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

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.

From Indication-Based Pricing to Blended Approach: Evidence on the Price and Reimbursement Negotiation in Italy

BACKGROUND

New indications for existing medicines are increasing over time. In most countries, drug pricing and reimbursement conditions are renegotiated every time a new indication is approved. There is a growing interest in the price negotiation model for new indications, specifically comparing an indication-based versus blended approach. However, little evidence currently exists regarding the complexity of these negotiations and their impact on actual prices. Italy has recently transitioned from an indication-based approach to a blended price model. This study aims to measure the impact of price and reimbursement negotiation of new indications on discounts (i.e. actual prices) and on the negotiation duration, used as a proxy of its complexity.

METHODS

We considered new indications approved through a European centralized procedure from January 2013 to March 2022 for which the price and reimbursement status was approved in Italy between January 2015 and March 2022, amounting to 52 new indications. Data on the timeframe of the Italian price and reimbursement process and its phases were obtained from publicly available sources. Discounts for the first indication and their subsequent increases for new indications were estimated by comparing ex-factory prices and tendered prices. To calculate p-values, we employed the Mann-Whitney test, and multiple regression models were utilized to examine correlations between negotiation time and the characteristics of the medicines.

RESULTS

The mean time to reimbursement was 603 days, in contrast to 583 days for the first launch. Price negotiation took longer for rare diseases, cancer drugs, and in case of therapies with minor added therapeutic value. On average, the additional discount (on top of discounts for prior indications) was 13%, significantly lower than the mean discount for the first indications approved (24.9%). The discounts increment was lower, but negotiation took longer if a Managed Entry Agreement accompanied the final agreement. Additionally, discounts have increased over the years.

CONCLUSION

The negotiation for new indications takes longer than the first one, and provides, on average, an additional discount of 13%. While our findings bear the potential for significant policy implications, they necessitate prudent interpretation due to a limited number of observations. The increasing trend in additional discounts over time applied to all indications in recent negotiations, may suggest a descending trend of value for new indications and a shift from an indication-based pricing approach to a blended model. Otherwise, budget impact considerations might have outweighed a value-based approach in the recent negotiations. If so, two potential options for restoring a value-based approach are returning to an indication-based pricing or giving explicit and higher weight to value within a blended model.

Financial Outcomes of Managed Entry Agreements for Pharmaceuticals in Italy

Importance

Most countries in the Organisation for Economic Co-operation and Development apply managed entry agreements (MEAs), reimbursement arrangements between manufacturers and payers, to pharmaceuticals. Few data exist regarding their ability to lower expenditures.

Objective

To analyze the financial outcomes of MEAs for pharmaceuticals from 2019 to 2021 in Italy.

Design, Setting, and Participants

In this observational study of MEAs and pharmaceutical spending in Italy, medications that were monitored through individually collected data and generated paybacks from manufacturers during the 2019 to 2021 study period were included in the analysis. Payback data were collected through pharmaceutical spending monitoring activities conducted by the Agenzia Italiana del Farmaco (Italian Medicines Agency). Expenditure data were collected through the Italian Drug Traceability System. Products were categorized by type of MEA: financial-based, outcome-based, or mixed.

Main Outcomes and Measures

The main outcome was median payback as a proportion of expenditure by category of MEA. Results were also provided by subtype: cost sharing or capping models for financial-based MEAs and risk-sharing or payment-by-result models for outcome-based MEAs. Mixed MEAs were considered when medications had multiple indications with different MEA types.

Results

A total of 73 medications with MEAs generated a payback by manufacturers during the study period. Six were either not reimbursable or delivered within the Italian National Health Service, and 5 had incomplete data. Of the 62 medications analyzed, 24 (38.7%) had financial-based MEAs, 30 (48.4%) had outcome-based MEAs, and 8 (12.9%) had mixed MEAs. A total payback amount of €327.5 million was calculated during the 3 years, corresponding to 0.9% of the €41.1 billion of total expenditures for medications purchased by public health facilities in Italy. Financial-based MEAs returned the highest payback revenues, €158.1 million; the outcome-based MEAs and mixed MEAs generated smaller paybacks of €74.5 million and €94.9 million, respectively. Overall, the median proportion of payback to expenditure on the medications analyzed was 3.8%. For mixed MEAs, the payback-to-expenditure proportion was 6.7%; for outcome-based MEAs, 3.3%; and for financial-based MEAs, 3.7%.

Conclusions and Relevance

This observational study found limited evidence that MEAs lower pharmaceutical expenditures. Determining criteria for prioritizing MEA use, identifying potential design changes, and improving implementation may be needed in the future.

Health technology assessment criteria as drivers of coverage with managed entry agreements: a case study of cancer medicines in four countries

BACKGROUND

Managed entry agreements (MEAs) continue to emerge in health technology assessment (HTA)-based decision-making, to address evidentiary uncertainties arising therein. Evidence on the HTA criteria that influence MEAs' uptake remains scarce. This study explores the HTA criteria that determine (i) if an HTA funding decision will be listed with conditions (LWC) other than a MEA, or with a MEA as a condition (LWCMEA), and ii) the MEA type implemented (i.e., financial, outcomes based, or combination).

METHODS

HTA reports of all oncology medicines approved since 2009 in Australia, England, Scotland, and Sweden were searched to capture the clinical/economic evidence uncertainties raised in the decision-making process, the Social Value Judgements (SVJs) considered therein and the final coverage decision. Binary and multinomial logit models captured the probability (odds ratio (OR)) of a coverage decision being LWCMEA vs. LWC, and of the MEA being financial, outcomes based, or combination, based on the HTA criteria studied.

RESULTS

23 (12%) LWC and 163 (88%) LWCMEA decisions were identified; 136 (83.4%) comprised financial, 10 (6.2%) outcomes based and 17 (10.4%) combination MEAs. LWCMEA decisions were driven by economic model utilities' uncertainties (7.16 < OR < 26.7, p < .05), and the innovation (8.5 < OR < 11.7, p < .05) SVJ. Outcomes based contracts were influenced by clinical evidence (OR = 69.2, p < .05) and relevance to clinical practice (OR = 26.4, p < .05) uncertainties, and rarity (OR = 46.2, p < .05) and severity (OR = 23.3, p < .05) SVJs. Financial MEAs were influenced by innovation (8.9 < OR < 9.3, p < .05) and societal impact (OR = 17.7, p < .0001) SVJs.

CONCLUSIONS

This study provides an empirical framework on the HTA criteria that shape payers' preferences in funding with MEAs, when faced with uncertainty.

Prezzo e rimborso dei farmaci in caso di estensione delle indicazioni: i risultati di una survey sui soci di ISPOR Italy Rome Chapter

Multi-indication pricing models for medicines and some international impact evidence are available in the literature. Data on the Italian context are more limited. This paper illustrates the results of a study aimed at gathering the opinion on this topic of experts, members of the ISPOR Italy Rome Chapter.

The opinion was collected through a structured questionnaire, validated by two potential responders, and administered online in the period October/July 2022.

There were 45 responders (20% of the members); 67% of responders work in pharmaceutical companies and 13% in consultancy firms. The remainder belongs to regulators/payers and universities.

The survey highlighted a preference for (i) non-automatic models, as automatic approaches are mainly based on price cuts/discount increases in relation to an increase in volumes, (ii) an “indication-based-pricing” model (where prices are differentiated by indication through discounts/risk sharing agreements), since it is more consistent with a value-based approach, even if more complex to manage, (iii) a mix of discounts/agreements according to existing evidence.

The opinion collected is consistent with the opinions available in the literature, but not consistent with the Italian trend, where, compared to the past, a blended approach is prevailing. A blended pricing envisages a renegotiation of the single price for all indications, essentially based on a change in the discount. Our hope is that in the future the experts’ opinion will be taken into consideration and that a targeted indication-based-pricing will be adopted again.

Reimbursement and payment models in Central and Eastern European as well as Middle Eastern countries: A survey of their current use and future outlook

There is growing interest in innovative reimbursement and payment models in Central and Eastern European (CEE) and Middle Eastern (ME) countries. A questionnaire was sent to payers from CEE and ME countries regarding the current use of, future preferences for and perceived barriers with these models. Twenty-seven healthcare payers from 11 countries completed the survey. Results showed participants preferred using outcome-based reimbursement models and delayed payment models more often; however, currently they are rarely applied. Barriers hindering implementation were mostly related to IT and data infrastructure, measurement issues, transaction costs and the administrative burden. Given these barriers highlighted in our study, policymakers should focus on the development of an implementation framework with contract templates for the preferred reimbursement and payment schemes to aid the feasibility of a successful implementation.

When Reality Does Not Meet Expectations-Experiences and Perceived Attitudes of Dutch Stakeholders Regarding Payment and Reimbursement Models for High-Priced Hospital Drugs

This study aimed to identify the current experiences with and future preferences for payment and reimbursement models for high-priced hospital therapies in the Netherlands, where the main barriers lie and assess how policy structures facilitate these models. A questionnaire was sent out to Dutch stakeholders (in)directly involved in payment and reimbursement agreements. The survey contained statements assessed with Likert scales, rankings and open questions. The results were analyzed using descriptive statistics. Thirty-nine stakeholders (out of 100) (in)directly involved with reimbursement decision-making completed the survey. Our inquiry showed that currently financial-based reimbursement models are applied most, especially discounts were perceived best due to their simplicity. For the future, outcome-based reimbursement models were preferred, particularly pay-for-outcome models. The main stated challenge for implementation was generating evidence in practice. According to the respondents, upfront payments are currently implemented most often, whereas delayed payment models are preferred to be applied more frequently in the future. Particularly payment-at-outcome-achieved models are preferred; however, they were stated as administratively challenging to arrange. The respondents were moderately satisfied with the payment and reimbursement system in the Netherlands, arguing that the transparency of the final agreements and mutual trust could be improved. These insights can provide stakeholders with future direction when negotiating and implementing innovative reimbursement and payment models. Attention should be paid to the main barriers that are currently perceived as hindering a more frequent implementation of the preferred models and how national policy structures can facilitate a successful implementation.

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.

Analysing supply chain coordination mechanisms dealing with repurposing challenges during Covid-19 pandemic in an emerging economy: a multi-layer decision making approach

Following the outbreak of the Covid-19 pandemic, there was a serious need for the pharmaceutical industry to combat the disease more quickly and effectively. In this regard, numerous companies set out to repurpose current drugs. The noticed decision has major challenges in various dimensions, including the creation and management of an efficient supply chain. The present study attempts to examine the significance and relationships of the repurposing challenges and analyze the effectiveness of supply chain coordination contracts confronting them. In this regard, a combination of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytic Network Process (ANP) named DANP method is applied to investigate the relationships and extracting the weights of the mentioned challenges and the multi-criteria optimization and compromise solution technique called VIKOR is employed to prioritize the supply chain coordination contracts found on their impact facing with repurposing challenges. The mentioned techniques have been conducted under the condition of linguistic Z-numbers. The results demonstrated that financial support and digitalization are the most influential challenges. Moreover, collaboration and data availability have the most weight. In addition, four contracts including effort sharing, cost-sharing, credit option and buyback are the best contracts that companies in the merging economy of Iran should concentrate on them. This research proposes a novel framework of decision-making by integrating DANP and VIKOR with linguistic Z-numbers. Additionally, this study takes a new look at the use of coordination contracts from the viewpoint of repurposing challenges which is highlighted particularly during the Covid-19 pandemic.

How Do Iranian Stakeholders Think About Pharmaceutical Managed Entry Agreements?

Background: Uncertainty in real-world product profiles is the main barrier to pharmaceutical market access. Managed entry agreements (MEAs) are the formal arrangements to overcome these uncertainties. Despite the extensive experience of developed countries in implementing such agreements, the experience of developing countries is minimal. As health decision-makers in Iran have moved towards implementing MEAs since 2020, seeking stakeholders' insights is crucial for filling this experience gap and facilitating the optimal implementation of these new policies. Methods: Our research was done in three phases: (1) Focus group interviews to disclose the main objectives of implementing MEAs in Iran, (2) the AHP approach to prioritize uncertainties, and (3) individual semi-structured interviews to carry out strengths, weaknesses, opportunities, and threats (SWOT) analysis. Results: Based on our stakeholders' views, increasing flexibility in improving patients' access to innovative and expensive drugs and responding to budget impact uncertainty seems highly prioritized for conducting MEAs in Iran. The SWOT analysis showed that although MEAs have the chance for success due to their strengths and opportunities, such as providing early and assured access, allocating resources efficiently, and enhancing the efficiency of post-marketing studies, policymakers should consider the weaknesses and threats such as difficulty in defining outcomes, high transaction cost, and lack of suitable infrastructure to increase the success rate. Conclusions: Efficient implementation of MEAs depends on the weaknesses and threats and considering the views of relevant stakeholders. Constructive interaction among all stakeholders is essential for adequately executing MEAs.

Implementing Risk-Sharing Arrangements for Innovative Medicines: The Experience in Catalonia (Spain)

OBJECTIVES

Publications assessing health and economic outcomes of risk-sharing arrangements (RSAs) are limited. Better knowledge of these outcomes would shed light on the pertinence of such arrangements, informing design improvements for the future. The aim of the study is to describe the different types of RSAs implemented in Catalonia and their health and economic outcomes.

METHODS

Retrospective descriptive analysis of RSAs implemented from January 2016 to December 2019 in the Catalan Health Service, CatSalut. Individual RSAs were reviewed and categorized according to standard RSA guidelines. Relevant health and economic outcomes pertaining to the RSAs were analyzed using aggregate data recorded in Catalan central registries.

RESULTS

A total of 15 RSAs were implemented over the study period (10 of which are still ongoing). A total of 8 consisted of performance-linked reimbursements (PLRs) and 7 of cost-sharing arrangements (CSAs). The arrangements were implemented in the oncohematology (n = 11), rare disease (n = 3), and neurology (n = 1) areas. A total of 951 patients were included in PLR and 73% achieved the target health outcomes. Total medication costs were €9 295 755 of which 11% were refunded to CatSalut. CSAs involved 2066 patients and resulted in overall refunds of €1 349 564 (2.61%) for CatSalut.

CONCLUSIONS

Both PLRs and CSAs were used to manage the different uncertainties related to accessing innovative medicines in Catalonia. The data generated provide relevant information to inform decision-making, allowing an adaptation of the initial recommendation for use and access. Additional efforts are required to increase the RSA assessments and their publication.

Cost associated with a relapse-free patient in multiple sclerosis: A real-world health indicator

Background

The efficacy and safety of disease-modifying therapies (DMTs) in multiple sclerosis (MS) are well known; however, owing to their high costs, determining real-world outcomes is essential to evaluate the cost-effectiveness of different therapeutic strategies. This study aimed to investigate the variability in the annual cost of DMTs associated with a relapse-free patient in a representative population cohort of relapsing-remitting MS (RRMS), and whether this could serve as an appropriate health indicator.

Methods

We analyzed the patients followed up in our MS clinic during the years 2016 and 2019, and selected patients belonging to our health district diagnosed with RRMS. The treatment cost associated with a relapse-free patient was the ratio between the total cost of DMTs and the number of relapse-free patients, treated and not treated, during the year of the study.

Results

A total of 158 patients with RRMS in 2016 and 183 in 2019 were included in our study. In 2016, 101 patients with RRMS (63.9%) received treatment with DMTs and 120 patients (75.9%) remained relapse-free. The mean cost of DMTs per patient in 2016 was €7414.3 (95% confidence interval [CI]: 6325.2–8503.4) considering all the patients (treated and not treated). In 2019, 126 patients (68.9%) received DMTs and 151 patients (82.5%) remained relapse-free. The mean cost of DMTs per patient in 2019 was €6985.4 (95% CI: 5986.9–7983.9) considering all the patients. The cost per year of DMTs to achieve a relapse-free patient was €9762.2 in 2016 and €8465.8 in 2019.

Conclusions

The treatment cost per year to achieve a relapse-free patient was stable during successive measurements in the same population. Therefore, it may be considered a good real-world health indicator for patients with RRMS treated with DMTs.

The Challenges of Outcomes-Based Contract Implementation for Medicines in Europe

OBJECTIVES

The aim was to outline the challenges of implementing outcomes-based contracts (OBCs) in Europe.

METHODS

A scoping review was conducted, building on the searches of a previous systematic review and updating them for December 2017 until May 2021. The combined results were screened, based on inclusion and exclusion criteria. All identified studies published in the English language that described specific OBC schemes for medicines in European countries were included. Insights into the challenges of OBCs were extracted and analysed to develop a conceptual framework.

RESULTS

Ten articles from the previous systematic review matched our inclusion criteria, along with 14 articles from electronic searches. Analysis of these 24 articles and classification of the challenges revealed that there are multiple barriers that must be overcome if OBCs that benefit all stakeholders are going to be adopted widely across Europe. These challenges were grouped according to five key themes: negotiation framework; outcomes; data; administration and implementation; and laws and regulation.

CONCLUSIONS

If the promise of OBCs is to be fully realised in Europe, there remain major challenges that need to be overcome by all stakeholders working in partnership. The overlapping and interconnected nature of these challenges highlights the complexity of OBC arrangements.

Central European journal of operations research (CJOR) "operations research applied to health services (ORAHS) in Europe: general trends and ORAHS 2020 conference in Vienna, Austria"

This articles provides a short summary of the research topics and latest research results of the European Working Group "Operations Research Applied to Health Services" (ORAHS) organized as an e-conference in Juli 2020 at the University of Vienna, Austria (https://orahs2020.univie.ac.at/). Furthermore, challenges for OR in health care including application areas, decision support systems, general trends, and modelling techniques are briefly illustrated from an European and international perspective by providing selected essential literature reviews.

The opportunity of patient-journey studies for academic clinical research in oncology

A wave of new treatments and treatment combinations are becoming available for solid tumours. Trials performed to obtain registration establish a positive benefit-risk but unavoidably leave many questions unanswered on place-in-therapy and the relative efficacy of different treatment sequences. Such limitations create problems in terms of strength of treatment guidelines and reimbursement (in countries where a public payer exists). Data on new drugs arriving during the last 10 years for the treatment of hepatocellular carcinoma and renal cancer are reported as an example of how the fortunate condition of having new effective treatments may translate into uncertainty regarding the optimal treatment plan. We suggest that academic research should react to such limitations and propose a model of patient-journey study (PJS), where patients are followed from the initial diagnosis across subsequent lines of treatment. A PJS master protocol might include at each node of clinical decision either the possibility of choosing treatment according to guidelines (generating prospective real-world evidence) or the possibility to randomise where uncertainty exists (generating comparative effectiveness data). PJS protocols might be adaptively modified every time a new drug arrives on the market. Overall, methodologically sound analyses of PJS will produce knowledge on the efficacy and the effectiveness of different treatment pathways and might significantly optimise treatment of patients in clinical practice. PJS would represent a jump from a few snapshots (trials performed to get regulatory approval) to a full movie (evidence on the relative value of treatment pathways).

Characterization of the Pharmaceutical Risk-Sharing Arrangement Process in Catalonia

Pharmaceutical risk-sharing arrangements have emerged as a reasonable tool to promote sustainable access to innovative medicines with uncertain clinical evidence and/or economic impact from the payer perspective. These funding mechanisms pose an alternative option to the traditional fixed-price methods and are intended to align the price of medication with the value delivered in treating patients, balancing clinical need with affordability in the face of increasing therapeutic innovation and ever-tight budgets. The Catalan Health Service (CatSalut) has set up a systematic, traceable, and transparent methodology for the design and implementation of risk-sharing arrangements and 15 of such access schemes have been successfully implemented until December 2019. Our experience has acknowledged the need for a robust study design, appropriate financial, technical, and administrative resources, and strong stakeholder commitment and communication as critical to the success of risk-sharing arrangements. While the experience in Catalonia has been positive and has served to highlight the potential of such schemes in tackling public health policy concerns, this exchange can often be undermined by the lack of transparency surrounding risk-sharing arrangements and the fact that the literature related to their methodology, implementation, and impact is scarce. Further studies should be conducted and shared to address this obstacle.

Guidance for the Harmonisation and Improvement of Economic Evaluations of Personalised Medicine

OBJECTIVE

The objective of this study was to develop guidance contributing to improved consistency and quality in economic evaluations of personalised medicine (PM), given current ambiguity about how to measure the value of PM as well as considerable variation in the methodology and reporting in economic evaluations of PM.

METHODS

A targeted literature review of methodological papers was performed for an overview of modelling challenges in PM. Expert interviews were held to discuss best modelling practice. A systematic literature review of economic evaluations of PM was conducted to gain insight into current modelling practice. The findings were synthesised and used to develop a set of draft recommendations. The draft recommendations were discussed at a stakeholder workshop and subsequently finalised.

RESULTS

Twenty-two methodological papers were identified. Some argued that the challenges in modelling PM can be addressed within existing methodological frameworks, others disagreed. Eighteen experts were interviewed. They believed large uncertainty to be a key concern. Out of 195 economic evaluations of PM identified, 56% addressed none of the identified modelling challenges. A set of 23 recommendations was developed. Eight recommendations focus on the modelling of test-treatment pathways. The use of non-randomised controlled trial data is discouraged but several recommendations are provided in case randomised controlled trial data are unavailable. The parameterisation of structural uncertainty is recommended. Other recommendations consider perspective and discounting; premature survival data; additional value elements; patient and clinician compliance; and managed entry agreements.

CONCLUSIONS

This study provides a comprehensive list of recommendations to modellers of PM and to evaluators and reviewers of PM models.

Methodological Challenges in the Economic Evaluation of a Gene Therapy for RPE65-Mediated Inherited Retinal Disease: The Value of Vision

The emergence of gene therapies challenge health economists to evaluate interventions that are often provided to a small patient population with a specific gene mutation in a single dose with high upfront costs and uncertain long-term benefits. The objective of this study was to illustrate the methodological challenges of evaluating gene therapies and their implications by discussing four economic evaluations of voretigene neparvovec (VN) for the treatment of RPE65-mediated inherited retinal disease. The checklist for economic evaluations of gene therapies of Drummond et al. was applied to the economic evaluations of VN performed by US Institute for Clinical and Economic Review, two country adaptations of the company model in the UK and the Netherlands, and another US publication. The main differences in methodological choices and their impact on cost-effectiveness results were assessed and further explored with sensitivity analyses using the Dutch model. To enable comparison between the economic evaluations, costs were converted to US dollars. Different methodological choices were made in the economic evaluations of VN resulting in large differences in the incremental cost-effectiveness ratio varying from US$79,618 to US$643,813 per QALY. The chosen duration of treatment effect, source of utility values, discount rate and model structure had the largest impact on the cost-effectiveness. This study underlines the findings from Drummond et al. that standard methods can be used to evaluate gene therapies. However, given uncertainty about (particularly long-term) outcomes of gene therapies, guidance is required on the acceptable extrapolation of treatment effect of gene therapies and on how to handle the uncertainty around this extrapolation in scenario and sensitivity analyses to aid health technology assessment research and align submissions of future gene therapies.

Potential approaches for the pricing of cancer medicines across Europe to enhance the sustainability of healthcare systems and the implications

Introduction: There are growing concerns among European health authorities regarding increasing prices for new cancer medicines, prices not necessarily linked to health gain and the implications for the sustainability of their healthcare systems.Areas covered: Narrative discussion principally among payers and their advisers regarding potential approaches to the pricing of new cancer medicines.Expert opinion: A number of potential pricing approaches are discussed including minimum effectiveness levels for new cancer medicines, managed entry agreements, multicriteria decision analyses (MCDAs), differential/tiered pricing, fair pricing models, amortization models as well as de-linkage models. We are likely to see a growth in alternative pricing deliberations in view of ongoing challenges. These include the considerable number of new oncology medicines in development including new gene therapies, new oncology medicines being launched with uncertainty regarding their value, and continued high prices coupled with the extent of confidential discounts for reimbursement. However, balanced against the need for new cancer medicines. This will lead to greater scrutiny over the prices of patent oncology medicines as more standard medicines lose their patent, calls for greater transparency as well as new models including amortization models. We will be monitoring these developments.

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.

A MEA is a MEA is a MEA? Sequential decision making and the impact of different managed entry agreements at the manufacturer and payer level, using a case study for an oncology drug in England

BACKGROUND

In a typical single-payer setting that uses an explicit cost-effectiveness (CE) threshold in its decision-making, the payer aims to maximize the net-monetary-benefit (NMB) given the CE threshold, whilst the manufacturer aims to maximize the expected discounted-cash-flow (DCF) resulting from the sales of that technology. Managed entry agreements (MEAs) are tools that are used to improve access to expensive technologies that would otherwise not be deemed to be cost-effective to payers. While simple discount on the list price is the most commonly applied MEA type, there are different forms, each having a different impact on the cost-effectiveness of the technology, on the lifetime DCF-per-patient and on the decision uncertainty. We aim to analyze the sequential decision-making (SDM) of different MEAs (i.e. simple discount, free treatment initiation, lifetime treatment acquisition cost-capping [LTTACC], performance-based money-back guarantee [MBG]) at the manufacturer and at the payer level, respectively.

METHODS

We first model the SDM of the manufacturer and the payer as a sequential game and explain the challenges to find an equilibrium analytically. Then we propose a heuristic computational method to follow for each of the MEA types, based on practice. To demonstrate this SDM on a case study, a UK-based cost-utility analysis using a three-state, partitioned-survival-model was constructed to determine the cost-effectiveness of regorafenib versus best-supportive-care for the second-line treatment of hepatocellular carcinoma. The optimal agreement terms that would maximise the lifetime DCF-per-patient for each MEA, whilst remaining below the CE-threshold (£50,000/QALY gained) were obtained in the deterministic base-case. Robustness for each optimized MEA was then assessed using probabilistic sensitivity and scenario analyses, the value of information (VoI), and HTA-risk analyses.

RESULTS

As expected, the introduction of all MEAs improved the probabilistic ICER and NMB values to (almost) acceptable levels, compared to the "no-MEA" case (ICER ~ £78,000/QALY-gained). The expected DCFs across the explored MEAs were all similar, whilst the payer strategy & uncertainty burden (PSUB) for regorafenib decreased in all MEAs explored. VoI analyses revealed that regorafenib mean-dose-intensity and time-on-treatment (ToT) parameters attributed most to the decision uncertainty. LTTACC provided the smallest PSUB and the most robust NMB estimates under parametric uncertainty. For scenarios assuming increased regorafenib ToT or mean-dose-intensity, LTACC again provided acceptable cost-effectiveness outcomes, whereas for scenarios assuming decreased regorafenib progression-free/overall survival effectiveness, only MBG resulted in plausible ICER values. In scenarios, where the source of uncertainty was not targeted by MEA parameters (e.g. the scenario assuming higher progressed disease resource utilization), all investigated MEA types resulted in unacceptable cost-effectiveness outcomes.

CONCLUSION

Each MEA type has a different implication. The impact of different MEAs on the NMB is more noteworthy than on the DCF, in relative terms, hence payers will benefit from the early participation of the MEA design rather than leaving this up to the prerogative of the manufacturer. While simple discount might be practical for implementation purposes, other MEAs can provide additional benefits to the payer in terms of increased NMB, reduced decision risk and reduced uncertainty. MEA performance should be investigated not only under parametric uncertainty, but also under-identified structural uncertainty, and the barriers of implementation should be considered thoroughly before choosing the most appropriate MEA type.

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.

Recalibrating Health Technology Assessment Methods for Cell and Gene Therapies

Recently licensed cell and gene therapies have promising but highly uncertain clinical benefits. They are entering the market at very high prices, with the latest entrants costing hundreds of thousands of dollars. The significant long-term uncertainty posed by these therapies has already complicated the use of conventional economic evaluation approaches such as cost-effectiveness and cost-utility analyses, which are widely used for assessing the value of new health interventions. Cell and gene therapies also risk jeopardising healthcare systems' financial sustainability. As a result, there is a need to recalibrate the current health technology assessment methods used to measure and compensate their value. In this paper, we outline a set of technical adaptations and methodological refinements to address key challenges in the appraisal of cell and gene therapies' value, including the assessment of efficiency and affordability. We also discuss the potential role of alternative financing mechanisms. Ultimately, uncertainties associated with cell and gene therapies can only be meaningfully addressed by improving the evidence base supporting their approval and adoption in healthcare systems.

Integrative Review of Managed Entry Agreements: Chances and Limitations

BACKGROUND AND OBJECTIVE

Managed entry agreements (MEAs) consist of a set of instruments to reduce the uncertainty and the budget impact of new high-priced medicines; however, there are concerns. There is a need to critically appraise MEAs with their planned introduction in Brazil. Accordingly, the objective of this article is to identify and appraise key attributes and concerns with MEAs among payers and their advisers, with the findings providing critical considerations for Brazil and other high- and middle-income countries.

METHODS

An integrative review approach was adopted. This involved a review of MEAs across countries. The review question was 'What are the health technology MEAs that have been applied around the world?' This review was supplemented with studies not retrieved in the search known to the senior-level co-authors including key South American markets. It also involved senior-level decision makers and advisers providing guidance on the potential advantages and disadvantages of MEAs and ways forward.

RESULTS

Twenty-five studies were included in the review. Most MEAs included medicines (96.8%), focused on financial arrangements (43%) and included mostly antineoplastic medicines. Most countries kept key information confidential including discounts or had not published such data. Few details were found in the literature regarding South America. Our findings and inputs resulted in both advantages including reimbursement and disadvantages including concerns with data collection for outcome-based schemes.

CONCLUSIONS

We are likely to see a growth in MEAs with the continual launch of new high-priced and often complex treatments, coupled with increasing demands on resources. Whilst outcome-based MEAs could be an important tool to improve access to new innovative medicines, there are critical issues to address. Comparing knowledge, experiences, and practices across countries is crucial to guide high- and middle-income countries when designing their future MEAs.

Mapping of Current Obstacles for Rationalizing Use of Medicines (CORUM) in Europe: Current Situation and Potential Solutions

Introduction

There are increasing concerns regarding the inappropriate use of medicines with expenditure continuing to grow driven by increasing sales in oncology and orphan diseases, enhanced by their emotive nature. As a result, even high income countries are struggling to fund new premium priced medicines. These concerns have resulted in initiatives to better manage the entry of new medicines and enhance the rational use of medicines (RUM). However, there is a need to ascertain the current situation. We sought to address this by developing the Current Obstacles for Rationalizing Use of Medicines in Europe (CORUM) mapping tool to qualitatively investigate the current situation and provide analysis of current views on RUM and interventions among key European payers and their advisers. The findings will be used to provide future guidance.

Methodology

Descriptive study exploring and identifying perceived gaps to achieving optimal RUM. The CORUM tool was based on the WHO 12 key interventions to promote RUM.

Results

62 participants took part with most respondents believing their country could improve RUM capacity. This included educational initiatives on the use of clinical guidelines (90%) and the inclusion of problem-based pharmacotherapy in undergraduate curricula and for Continued Professional Development. Key challenges included a lack of regular updates of guidelines, exacerbated by limited funding and a lack of follow-up to monitor adherence to agreed guidelines. RUM could also be enhanced by the development of regional formularies as well as implementing Drug and Therapeutic Committees where these are currently limited. There also needs to be greater co-ordination between RUM and Health Technology Assessment activities, with countries learning from each other.

Conclusion

There is an urgent need to improve RUM through improved educational and other activities among European countries, with countries learning from each other. This will involve addressing current challenges and we will be following this up.