Sustainable Financing of Innovative Therapies: A Review of Approaches

Towards ethical drug pricing: the European Orphan Genomic Therapies Fund

An increasing number of novel genomic therapies are expected to become available for patients with rare or ultra-rare diseases. However, the primary obstacle to equal patient access to these orphan genomic therapies are currently very high prices charged by manufacturers in the context of limited healthcare budgets. Taking into account ethical pricing theories, the paper proposes the implementation of a pricing infrastructure covering all European member states, which has the potential to promote distributive justice while maintaining the attractiveness of genomic therapy development.

A perspective on life-cycle health technology assessment and real-world evidence for precision oncology in Canada

Health technology assessment (HTA) can be used to make healthcare systems more equitable and efficient. Advances in precision oncology are challenging conventional thinking about HTA. Precision oncology advances are rapid, involve small patient groups, and are frequently evaluated without a randomized comparison group. In light of these challenges, mechanisms to manage precision oncology uncertainties are critical. We propose a life-cycle HTA framework and outline supporting criteria to manage uncertainties based on real world data collected from learning healthcare systems. If appropriately designed, we argue that life-cycle HTA is the driver of real world evidence generation and furthers our understanding of comparative effectiveness and value. We conclude that life-cycle HTA deliberation processes must be embedded into healthcare systems for an agile response to the constantly changing landscape of precision oncology innovation. We encourage further research outlining the core requirements, infrastructure, and checklists needed to achieve the goal of learning healthcare supporting life-cycle HTA.

Outcome-based reimbursement in Central-Eastern Europe and Middle-East

Outcome-based reimbursement models can effectively reduce the financial risk to health care payers in cases when there is important uncertainty or heterogeneity regarding the clinical value of health technologies. Still, health care payers in lower income countries rely mainly on financial based agreements to manage uncertainties associated with new therapies. We performed a survey, an exploratory literature review and an iterative brainstorming in parallel about potential barriers and solutions to outcome-based agreements in Central and Eastern Europe (CEE) and in the Middle East (ME). A draft list of recommendations deriving from these steps was validated in a follow-up workshop with payer experts from these regions. 20 different barriers were identified in five groups, including transaction costs and administrative burden, measurement issues, information technology and data infrastructure, governance, and perverse policy outcomes. Though implementing outcome-based reimbursement models is challenging, especially in lower income countries, those challenges can be mitigated by conducting pilot agreements and preparing for predictable barriers. Our guidance paper provides an initial step in this process. The generalizability of our recommendations can be improved by monitoring experiences from pilot reimbursement models in CEE and ME countries and continuing the multistakeholder dialogue at national levels.

Impact of Managed Entry Agreements on availability of and timely access to medicines: an ex-post evaluation of agreements implemented for oncology therapies in four countries

BACKGROUND

Despite the increased utilisation of Managed Entry Agreements (MEAs), empirical studies assessing their impact on achieving better access to medicines remains scarce. In this study we evaluated the role of MEAs on enhancing availability of and timely access to a sample of oncology medicines that had received at least one prior rejection from reimbursement.

METHODS

Funding decisions and their respective timelines for all oncology medicines approved between 2009 and 2018 in Australia, England, Scotland and Sweden were studied. A number of binary logit models captured the probability (Odds ratio (OR)) of a previous coverage rejection being reversed to positive after resubmission with vs. without a MEA. Gamma generalised linear models were used to understand if there is any association between time to final funding decision and the presence of MEA, among other decision-making variables, and if so, the strength and direction of this association (Beta coefficient (B)).

RESULTS

Of the 59 previously rejected medicine-indication pairs studied, 88.2% (n = 45) received a favourable decision after resubmission with MEA vs. 11.8% (n = 6) without. Average time from original submission to final funding decision was 404 (± 254) and 452 (± 364) days for submissions without vs. with MEA respectively. Resubmissions with a MEA had a higher likelihood of receiving a favourable funding decision compared to those without MEA (43.36 < OR < 202, p < 0.05), although approval specifically with an outcomes-based agreement was associated with an increase in the time to final funding decision (B = 0.89, p < 0.01). A statistically significant decrease in time to final funding decision was observed for resubmissions in Australia and Scotland compared to England and Sweden, and for resubmissions with a clinically relevant instead of a surrogate endpoint.

CONCLUSIONS

MEAs can improve availability of medicines by increasing the likelihood of reimbursement for medicines that would have otherwise remained rejected from reimbursement due to their evidentiary uncertainties. Nevertheless, approval with a MEA can increase the time to final funding decision, while the true, added value for patients and healthcare systems of the interventions approved with MEAs in comparison to other available interventions remains unknown.

Cost-Based Price Calculation of Mexiletine for Nondystrophic Myotonia

OBJECTIVES

Mexiletine is a long-known drug used for the treatment of arrhythmias and repurposed in the 1980s for patients with nondystrophic myotonia (NDM). Recently, the price of mexiletine in Europe increased significantly after registration as an orphan drug for NDM. This led to international discussions on affordability and willingness to reimburse mexiletine in the absence of background information that would justify such a price. Our objective was to calculate a cost-based price for mexiletine for adult patients with NDM based on detailed information on development costs.

METHODS

We calculated a fair price based on a cost-based pricing model for commercial mexiletine to treat adults with NDM using a recent European drug-pricing model as a framework to include actual costs incurred. Three scenarios were applied: 1 with minimum estimated costs, 1 with maximum estimated costs, and 1 with costs as if mexiletine was innovative.

RESULTS

The calculated fair price of mexiletine per patient per year (PPPY) is €452 for the minimum scenario and €1996 for the maximum scenario. By using hypothetical R&D costs used for innovative drugs, the price would be €6685 PPPY. In Europe, the list price of mexiletine ranges from €30 707-60 730 PPPY, based on 600 mg daily.

CONCLUSIONS

The current list price for mexiletine in Europe is manifold higher than any scenario of the cost-based models. Accounting for the reduced costs for clinical development in a repurposing scenario, the cost-based pricing model provides a fair commercial price range, which can be used as benchmark for pricing negotiations and/or reimbursement decisions.

Can the Consideration of Societal Costs Change the Recommendation of Economic Evaluations in the Field of Rare Diseases? An Empirical Analysis

OBJECTIVES

To analyze whether the adoption of a societal perspective would alter the results and conclusions of economic evaluations for rare disease-related healthcare technologies.

METHODS

A search strategy involving all the active substances considered as orphan drugs by the European Medicines Agency plus a list of 76 rare diseases combined with economic-related terms was conducted on Medline and the Cost-Effectiveness Registry from the beginning of 2000 until November 2018. We included studies that considered quality-adjusted life years as an outcome, were published in a scientific journal, were written in English, included informal care costs or productivity losses, and separated the results according to the applied perspective.

RESULTS

We found 14 articles that fulfilled the inclusion criteria. Productivity losses were considered in 12 studies, the human capital approach being the method most frequently used. Exclusively, informal care was considered in 2 articles, being valued through the opportunity cost method. The 14 articles selected resulted in 26 economic evaluation estimations, from which incremental cost-utility ratio values changed from cost-effective to dominant in 3 estimates, but the consideration of societal costs only modified the authors' conclusion in 1 study.

CONCLUSIONS

The presence of societal costs in the economic evaluation of rare diseases did not affect the conclusions of the studies except in a single specific case. In those studies where the societal perspective was considered, we did not find significant changes in the economic evaluation results due to the higher costs of treatments and the low quality-adjusted life-years gained.

Application of Managed Entry Agreements for Innovative Therapies in Different Settings and Combinations: A Feasibility Analysis

The reimbursement of expensive, innovative therapies poses a challenge to healthcare systems. This study investigated the feasibility of managed entry agreements (MEAs) for innovative therapies in different settings and combinations. First, a systematic literature review included studies describing used or conceptual agreements between payers and manufacturers (i.e., MEAs). Identical and similar MEAs were clustered and data were extracted on their benefits and limitations. A feasibility assessment was performed for each individual MEA based on how it could be applied (financial/outcome-based), on what level (individual patients/target population), in which payment setting (centralized pricing and reimbursement authority yes/no), for what type of therapies (one-time/chronic), within what payment structures, and whether combinations with other MEAs were feasible. The literature search ultimately included 82 papers describing 117 MEAs. After clustering, 15 unique MEAs remained, each describing one or multiple similar agreements. Four of those entailed payment structures, while eleven entailed agreements between payers and manufacturers regarding price, usage, and/or evidence generation. The feasibility assessment indicated that most agreements could be applied throughout the different settings that were assessed and could be applied in different payment structures and in combination with multiple other agreements. The potential to combine multiple agreements leads to a multitude of different reimbursement mechanisms that may manage the price, usage, payment structure, and additional conditions for an innovative therapy. This overview of the feasibility of combinations of MEAs can help decision-makers construct a reimbursement mechanism most suited to their preferences, the type of therapy under evaluation, and the applicable healthcare system.

Allocating healthcare resources to genomic testing in Canada: latest evidence and current challenges

Precision medicine (PM) informed by next-generation sequencing (NGS) poses challenges for health technology assessment (HTA). To date, there has been limited reimbursement of genomic testing with NGS in Canada, particularly for whole-genome and whole-exome sequencing (WGS/WES). Through a structured literature review, we examine Canadian economic evidence and evidentiary challenges for the adoption of genomic testing. We searched Medline (PubMed) for published Canadian studies generating economic evidence for PM informed by NGS. Our search focused on studies examining the costs and/or value of NGS. We reviewed included studies and summarized results according to evaluation type, clinical context, NGS technology, and test strategy. We then grouped HTA challenges encountered by authors when evaluating NGS. Our review included twenty-five studies. To determine the economic impacts of NGS-informed PM in Canada, studies applied cost-effectiveness analysis (52%, n = 13), stated preference analysis (20%, n = 5), cost-consequence analysis (16%, n = 4), and healthcare resource utilization or costing analysis (12%, n = 3). NGS panels were the most common technology evaluated (n = 13), followed by WGS and/or WES (n = 8). The included studies highlighted multiple challenges when generating economic evidence, many of which remain unaddressed. Challenges were broadly related to (1) accounting for all NGS outcomes; (2) addressing uncertainty; and (3) improving consistency of economic approaches. Canadian studies are beginning to produce estimates of the economic impacts of NGS-informed PM, yet challenges for HTA remain. While solutions and real-world evidence are generated, lifecycle health technology management methods can be designed to better support resource allocation decisions for genomic testing in Canada.

Uncertainty and Coverage With Evidence Development: Does Practice Meet Theory?

OBJECTIVES

In theory, a successful coverage with evidence development (CED) scheme is one that addresses the most important uncertainties in a given assessment. We investigated the following: (1) which uncertainties were present during the initial assessment of 3 Dutch CED cases, (2) how these uncertainties were integrated in the initial assessments, (3) whether CED research plans included the identified uncertainties, and (4) issues with managing uncertainty in CED research and ways forward from these issues.

METHODS

Three CED initial assessment dossiers were analyzed and 16 stakeholders were interviewed. Uncertainties were identified in interviews and dossiers and were categorized in different causes: unavailability, indirectness, and imprecision of evidence. Identified uncertainties could be mentioned, described, and explored. Issues and ways forward to address uncertainty in CED schemes were discussed during the interviews.

RESULTS

Forty-two uncertainties were identified. Thirteen (31%) were caused by unavailability, 17 (40%) by indirectness, and 12 (29%) by imprecision. Thirty-four uncertainties (81%) were only mentioned, 19 (45%) were described, and the impact of 3 (7%) uncertainties on the results was explored in the assessment dossiers. Seventeen uncertainties (40%) were included in the CED research plans. According to stakeholders, research did not address the identified uncertainty, but CED research should be designed to focus on these.

CONCLUSIONS

In practice, uncertainties were neither systematically nor completely identified in the analyzed CED schemes. A framework would help to systematically identify uncertainty, and this process should involve all stakeholders. Value of information analysis, and the uncertainties that are not included in this analysis should inform CED research design.

Barriers for Access to New Medicines: Searching for the Balance Between Rising Costs and Limited Budgets

Introduction: There is continued unmet medical need for new medicines across countries especially for cancer, immunological diseases, and orphan diseases. However, there are growing challenges with funding new medicines at ever increasing prices along with funding increased medicine volumes with the growth in both infectious diseases and non-communicable diseases across countries. This has resulted in the development of new models to better manage the entry of new medicines, new financial models being postulated to finance new medicines as well as strategies to improve prescribing efficiency. However, more needs to be done. Consequently, the primary aim of this paper is to consider potential ways to optimize the use of new medicines balancing rising costs with increasing budgetary pressures to stimulate debate especially from a payer perspective. Methods: A narrative review of pharmaceutical policies and implications, as well as possible developments, based on key publications and initiatives known to the co-authors principally from a health authority perspective. Results: A number of initiatives and approaches have been identified including new models to better manage the entry of new medicines based on three pillars (pre-, peri-, and post-launch activities). Within this, we see the growing role of horizon scanning activities starting up to 36 months before launch, managed entry agreements and post launch follow-up. It is also likely there will be greater scrutiny over the effectiveness and value of new cancer medicines given ever increasing prices. This could include establishing minimum effectiveness targets for premium pricing along with re-evaluating prices as more medicines for cancer lose their patent. There will also be a greater involvement of patients especially with orphan diseases. New initiatives could include a greater role of multicriteria decision analysis, as well as looking at the potential for de-linking research and development from commercial activities to enhance affordability. Conclusion: There are a number of ongoing activities across countries to try and fund new valued medicines whilst attaining or maintaining universal healthcare. Such activities will grow with increasing resource pressures and continued unmet need.

The HTA Risk Analysis Chart: Visualising the Need for and Potential Value of Managed Entry Agreements in Health Technology Assessment

BACKGROUND

Recent changes to the regulatory landscape of pharmaceuticals may sometimes require reimbursement authorities to issue guidance on technologies that have a less mature evidence base. Decision makers need to be aware of risks associated with such health technology assessment (HTA) decisions and the potential to manage this risk through managed entry agreements (MEAs).

OBJECTIVE

This work develops methods for quantifying risk associated with specific MEAs and for clearly communicating this to decision makers.

METHODS

We develop the 'HTA risk analysis chart', in which we present the payer strategy and uncertainty burden (P-SUB) as a measure of overall risk. The P-SUB consists of the payer uncertainty burden (PUB), the risk stemming from decision uncertainty as to which is the truly optimal technology from the relevant set of technologies, and the payer strategy burden (PSB), the additional risk of approving a technology that is not expected to be optimal. We demonstrate the approach using three recent technology appraisals from the UK National Institute for Health and Clinical Excellence (NICE), each of which considered a price-based MEA.

RESULTS

The HTA risk analysis chart was calculated using results from standard probabilistic sensitivity analyses. In all three HTAs, the new interventions were associated with substantial risk as measured by the P-SUB. For one of these technologies, the P-SUB was reduced to zero with the proposed price reduction, making this intervention cost effective with near complete certainty. For the other two, the risk reduced substantially with a much reduced PSB and a slightly increased PUB.

CONCLUSIONS

The HTA risk analysis chart shows the risk that the healthcare payer incurs under unresolved decision uncertainty and when considering recommending a technology that is not expected to be optimal given current evidence. This allows the simultaneous consideration of financial and data-collection MEA schemes in an easily understood format. The use of HTA risk analysis charts will help to ensure that MEAs are considered within a standard utility-maximising health economic decision-making framework.

The Implementation of Managed Entry Agreements in Central and Eastern Europe: Findings and Implications

BACKGROUND

Managed entry agreements (MEAs) are a set of instruments to facilitate access to new medicines. This study surveyed the implementation of MEAs in Central and Eastern Europe (CEE) where limited comparative information is currently available.

METHOD

We conducted a survey on the implementation of MEAs in CEE between January and March 2017.

RESULTS

Sixteen countries participated in this study. Across five countries with available data on the number of different MEA instruments implemented, the most common MEAs implemented were confidential discounts (n = 495, 73%), followed by paybacks (n = 92, 14%), price-volume agreements (n = 37, 5%), free doses (n = 25, 4%), bundle and other agreements (n = 19, 3%), and payment by result (n = 10, >1%). Across seven countries with data on MEAs by therapeutic group, the highest number of brand names associated with one or more MEA instruments belonged to the Anatomical Therapeutic Chemical (ATC)-L group, antineoplastic and immunomodulating agents (n = 201, 31%). The second most frequent therapeutic group for MEA implementation was ATC-A, alimentary tract and metabolism (n = 87, 13%), followed by medicines for neurological conditions (n = 83, 13%).

CONCLUSIONS

Experience in implementing MEAs varied substantially across the region and there is considerable scope for greater transparency, sharing experiences and mutual learning. European citizens, authorities and industry should ask themselves whether, within publicly funded health systems, confidential discounts can still be tolerated, particularly when it is not clear which country and party they are really benefiting. Furthermore, if MEAs are to improve access, countries should establish clear objectives for their implementation and a monitoring framework to measure their performance, as well as the burden of implementation.

Defining and Measuring the Affordability of New Medicines: A Systematic Review

BACKGROUND

In many healthcare systems, affordability concerns can lead to restrictions on the use of expensive efficacious therapies. However, there does not appear to be any consensus as to the terminology used to describe affordability, or the thresholds used to determine whether new drugs are affordable.

OBJECTIVES

The aim of this systematic review was to investigate how affordability is defined and measured in healthcare.

METHODS

MEDLINE, EMBASE and EconLit databases (2005-July 2016) were searched using terms covering affordability and budget impact, combined with definitions, thresholds and restrictions, to identify articles describing a definition of affordability with respect to new medicines. Additional definitions were identified through citation searching, and through manual searches of European health technology assessment body websites.

RESULTS

In total, 27 definitions were included in the review. Of these, five definitions described affordability in terms of the value of a product; seven considered affordability within the context of healthcare system budgets; and 15 addressed whether products are affordable in a given country based on economic factors. However, there was little in the literature to indicate that the price of medicines is considered alongside both their value to individual patients and their budget impact at a population level.

CONCLUSIONS

Current methods of assessing affordability in healthcare may be limited by their focus on budget impact. A more effective approach may involve a broader perspective than is currently described in the literature, to consider the long-term benefits of a therapy and cost savings elsewhere in the healthcare system, as well as cooperation between healthcare payers and the pharmaceutical industry to develop financing models that support sustainability as well as innovation.