, and strategic snowball selection. Payment mechanisms consist of three classical microeconomics variables, fixed or variable: price, quantity, and expense. Time dimensions are used to analyze their attributes and effects. Different mechanisms emerge from the combination of these variables. Results Among the most used are: Fee-For-Service, Global Budget, Bundled Payments, Diagnosis-Related Groups, Per-capita, Performance Pay, and Risk-Sharing Agreements. A fourth has also gained importance: Financial Risk. Conclusions Payment mechanisms are essential to link health efforts with clinical practice. They make it possible to regulate relationships between insurers, providers, and users, which, depending on the architecture of the mechanism, can become beneficial or hinder the fulfillment of the objectives of the health system.

Paying For Value From Costly Medical Technologies: A Framework For Applying Value-Based Payment Reforms

Innovative medical products offer significant and potentially transformative impacts on health, but they create concerns about rising spending and whether this rise is translating into higher value. The result is increasing pressure to pay for therapies in a way that is tied to their value to stakeholders through improving outcomes, reducing disease complications, and addressing concerns about affordability. Policy responses include the growing application of health technology assessments based on available evidence to determine unit prices, as well as alternatives to volume-based payment that adjust product payments based on predictors or measures of value. Building on existing frameworks for value-based payment for health care providers, we developed an analogous framework for medical products, including drugs, devices, and diagnostic tools. We illustrate each of these types of alternative payment mechanisms and describe the conditions under which each may be useful. We discuss how the use of this framework can help track reforms, improve evidence, and advance policy analysis involving medical product payment.

Managed Entry Agreements: Policy Analysis From the European Perspective

BACKGROUND

Mounting pressures on the healthcare system, such as budget constraints and new, costly health technologies reaching the market, have pushed payers and manufacturers to engage in managed entry agreements (MEAs) to address uncertainty and facilitate market access.

OBJECTIVES

This study was conducted to illustrate the current landscape of MEAs in Europe and to analyze the main hurdles they face in implementation, providing a policy perspective.

METHODS

We conducted a health policy analysis based on a literature review and described the emergence, classification, current use, and implementation obstacles of MEAs in Europe.

RESULTS

Throughout Europe, uncertainty and high prices of health technologies have pushed stakeholders towards MEAs. Two main types of MEAs were applied heavily, finance-based agreements (FBAs) and performance-based agreements, including individual performance-based agreements and coverage with evidence development (CED). Service-based agreements have not been as heavily considered so far, yet are increasingly used. Many European countries are turning to CEDs to address uncertainty and facilitate market access while negotiating the pricing and reimbursement rates of products. Despite the interest in CEDs, European countries have moved toward FBAs due to the complexities and burdens associated with PBAs.

CONCLUSIONS

Ultimately, in Europe, with the exception of Italy, where MEAs have proven to be inefficient, MEAs are predominantly FBAs dedicated to addressing cost containment from payers' perspective and external reference pricing from the manufacturers' perspective. It has been speculated that MEAs will disappear in the medium-term as they are counterproductive for extending patient access and emergence of innovation. To inform value-based decision making and allow early access to innovative medicines, CEDs should be revisited.

Views of European Drug Development Stakeholders on Treatment Optimization and Its Potential for Use in Decision-Making

Background

The current drug development paradigm has been criticized for being too drug-centered and for not adequately focusing on the patients who will eventually be administered the therapeutic interventions it generates. The drug-driven nature of the present framework has led to the emergence of a research gap between the pre-approval development of anticancer medicines and their post-registration use in real-life clinical practice. This gap could potentially be bridged by transitioning toward a patient-centered paradigm that places a strong emphasis on treatment optimization, which strives to optimize the way health technologies are applied in a real-world environment. However, questions remain concerning the ideal features of treatment optimization studies and their acceptability among key stakeholders.

Objectives

The aim of this study was to explore the views of key stakeholders in the drug development process regarding the concept of treatment optimization.

Methods

Semi-structured interviews were conducted between December 2018 and May 2019 with 26 participants across ten EU Member States and six different stakeholder groups, including academic clinicians as well as representatives of patient organizations, regulatory authorities, health technology assessment agencies, payers, and industry.

Results

Based on the input of the experts interviewed, clarification was obtained regarding the optimal features of treatment optimization studies in terms of their conduct, funding, timing, design, and setting. Moreover, a number of opportunities and challenges of undertaking such trials were identified. Inter-stakeholder discussion during their design was seen as desirable. There was also broad support among the participants for regulatory measures to facilitate treatment optimization, although there was no agreement on the optimal scale and nature of these initiatives. Furthermore, the interviewees believed that the evidence strength of well-designed treatment optimization studies performed according to rigorous quality standards is greater than or at least equal to that of classical clinical trials. In addition, there was a strong consensus that the results of treatment optimization studies should be taken into account during the decision-making of regulators, payers, and/or clinicians.

Conclusions

Stakeholders involved in drug development consider treatment optimization studies to be valuable tools to address current evidence gaps and support their implementation into the existing research framework.

The Use of Risk-Sharing Contracts in Healthcare: Theoretical and Empirical Assessments

OBJECTIVE

The aim of this review is to provide a summary of the literature on risk-sharing agreements, including conceptual, theoretical and empirical (number of agreements and their achievements) perspectives, and stakeholders'  perceptions.

METHODS

We conducted a systematic literature search in MEDLINE from 2000 to April 2019, following PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) methodology, and completed it with a manual search of other publications (mainly grey literature). The search was restricted to publications with English abstracts; the initial identification of articles was restricted to the title, abstract and key words fields. The geographical scope was not restricted.

RESULTS

Over 20 studies proposed different taxonomies of risk-sharing contracts, which can be summarised as financial and paying-for-performance agreements. Theoretical studies modelling the incentives to implement risk-sharing agreements are scarce; they addressed different types of contracts and regulatory contexts, characterizing the drug prices and the optimal strategies of the involved agents. Empirical studies describing specific agreements are abundant and referred to different geographical contexts; however, few articles showed the economic results and assessed the value of such contracts. Stakeholders' perceptions of risk-sharing contracting were favourable, but little is known about the economic and clinical advantages of specific agreements. Whether risk-sharing contracts have yielded the desired results for healthcare systems remains uncertain.

CONCLUSION

Risk-sharing contracts are increasingly used, although the lack of transparency and aggregated registries makes it difficult to learn from these experiences and assess their impact on healthcare systems.

[The incorporation of nusinersen by the Brazilian Unified National Health System: critical thoughts on the institutionalization of health technology assessment in Brazil]

In April 2019, a ruling was signed for the incorporation of the drug nusinersen by the Brazilian Unified National Health System (SUS). Nusinersen is the most expensive drug ever incorporated by the SUS and is used to treat type I 5q spinal muscular atrophy. The incorporation has been described as a milestone in decision-making on new technologies in the SUS, enabled through a risk-sharing agreement. The article discusses the process involved in the incorporation of nusinersen, highlighting the context, timing, and technical issues, in addition to possible consequences for the institutionalization of health technology assessment (HTA) in the SUS. The study used an exploratory method, reviewing public information produced by the Commission for Incorporation of Technologies in the SUS (CONITEC) and searches in government databanks on prices and purchases. A timeline was produced, describing the key points in the process of incorporation. There were two formal requests for the drug's incorporation. The first was submitted by the Division of Science, Technology, and Strategic Inputs (SCTIE) of the Brazilian Ministry of Health and was turned down unanimously in November 2018. This was followed by a petition by the head of the SCTIE to the Attorney General's Office (AGU) to overrule the recommendation by the CONITEC plenary. The AGU recommended a new submission, made by the drug's manufacturing company, which was approved unanimously in March 2019. The was no addition of new evidence or a price reduction to justify the change of decision. No elements were identified in the risk-sharing agreement. This suggests problems of transparency and accountability, as well as risks in the process of institutionalization of HTA that had been underway in the SUS.

The impact of pharmaceutical marketing on market access, treatment coverage, pricing, and social welfare

Pharmaceutical spending in the United States, Canada, and the EU is growing. Public payers cover a large portion of these costs and have responded by instituting various pricing and access policies to limit their expenditure. One challenge that public payers face is additional demand induced by a manufacturer's marketing effort. We use a game theoretic approach to study the impact of pharmaceutical marketing on six practical pricing and access policies: negotiated pricing, open pricing, controlled pricing, a listing process, a risk-sharing arrangement, and a value-based pricing with risk-sharing arrangement. We find that all non-value-based policies result in either restricted access or suboptimal treatment coverage. We find that marketing is the highest in the first-best setting where all decisions are made by a social planner. We also find that the value-based pricing with risk-sharing arrangement is preferred by the manufacturer and from a societal perspective whereas no policy is universally preferred by a health care payer. A value-based pricing with risk-sharing arrangement always results in zero net monetary benefit for a health care payer. Therefore, considering non-value-based arrangements, we find that a negotiated pricing policy, a controlled pricing policy, or a risk-sharing arrangement may be socially preferred.

Conditional Financing of Drugs in the Netherlands: Past, Present, and Future-Results From Stakeholder Interviews

BACKGROUND

Conditional financing (CF) of hospital drugs was implemented in the Netherlands as a form of managed entry agreements between 2006 and 2012. CF was a 4-year process comprising 3 stages: initial health technology assessment of the drug (T = 0), conduct of outcomes research studies, and reassessment of the drug (T = 4).

OBJECTIVES

To analyze stakeholder experiences in implementing CF in practice.

METHODS

Public and private stakeholders were approached for participation in stakeholder interviews through standardized email invitations. An interview guide was developed to guide discussions that covered the following topics: perceived aims of CF, functioning of CF, impact of CF, and conclusions and future perspectives. Extensive summaries were generated for each interview and subsequently used for directed content analysis.

RESULTS

Thirty stakeholders were interviewed. Differences emerged among the stakeholders on the perceived aims of CF. Conversely, there was some agreement among stakeholders on the shortcomings in the functioning of CF, the positive impact of CF on the Dutch healthcare setting, and improvement points for CF.

CONCLUSIONS

Despite stakeholders' belief that CF either did not meet its aims or only partially did so, there was agreement on the need for new policy to address the same aims of CF in the future. Nevertheless, stakeholders diverged on whether CF should be improved on the basis of learnings identified and reintroduced into practice or replaced with new policy schemes.

Sharing knowledge for policy action in low- and middle-income countries: A literature review of managed entry agreements

Managed entry agreements (MEAs)—a type of formal institutional arrangement between pharmaceutical companies and payers for sharing the risk with respect to the introduction of new pharmaceutical technologies—may expand access to new pharmaceutical technologies for non-communicable diseases (NCDs). Although common in highincome countries (HICs), there is limited evidence of their use in low- and middle-income countries (LMICs). This article aims to document international experiences of countries implementing MEAs and potential barriers and facilitators for their use in LMICs. We reviewed published literature sources on MEAs over the past 10 years considering peer-reviewed publications and gray literature data. We took into consideration the MEAs taxonomy presented by Kanavos and Ferrario et al. to categorize our findings, and extract information on factors for their implementation. We retrieved 285 MEAs documented in the literature, mostly from HICs and for a broad spectrum of NCDs. Financial schemes were slightly more prominent than performance-based agreements. Identified factors that could potentially facilitate or hinder the implementation of MEAs included the presence of quality administrative and information systems to track their implementation; availability of quality data and evidence of positive outcomes; uncertainty of drug efficacy/effectiveness, safety, and financial impact; and cultural factors, namely country’s preference for certain type of agreement and trust among payers and manufacturers. The increased availability of publications in recent years suggests a growing interest among policy-makers and researchers in the implementation of MEAs. While the use of MEAs in LMICs is very limited, this could be the result of limited empirical evidence on its use and possibly due to the use of a different taxonomy for describing MEAs in these settings. As any other policy option, the implementation and use of MEAs come with advantages and challenges. Since there is limited evidence on their use in LMICs, the identified cases of implementation in HICs may serve to inform the interest on MEAs in resource limited settings. Therefore, further research in this field especially in the context of LMICs may be of value for the global community as all countries are embarking into fairer and sustainable Universal Health Coverage (UHC).

Acuerdos de Riesgo Compartido: Lecciones Para su Diseño e Implementación a la Luz de la Experiencia Internacional

BACKGROUND

Despite the growing interest in risk-sharing agreements as appropriate payment mechanisms for high-cost treatments, few practical resources facilitate their adoption.

OBJECTIVE

To identify and propose lessons for designing and implementing these models based on a review of the international experience, and to offer a concise model based on these lessons.

METHODS

The steps of the Joanna Briggs Institute were adopted, which included identifying the concept and its relevant variants in scientific and gray literature.

RESULTS

Forty-one references were examined in depth. The design of these payment mechanisms should be a process carried out by competent actors (payer, producer, specialists, patients, and a neutral entity); the design must be supported by a sound regulatory and contractual framework that structures its components and clarifies the functions of each actor. Finally, there are critical activities for each actor in each phase of the agreement's progress.

CONCLUSIONS

The participation of all actors and the clarification of critical elements and tasks are fundamental for the optimal development of the experiences.

Upgrading the SACT dataset and EBMT registry to enable outcomes-based reimbursement in oncology in England: a gap analysis and top-level cost estimate

Background: Outcomes-based reimbursement (OBR) can reduce decision uncertainty and accelerate patient access to cell and gene therapies, however, OBR is rarely applied in practice in England. Oncology is the therapy area with the most cell and gene therapies in late-stage development, and the Systemic Anti-Cancer Therapy (SACT) dataset and The European Society for Blood and Marrow Transplantation (EBMT) registry are two data collection infrastructures that could potentially act as conduits for implementing OBR in cancer in England. Objective: To perform a gap analysis to identify the key requirements for upgrading the SACT and EBMT databases for the purposes of enabling OBR, and a top-level estimation of how much this upgrade may cost, using either a manual (staff-heavy) workaround or part automation (technology-heavy) approach. Methodology: The analysis of current data capture and gaps is informed by secondary research, while the assumptions and data used to derive the top-level cost estimates were informed by consensus-based primary research with experts in healthcare information technology (IT) systems integration and platform development, as well as experts of SACT and EBMT. Findings: In its current form, the SACT dataset in isolation is largely unfit for enabling OBR in oncology, whether through clinical, economic or humanistic outcomes. The EBMT registry has a greater potential; however, this relates to key clinical outcomes only, not economic or humanistic outcomes. Part automation requires a higher upfront investment than the manual workaround (~£1.8 million vs. ~£400k); however, lower annual costs (~£200 vs. ~£260k-£850k) mean that part automation becomes a more cost-effective approach over time. Conclusions: An appropriately automated and scalable data collection infrastructure should be implemented, with the ability to integrate clinical, economic and humanistic outcomes with healthcare cost data and payment systems, to enable OBR not only in cancer but also in other therapy areas.

Data collection infrastructure for patient outcomes in the UK - opportunities and challenges for cell and gene therapies launching

Background: Cell and gene therapies are associated with uncertainty around their value claims at launch due to limitations of supporting clinical data; furthermore, their high costs present affordability issues for payers. Outcomes-based reimbursement can reduce payer decision uncertainty and improve patient access, however, requires data collection infrastructure and practice to be operational. Objective: To identify indications most likely to see launch of cell or gene therapies in the UK over the next five years, and to perform a qualitative assessment of how conducive the existing data collection infrastructure and clinical practice is in facilitating adoption of outcomes-based reimbursement in the corresponding indications. Methodology: Through secondary research, we identified target indications for cell or gene therapies at a mature clinical development stage (Phase III) with EU and/or US trial sites, and assessed availability of relevant data collection infrastructures in the UK. Secondary research findings were validated through primary research (expert interviews). Key parameters considered for the suitability of existing data collection infrastructure in supporting outcomes-based reimbursement include time horizon of data collection, whether data entry is mandatory and whether infrastructure is product or therapy area-specific. Findings: We identified 58 cell or gene therapies, spanning 47 indications, 20 of which are in oncology. Oncology seems well placed for outcomes data collection (through the mandatory Systemic Anti-Cancer Treatment database), however data entry compliance can be an issue (due to resource limitations), and upgrading will be needed for the purpose of outcomes-based reimbursement. Among non-oncology indications ~two-thirds have data collection infrastructures in place, but only three come close to the requirements for outcomes-based reimbursement. Conclusions: Existing data collection infrastructure in indications with potential cell or gene therapies launches in the next five years in the UK is overall not sufficient to facilitate outcomes-based reimbursement.

Implementing managed entry agreements in practice: The Dutch reality check

BACKGROUND

Conditional financing (CF) of expensive hospital drugs was applied in the Netherlands between 2006 and 2012; a 4-year coverage with evidence development (CED) framework for expensive hospital drugs. This study aims to evaluate the CF framework, focusing on Health Technology Assessment (HTA) procedures.

METHODS

Using a standardised data extraction form, researchers independently extracted information on procedural, methodological and decision-making aspects from HTA reports of drugs selected for CF.

RESULTS

Forty-nine drugs were chosen for CF, of which 12 underwent the full procedure. The procedure extended beyond the envisioned 4 years period for 11/12 drugs. Outcomes research studies conducted as part of CF provided insufficient scientific data to reach conclusions on appropriate use and cost-effectiveness of 5/12 drugs. After re-assessment, continuation of reimbursement was advised for 10/12 drugs, with 6 necessitating yet additional conditions for evidence generation. Notably, advice to discontinue reimbursement for 2/12 drugs has not yet been implemented in Dutch healthcare practice.

CONCLUSIONS

Theoretically, CF provided an option for quick but conditional access to drugs. However, numerous aspects related to the design and implementation of CF negatively affected its value in practice. Future CED schemes should aim to incorporate learnings from the CF example to increase their impact in healthcare practice.

Campylobacter control measures in indoor broiler chicken: critical re-assessment of cost-utility and putative barriers to implementation

As campylobacteriosis is one of the most important foodborne infections, a European Union (EU)-27 level cost-effectiveness model has been developed on the socio-economic costs and benefits of applying certain control measures for the reduction of Campylobacter in broiler meat. This is expected to be a gold standard for food safety policymakers in the EU; hence, the validity of its modelling assumptions is essential. The authors of the present paper conducted an independent review of model input parameters on health and economic burden and found that the model most probably overestimated the burden of human campylobacteriosis. A discounted, quality-adjusted life year (QALY)-based European estimate has been developed for human campylobacteriosis and resulted in 15.23 QALY loss per 1000 human gastroenteritis cases. Country-specific cost of illness estimates have been developed for various countries in the EU-27. Based on these model adaptations, a selected Campylobacter control strategy was re-assessed and its high cost-effectiveness was confirmed at the EU level, and also in all but three Member States. Bacteriocin treatment or vaccination of the animals, two alternative control measures were also re-evaluated, and these strategies seemed to be far less cost-effective than the investigated strategy. Putative barriers to the rapid implementation of the investigated Campylobacter control strategy are discussed, and potential solutions are proposed. Further research is required on stakeholder perspectives pertaining to the realistic barriers and implementation opportunities.

Risk-Sharing Agreements in the EU: A Systematic Review of Major Trends

OBJECTIVE

Our objectives were to explore the changes in the level of interest in risk-sharing agreements (RSAs) in the EU during the last 15 years and the underlying reasons for these changes.

METHODS

A systematic literature review was conducted using PubMed, Scopus, Web of Science, and Embase. Articles identified were divided into 'quantitative articles' used to establish the level of interest and 'qualitative articles' used to identify the underlying trends in RSAs.

RESULTS

The literature search retrieved 2144 scientific articles. Data were extracted from 238 articles. Of these, 100 contained quantitative data and 138 contained qualitative data. The pace of articles being published about RSAs grew significantly in 2015, which related to the increase in interest in and knowledge about RSAs. The underlying reasons for the fluctuations were condensed into four overall themes: (1) push for value-based pricing, (2) economic crisis and further push to contain costs, (3) criticism of RSAs in the real world, and (4) diversification of RSAs to fit the purpose.

CONCLUSION

The overall level of interest in RSAs in the EU has been increasing since 2000; therefore, articles reporting the number of RSAs implemented and case studies have been steadily growing as evidence is becoming more readily available. The number of qualitative articles reporting and discussing the underlying reasons for these changes in interest has largely fluctuated over the last 15 years. Despite these fluctuations, interest in RSAs remains high.

Outcomes-Based Contracting Experience: Research Findings from U.S. and European Stakeholders

BACKGROUND

Outcomes-based contracts (OBCs), a type of risk-sharing arrangement (RSA), have emerged as a promising avenue for payers to engage with pharmaceutical manufacturers to share risk and improve patient access to medicines via evaluation of real-world outcomes.

OBJECTIVE

To assess the level of recent OBC activity and stakeholder perceptions of these arrangements, as well as the outlook for future OBC activity from a payer and manufacturer perspective in the United States and EU-5 (France, Germany, Italy, Spain, and the United Kingdom).

METHODS

Using a structured questionnaire, interviews were conducted with 27 experts, including 14 U.S. payers, 5 EU-5 national payers, and 8 manufacturer pricing/market access executives (4 U.S., 4 EU-5). We also used the University of Washington's Performance Based Risk-Sharing (PBRS) database and other targeted publicly available information.

RESULTS

Publicly disclosed information on OBCs understates the level of OBC activity, since many arrangements are confidential. Overall, U.S. and EU-5 interviewees generally expected that 2 to 3 times more OBCs would be implemented in the next 5 years than in the previous 5 years. Key drivers included the introduction of a national OBC framework in Spain, potentially a similar framework in the United Kingdom, a growing sickness fund activity in Germany, and a U.S. movement towards accountable care. Motivation for OBCs varied markedly across markets and stakeholders, with operational feasibility noted as a significant hurdle in the United States and France. Along with improving health outcomes, cost and financial risk reduction were the primary OBC motivators for payers, while potential access or reimbursement gains were key factors for manufacturers.

CONCLUSIONS

Using direct input from U.S. and EU-5 payer and pharmaceutical manufacturer decision makers, this research suggests that high OBC growth is expected in the EU-5 and, to a more moderate extent, in the United States, particularly if clear, simpler OBC frameworks can be developed.

DISCLOSURES

This study was funded by Novartis Pharmaceuticals. Novartis employees were involved in all aspects of this study. Vegesna and Sasane are employed by and own stock in Novartis. Nazareth and Ko were employees of Novartis at the time of this study. Frois, Demean, Carpenter, and Wu are or have been employed by Analysis Group, which received a grant from Novartis for this research. Navarro received consulting fees from Novartis for his involvement in this research. Study concept and design were contributed by Sasane, Frois, Nazareth, and Wu. Navarro, Demean, and Frois took the lead in data collection, assisted by Carpenter, Ko, and Nazareth. Data interpretation was provided by Frois, Carpenter, Nazareth, and Ko, along with Sasane, Demean, Wu, and Navarro. The manuscript was written by Frois, Demean, Nazareth, and Ko, along with Sasane, Carpenter, Wu, and Navarro, and revised by Frois, Ko, and Vegesna, along with Sasane, Nazareth, Wu, and Navarro.

Multi-indication and Combination Pricing and Reimbursement of Pharmaceuticals: Opportunities for Improved Health Care through Faster Uptake of New Innovations

Many pharmaceuticals are effective in multiple indications and the degree of effectiveness may differ. A product-based pricing and reimbursement system with a single price per product is insufficient to reflect the variable values between different indications. The objective of this article is to present examples of actual pricing and reimbursement decisions using current value-based pricing in Sweden and to discuss their implications and possible solutions. The value of several cancer drugs was estimated for various indications based on a willingness-to-pay threshold of 1 million SEK (EUR 104,000) per QALY gained. For some drugs, the estimated value was higher than the drug acquisition cost in several indications, whilst in others, the estimated value was lower than the drug acquisition cost. Drugs used in combination present a special case. If a drug prolongs survival and consequently also a continued use of the anchor drug, the combination use may not be cost effective even at a zero price. In a product-based pricing and reimbursement system, patients may not get access to drugs or access may be delayed and manufacturers may be discouraged to invest in future indications. To overcome these issues, there are several approaches to link price and value. One approach is a "weighted-average" price based on an average of the value across all indications. Another is "multi-indication pricing," which enables price differentiation between indications. However, there are several barriers for applying multi-indication pricing and reimbursement schemes. One barrier is the lack of existing administrative infrastructure to track patients' indications.

Managed Entry Agreements for Pharmaceuticals in the Context of Adaptive Pathways in Europe

As per the EMA definition, adaptive pathways is a scientific concept for the development of medicines which seeks to facilitate patient access to promising medicines addressing high unmet need through a prospectively planned approach in a sustainable way. This review reports the findings of activities undertaken by the ADAPT-SMART consortium to identify enablers and explore the suitability of managed entry agreements for adaptive pathways products in Europe. We found that during 2006-2016 outcomes-based managed entry agreements were not commonly used for products with a conditional marketing authorization or authorized under exceptional circumstances. The barriers and enablers to develop workable managed entry agreements models for adaptive pathways products were discussed through interviews and a multi-stakeholder workshop with a number of recommendations made in this paper.

Innovative pharmaceutical pricing agreements in five European markets: A survey of stakeholder attitudes and experience

BACKGROUND

Innovative pricing agreements for medicines have been used in European markets for more than 20 years, and offer an opportunity for payers and pharmaceutical companies to align on value, optimise speed to patients, and share risk. Developing successful agreements requires alignment between key stakeholders, yet there is a lack of summative data on how current innovative agreements are used in the real-world (e.g. the level of realised access to medicines, and rebates and discounts, which are often non-transparent).

METHODS

This research used a web-based survey of payer stakeholders to determine what kinds of innovative agreements are currently used, anticipated future usage, attitudes, and drivers of adoption. Participants included national and regional payers (or former payers) and hospital-level decision makers.

RESULTS

Sixty-six payers completed the survey. Respondents expected that the use of innovative pricing agreements will remain the same or increase in the future. Overall, they felt there is a positive attitude towards new schemes, and that innovative agreements are likely to be used when they reduce total costs or reduce uncertainty.

CONCLUSIONS

Given payer expectations, pharmaceutical companies should continue to take a role in ensuring that they have sufficient capacity to support payers in the design and implementation of innovative pricing agreements.

Payer and Pharmaceutical Manufacturer Considerations for Outcomes-Based Agreements in the United States

BACKGROUND

Considerable interest exists among health care payers and pharmaceutical manufacturers in designing outcomes-based agreements (OBAs) for medications for which evidence on real-world effectiveness is limited at product launch.

OBJECTIVES

To build hypothetical OBA models in which both payer and manufacturer can benefit.

METHODS

Models were developed for a hypothetical hypercholesterolemia OBA, in which the OBA was assumed to increase market access for a newly marketed medication. Fixed inputs were drug and outcome event costs from the literature over a 1-year OBA period. Model estimates were developed using a range of inputs for medication effectiveness, medical cost offsets, and the treated population size. Positive or negative feedback to the manufacturer was incorporated on the basis of expectations of drug performance through changes in the reimbursement level. Model simulations demonstrated that parameters had the greatest impact on payer cost and manufacturer reimbursement.

RESULTS

Models suggested that changes in the size of the population treated and drug effectiveness had the largest influence on reimbursement and costs. Despite sharing risk for potential product underperformance, manufacturer reimbursement increased relative to having no OBA, if the OBA improved market access for the new product. Although reduction in medical costs did not fully offset the cost of the medication, the payer could still save on net costs per patient relative to having no OBA by tying reimbursement to drug effectiveness.

CONCLUSIONS

Pharmaceutical manufacturers and health care payers have demonstrated interest in OBAs, and under a certain set of assumptions both may benefit.

ESMO European Consortium Study on the availability, out-of-pocket costs and accessibility of antineoplastic medicines in Europe

BACKGROUND

The management of cancer is predicated on the availability and affordability of anticancer therapies, which may be either curative or noncurative.

AIM

The primary aims of the study were to evaluate (i) the formulary availability of licensed antineoplastic medicines across Europe; (ii) patient out-of-pocket costs for the medications and (iii) the actual availability of the medication for a patient with a valid prescription.

MATERIALS AND METHODS

The survey tool was based on the previous ESMO studies that addressed the availability and accessibility of opioids for the management of cancer pain. A total of 185 field reporters from 49 countries were invited to participate. The preliminary set of data was posted on the ESMO website for open peer-review, and amendments have been incorporated into the final report.

RESULTS

There are substantial differences in the formulary availability, out-of-pocket costs and actual availability for many anticancer medicines. The most profound lack of availability is in countries with lower levels of economic development, particularly in Eastern Europe, and these are largely related to the cost of targeted agents approved in the last 10 years. Discrepancies are less profound among medications on the WHO model essential medicines list (EML) for cancer and in curative settings. However, medicine shortages also affect WHO EML medicines, with relevant therapeutic implications for many patients.

CONCLUSIONS

The cost and affordability of anticancer treatments with recent market approval is the major factor contributing to inequity of access to anticancer medications. This is especially true with regards to new medications used in the management of EGFR- or ALK-mutated non-small-cell lung cancer, metastatic melanoma, metastatic renal cell cancer, RAS/RAF wild-type metastatic colorectal cancer, HER2 overexpressed breast cancer and castration-resistant metastatic prostate cancer.

Performance-Based Risk-Sharing Arrangements for Pharmaceutical Products in the United States: A Systematic Review

BACKGROUND

Value for money is a growing necessity in today's U.S. health care system in which drug spending is expected to increase by an average rate of 6.7% yearly through 2025. In response to uncertainty about real-world clinical and economic outcomes for many drugs, health insurers and pharmacy benefit managers (PBMs) have implemented various contracts and arrangements with drug manufacturers that can collectively be described as performance-based risk-sharing arrangements (PBRSAs). Little is known about U.S.-specific PBRSAs for drugs.

OBJECTIVES

To conduct a systematic review of U.S.-specific PBRSAs for drugs to describe (a) trends over time and (b) key aspects including outcome measures and terms of arrangements between stakeholders.

METHODS

A systematic review was conducted in MEDLINE (January 1, 1946-April 1, 2017), Embase (January 1, 1988-April 1, 2017), and the grey literature (up to April 1, 2017) to identify publicly disclosed PBRSAs. Articles and conference abstracts were included if they were published in English and described a U.S.-specific PBRSA for a drug. Articles and conference abstracts were excluded if they only described a PBRSA similar to a money-back guarantee to patients. They were also excluded if they only described a PBRSA between a PBM and a health insurer in which the latter would receive a discount for patients nonadherent to a drug. Results were summarized as counts and percentages.

RESULTS

From the literature review, 26 publicly disclosed PBRSAs were identified. Of these, 16 (62%) were announced or initiated from 2015 to 2017, and 10 (38%) were announced or initiated from 1997 to 2012. Thirteen (50%) PBRSAs involved cardiometabolic indications; 5 (19%) involved oncology indications; and 8 (31%) involved other indications. Categorized by health insurer or PBM, 10 (38%) PBRSAs involved large multistate insurers; 5 (19%) involved the Centers for Medicare & Medicaid Services; 7 (27%) involved regional insurers; 3 (12%) involved PBMs; and 1 (4%) involved multiple unspecified insurers. Regarding the most active drug manufacturers, Amgen initiated 5 (19%) PBRSAs and Novartis initiated 4 (15%). Relative to the initial FDA approval of a treatment, 15 (58%) PBRSAs were announced or initiated within 5 years, and 11 (42%) were announced or initiated more than 5 years later. For data collection, electronic medical record (EMR) data would have been an appropriate source for 12 (46%) PBRSAs; claims data would have been an appropriate source for 11 (42%) PBRSAs; and EMR and claims data would have been appropriate sources for 2 (8%) PBRSAs; no description of the outcome measures was available for 1 (4%) PBRSA.

CONCLUSIONS

The number of publicly disclosed U.S.-specific PBRSAs for drugs has increased over the years. This review's findings confirm the interest of stakeholders in such arrangements and their confidence in the use of the selected outcome measures. Each PBRSA represents a timely collaboration among stakeholders to provide access to a drug while generating evidence to better elucidate its clinical and economic value.

DISCLOSURES

No funding supported this systematic review. Yu is an employee and shareholder of Allergan. Chin reports personal fees from Formulary Resources. Oh and Farias have nothing to disclose. Study concept and design were primarily contributed by Yu, along with the other authors. All authors contributed to the collection and interpretation of the data. The manuscript was written by Yu, Chin, Oh, and Farias and revised by Yu and Chin, along with the other authors.

Performance-Based Risk-Sharing Arrangements: An Updated International Review

Enthusiasm for performance-based risk-sharing arrangements (PBRSAs) continues but at variable pace across countries. Our objective was to identify and characterize publicly available cases and related trends for these arrangements. We performed a review of PBRSAs from 1993 to 2016 using the University of Washington PBRSA Database. Arrangements were categorized according to a previously published taxonomy. Macro-level trends were identified related to the timing of adoption, countries involved, types of arrangements, and disease areas. Our search yielded 437 arrangements. Among these, 183 (41.9%) were categorized as currently active, while 58.1% have expired. Five main types of arrangements have been identified, namely coverage with evidence development (149 cases, 34.1%), performance-linked reimbursement (104 cases, 23.8%), conditional treatment continuation (78 cases, 17.8%), financial or utilization (71 cases, 16.2%), and hybrid schemes with multiple components (35 cases, 8.0%). The pace of adoption varies across countries but has renewed an upward trend after a lull in 2012/2013. Conditions in the USA may be changing toward a more favorable environment of PBRSAs. Interest in PBRSAs remains high, suggesting they are a viable coverage and reimbursement mechanism for a wide range of medical products.